Articles

Par Hawaii Refining warning letter and lessons learned

 

October 12, 2024

 

PRESENTED BY COMPLYX

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On August 23, 2024, the Pipeline and Hazardous Materials Safety Administration (PHMSA) issued a warning letter to Par Hawaii Refining LLC, highlighting probable violations discovered during an inspection of the company's Drug and Alcohol (D&A) program. The inspection, conducted between April 10 and June 5, 2024, identified non-compliance with Title 49 of the Code of Federal Regulations (CFR). This article outlines the regulatory issues identified and provides recommendations to prevent similar occurrences.

 

1. Failure to Conduct Required Drug and Alcohol Background Checks

 

Regulatory Citation: 49 CFR § 40.25(a)(1)

 

The first violation pertains to Par Hawaii’s failure to obtain drug and alcohol testing records for employees who were either newly hired or transferred into safety-sensitive roles. Section 40.25(a)(1) of Title 49 CFR mandates that employers request drug and alcohol testing information for any employees starting safety-sensitive duties. This information must cover the previous two years and is contingent on the employee providing written consent.

 

Details of the Issue: Par Hawaii did not obtain the required consent or request the relevant background checks for multiple employees, as revealed by their 2022 Management Information System (MIS) report. Three employees who were hired and subjected to pre-employment drug testing had no corresponding records, and the same failure was noted for trainees later transferred into safety-sensitive positions.

 

Lessons Learned and Prevention Tips

 

Documentation: Ensure that written consent forms are obtained from all employees hired or transferred into safety-sensitive positions. The request for background checks must be documented and maintained for auditing purposes.

 

Standard Operating Procedures (SOPs): Employers should implement clear SOPs to ensure that background checks are initiated as soon as an employee is considered for a safety-sensitive role. A checklist or automated system could ensure compliance with § 40.25.

 

2. Mismanagement of the Random Drug Testing Pool

 

Regulatory Citation: 49 CFR § 40.347(b)(2)

 

The second issue identified involved the inclusion of employees who were not covered by PHMSA regulations in the same random drug testing pool as those who were. Section 40.347(b)(2) clearly prohibits mixing non-DOT-covered employees with DOT-covered employees in the random selection pool for drug testing.

 

Details of the Issue: Par Hawaii's third-party administrator (TPA) failed to differentiate between DOT-covered and non-DOT-covered employees when conducting random drug testing. In 2023, Par Hawaii incorrectly reported 138 covered employees for random drug testing, whereas only 67 employees should have been classified as covered under PHMSA regulations.

 

Lessons Learned and Prevention Tips

 

Segregation of Testing Pools: Companies must ensure that only employees performing safety-sensitive functions, as defined under § 199.3, are included in the PHMSA-covered testing pool. Clear communication with TPAs is essential to maintain compliance with these regulations.

 

Regular Audits: Conduct internal audits of employee classifications and random drug testing pools to verify that only eligible employees are included. This would help avoid the risk of including non-DOT employees and violating § 40.347(b)(2).

 

Regulatory and Financial Implications

 

PHMSA's enforcement powers, under 49 U.S.C. § 60122 and 49 CFR § 190.223, authorize the agency to impose civil penalties for violations of pipeline safety regulations. For violations occurring in 2023, the maximum penalty can be as high as $266,015 per violation, per day. While no penalties were assessed in this case, the warning letter emphasized the potential for future enforcement actions if these issues are not corrected.

 

Key Takeaways for Pipeline Operators

 

  • Employee Background Checks: Always secure written consent and request the drug and alcohol testing records from previous employers for the past two years before allowing an employee to perform safety-sensitive functions.
  • Testing Pool Management: Random testing pools should be meticulously managed, ensuring that only DOT-covered employees are part of the selection pool. Use separate pools for non-DOT employees.
  • Internal Reviews: Regularly review drug and alcohol testing protocols and employee classifications to ensure compliance with federal regulations.
  • Training and Awareness: Both management and TPAs should be thoroughly trained in PHMSA regulations to avoid misclassification and procedural errors.

 

By addressing these common issues proactively, operators can avoid costly penalties and enhance the overall safety of their operations.