As we illustrated in Part 1 of this post a new aspect of safety management risk is possible criminal liability for actions, or inactions, associated with events that did, or could have, safety consequences. While there has always been the potential for criminal liability it has generally been directed at the corporate level versus individual employees. Heretofore, “few executives have been on the hook, partly because it is tough for prosecutors to prove an individual had criminal intent in a corporate setting where decision-making is spread among many.” 1,2
The Justice Department has been making a new push to target individuals more frequently to hold them accountable for corporate malfeasance. Much of the criminal liability in recent years has been cropping up in industries other than nuclear, as illustrated in the summary table in Part 1. The Deepwater Horizon drill rig explosion and the Massey Coal explosion at the Upper Big Branch mine have been leading examples. More recently the series of scandals involving automobile manufacturers are adding to the record. And the Flint water contamination situation is also evolving rapidly. We’ll discuss the significance of these cases and how it could impact the conduct of individuals responsible for safe nuclear operations and the role of regulation. In particular, under what circumstances criminal liability may attach and whether the potential to be held criminally liable is an effective force in assuring compliant behaviors and ultimately safety.
Who’s a Criminal?
The various cases are a mix of corporate and individual liability. All three corporations involved in Deepwater pleaded guilty to various charges and paid very large fines. In BP’s case, it pleaded guilty to felony manslaughter. Manslaughter charges against individuals employed by BP were dropped prior to trial. Individual liability was limited to violations of the Clean Water Act and obstruction of justice (misdemeanors).3
David Uhlmann, a professor at the University of Michigan Law School and former environmental-crimes prosecutor stated, “The Justice Department always seeks to hold individuals accountable for corporate crime, but doing so in the Gulf oil spill meant charging individuals who had no control over the corporate culture that caused the spill.” 4
Other cases followed a similar pattern until Upper Big Branch. Mostly lower level individuals were being targeted; higher ups were insulated from knowledge or direct involvement in the specific event. With Massey prosecutors worked their way up the management chain all the way to the CEO.5 However even where there were significant indications of the CEO driving a “production first” culture, the felonies he faced were based on securities fraud and making false statements. Ultimately he was convicted of violating safety standards and will serve jail time.6 Fukushima will be another attempt to hold senior management accountable (for something termed, “professional negligence”) but, as previously noted, the case is thought to be difficult. The Attorney General in the Flint water cases promises more indictments and implies higher ups will be charged. It remains to be seen whether this targeting of individuals will prove to be a truer preventive measure than other remedies.
Proof of Criminal Behavior is Difficult
Ultimately the prospect of criminal prosecution is fraught with legal and practical obstacles.7 Current law does not provide a realistic platform for prosecution or sentencing. Statutory provisions are often limited to misdemeanors. Making applicable statutes “tougher”, as already proposed by a presidential candidate, is also problematic as it risks over-criminalizing management actions which occur in a complex environment and involve many individuals. Simple negligence is a problematic ground for criminal liability which generally requires a showing of intent or recklessness.8 As noted in regard to the VW scandal, “…investigations are ongoing. Whether criminal prosecutions result may be a matter of balancing suspicion of criminal wrongdoing against the standards of proof required - and the track record of recent prosecutions.9
All of the recent experience involving corporations were guilty pleas - the cases did not go to trial and so the standard of proof was not tested. In the BP cases, the DOJ made quite a splash with its indictments of individuals but clearly overreached in charging as the courts and juries quickly dismissed most cases and all felony charges.
Fukushima may be a bit of an oddity as the charges have been mandated by a citizen’s panel. The charge is “professional negligence” which probably does not have a direct analog in U.S. law. It does suggest that there will be scrutiny of the actual decisions made by executives which resulted in safety consequences. In the Flint cases, there will another attempt to review an actual safety decision. An engineer of the Michigan Department of Water Quality is charged with “misconduct” in authorizing use of the Flint water plant “knowing” it was deficient. Bears watching.
Competing Priorities and Culture Are Being Cited More Frequently
Personnel are already in a difficult position when it comes to assuring safety. Corporations inherently, and often quite intentionally, place significant emphasis on achieving operational and business goals. These goals at certain junctures may conflict with assuring safety. The de facto reality is that it is up to the operating personnel to constantly rationalize those conflicts in a way that achieves acceptable safely. Those decisions are rarely obvious, may imply significant benefits or costs, and are subject to ex post critical review with all the benefits of time, hindsight, and no direct decision making responsibility. Thus the focus may shift from decisions to the culture that may have produced or rationalized those decisions.
The Mine Safety and Health Administration report concluded that the [Upper Big Branch] disaster was "entirely preventable," and was caused in part by a pattern of major safety problems and Massey's efforts to conceal hazards from government inspectors, all of which "reflected a pervasive culture that valued production over safety.” The Governor of West Virginia’s independent review also found that Massey had “made life difficult” for miners who tried to address safety and built “a culture in which wrongdoing became acceptable.”
As noted in the media, “the automotive industry is caught up in an emissions rigging scandal that exposes systematic cheating and an apparent culture of corrupt ethics." At VW nine executives so far have been suspended but blame has been focused on a small group of engineers for the misconduct, and VW contends that members of its management board did not know of the decade-long deception. The idea that a few engineers are responsible “just doesn’t pass the laugh test,’ said John German, a former official at the Environmental Protection Agency…its management culture — confident, cutthroat and insular — is coming under scrutiny as potentially enabling the lawbreaking behavior.10 Mitsubishi Motors is also implicated and investigations are being launched into their peers – including Daimler and Peugeot – to assess the extent of the problem around the world.
Ineffective Regulation is Becoming a Focus
Last but perhaps the most intriguing evolution in these cases is a new emphasis on the responsibility of the regulator when safety is compromised. There was an extensive and ongoing history of violations at Big Branch Mine, many unresolved, but which did not lead to more stringent enforcement measures by the Mine Safety and Health Administration (MSHA) - such as a shutdown of mine operations. State of West Virginia investigators claimed that the U.S Department of Labor and its MSHA were equally at fault for failing to act decisively after Massey was issued 515 citations for safety violations at the UBBM in 2009. “…officials with the MSHA repeatedly defended their agency’s performance. They were quick to point to the fact that the Mine Safety Act places the duty for providing a safe workplace squarely on the shoulders of the employer, insisting that the operator is ultimately responsible for operating a safe mine.” 11
Similar concerns have arisen with regard to Fukushima where safety regulators have been perceived to lack independence from nuclear plant operators. And thinking back to Davis Besse, it seems that the NRC’s actions could have been more intrusive and proactive in determining the condition of the RPV head prior to allowing the inspections to be delayed.
With regard to Flint we noted above that criminal (felony) charges have been brought against a state engineer for “misconduct in office” for authorizing use of the Flint plant. In addition, he and a supervisor are also charged with misconduct in office for “willfully and knowingly misleading the federal Environmental Protection Agency…” An expert in environmental crimes notes ”It’s extremely unusual and maybe unprecedented for state and local officials to be charged with criminal drinking water violations, . . .” 12
Whether these pending actions lead to a robust effort to hold regulators and their staff accountable is hard to know. It bears watching, particularly the contention by MSHA and other regulatory agencies including the NRC, that operators are primarily and ultimately responsible. In Part 3 we’ll share some thoughts on what might other approaches might be effective.
1 P. Loftus, "Criminal Trials of Former Health-Care Executives Set to Begin," The Wall Street Journal (May 22, 2016).
2 The Davis Besse case is prototypical of the way cases were handled in the past. The corporation pleaded guilty to making false statements and paid a big fine. Lower level individuals were found guilty of similar charges. In the Siemaszko trial the court was quite ready to attribute to the defendant knowledge of the content of NRC communications, whether directly prepared by him or not, or acquiescence in materials drafted by others that misrepresented conditions for the RPV. They also dismissed his contention that he lacked proper expertise. The court found that he knew and had a motive - keeping the plant running. There was testimony that higher management was the source of the operational pressure but culpability did not extend beyond the individuals making the actual statements and submittals to the NRC.
3 Transocean Deepwater Inc. also admitted that members of its crew onboard the Deepwater Horizon, acting at the direction of BP’s Well Site Leaders were negligent in failing fully to investigate clear indications that the well was not secure and that oil and gas were flowing into the well. Halliburton was the supplier of drilling cement to seal the outside of the drilling pipe. Its guilty plea admitted destroying evidence of instructions to employees to “get rid of” simulation analyses of the event that failed to show that Halliburton’s recommendations to BP would have lowered the risk of a blowout. [S. Mufson, "Halliburton to Plead Guilty to Destroying Evidence in BP Spill," The Washington Post (July 25, 2013).] This was an attempt to show that a decision by BP to use fewer pipe centralizers was a serious error contributing to the accident.
4 A. Viswanatha, "U.S. Bid to Prosecute BP Staff in Gulf Oil Spill Falls Flat," The Wall Street Journal (Feb. 27, 2016).
6 “Large punitive or compensating settlements, so the argument goes, act as an effective deterrent for mining companies, forcing them to improve their safety systems or face potentially debilitating fines. However, given the revelations about Massey and the several major US mining disasters that have taken place in the last ten years, it's impossible to argue that financial punishment has been a wholly effective scarecrow, especially when companies feel they can game the MSHA system.” [C. Lo, "Upper Big Branch: the search for justice," Mining-technology.com (June 20, 2013).]
7 "To this point, research on corporate crime has been, for the most part, overlooked by mainstream criminology. In particular, corporate violations of safety regulations in the coal mining industry have yet to be studied within the field of criminology.” [C. N. Stickeler, "A Deadly Way of Doing Business: A Case Study of Corporate Crime in the Coal Mining Industry," University of South Florida (Jan. 2012).]
8 “carelessness which is in reckless disregard for the safety or lives of others, and is so great it appears to be a conscious violation of other people's rights to safety. It is more than simple inadvertence, but it is just shy of being intentionally evil.” Read more: http://dictionary.law.com/Default.aspx?selected=838#ixzz41W5CGRf0.
9 J. Ewing and G. Bowley, "The Engineering of Volkswagen’s Aggressive Ambition," The New York Times (Dec. 13, 2015).
11 The quote is from the case study and references the Governor’s investigation - McAteer, J. D., Beall, K., Beck, J. A., Jr., McGinley, P. C., Monforton, C., Roberts, D. C., Spence, B., & Weise, S. (2011). Upper Big Branch: The April 5, 2010, explosion: A Failure of Basic Coal Mine Safety Practices (Report to the Governor).
12 M. Davey and R. Perez-Pena "Flint Water Crisis Yields First Criminal Charges," New York Times (April 20, 2016).