The Week in Ethics: Culture Kills — The Legacy of Massey Energy
When former CEO Don Blankenship left Massey Energy a year ago taking $12 million in severance, a consulting contract for two years, and hefty retirement and pension packages, he also left refusing to participate in federal investigations into his mine’s deadly explosion.
In April 2010, 29 miners died in Massey’s Upper Big Branch (UBB), the worst mining disaster in 40 years. Massey, under Blankenship, never accepted responsibility for the explosion and blamed the federal government.
On December 6, 2011, the U.S. Department of Mine Safety and Health Administration (MSHA) issued a 1,000 page report of its investigation into the UBB tragedy. Alpha Natural Resources, which bought Massey earlier this year, agreed to pay $209 million in penalties (civil, criminal and restitution) for Massey Energy’s role in the explosion. While criminal action won’t be pursued against Alpha, the settlement doesn’t cover Blankenship or other Massey managers.
The settlement agreement with Alpha includes that $80 million be spent to improve safety and infrastructure in UBB and all underground mines Alpha owns. while another $48 million will finance academic research on mine safety.
Also on December 6, MHSA fined Alpha $10.8 million, the largest penalty in agency history, and cited Massey’s corporate culture as the root cause of the tragedy. They issued 369 citations for violations, saying that Massey “promoted and enforced a workplace culture that valued production over safety, and broke the law as they endangered the lives of miners.”
Included in the findings are:
- Examples of systematic, intentional, and aggressive efforts by Massey to avoid compliance with health and safety standards
- Testimony management intimidated miners saying their raising safety issues jeopardized their jobs
- Advance notification to mine personnel of state and federal inspections
- Two sets of books kept regarding safety and health hazards concealing certain hazards
- Failure to perform required mine examinations adequately and remedy known hazards and violations
- Failure to provide adequate training
- Failure to take necessary precautions that would have prevented the April 5, 2010 explosion
Massey’s legacy is that its leadership — Blankenship and the board of directors — failed to follow laws or create a work climate that would have avoided the conditions that led to the explosion and loss of life. Whether or not criminal charges are brought against Blankenship or any members of its previous leadership, the report’s findings indicate Massey was run in a manner that put its employees and shareholders at risk.
In any risk management study its board addressed, culture was apparently overlooked as Massey’s leading vulnerability. Massey became another poster child proving that culture matters; when tone at the top, transparency, integrity, and building trust are subsumed by short-term profits, crisis inevitably ensues.
So, in this case, culture killed.
“The best tribute to the 29 Massey workers” who died, I wrote in an April 2010 column on Blankenship ” is that safety really becomes Massey’s top priority and that going forward, no one should ever be injured or die in a Massey mine from issues the company can prevent. There is no acceptable tolerance level for deaths in the workplace; to operate as if there is constitutes a failure of leadership.”
Small comfort to the 29 families and hundreds of people affected by the UBB tragedy, but it is a start.
Gael O’Brien December 7, 2011
Gael O’Brien is also a columnist for Business Ethics Magazine . Her latest column is “Campus Crises Highlight Risk Management Weaknesses”Culture, Ethical Behavior, Governance, Integrity, Leadership, Reputation, Tone at the Top, Transparency, Trust
Tags: Alpha Natural Resources, Corporate Culture, Don Blankenship, Massey Energy, MSHA Massey Investigationfinal, U.S. Department of MIne Safety and Health Administration, Upper Big Branch Mine ExplosionYou can comment below, or link to this permanent URL from your own site.