The Lesson Of Sago

Jeff Milchen

January 06, 2006

Jeff Milchen directs  ReclaimDemocracy.org, a non-profit organization working to restore citizen authority over corporations.

After 12 of 13 workers trapped in the Sago coal mine were found dead, the Bush administration issued predictable promises to conduct a full investigation and take “necessary steps to ensure that this never happens again.”    
 
Bush officials could learn a lot about how to improve mine safety by talking with any miner for just a few minutes. But the most crucial step to prevent tragedies like Sago has less to do with mining than with the norms of corporate behavior. To prevent future mining accidents, we must change the cost-benefit analysis corporate executives employ on workplace safety.

Consider how this cost-benefit approach played out for the Sago mine. Last year alone, the mine received a whopping 205 citations from the government agency that regulates mines for safety violations. Many citations handed out by the Mine Safety and Health Administration (MSHA) were for breaking ventilation rules that exist specifically to prevent explosions like the one that doomed the Sago miners. In the last quarter of 2005, inspectors cited 18 “serious and substantial” violations capable of causing major injuries or deaths.

Mining is a notoriously dangerous occupation. The injury rate at the Sago mine tripled the national average, and more than a dozen serious roof falls —in which huge slabs of the mine roof simply collapsed—were recorded. But the Bush administration never closed the mine to force correction of unsafe working conditions.

Instead, MSHA simply continued issuing fines and the managers at then-owner Anker Mining Co. simply paid (most of) them while continuing to break laws. Why pay the fine rather than abide by the law? Because it made financial sense: The total fines for those 205 violations total about $25,000 and the highest fine imposed for a repeated and serious violation was $878.

Now consider that the quarterly earnings recently reported  by International Coal Group, owner of Sago mine since last November, were $158 million. The heftiest fine levied against ICG in 2005 equals less than one minute of ICG’s income. This kind of weak penalty is akin to speed limits and drunken driving laws being “enforced” with fines of a few nickels.

Like drunk or reckless drivers, most corporate executives would never break the law deliberately if they knew action X would cause the deaths of persons one through 12. But because of the nature of corporations, that’s never the case. The structure of most corporations separates decision-making power from accountability for those decisions. Executives are expected to decide whether to correct safety problems by weighing economic costs against benefits, not by considering the human impact of their decisions.

At Sago, it seems management performed the same calculations their counterparts at General Motors, Ford and Firestone, and many other corporations have used many times in the past. When money saved by flouting safety rules far outweighs the cost of minuscule fines and the occasional court settlement, corporations often will choose to endanger workers, customers or all of us.

The Bush administration reflexively blames “bad apples” rather than address a broken system and its own role in perpetuating it, but Rep. Major Owens, D-New York, was on target when he noted last year, "the federal government is itself guilty of gross negligence in efforts to deter corporate manslaughter.”

Rather than solving that problem, Bush and Congress continue to exacerbate it. The 2006 budget for MSHA cuts $5 million in real dollars, requiring further cuts to an agency that already has reduced staffing by 170 workers since 2001. And Bush’s nominee to head the MSHA, Richard Stickler, is a former mine manager with an abysmal safety record. Since Bush took office, 17 proposed MSHA standards to protect miners’ safety and health were discarded.

If the Bush administration wants its promises to mean something, replacing Stickler’s nomination with someone who has demonstrated real interest in protecting workers’ lives is crucial. The agency already has lost dedicated people due to mission drift.

In an interview with TomPaine.com earlier this week, Celeste Monforton, former special assistant at the MSHA under the Clinton administration, said she left a year after Bush took office because she “didn’t want to be a disgruntled employee.” She believed Bush appointees were focused on “trying to be a friend and partner to industry instead of protecting workers.”

As for congressional action, Rep. Owens plans to renew a push for the Wrongful Death Accountability Act, introduced unsuccessfully in the House and Senate in previous sessions. Among the bill’s provisions are making corporate manslaughter a felony offense and doubling the maximum punishment for lying to Occupational Safety and Health inspectors (up to one year in prison). Owens says he may broaden proposals to cover the MSHA.

Yet as the Corporate Crime Reporter noted  last month, Justice Department prosecutors increasingly are offering corporations deferred/non-prosecution deals rather than pursuing criminal charges, so change must extend well beyond Congress.

When the corporate media and wealthy interests sounded alarms over the financial losses borne by investors in the wake of the Enron scandal, government responded swiftly (if inadequately).  Forcing federal officials to change their political calculations and treat corporate crimes that kill as seriously as those harming investors will require a level of public outcry that dwarfs the response to Enron and Arthur Andersen scandals.

Perhaps the outrage over this mine disaster will prove the impetus to save the lives of other Americans. It’s not just to protect those toiling in mines. More U.S. workers are killed on the job in an average day than died in the Sago mine, and most of them just as needlessly.

Though the timing was unpredictable, the Sago tragedy is not rightfully called an accident. Only when corporate executives believe the consequences for willfully endangering workers’ lives are duly harsh—like prison sentences or severe fines—will events like Sago cease to be regular occurrences.