Phillips 66 Company

Read the official release (oshrc.gov)

Plain-English summary

After an explosion and fire at a Phillips 66 petrochemical facility, OSHA alleged 566 willful general-duty-clause violations and proposed more than $5.6 million in penalties. A proposed settlement removed the willful classification, set a $4 million payment, and extended abatement schedules across several facilities for periods of roughly three to eight and a half years. A union representing affected employees objected to the extended abatement periods, but the judge approved the agreement without proof that the executed agreement had been served on the union and before the full objection period expired. The Commission set aside the approval and remanded for evidence and findings on the permissible scope and merits of the union's abatement objections. It also required any later settlement approval to comply with service rules and to address the relationship between the two consolidated dockets.

Decision snapshot

• Cited standard(s): 29 U.S.C. § 654(a)(1)
• Outcome: Settlement approval was set aside and both consolidated cases were remanded for expedited proceedings.
• Key point: An authorized employee representative must receive the executed settlement and the full objection period before a judge approves extended abatement terms.

Full text (OSHRC public release)

Docket No. 90-1271_90-1549

SECRETARY OF LABOR,

Complainant,

v.

PHILLIPS 66 COMPANY,

Respondent.

OIL, CHEMICAL AND ATOMIC WORKERS

INTERNATIONAL UNION, LOCAL 4-227,

Authorized Employee

Representative.

Docket No. 90-1271 & 90-1549

(Consolidated)

DIRECTION FOR REVIEW AND ORDER

An order of Administrative Law Judge Louis G. LaVecchia
approving a settlement agreement between the Secretary of Labor and Respondent, Phillips
66 Company ("Phillips"), is hereby directed for review under section 12 (j) of
the Occupational Safety and Health Act of 1970, 29 U.S.C. � 651-78 ("the Act"),
and Commission Rule 91 (a), 29 C.F.R. � 2200.91 (a). For the reasons that follow, we set
aside the judge's order and remand for further proceedings.

Following an explosion and fire at Phillips' petrochemical
facility in Pasadena, Texas, the Secretary, through the Occupational Safety and Health
Administration ("OSHA"), conducted a lengthy inspection resulting in the
issuance of a citation setting forth detailed and complex allegations of violations of
section 5 (a) (1) of the Act, 29 U.S.C. � 654 (a) (1). These allegations were repeated
individually and separately for each of the 566 employees alleged to be exposed to the
hazard of fire and explosion at that facility, and each of the 566 violations were alleged
to be willful. The Secretary sought penalties in the amount of $5,660,000 for the
violations of section 5 (a) (1). The Secretary further alleged serious violations of
standards promulgated under the Act, for which she proposed an additional penalty of
$6,200. Phillips contested all the citations in their entirety. Thereafter, the Secretary
and Phillips entered into a settlement agreement, and Judge LaVecchia approved that
settlement in his order which is now before us.

The settlement agreement essentially: 1) deletes the alleged
willful characterization, 2) slightly reduces the penalty to be paid by Phillips, and 3)
greatly extends the abatement periods for the violations. While the maximum abatement
period specified in the citations and the Secretary's complaint was approximately ten
months, the settlement agreement creates a graduated abatement schedule for several
different Phillips worksites, including worksites other than the facility involved in the
inspection and citations at issue here. Depending on the worksite, the prescribed
abatement period varies from approximately three years to eight and one-half years from
the date of a final Commission order.

The Secretary served a copy of the proposed settlement
agreement on the labor unions representing Phillips' employees by facsimile transmission
on August 21, 1991, only one day before the agreement was executed by the Secretary and
Phillips. On August 23, 1991, the executed agreement was filed with the judge's office by
mail and was received by the judge on August 20, 1991. The judge approved the agreement in
an order dated September 5, 1991. There is no indication that the executed agreement was
served on any of Phillips' unions.

On August 30, 1991, Local 4-227 of the Oil, Chemical and Atomic
Workers International Union ("union"), one of the collective bargaining
representatives for Phillips' employees, wrote to the Commission as follows:

Please be advised that we received the proposed settlement
agreement...on August 21, 1991 and vigorously object to its entry.

On behalf of the [union], we object to the manner in which this
is being settled. We have had insufficient time to study the document at length and
further, object to:

1. The fact that the fines have been lowered;

2. A deletion of the willful violation findings;

3. The period of time with which Phillips is allowed to abate; and

4. Any further objections we may have to the findings once we have sufficient time to
   review our copy.

We construe this letter as a petition for discretionary review
of the judge's order under Commission Rule 91 (b), 29 C.F.R. � 2200. 91 (b), which
provides that "[a] party adversely affected or aggrieved by the decision of the Judge
may seek review by the Commission by filing a petition for discretionary review."

It is well-settled that employees or their representatives, may
object to settlement agreements solely on the ground that the abatement period specified
in the agreement is unreasonable. General Electric Co., 14 BNA OSHC 1763, 1765,
1987-90 CCH OSHD � 29,072, p. 38,849 (No. 88-2265, 1990). Since the union here is raising
such an objection, and this is a significant case in which the parties to the settlement
agreement have sought to greatly extend the abatement periods, we direct review in order
to consider that objection. [[1]] Because Judge LaVecchia did not rule on the union's
objections to the settlement agreement, and the objections raise factual issues regarding
the reasonableness of the extended abatement periods set forth in the settlement
agreement, we remand for development of the necessary factual record and determination of
the merits of the union's objection to the abatement periods prescribed by the settlement
agreement.

Furthermore, neither the parties to the settlement agreement
nor Judge LaVecchia acted in accordance with the Commission's rules and case law regarding
the procedures for allowing employees or their representatives to raise objections to
settlement agreements. Rule 100 (c), 29 C.F.R. � 2200.100(c), provides, in pertinent
part, as follows:

When a settlement agreement is filed with the Judge or the
Executive Secretary, proof of service shall be filed with the settlement agreement,
showing service upon all parties and authorized employee representatives... If the time
has not expired under these rules for electing party status, or if party status has been
elected, an order terminating the litigation before the Commission because of the
settlement shall not be issued until at least ten days after service to consider any
affected employee's or authorized employee representative's objection to the
reasonableness of any abatement time.

The purpose of this rule is to ensure that employees or their
representatives have the opportunity to present, and to have the judge consider, any
objections they may have to the reasonableness of the abatement period in the settlement
agreement before the agreement is approved. General Electric, 14 BNA OSHC at 1764,
1987-90 CCH OSHD at p. 38,849.

The record here fails to show that the executed copy of the
settlement agreement was served on the union. [[2]] Furthermore, even assuming the union
had been properly served, Judge LaVecchia failed to afford the union the full 10-day
period prescribed by Rule 100 (c) for the filing of objections to the abatement period.

Under the Commission's rule regarding the computation of time,
the period in which the union could file objections with the judge did not expire until at
least September 9, 1991, and would not have expired until September 12, 1991 had the union
been served by mail as was the judge. [[3]] Therefore, not only did the judge err by
approving the settlement agreement in the absence of proof of service of the executed
agreement on the union, but he also denied the union the opportunity to make known its
objections to the settlement agreement in a manner consistent with the Commission's
rules.[[4]]

We further note additional aspects of these cases that warrant
the attention of the parties and the judge on remand. The Secretary has filed a motion
requesting that the Commission remand these proceedings for the reasons that the union has
raised an objection cognizable under the Act and the judge issued his order prematurely,
grounds which we have addressed in this order. In that, motion, however, the Secretary
also contends that the union has standing to challenge the extended abatement periods only
for the particular worksite at which the inspection occurred. In the Secretary's view, the
union may not object to the abatement periods prescribed in the settlement agreement for
facilities that were not cited by the Secretary. We express no opinion on the merits of
that contention at this time. On remand, the parties may present their arguments to the
judge regarding the permissible scope of the union's objection to the time for
abatement.[[5]]

In addition, although technically there are two consolidated
cases before us at this time, Phillips' contest of the citations issued as a result of
OSHA's inspection of the Pasadena facility, where the fire and explosion occurred,
constitutes only one docket number, 90-1549. OSHA, nonetheless, also issued citations at
another Phillips worksite known as the "Sweeny Complex," and these other
citations are currently pending before Judge LaVecchia in docket no. 90-1271. The
"Sweeny Complex" is one of the additional worksites encompassed in the
settlement agreement at issue. Accordingly, regardless of the merits of the Secretary's
argument that the union is not entitled to challenge the abatement dates set forth in the
settlement agreement with respect to the Sweeny plant, the union conceivably may be
entitled to dispute the abatement dates prescribed for the violations at issue in docket
no. 90-1271.[[6]]

Judge LaVecchia previously granted the parties' joint motion to
consolidate this proceeding with docket no. 90-1271. In order for any settlement agreement
that may be approved on remand in docket no. 90-1549 to take effect, the two cases will of
necessity have to be severed. Similarly, to the extent any settlement agreement approved
in docket no. 90-1549 alone also disposes of any citation items at issue in docket no.
90-1271, those items would have to be severed from docket no. 90-1271 so that the
settlement agreement could properly become a final order. See R & R Builders, Inc.,
14 BNA OSHC 1844, 1987-90 CCH OSHD � 29,105 (No. 88-282, 1990) (discussion of severance
of citation items). On the other hand, the parties are of course free to enter into a
single settlement agreement disposing of both docket numbers, in which event consolidation
would continue to be appropriate.

We therefore instruct the judge on remand as follows: the judge
is to issue a ruling on the extent to which the union may challenge the abatement periods
specified in the settlement agreement after affording the parties, including the union, an
opportunity to be heard on that question. Once the judge determines the permissible scope
of the union's objections, the judge is then to make findings on the merits of those
objections based on an appropriate evidentiary record. If he determines that the union's
permissible objections are meritorious and that an abatement period shorter than that
provided in the settlement agreement is appropriate, he is to enter an order disapproving
the settlement agreement. On the other hand, if the judge finds that the abatement periods
the union may properly dispute are reasonable, he is to approve the agreement. In that
event, or in the event the Secretary and employer submit another settlement agreement to
which the union does not object, the judge shall determine an appropriate disposition of
docket no. 90-1271 in accordance with our remarks above. Finally, we emphasize that any
subsequent settlement agreement submitted to the judge must be in compliance with the
service requirements of Rule 100(c) and that any order by the judge approving such an
agreement must afford the union the full 10-day period for making objections prescribed by
Rule 100(c).

Accordingly, these cases are remanded for further proceedings consistent with this
opinion. We also order that further proceedings be expedited, pursuant to Rule 103, 29
C.F.R. � 2200.103.

Edwin G. Foulke, Jr.

Chairman

Donald G. Wiseman

Commissioner

Velma Montoya

Commissioner

Dated: September 25, 1991

LYNN MARTIN, Secretary of Labor,

United States Department of Labor,

Complainant,

v.

PHILLIPS 66 COMPANY,

Respondent.

OSHRC Docket

No. 90-1549

ORDER APPROVING SETTLEMENT AGREEMENT

A Stipulation and Settlement Agreement has been filed in this
case which disposes of all issues pending before the Review Commission. Upon
consideration, it is ORDERED:

1. The Stipulation and Settlement Agreement is approved and its
   terms are incorporated into this Order.

2. The citations are affirmed as modified in that Agreement.

Dated this 5th day of September, 1991.

JUDGE

LYNN MARTIN, Secretary of Labor,

United States Department of Labor,

Complainant,

v.

PHILLIPS 66 COMPANY,

Respondent.

OSHRC Docket

No. 90-1549

STIPULATION AND SETTLEMENT AGREEMENT

Phillips 66 Company ("Phillips") and Lynn Martin,
Secretary of Labor, United States Department of Labor ("Secretary" or
"OSHA"), in settlement of the captioned case, pursuant to 29 C.F.R. � 2200.100,
hereby agree to the following. This Agreement disposes of any and all issues contained in
that case.

1. To supplement and enhance existing safety practices and
   procedures, Phillips agrees to implement process safety management procedures at its
   Houston Chemical Complex ("HCC") pursuant to the terms of this Agreement. The
   goal of the process safety management system is to prevent the incidence and mitigate the
   consequences of uncontrolled releases of highly hazardous chemicals. The process safety
   management system shall: (1) provide a systematic approach to identifying, evaluating, and
   controlling hazards in the processes listed herein; (2) provide a management structure to
   address the findings of the process hazard analysis; (3) recommend corrective action; and
   (4) confirm and document completion or other disposition of recommended corrective
   actions. The core component of the process safety management system at HCC shall be a
   process hazard analysis for each process that has the potential for an uncontrolled
   release of highly hazardous chemicals, and separate process safety management analyses to
   assess factors bearing on the overall safety of the HCC. The processes subject to this
   Agreement are as follows: (1) polyethylene units; (2) developmental unit; (3)
   polypropylene unit; (4) K- Resin unit; and (5) neohexene unit.

2. The process hazard analysis shall be conducted by Phillips
   or under its direction utilizing a methodology that will best address the hazards of the
   particular process at issue. The process hazard analysis shall include, but not be
   confined to, (1) a human factors analysis of working conditions that may adversely impact
   the safety performance of HCC personnel and potentially contribute to accident event
   sequences, and (2) an analysis of the safety effectiveness of process hardware, piping,
   valving, and instrumentation, especially during maintenance operations or upset/emergency
   conditions. The process hazard analysis shall be performed by individuals with expertise
   in engineering and in process operations. The team shall include at least one person with
   experience and knowledge specific to the hazard or process under evaluation, and be led by
   an independent consultant. Such independent consultant has been retained by Phillips.

3. In addition to the process hazard analysis, Phillips will
   address the following issues in separate process safety management analyses to ensure that
   these areas conform with applicable OSHA standards or generally accepted industry
   practices: (a) the adequacy of its safety permit and hot work permit procedures, including
   enforcement; (b) compliance with OSHA's standard regarding lockout/tagout of energy
   sources during maintenance operations; (c) proper classification of hazardous locations
   and control over the introduction of ignition sources into such hazardous locations; (d)
   contingency planning for upset conditions and emergency response planning; (e) upset and
   emergency condition detection systems, and systems to mitigate the scale of hazardous
   chemical releases; (f) the siting, separation, design and configuration of physical
   facilities and equipment to ensure that the facilities are designed, maintained,
   inspected, tested and operated in a safe manner; (g) the training of operators,
   technicians, and maintenance personnel, including HAZCOM training; (h) the safety of
   existing Standard Operating Procedures and maintenance procedures; and (i) the assignment
   of authority and responsibility to identify and correct hazardous conditions.

4. Phillips agrees that the process safety management system
   will promptly address the findings of each process hazard analysis and process safety
   management analysis and develop appropriate recommendations. This management system shall
   (1) implement and document any actions taken pursuant to the process hazard/process safety
   management analyses; (2) communicate such actions to operations, maintenance or other
   personnel who work in the facility, including contractor employees whose working
   conditions are affected by the findings and recommendations of an analysis; and (3) assure
   that all corrective action is implemented according to this Agreement. Phillips management
   will prepare written responses to each process hazard analysis. If, upon consideration of
   the recommendations contained in the process hazard analysis, management determines that
   corrective action is required, that action will be taken. If management disagrees with a
   hazard assessment or recommendation contained in a process hazard analysis, the written
   response shall explain and justify the disagreement.

5. Within thirty (30) days after execution of this Agreement,
   Phillips shall provide the OSHA Houston Area Office with the name of a management contact
   person for HCC. The management contact person shall meet with the OSHA Houston Area
   Director within sixty (60) days thereafter, and as necessary to review actions planned or
   undertaken by HCC pursuant to this Agreement. Such meetings can be requested by OSHA or
   Phillips.

6. Phillips agrees to provide the OSHA Houston Area Office with
   a certified copy of the process hazard/process safety management analyses and any
   management responses thereto, and to review with OSHA any comments or recommendations it
   may have upon request.

7. Phillips agrees to conduct the process hazard/process safety management analyses
   required by this Agreement, provide copies of such analyses and management responses to
   OSHA, and address any recommended corrective actions contained in or arising from such
   analyses, in accordance with the following schedule:

Task
Completion Date

1.
Identify process hazard/process safety

management analysis staff.
30 days from date of final

Commission Order

2.
Complete process hazard/process

safety management analyses.
1 year from same

3.
Provide OSHA Houston Area Office

with process hazard/process safety

management analyses.
I year from same

4.
Provide OSHA Houston Area Office

with management responses.
30 days from completion of

analyses

5.
Complete actions recommended by

process hazard/process safety

management analyses.
As soon as practicable, but

within 2 years from completion

of Step 2

8. If the schedule contained herein cannot be met, OSHA will not unreasonably deny a
   timely-filed petition for modification of abatement. 29 C.F.R. � 1903.14a.

9. Phillips further agrees that on or before the scheduled
   completion date for each numbered task in Paragraph 7 above, it will transmit written
   verification to the OSHA Houston Area Office that the task has been completed as
   scheduled.

10. Phillips further agrees to provide to OSHA an evaluation,
    to be conducted by an independent consultant, of the adequacy of settling leg maintenance
    procedures performed while polyethylene reactors are in operation. This evaluation will be
    forwarded to the OSHA Houston Area Office no later than six (6) months from the date of a
    final Commission Order.

11. If OSHA disagrees with Phillips' determination of (1) the
    assessment of a process safety hazard, (2) the need for corrective action, or (3) an
    appropriate time frame for executing corrective action, OSHA will state its points of
    disagreement, and the reasons therefor, in writing so that Phillips may review them. OSHA
    and Phillips will then engage in good faith discussions to resolve the disagreement. This
    paragraph shall not limit OSHA's right to use, as appropriate, enforcement methods
    provided by the OSH Act.

12. Phillips agrees to develop and maintain a compilation of
    written safety information to enable Phillips and all exposed employees, including
    contractor employees, to identify and understand the specific hazards posed by the
    processes involving highly hazardous chemicals present at HCC. This safety information
    will be communicated to all exposed employees, including contractor employees, and shall
    describe the hazards of the highly hazardous chemicals used in the process, as well as
    information pertaining to the equipment and technology involved in the process. In
    addition, Phillips agrees to develop and implement written operating procedures to provide
    clear instructions for safely conducting process and maintenance operations consistent
    with the process safety information it develops. The steps required by this paragraph
    shall be completed within 90 days of the completion of the process hazard/process safety
    management analyses required under � 7.

13. Phillips agrees to train each employee involved in a
    covered process or maintenance operation in an overview of the process and in pertinent
    operating procedures for that process. The training will emphasize the specific safety and
    health hazards of the process, and safe operating procedures and practices applicable to
    the process. Refresher and supplemental training shall be provided at least annually in
    the event the process does not undergo significant change, or concomitantly with any
    process change or modification to ensure understanding and adherence to the current
    operating procedures of the process or maintenance operation. Such training will be
    completed prior to assigning an employee to a process or maintenance operation.

14. Phillips agrees to inform any contractor performing work
    on, or near, a process, of the known potential fire, explosion or toxic release hazards
    related to the contractor's work and the process, and ensure that contractor employees are
    trained in the work practices and emergency procedures necessary to safely perform their
    job.

15. Phillips will implement a process safety management system
    at its Borger Refinery & NGL Process Center, Philtex/Ryton Complex, Sweeny Refinery
    & Petrochemical Complex, and Woods Cross Refinery in accordance with the terms and
    timetable provided in Appendix "A," which is incorporated herein by reference.

16. All documents or other information made available by
    Phillips under this Agreement shall be handled in accordance with Section 15 of the OSH
    Act, 29 U.S.C. � 644, 18 U.S.C.� 1905, and 29 C.F.R. � 1903.9. Phillips will have the
    obligation to identify the document, information, or portion thereof that contains
    proprietary or confidential information.

17. OSHA agrees not to issue citations to Phillips for any
    working conditions identified in the process hazard analysis or any other analysis
    required by this Agreement, provided such conditions are being or will be addressed in
    good faith in accordance with this Agreement (including correction, if necessary).
    Phillips agrees to allow OSHA access to HCC to determine progress and compliance with this
    Agreement. OSHA agrees that, assuming good-faith implementation of this Agreement by
    Phillips, it shall not conduct general schedule inspections, except that OSHA may conduct
    monitoring inspections to determine compliance with this Agreement. OSHA retains the right
    to conduct all other types of inspections permitted under the OSH Act.

18. No later than six (6) months following Phillips'
    verification that it has completed all of the actions enumerated in Paragraphs 1 through
    14 of this Agreement, OSHA shall return to Phillips all copies of Phillips' process hazard
    analyses, written management responses, and other safety analyses. OSHA shall not
    thereafter retain any such copies.

19. OSHA amends Citation No. 1, Inspection No. 106612433 issued
    April 19, 1990, to delete any characterization of the alleged violations contained
    therein.

20. Phillips agrees to pay the amount of FOUR MILLION DOLLARS
    ($4,000,000.00) in settlement of Citations Nos. 1 and 2, as amended, Inspection No.
    106612443 issued April 19, 1990, within thirty (30) days of a final Order of the
    Commission.

21. The parties agree that this Settlement Agreement shall
    become the final Order of the Commission and an agreed Order is attached hereto. The terms
    hereof shall be subject to enforcement under � 11(b) of the Act. Phillips consents to the
    entry of such an Order by the Circuit Court of Appeals.

22. The parties agree that the Citation as amended and
    Notification of Proposed Penalty, Complaint, Answer, Stipulation and Settlement Agreement,
    Phillips' Notice of Contest, Phillips' failure to continue to contest, Phillips' abatement
    of the alleged violations, Phillips' payment provided herein and the Commission's Final
    Order entered herein shall not constitute any evidence or admission on the part of
    Phillips of any violation of the Occupational Safety and Health Act or regulations or
    standards promulgated thereunder. None of the foregoing shall be admitted into evidence,
    in whole or in part, in any proceeding or litigation in any court, agency or forum, except
    in proceedings brought directly under the Act by the Secretary. The contents of the
    Stipulation and Settlement Agreement are for the exclusive benefit of the parties hereto,
    and none of the foregoing constitute evidence or an admission on the part of Phillips that
    any of the conditions alleged in the Citations or Complaint existed or were a cause,
    proximate or otherwise, of any accident, or damages, if any, resulting therefrom. Phillips
    is entering into this Settlement Agreement without any prejudice to its rights to raise
    any defense or argument in any future or pending cases before the Commission or in any
    other proceedings, including but not limited to the right to assert that any future
    conditions identical or similar to those alleged in the original Citations or the
    Complaint do not violate the Occupational Safety and Health Act or any standard
    promulgated thereunder. By entering into this Settlement Agreement Phillips does not admit
    the truth of any alleged facts, any of the characterizations of Phillips' alleged conduct
    or any of the conclusions set forth in the Citations or Complaint issued in this matter
    regarding the standards cited therein.

23. Phillips certifies that the names and addresses of all
    authorized employee representatives of affected employees are:

Oil, Chemical and Atomic Workers

International Union, AFL-CIO

Local Union No. 4-227 (clerical group)

F.G. Bunch

Oil, Chemical and Atomic Workers

International Union, AFL-CIO

Local Union No. 4-227(clerical group)

Joe Campbell

Oil, Chemical and Atomic Workers

International Union, AFL-CIO

Local Union No. 4-227 (plant group)

B. G. Martinez

Oil, Chemical and Atomic Workers

International Union, AFL-CIO

Local Union No. 4-227 (plant group)

Joe Campbell

International Brotherhood of Electrical Workers

Local Union No. 716

G. G. Welch

International Brotherhood of Electrical Workers, AFL-CIO

J. D. Muhl

Phillips further certifies that there are no other unions
representing affected employees except as set forth above.

24. The Secretary certifies that service of the fully executed
    Settlement Agreement was made on each authorized employee representative by facsimile
    transmission on August 21, 1991. Affected employees have not raised objections to the
    reasonableness of any abatement period specified herein.

25. Each party agrees to bear its own fees and other expenses
    incurred by such party in connection with any stage of this proceeding.

DATED August 22, 1991.

FOR PHILLIPS 66 COMPANY FOR U.S. DEPARTMENT OF LABOR

John VanBuskirk

Senior Vice President

ALAN C. McMILLAN

Deputy Assistant Secretary

Occupational Safety and Health Administration

Marion R. Froehlich

Counsel for Phillips 66 Company

ROBERT P. DAVIS Solicitor of Labor

JAMES E. WHITE

Regional Solicitor

JACK F. OSTRANDER

Counsel for Occupational Safety and Health

SUE ANN WOLFF

Senior Trial Attorney

BRIAN L. PUDENZ

JANICE L. HOLMES Trial Attorneys

APPENDIX "A" TO

STIPULATION AND SETTLEMENT AGREEMENT

BETWEEN PHILLIPS 66 COMPANY AND LYNN MARTIN,

SECRETARY OF LABOR, UNITED STATES DEPARTMENT OF LABOR

Phillips 66 Company ("Phillips") and Lynn Martin,
Secretary of Labor, United States Department of Labor ("Secretary" or
"OSHA"), hereby agree to the following:

1. Phillips agrees to implement a process safety management
   system at its Borger Refinery & NGL Process Center, Philtex/Ryton Complex, Sweeny
   Refinery & Petrochemical Complex, and Woods Cross Refinery. This system will be a
   comprehensive process safety management system which includes but is not limited to the
   steps described in the Agreement to which this Appendix "A" is attached.

2. Phillips agrees to abide by the following timetable:

Task
Completion Date

1. Identify process hazard/process safety

management analysis staff.
30 days from date of final Review

Commission Order

2. Complete process hazard/process safety

management analysis on the following

units:
Two and one-half years from date

of final Review Commission

Order

Sweeny:

26.1
ARDS Unit, A Train

30
HF Alkylation Unit

26.1
ARDS Unit, Trains A and B

28.1
DEA Regenerators and Sour

Water Strippers

28.2
Sulfur Unit

15
Hexane Isom

3
FCC Unit

4
FCC Gas Plant

27.1
HOC Unit

27.2
HOC Gas Plant

43
Copper Treater

10ABC
NGL Fractionation

17
Light Aromatics Recovery

19
Benzene Hydrogenation

Borger

43
Sulfur Recoverv Unit

22
HF Alkylation

9
Crude Unit

10
Crude Unit

34
Sulfur Recovery Unit

42
ARDS

11
Ethane Recovery Unit

29
Cat Cracker

28
Crude Unit

40
Cat Cracker

35
Amine Treater & H2S Dryers

41
Hydrogen Unit

44
Amine & Sour Water Treater

6
Hexane Isom

Philtex:

Propylene Unloading and Storage

H2S System

SO2 Unloading and Storage

Butadiene Unloading and Storage

Woods Cross:

7
HF Alkylation

10
Solvent Deasphalting

11
Straight Run Gas Plant

62
Propane Pit

3. Complete process hazard/ process safety Four and one-half years from management
   analysis on the following same

units:

Sweeny:

15
Benzene Hydrogenation

56
Waste Water System

22
Ethylene Plant

I0D
NGL Fractionation

21
NGL Fractionation

11
Catalytic Reformer

14
Catalytic Reformer

24
Ethylene Plant

18
Propylene Fractionation

7
Heavy Aromatics Recovery

26.2
Hydrogen Purification Unit

20
Pentane Isomerization

25.2
Distillate HDS

Borger:

19.2
Reformer

7
Reformer

2.2
NGL HDS

19.1
Naphtha HDS

19.3
Distillate HDS

36
HDS Treater

1.6
Propane Treater

4
Butane Isom

5
Pentane Isom

6
Benzene Hydrogenation

26
Light End Recovery & Alky

Feed Treater

Philtex:

Dimethyl Sulfide Blending and Storage Methyl Mercaptan Reaction and Storage Propane
Storage and Processing Butane Storage and Processing Anhydrous HCl Storage

Woods Cross:

4
TCC

6
Reformer

12
NHDS

68
Pressurized HC Storage

86
Pressurized HC Truck

Loading/Unloading

87
Pressurized HC Railroad

Loading/Unloading

5
Vacuum

8
Crude

13
C5/C6 Isomerization

4. Complete process hazard/process safety. Six and one-half years from same management
   analysis on the following units:

Sweeny

62
Clemens Terminal

68
Sweeny Tank Farm, #1

Pumphouse

88
Freeport Terminal #1

89
San Bernard Terminal

86
Truck Loading Rack

87
Tank Car Loading Rack

6
MTBE Unit and Hydroisom

Unit

58
Pipelines

25
Crude Unit

9
Crude Unit

51
Steam Plants

52
Water Treater

90
Jones Creek Terminal

92
Freeport Terminal #2

Borger:

12
Pantex Cryogenic Gas Plant

No. 7
Cols. 35-42, 45

No. 1
Cols. 7, 9-12

No. 1
Cols. 13-17

No. 4
Cols. 23-27

No. 4
Cols. 18-22

No. 6
Cols. 28-34

23
Straight Run Fractionator

Cols. 104, 105, 108, 109, 111, 117 N-Butane Treater

2.1 Minalk Treater

13 Front end clean-up NGL Train Rack

NGL Truck Rack

Above Ground Propane Storage and Loading

RAW NGL Feed System

E/P Caverns and Handling

Propane Caverns and Handling

Above Ground IC4 Storage and Handling

Above Ground NC4 Storage and Handling

Isobutane Caverns and Handling N-Butane Caverns and Handling De-ethanized NGL Feed System
Alky Feed Caverns and Handling Above Ground 1C5 Storage and Handling

Above Ground NC5 Storage and Handling

5. Complete actions recommended by  process hazard/process
   safety management analyses.

As soon as practicable, but within two years from completion of the process
hazard/process safety management analysis on each unit

3. Upon request by OSHA, Phillips shall make available to OSHA
   any documents prepared pursuant to this Appendix "A" including verification of
   corrective actions taken.

4. The parties recognize that circumstances may cause delays to occur, such as
   construction or design problems and delays in obtaining necessary permits. If the
   timetable contained herein cannot be met, Phillips will communicate that information to
   OSHA including the reason (s) for the delay and the expected completion date (s). The
   parties agree that all undertakings by Phillips pursuant to this Appendix "A"
   are part of a settlement of a dispute between the parties and do not constitute an
   abatement of any unsafe condition.

5. All documents or other Information made available by
   Phillips under this Appendix shall be handled in accordance with Section 15 of the OSH
   Act, 29 U.S.C. � 644, 18 U.S.C. � 1905, and 29 C.F.R. � 1903.9. Phillips will have the
   obligation to identify the document, information, or portion thereof that contains
   proprietary or confidential information. No later than six (6) months following Phillips'
   verification that it has completed all of the actions enumerated herein, OSHA shall return
   to Phillips all copies of Phillips' process hazard/process safety management analyses,
   written management responses, and other safety analyses. OSHA shall not thereafter retain
   any such copies.

6. OSHA agrees not to issue citations to Phillips for any
   working conditions identified in the process hazard analysis or any other analysis
   required by this Appendix, provided such conditions are being or will be addressed in good
   faith in accordance with this Appendix (including correction, if necessary). Phillips
   agrees to allow OSHA access to the above facilities to determine progress and compliance
   with this Appendix. OSHA agrees that, assuming good-faith implementation of this Appendix
   by Phillips, it shall not conduct general schedule inspections, except that OSHA may
   conduct monitoring inspections to determine compliance with this Agreement. OSHA retains
   the right to conduct all other types of inspections permitted under the OSH Act.

DATED August 22, 1991.

FOOTNOTES:

[[1] ]We further construe the letter as a request for party
status and we grant the request in accordance with Rule 20(a), 29 C.F.R. � 2200.20 (a):
"Affected employees and authorized employee representatives, by notice of election
filed at least ten days before the hearing, may elect party status concerning any matter
in which the Act confers a right to participate." The record does not reflect that
any hearing date was set in these proceedings.

[[2]] Although the union here was not a party when the
settlement agreement was executed, Rule 100 (c) nevertheless is intended to ensure that
all employee representatives have notice of the terms of a settlement agreement.
Therefore, even non-party employee representatives are entitled to be served with a copy
of the executed settlement agreement. General Electric Co., 14 BNA OSHC 1763, 1764
n.2, 1987-90 CCH OSHD � 29,072, p. 38,849 n.2 (No. 88-2265, 1990); General Motors
Corp., Delco Electronics Div., 14 BNA OSHC 1753, 1987-90 CCH OSHD � 29,069 (No.
88-1112, 1990).

[[3]] Commission Rule 4 is as follows:

� 2200.4 Computation of time.

(a) Computation. In computing any period of time
prescribed or allowed in these rules, the day from which the designated period begins to
run shall not be included. The last day of the period so computed shall be included unless
it is a Saturday, Sunday or Federal holiday, in which event the period runs until the end
of the next day which is not a Saturday, Sunday, or Federal holiday. When the period of
time prescribed or allowed is less than 11 days, intermediate Saturdays, Sundays and
Federal holidays shall be excluded from the computation.

Under this rule, assuming a service date of August 23, 1991, the 10-day period allowed by
Rule 100(c) for the filing of objections by the union would not have expired until
September 9, not counting intermediate weekend days and the Federal holiday of September
2, 1991. In addition, Rule 4(b), 29 C.F.R, � 2200.4(b), provides that where a document is
served by mail, three days shall be added to the period prescribed for filing a response.

[[4]] We note that the union filed its letter of August 30,
1991 with the Commission rather than with the judge, contrary to Rule 8, 29 C.F.R. �
2200.8, which requires that after a case is assigned to a Judge and until the judge's
decision is docketed with the Commission, all documents shall be filed with the judge.
While we do not excuse the union's violation of our rules, the record reflects that the
Executive Secretary for the Commission sent the union's letter back to the judge's office,
where it was received on September 11, 1991. Accordingly, had the judge waited until
September 12, 1991, the expiration of the 10-day period allowing for service of the
settlement agreement on the union by mail, he would have received the union's objection in
time to consider that objection before issuing an order.

[[5]] It is unclear at this time what position the Secretary
would take with respect to approval of the settlement agreement in the event the judge
were to accept the Secretary's argument that the union's right to challenge the abatement
period is limited to the period for abating the hazard at the cited plant. However,
insofar as the Secretary may be suggesting that the portion of the settlement agreement
prescribing abatement periods for the other facilities should be approved regardless of
any objections by the union, we emphasize that a judge is not empowered to excise
provisions from a settlement agreement and approve the agreement only in part. John
Deere Foundry, 9 BNA OSHC 1351, 1981 CCH OSHD � 25,218 (No. 78-5498, 1981)
(consolidated) (selective approval of a settlement agreement may not reflect the intent of
the parties to the agreement).

[[6]] We do not know whether the union has elected or may be
entitled to elect party status in docket no. 90-1271 as the representative for affected
employees at the Sweeny facility. We also do not know whether the citations in docket no.
90-1271 involve the same hazards or working conditions as those covered by the settlement
agreement here.