Why Did KMCO Get a High Industry Ranking In 2017 Despite Violations?

Operations remained suspended Wednesday at the KMCO plant in Crosby on orders of the Harris County Fire Marshal's office after Tuesday’s plant fire and explosion that cost 27-year-old James Earl “Bubba” Mangum his life and left two other men critically injured.  One of the men identified by channel 13 as Joe Peralez, underwent surgery at Memorial Hermann Hospital for severe burns.

KMCO released a statement at 3:30 p.m. Wednesday saying that they had been applying additional fire-fighting foam to tanks containing methanol and ethanol. They said the cause of the leak — being investigated by KMCO, regional, state and federal authorities – was still unknown.

According to its website, KMCO produces 900 million pounds per year of chemical products a year, including Glycol, antifreeze, brake fluid, as well as oil blends. According to KMCO’s Risk Management Plan, ethylene oxide is the most dangerous chemical on site, and is described as “flammable, toxic, and reactive.”

Prior to the majority stake acquisition in June 2012 by private equity firm Owner Resource Group, the Crosby plant was the subject of a number of lawsuits, fines, and violations from Harris County to the Occupational Safety and Health Administration to the Texas Commission on Environmental Quality. At that time, then-chairman Arthur McFerrin stated in an article for Chemicals-technoloy.com: “ORG brings additional capital and resources that will allow the company to improve upon the high quality products and services to which our customers are accustomed.”

With new president and CEO Jeff Foley at the helm, KMCO continued to incur fallout from an incident that occurred in 2011, prior to the acquisition, when falsified documents allowed for shortcuts in safety proceedings which resulted in one death and two injuries. The company was also cited for a chemical fire and violation of the Clean Air Act. In 2016, KMCO pleaded guilty to the 2011 violation and agreed to pay $3.5 million.

In regard to violations incurred after the 2012 acquisition of KMCO, Foley issued the following statement today:

“We self-reported all the violations and reportable incidents that we discovered after we took control of the facility. We did the right thing and the government fined us for it. But we remain committed to doing what’s right regardless of cost.”

In January 2016, in an effort to turn things around, KMCO began participation in the ChemStewards® program offered by the Society of Chemical Manufacturers & Affiliates.

According to their website, SOCMA is “Recognized as the voice of the specialty chemical industry.” The ChemStewards® program, created in 2005, is described as “An environmental, health, safety, and security management program designed to help your facility optimize its performance, save money, and enhance its role as a good corporate citizen in your community.”

In 2016, KMCO’s safety manager, Kelly Nidini told the Houston Chronicle that “The company had significantly upgraded its facilities since 2013, won multiple industry awards and was planning on investing millions, primarily for safety and environmental concerns.”

This program addressed all the areas where KMCO had fallen short over the years, a logical next step in turning the company around. Since employing this program, KMCO received two awards. Eight months into the program it was awarded the Silver Performance Improvement Award. A year later, in August 2017, it qualified for the program’s highest ranking, the Excellence Tier. In March of 2018, KMCO announced its re-certification with the program.

However, according to the Houston Chronicle, records show that in the past three years, KMCO has violated the Clean Air Act three times, the Clean Water Act seven times, and the Resource and Conservation Recovery act just last February. Unless they are all using completely different standards, why would SOCMA, an association self-labeled as the “leading voice” of the specialty chemistry industry, grant laurels to KMCO if at the same time?

SOCMA released the following statement today regarding the incident:

“SOCMA is actively monitoring events at the KMCO facility in Crosby, Texas. We commend the community of emergency responders, employees and local officials who tirelessly worked to contain and extinguish the fire to protect the surrounding community.

"Our thoughts and prayers are with all those affected, particularly the two workers who were injured, and our deepest condolences go out to the family who has lost a loved one.

“SOCMA represents companies in the specialty and fine chemical industry. Safety is a top priority for our members, and the association actively promotes processes to raise standards for workplace safety and compliance with regulations.

“We are awaiting official reports from governing authorities regarding the incident. These important findings will provide learnings to continually help improve the performance of the chemical industry. We will also continue to work with stakeholders to identify procedures and measures to safeguard our members’ operations and communities.”