U.S. DEPARTMENT OF LABOR MINE SAFETY AND HEALTH ADMINISTRATION (((((((((((((((((((((((((((((((( ( In the Matter of: ( ( PUBLIC HEARING ON PROPOSED ( RULE CRITERIA AND PROCEDURES ( FOR ASSESSMENT OF CIVIL ( PENALTIES ( ( (((((((((((((((((((((((((((((((( Wednesday, October 4, 2006 Hilton Salt Lake City Center 255 South West Temple Salt Lake City, Utah 84101 The above-entitled matter was convened, pursuant to notice, at 9:07 a.m. BEFORE: PATRICIA W. SILVEY, Moderator PARTICIPANTS: Agency Panelists: PATRICIA W. SILVEY, Director Office of Standards, Regulations and Variances, MSHA JAY MATTOS, Acting Director, Assessments PETER MONTALI Office of Metal and Nonmetal Mine Safety and Health KEITH WATSON Office of Assessments PARTICIPANTS (continued): ROBERT STONE Economic Analysis Division WILLIAM CROCCO Office of Coal Mine Safety and Health JACK POWASNIK Office of the Solicitor GERRY GUNN Regulatory Development Division I N D E X Opening Statement, Patricia W. Silvey, Acting Director of the Office of Standards, Regulations and Variances for the Mine Safety and Health Administration 4 Testimony of James Poulson, Utah American Energy 19 Testimony of David Graham, Manager, Safety and Health for General Chemicals Soda Ash Partners in Sweetwater County, Green River, Wyoming, accompanied by Henry Chajet, Senior Partner, Patton Boggs and counsel to MARG 34 Testimony of Mike Crum, Wyoming Mining Association 71 Testimony of Jack Cottrell, Kinross Gold Corporation 82 Testimony of Mike Crum, FMC Corporation, Green River, Wyoming 102 Testimony of David Litvin, Utah Mining Association. 118 Adjourn 123 P R O C E E D I N G S 9:07 a.m. MS. SILVEY: Good morning. My name is Patricia W. Silvey. I am the acting Director of the Office of Standards, Regulations and Variances for the Department of Labor's Mine Safety and Health Administration. I will be the moderator of this public hearing today on MSHA's proposed rule concerning civil penalties. The members of the MSHA panel are and the persons responsible, primarily responsible for drafting this proposal, are to my right, Jay Mattos, who is the Director of the Office of Assessments and the chair of the Rulemaking Committee. MR. MATTOS: Jay Mattos. MS. SILVEY: Peter Montali. MR. MONTALI: Pete Montali. (Telephone rings.) MS. SILVEY: I'm sorry, excuse me. Somebody from work. So it goes. Can't get away from them. Peter Montali is with the Metal/Nonmetal Mine Safety and Health Office. Next to Pete, Gerry Gunn. MS. GUNN: Gerry Gunn. MS. SILVEY: Gerry Gunn is with my office and she's the regulatory specialist on the committee. To my left Jack Powasnik. MR. POWASNIK: Jack Powasnik. MS. SILVEY: And Jack is with the Department of Labor's Office of the Solicitor and he is obviously the lawyer on the committee. To his left, Robert Stone. MR. STONE: Robert Stone. MS. SILVEY: And Robert is MSHA's chief economist and so his staff provided economic assistance to the committee. To Robert's left, William Crocco. MR. CROCCO: William Crocco. MS. SILVEY: And Bill is with the Coal Mine Health and Safety Office. So those are the members of the MSHA Rulemaking Committee. This is the third of six hearings on this proposed rule. The first hearing was held on September 26th in Arlington, Virginia; the second, September 28th in Birmingham; the fourth will be October 6th in St. Louis; the fifth, October 17th in Charleston, West Virginia; and the sixth, October 19th in Pittsburgh. The comment period will close on October 23rd. In accordance with the MINER Act, as some of you know, MSHA must issue final regulations for those provisions dealing with civil penalties that are contained in the MINER Act by December 2006. We have a short time frame for doing that. We will accept documents today that you would like to submit for the record. This hearing will be conducted in an informal manner. As many of you who have participated in these hearings know, formal rules of evidence do not apply. Members of the panel may question witnesses. Witnesses may ask questions of the panel. Scheduled speakers will make their presentations first. After that, others will be allowed, although it doesn't appear that we have any time problems today. The transcript of this hearing will be posted on the MSHA website within a week after today. Before I discuss the provisions of the rule, I want to give a short overview of the civil penalty process beginning with the clarification of a few terms. The first term is "citation." The inspector issues a citation for a violation of any MSHA standard, rule, order, safeguard, or regulation. The inspector sets a time to abate the condition. The second is an "order." The inspector can issue an order under several different circumstances. Primarily, when a violation is not abated within the time allowed by the inspector; when the inspector finds a violation caused by an unwarrantable failure; when the inspector determines that an imminent danger exists. And when an order is issued, the order does not necessarily require that the entire mine be shut down. It applies to the area affected by the order. Third, "significant and substantial," or as we refer to "S&S". An S&S violation is one that is reasonably likely to result in a reasonably serious injury or illness. The inspector makes the S&S determination at the time of the issuance of the citation. Finally, "unwarrantable failure." This term has been defined to mean "aggravated conduct, constituting more than ordinary negligence." Under the Mine Act, MSHA proposes penalties, and the Federal Mine Safety and Health Revision Commission, or the Commission, assesses penalties. A proposed penalty that is not paid or contested within 30 days of receipt becomes a final order of the Commission by operation of law. Penalties that are contested before the Commission are reviewed de novo. We will use the term "assessment" to refer to MSHA's assessments as well as assessments that are final orders of the Commission. The Mine Act requires MSHA to consider six criteria in assessing civil penalties and they are: the appropriateness of the penalty to the size of the business; the operator's history of previous violations; whether the operator was negligent; the gravity of the violation; the operator's good faith in abating the violation; and the effect of the penalty on the operator's ability to continue in business. The first five criteria are applied to compute the penalty amount. The final criterion is applied after the penalty is proposed, upon a request by the mine operator. The operator must send in supporting documents that the amount of the penalty will negatively affect the company's ability to continue in business. MSHA will review this information and may adjust the penalty. MSHA published the proposed rule in the Federal Register on September 8th. It was placed on MSHA's website and a copy was sent to the Small Business Administration Office of Advocacy. Basically, the proposed rule does two things. It revises MSHA's civil penalty program to increase penalty amounts and to improve the effectiveness of MSHA's civil penalty process. These changes are intended to induce greater mine operator compliance with the Mine Act and MSHA's safety and health standards and regulations, thereby improving safety and health for miners. Second, the proposal implements the three provisions of the Mine Improvement and New Emergency Response Act of 2006, also known as the MINER Act. The proposal does not change the way inspectors issue citations. The inspectors will continue to make factual determinations with respect to safety and health violations as they do now. And please note that while the MINER Act and the Mine Act contain provisions for criminal fines, this rule, as the name implies, only concerns civil penalties. Under the existing rule, MSHA has three types of assessments: single, regular, and special. I will now address the proposed changes to each type of assessment. But before I address the changes, I want to clarify for the record that -- I want to clarify one aspect of the proposal and that aspect relating to single penalty and that is that the existing rule provides for a $60 single penalty for non-S&S violations that are timely abated, and where the operator does not have an excessive history of violations. Under the proposal, the Agency proposes to delete the single penalty, but in deleting the single penalty, the proposal would replace all penalties associated with non-S&S violations, would then have to be processed through the regular formula system. So in deleting the single penalty, we are not getting rid of penalties for non-S&S violations, but we're replacing that aspect of the penalty with the regular formula penalties. All non-S&S violations will be processed through the regular assessment provision and receive a higher penalty through that provision. The Agency has taken this action in the belief that eliminating the single penalty provision will cause mine operators to focus their attention on preventing all hazardous conditions. Regular assessments are derived by assigning penalty points for the statutory criteria and then converting the total points to a dollar amount. The penalty point tables are published in Section 100.3 of the rule. Regular assessments are computer-generated through MSHA's Management Information System. The proposal would make a number of changes through the process -- to the process and the tables used for computing penalty amounts. The point tables would be revised so that the penalties increase proportionately to increases in operator size, history, and negligence, and the gravity or seriousness of the violation. The regular assessment changes are as follows: Size: The size criterion includes operator size and controller size. For coal mines, operator size is measured by tonnage of coal produced by that mine during the previous calendar year. For metal and nonmetal mines, operator size is measured by the hours worked at the mine during the pervious calendar year. Size for independent contractors is measured by the total hours worked at all mines. Under the proposal, the maximum number of points for operator size would increase from 10 to 20. The proposal would continue to assign no points for the smallest number of operators and at this point I want to make a clarification to the proposal for the smallest operators, smallest coal operators. The preamble to the proposed rule states that according to 2005 data, nearly half of the existing coal mines had annual tonnage of up to 15,000 tons. This figure included surface facilities that do not produce coal. And if we exclude those facilities which would be a more accurate number, from the total number of coal mines, that would generate more accurate data. With this revision, approximately one-fourth of producing coal mines had actual tonnage of up to 15,000 tons. The proposal makes no changes to the size points for controlling entities. We did solicit comments on whether greater weight should be placed on the size of the controlling entity. And so I invite you to address this issue at the public hearing today or in your written comments. History of violations. The proposal includes several changes to the history criterion. We will shorten the time period for determining violation history. We will change independent contractor history from an annualized number to the total number of violations. We will add a new component for repeat violations of the same standard. And we would increase the number of history points. Under both the existing rule and the proposals, only violations for which the penalty has been paid or finally adjudicated are included in determining history. Under the proposal, the time period for determining history would be shortened from 24 months to 15 months and we did this because we think that the shorter time period would more accurately reflect an operator's current state of compliance. Both the existing rule and the proposed rule base history for production operators on violations per inspection day. Under the existing rule, history for independent contractors is based on the average number of violations over the past two years. The proposal would change this to the total number of violations in the previous 15 months. Since we were no longer using 24 months and using the 15 months, we did not think that there was any need to annualize the violations for independent contractors. In the proposal, MSHA solicited comments on this approach to determining violation history for independent contractors. Again, I invite you to address this issue here today and that is whether independent contractor history should be annualized. The maximum number of penalty points for this component of the violation history would be increased from 20 to 25. Significantly, we add a new component to the history criteria for repeat violations of the same standard. Under the proposal, penalty points are added for more than five repeat violations of the same standard during the preceding 15 months. Under the proposal, repeat violations are determined according to the manner in which the standard is cited. For example, a violation of Section 56.14101(a)(1) would not be considered for determining the number of previous violations of Section 56.14101(a)(2). MSHA solicits comments on this approach to determining repeat violations. MSHA also solicited comments in the proposal on two additional aspects of repeat violations: whether penalty points should be based on the total number of repeat violations, as in the proposal, or on the number of repeat violations per inspection day; and whether repeat violations should include all violations, as in the proposal, or only S&S violations. The Agency invites you to address these aspects of repeat violations. This new component of violation history would add up to 20 penalty points. Negligence: The proposed rule would retain the existing five levels of negligence, and would double the maximum number of penalty points from 25 to 50, with the increased placed entirely in the three highest levels of negligence. Under the proposal, penalties would increase proportionately for operators who exhibit increasingly high levels of negligence. Gravity: The proposal would retain the three components of gravity -- likelihood, severity and the number of persons potentially affected -- but would increase the number of penalty points from 30 to 88. Good faith in abating the violation: The existing rule adds 10 penalty points if the operator does not abate the violation within the time specified by the inspector, and reduces the total penalty amount by 30 percent if the violation is timely abated. The proposed rule would decrease the reduction for timely abatement to 10 percent and no penalty points would be added for violations that are not timely abated. The penalty point conversion table: The dollar amounts on the existing table range from $72 to the $60,000 statutory maximum. The minimum regular assessment is $60 under the existing rule. The proposed rule provides a maximum of 208 penalty points. The revised conversion table begins with $112. And under the proposal, as I stated earlier, with the 10 percent reduction for timely abatement, the lowest penalty amount would be $100. The dollar amount of the penalty increases steadily as the number of penalty points increases. Beginning at 133 points, each additional penalty point corresponds to an increase of approximately $3,070. The maximum penalty of $60,000 is reached at 140 points. Special assessments are processed where the violation is of such a nature that an appropriate penalty cannot be determined using the regular formula. The existing rule lists certain categories of violations, that must be reviewed to determine if a special assessment is appropriate. The proposed rule would remove this list. However, under the proposal, MSHA would retain its discretion to determine which types of violations would be reviewed for special assessment without being limited to a specific list. MSHA anticipates that the proposal would provide an -- that the proposed regular assessment provision will provide an appropriate penalty for most types of violations and therefore most types of violations would be processed through the regular assessment provision. In so doing, this will permit MSHA to focus its enforcement resources on more field enforcement activities rather than on administrative review activities. The proposed rule would also shorten the time allowed to request a health and safety conference with the district manager. Under the proposal, this time would be shortened from 10 days to 5 days. MSHA believes that this would result in a more effective civil penalty system because penalties would be assessed closer in time to the issuance of the citation. I would draw your attention to the fact that we've gotten a lot of comment on this aspect of the proposal. Finally, the proposal implements the civil penalty provisions of the MINER Act. And these provisions were effective on June 16, 2006. We issued, MSHA issued a procedure instruction letter to MSHA personnel which addressed those violations. I will discuss each provision separately. Unwarrantable failure: Under the MINER Act, minimum penalties for $2,000 and $4,000 respectively for unwarrantable failure citations and orders. Basically, under the MINER Act right now, these citations that are issued as unwarrantable are being processed, either through the regular formula system or through the special assessment and are receiving the $2,000, at a minimum, the $2,000 and the $4,000. Penalties for "flagrant" violations: The MINER Act established a new penalty of not more than $220,000 for "flagrant" violations. Those are violations involving "a reckless or repeated failure to make reasonable efforts to eliminate a known violation of a mandatory health or safety standard that substantially and proximately caused, or reasonably could have been expected to cause, death or serious bodily injury." And I was quoting from the MINER Act's definition of "flagrant" violations. As stated earlier, these are being processed as special assessments. Finally, failure to notify: The MINER Act established a penalty of at least $5,000, not more than $60,000 for violations involving failure to timely notify MSHA of a death or an injury or an entrapment with a reasonable potential to cause death. These are being processed right now as special assessments and would be processed under the proposal as special assessment. Please sign the attendance sheet before you leave, if you have not done so. We will post our transcripts on our website. The transcript will include the full text of my opening statement and the specific issues for which we seek additional comment. We will now begin. Please begin your presentation by clearly stating your name for the reporter and your organization and spelling your name for the reporter. Thank you. Our first speaker will be James Poulson with Utah American Energy. MR. POULSON: Good morning. My name is James Poulson, J-A-M-E-S, P-O-U-L-S-O-N. I am the Safety Director for Utah American Energy which is a Murray Company. I would like to thank MSHA and this panel for the opportunity to provide these comments on the proposed civil penalty rule. It's a rule which will have widespread effect on the industry and I believe not in the manner which MSHA seeks. Andalex Resources, Incorporated, West Ridge Resources, Incorporated and General Resources, Incorporated, all companies which are subsidies of Utah American Energy with the parent company of Murray Energy, we are underground coal mining operations. We're located in Carbon and Emery County. We have over 600 plus employees in the Utah work force which represents a very sizeable percent of Utah's underground coal miners. We take the safety of our employees as the absolutely top commitment. It is our moral and ethical responsibility to protect the health and safety of our employees. The proposed rule will be very harmful to the safety efforts of responsible operator. Civil penalties are not an incentive for safety nor do they have any positive effect on our, or any other responsible operator's safety efforts. We strongly urge MSHA to significantly modify the proposed rule and return to the prior penalty system to the extent possible. Some of the provisions of the proposed rule are statutory based and cannot be affected by rule making procedures. Our comments will be more aimed at the changes in which MSHA has some discretion or are otherwise statutory, but subject to interpretation. The changes, as a whole, are a misguided attempt to increase safety by punitive actions against the operators. The results will be greatly increased civil penalties which in which will be tripling them. Our specific comments are as follows: 100.3(b), appropriateness of the penalty to the size of the operator's business. MSHA has proposed to increase the penalty points for size from an old maximum of 10 to 20 points for mines over 2 million tons of production. MSHA contends that this is to make the monetary penalty proportional and therefore increase compliance. This view is seriously flawed and discriminatory. Large operators are inherently safer. This proposed change has the reverse effect of punishing size, which is generally a safety enhancer. The series of mine disasters that led to the MINER Act were all at smaller mines. This is typical of the proposed rule and shows the disconnect between the reality at mining operations and the MSHA bureaucracy. Next point, 100.3(d), negligence. The old five-tier system determining points to be assessed for negligence was effective and has been retained by MSHA, but with the points for the upper three tiers increased, and doubled at the level of the "reckless disregard." Our view is that the increase should not apply to "moderate negligence" and that is not at a volitional stage of culpability and is subject to wide variation of interpretation. 100.3(d), gravity. MSHA has increased the potential from a maximum of 30 penalty points under the previous rule to 88 penalty points under the proposed rule. Historically, the gravity portion of a citation is the most frequently contested item by our company in health and safety conferences conducted with the Agency. This is primarily due to the inspector's determination of the gravity being speculative in nature and subject to individual interpretation. This excessive increase in penalty points is unwarranted in potentially subjective areas. 100.3(f), demonstrated good faith of the mine operator in abating violations. In this misguided section, MSHA, actually decreases the beneficial effect of timely abatement of violations by operators. Previously, an operator could receive a reduction of 30 percent for timely abatement. Now it is only 10 percent. This is a disincentive, rather than an incentive, to timely compliance. 100.3(g), penalty conversion table. This now sets a floor of $112 for a penalty. It is inappropriate to set such a floor for non-significant and substantial, "non-S&S" penalties and mere paperwork violations. This is the purpose for which the single penalty assessment was designed, but this has also been eliminated at Section 100.4 of the proposed rule. The deletion of the single penalty, and the floor of $112 will have the effect of merely increasing bureaucracy and inefficiency and will not have any real effect on safety compliance. The concentration of MSHA and the operator should be on the elimination of potential S&S violations. Elimination of the single penalty causes the intention to be blurred. Lumping all violations, both S&S and non-S&S, into one category actually diminishes the emphasis on the S&S. This is a further example of the lack of a practical approach of MSHA to the real issues. 100.4, unwarrantable failure. Much of the proposed rule in this area is designed to implement the statutory requirement of the MINER Act. As such, there is little discretion possible. It is difficult to gauge the effect of one proposed change, the elimination of the list of specific categories that can be the basis of a special assessment. Our view is that this has not been a problem before, so why should it change, and that any change would probably lead to an increase in special assessments, which, if "flagrant" can be assessed at $220,000. This is an unacceptable combination as it provides MSHA with too much discretion. 100.6, procedures for review of citations and orders. The time period for requesting a health and safety conference has been reduced from 10 days to 5 days. There is no reason for the change. The rule goes on to incorporate certain statutory disclosures. MSHA predicts that for each 10 percent increase in penalty for violations, there will be a 3 percent decrease in its probability of occurrence. This appears to be bogus, as compliance at responsible operations is not driven by penalty costs, but by other motivations. This is a cynical attitude by MSHA and indicates a punitive mindset, rather than safety mindedness. Further in the disclosure portion, MSHA states that the proposed rule is economically feasible for the mining industry because the anticipated expected increase in penalties will be $15.9 million, equal to .07 percent of the coal mine sector revenue of $22.1 billion in 2004. This again shows a disconnect between the economic challenge faced especially by underground coal mines and the "understandings" of MSHA. I would be glad to answer your questions. Thank you. MS. SILVEY: Thank you. I don't know necessarily, I do have a couple of comments. On page 2 of your testimony and your testimony on 100.3(b), the size, and you state that our proposal is flawed and discriminatory and being you give support, "the large operations are inherently safer." Do you have any data to support that and if you don't have any data today, because I'm not meaning to put you on the spot, could you provide some for the record? MR. POULSON: Yes. There will be some written testimony I'll be sending in with this also. We will have supporting data of this. MS. SILVEY: Okay, if you could be as specific as you can when you provide the data. There's been a lot of discussion on the single penalty and a lot of testimony on the single penalty and for that reason that's one of the reasons I clarified in the opening statement what we were doing, what the Agency was doing in the proposal. And you are accurate. By deleting the single penalty, we were replacing it with being processed through the regular formula system as you accurately said in your testimony. So all penalties, S&S and non-S&S would be processed through the formula. In doing that, it was the Agency's belief that by making that change, mine operators would focus on non-S&S violations and S&S, all violations and eliminate all hazardous conditions from the mining work place. Your testimony is of the -- you testify that -- you think that by so doing this we actually diminish health and safety. In your particular mine and I don't know necessarily you gave me five -- I know you said of Murray Energy and you gave here three operations, do you have an estimate of how many of your, of the violations fall in the S&S category versus the non-S&S category? MR. POULSON: I can tell you -- MS. SILVEY: About. MR. POULSON: Greater than 50 percent fall in the S&S category. I did some analysis on it here and provided some data the other day and currently there is a higher percent of citations roughly in the neighborhood of 57 percent fall in S&S. Now as I talked about before, S&S and non-S&S is totally discriminatory or is -- MS. SILVEY: I was going to say judgmental is a more accurate. MR. POULSON: Judgmental and it's the perception between a certified mine inspector and the operator. One of the things MSHA needs to focus on, I believe is consistency. We have a very large problem with consistency from one examiner to the next or from one inspector to the next, I should say. MS. SILVEY: And clearly we hear that all the time and we continue to hear that and I would be remiss if I didn't say that wherever you have -- and I've said this before, so I think I sound like a broken record. Wherever you have the human element, you're going to have some element of no pun intended of subjectivity. So we try to focus on consistency and to improve consistency in our training and in our re-training, refresher training and that type of thing. But -- and in your testimony you also, I think that there's a reference here that the non-S&S or paperwork violations and I guess it's been my experience that the non-S&S, some can be paperwork as you said, but probably some can be more than paperwork, but it's just that where the gravity does not rise to the level to be S&S. MR. POULSON: Right. MS. SILVEY: And those are ones that at some point in the future, if allowed to be unchecked, they may indeed lead to S&S violations. MR. POULSON: Yes. Another point I'd like to make and you made this in your opening statement about factual determinations. This is what needs to be done by inspectors writing citations. We need to have factual evidence or factual matters in this body of citation, not speculative. I'd like to share that point with you. There's a lot of speculative things that go into citations. MS. SILVEY: Okay, I just have one final comment and it's more of a comment than anything because on page four of yours you put here, you quote from our analysis and just so everybody knows, when any agency does rules, there are various executive orders and statutory requirements that we must comply with and in terms of the impact of the rule, the regulatory economic analysis. So these comments, you were quoting from our analysis where we may -- and clearly, we made some assumptions, but one thing I would ask all of you to do, if you read the analysis, the cost analysis and if you disagree with any of the assumptions we made in there, if you could provide specifics on, if you take issue with anything. If you could provide specifics before the record closes, either today here, or before the record closes on October 23rd. Talking about one of the -- your one statement that we anticipated and expected increase of $15.9 million for the coal sector, and one of the ways that we determine the feasibility of a rule is there's a screening process, a threshold screening process. And when we compare the revenues, excuse me, the projected cost of a rule to the revenues of that sector and then you get a certain percentage and if it's under a certain percentage then it sort of automatically meets the threshold for feasibility. And that's basically what we did by doing that. But if anybody disagrees with any assumptions that we included, I could invite you to provide specific comments. Would you care to make any further comment on that, Robert? MR. STONE: No, that's fine. MS. SILVEY: Jay? MR. MATTOS: Yes, I have one or two questions. On the special assessments, you had a concern in your testimony. You expressed concern about the effect that the change might have and I want to clarify one thing is our intent, the committee's intent, what the special assessment provision was to actually reduce the number of special assessments that we would be doing. It's our hope and our intent that the regular formula will give an appropriate penalty to each citation and that the -- the reason we took out the list is because that list requires us, MSHA, to look at every citation or order issued within those categories and we'd rather not do that if we don't have to. We've rather have it go through the regular formula, reduced to paperwork, reduced to review process the enforcement folks go through. So it really is a housecleaning type provision more than any intent to change what's done. Right now the enforcement people have the discretion to recommend any citation or order for special assessment. They would retain that discretion, but they would not have to review every citation within certain categories to do that. So just to clarify that, our intent really is to reduce -- MR. POULSON: Let me make sure I understand. Your thinking is the special assessment would be gone or would be very low, would be reduced? MR. MATTOS: That's our hope, that's our expectation. Hopefully, that's the way it would work out. Going back to the size issue, the size of the operation, the size of the company, I do have a question there, your concern about penalizing larger companies, larger businesses, larger operations. The Mine Act requires us to consider that in the penalty assessment process and I'd be interested in your thoughts on how we might change that part of the proposal to accommodate what the requirements are in the Mine Act. MR. POULSON: I'll provide that in the written portion testimony. MR. MATTOS: That's great. The Committee would be interested. As a group, we wrestled with a lot of issues and a lot of different viewpoints while we were going through the process and the more information that we get during these hearings, the better it is for us. MR. POULSON: I guess off the top of my head I would say this. I mean it's America. We ought to be treated the same and fair. MR. MATTOS: I don't think anybody is going to argue that one, but we do have the provisions of the Mine Act that we have to accommodate that. MR. POULSON: I understand. MR. MATTOS: If you would provide something. MR. POULSON: Yes. MR. MATTOS: Anybody else who is speaking here today, I'd be interested in that particular and also the gravity. You talk about the subjectivity of the gravity of the violations. We've had comments in other hearings and we hear it all the time the consistency issue. It's a difficult issue. One that we hear a lot about are the number of persons affected by a condition. And I'd be interested in hearing proposals or ideas or thoughts on how we could obtain more consistency when determining gravity in all the areas, and particularly the number affected. We had comments or testimony last week, where you'd have two categories, zero and more than zero, for number affected, something like that. Those are interesting ideas. MR. POULSON: Right. MR. MATTOS: And we're certainly open to that kind of discussion. I didn't have any other questions or comments. MR. STONE: Let me just amplify one point that Jay just made which is the number of special assessments that we estimate would result from this proposed rule. Looking at the 2005 penalties, there were 3,189 special assessments. We estimate that under this proposed rule that number would decline from that to 491, so that all but about 2500 would go away and only about 500 would remain and that's our intention. MR. POULSON: That's the intent. I understand. MR. CROCCO: Could I ask you a question about the 30 percent, the 10 percent reduction or abatement? MR. POULSON: Sure. MR. CROCCO: You said by reducing that, I think that would be a disincentive for operators to abate. Are you saying that we'd see a large increase in 104(b) orders because operators wouldn't abate the conditions on time? MR. POULSON: No, I'm not saying that. I'm saying that if there's a greater incentive for an operator to abate the condition in a timely manner, then he's going to be more likely to do so. But when you go out there and you put the 10 percent factor out there for him, I think there's going to be more disincentive for the operator to abate them. MR. CROCCO: Of course the risk is you can get a (b) order if you didn't abate. MR. POULSON: There is a risk, yes. MR. CROCCO: For a company of your size, it's a pretty good size company, is the $60 penalty an adequate incentive for compliance, do you think? MR. POULSON: Well, again I'd like to go back to the statements I made before. An organization shouldn't be driven by penalties for safety. There should be something that comes from within and it's something we've got to and want to do, all operators want to do. Sixty dollars is, in my view, yes. We treat a $60 assessment just as high as we treat anything else, the same way. MR. CROCCO: So you don't see the penalty system or the assessment system as any kind of incentive for any operator to comply or change the way he's doing business or systems in place to pick up violations and correct them? MR. POULSON: In my view, no. MS. SILVEY: Anybody else? Okay, thank you. And we look forward to getting your additional comments. We appreciate it. Next, we have David Graham and I think this acronym, Methane Awareness Resources Group, maybe different than the Mining -- Mining maybe. That's close enough. It used to be methane. MR. GRAHAM: That's correct. They expanded the horizon. Good morning, my name is David Graham, D-A-V-I-D, G-R-A-H-A-M. I'm the manager of Safety and Health for General Chemicals Soda Ash Partners in Sweetwater County, Green River, Wyoming. We operate an underground trona mine that will be impacted by this proposed rule. I also serve as the chairman of the Mining Awareness and Resource Group, the MARG Coalition which is a group of companies supported by other associations and committed to protecting the safety and health of our employees and communities. Accompanying me today is Henry Chajet, senior partner, Patton Boggs and counsel to MARG. Concepts underlying MARG's participation in rulemaking have never changed. MARG members are committed to aggressively protecting all personnel from hazards. MARG members support sound research to identify, evaluate and prevent hazards. MARG members support sound regulations and fair enforcement that advances safety and health. Unfortunately, the MSHA proposed civil penalty rule does not further safety and health, is inconsistent with the principles of good government and fairness and violates the duties Congress imposed on MSHA regarding the issues of new rules. We hope the Agency will learn from its history and salvage this rulemaking so it can reform its rules to advance safety and health. To do so, we urge MSHA to appoint and independent, outside advisory committee composed of industry and labor to audit its enforcement and civil penalty history, consider options and make recommendations to the Secretary of Labor. MSHA's recent history demonstrates to the public and the regulated community that it should look beyond its bureaucratic fence line for assistance in accomplishing this worthy mission. The first flaw with the proposal to amend the civil penalty rules is its clear intent to increase civil penalties against the metal and nonmetal mining industry for nonserious violations of the thousands of regulations applicable to our facilities. The MINER Act adopted specific, detailed provisions aimed primarily at problems Congress perceived in the coal industry and specifically detailed general applicable penalty provisions for very serious hazards and gross misconduct. Congress did not intend to increase penalties for non-coal industry violations for items like trash cans without lids, housekeeping in bathrooms, a broken light bulb or spilled product scheduled for clean up on the next shift in a facility that handles 8 million tons of product a year. Nor did the Congress intend for MSHA to increase penalties for paperwork violations and fire extinguishers that work, but their inspection tags were not dated on the last, regularly scheduled inspection. According to MSHA's preliminary regulatory economic analysis for the proposed rule, the PREA, dated July 2006, 77 percent of metal and non-metal violations are nonserious, not categorized as significant and substantial, S&S violations, by MSHA inspectors. These minor violations should not be the subject of any increase in penalties. The MSHA PREA is confusing at best and at worst, demonstrates that the proposal is inconsistent with MSHA's mission and the congressional intent. On page 1, the PREA estimates that the cost of the proposed rule is $29.9 million annually. But at pages 19 and 20, the PREA estimates a $44 million increase in penalties with total penalties assessed under the proposed rule at $68.5 million. Most telling is the information presented in the PREA about serious violations and the absence of more detailed data regarding these serious violations that were the focus of the MINER Act. At page 16 of the PREA, MSHA estimates that there were a total of 116,673 violations assessed in 2005 and that about 52,000 were issued in the metal and non-metal industry. Penalties for these violations totalled about $25 million in 2005 with about $9.5 million assessed against metal and non-metal industries. MSHA does not present an analysis of penalty assessments for S&S versus non-S&S violations, nor a detailed analysis of unwarrantable violations and assessments. An example, the data for the unwarrantable violations and penalties issued in the non-coal industry. We strongly suggest that this data and its analysis be published for comment. At page 20, the PREA estimates that only $1.9 million of the $44 million increase in total penalties proposed by the new rules would result from the unwarrantable failure violations for which Congress imposed new minimum penalties. MSHA's PREA estimates do not include any annual penalty increase for the flagrant violations addressed by the MINER Act, nor the late notification minimum penalty proposed by the Act. The failure to estimate the impact of these new penalties, a clear focus of the MINER Act, prohibits meaningful analysis of and input on this proposal. The failure to focus the proposed rules on violations creating serious hazards that result from gross misconduct, directly contradicts the congressional intent and does not further MSHA's mission of advancing safety and health. Pending recommendations of a federal advisory committee that audits MSHA's enforcement system, MSHA should delete all provisions of its proposal that increases penalties beyond the scope of those expressly adopted by Congress for serious hazards and gross misconduct. Just last week, MSHA presented the Sentinels of Safety Awards to mines in various commodity and size groups that recorded the most hours without a loss time or accident. In addition to the numerous winners, there were hundreds of other mines that achieved outstanding safety and health records and accumulated millions of hours worked without injuries or illness. We commend those mines for that. MSHA has not conducted any analysis of its massive database to determine what differentiates safe employers from the ones it intends to penalize. In fact, MSHA's proposed rules will increase penalties assessed against safe mines and for this reason they are inconsistent with MSHA's mission and congressional mandate. We suggest that MSHA provide safety incentives by providing safe mines with penalty reductions rather than penalizing them with counter productive penalty increases. We suggest that MSHA ask the independent advisory committee to analyze (1) the relationship, if any, between the 10 leading causes of fatalities and serious injuries and the 10 leading causes of citations and penalty amounts nationally and in each MSHA district; (2) the relationship, if any, between injury and illness rates at each regulated facility and the 10 leading causes of citations and penalty amounts, the number of violations issued per inspection day, the number of repeat violations at each facility, and the size of each facility; (3) the relationship, if any, of the inspectors assigned to each regulated facility and the number of violations issued per inspection day, the number of repeat violations, the percentage of violations designated as significant and substantial, the percentage of violations designated low, moderate and high negligence, the number of orders issued, the penalties assessed against the facility and the injury and illness rates at each facility, the impact of prior penalty increases, example, $10,000 to $60,000 maximum penalty, on the incidents of violations and safety performance. We note that the PREA analysis at page 21 indicating that the new rules will result in a 19 percent decrease in violations is speculative, not supported by any data analysis and contrary to our actual experience, it demonstrates that incidents and type of citations issued is primarily influenced by the inspector conducting the inspection and the time he spends inspecting the facility. I'll give you an example of that. In 1999, I told an inspector in the fourth quarter, calendar for fourth quarter that our mine was having a good year. We had 32 citations at that time and you know what, guys, to be honest with you, that's pretty good for us. The ensuing inspection, I got 52 violations and it wasn't because we run a bad mine. There was no difference between that mine in the third quarter than it was the fourth quarter other than we got an inspector and I made a stupid statement. We believe that if MSHA analyzed its database, it would find that its inspectors specialized in issuing citations for violations of particular standards. For example, some inspectors focus on housekeeping, others on electrical matters and others on fire prevention type things. The result is the repeat violations are common at most larger and medium-size facilities. And while the subject matter cited at each mine may change as inspectors rotate, the 10 leading causes of violations does not seem to change substantially from year to year. As a result, we believe that increasing penalty amounts for repeat violations is neither justified nor fair, nor will it improve safety. In addition, the repeat violation proposal will operate as a penalty increase based on mine size. Large gassy mines with more permissible equipment will receive more permissibility violations than smaller mines. Larger mines with more production and more product transfer points and miles of transportation belts will receive more violations for spillage than small mines with not very many belts. Larger mines will receive more inspection days and thus more violations and therefore more repeat violations and higher penalties. If safety and health is our primary objective and the primary objective of MSHA, is there a difference or should there be a difference in a fine for a large mine that has a lid off a trash can as opposed to a small mine that has a lid off of a trash can? I don't understand the difference. The single minimum penalty permits MSHA, industry and labor to correct minor violations, issue a reasonable fine for them and focus the penalty system and related resources on serious hazards. It also reduces work for the MSHA assessments office, MSHA conference officers, solicitors and penalty collection officials, all of which have had significant problems keeping the process current over the last two years. The assessment office, in particular, has suffered repeated delays and losses of penalty proposals, contests and payments. I don't know what's happened over the last two years and I've talked to several other operators, but there seems to have been some type of change going on in the assessment office where it appears that penalty cases have been lost, checks have been lost, checks have not been applied to the appropriate case numbers. We never had that problem ever and all of a sudden within the last two years, we're experiencing a lot of problems. I had -- I just had one the other day that's two years old that was paid that we got a call from a collection agency on it that we had already provided a copy of the check back to the assessment office saying that it's paid. And got a call from a collection group through an attorney. We had to supply her with that. So there's problems within there that number one shouldn't be and this rule is not going to help in that particular department. Eliminating the single minimum penalty will produce a 77 percent increase in the application of the regular assessment formula for metal and non-metal mines. Not only increasing penalties, but vastly increasing the administrative workload to assess, conference, contest and otherwise respond to these penalties. It will further overextend MSHA and mine operator resources and cause counterproductive penalty disputes over minor violations. None of these costly delays have been identified, nor analyzed by the PREA. In conclusion, we urge MSHA to go back to the drawing board, limit its immediate proposal to the specific mandates of the MINER Act and appoint an advisory committee to audit MSHA enforcement and recommend improvements. Thank you very much for your attention and consideration. We would be pleased to answer any questions you might have. MS. SILVEY: Thank you. I do have some comments. I think with respect to your comment on the Office of Assessments, I'll let Jay discuss that and clearly if you have any specific problems, any specific issues that you know -- if you could give them to us today, we would definitely and I want to say that for the record, we would definitely, I promise you, we will take those and we will go back and we will look into them. I mean he can talk about the specifics of it, but I promise you, speaking for the Agency, we would do that. On your -- a lot of your discussion went to the preliminary regulatory economic analysis which, as you correctly noted, we have to do. And as I said at an earlier hearing, and I think I said a little bit this morning, maybe not as artfully as I did at an earlier hearing, when we do this analysis, we make certain assumptions and if you know what assumptions are, you know, people can agree with your assumptions or you can disagree with them. And you make the best assumptions that you think, you build in the best assumptions given the circumstances that you have. So I would say to all of you in terms of providing your comments, if you have disagreements or if you think you have better assumptions, if you would provide them to us for the record. But I would like to comment on a couple of things. First of all, with respect to the preliminary regulatory economic analysis, first of all, everything in there was based on -- we took our 2005 violation data and used that as a basis for projecting forward, had these proposed penalties been applied to that date. And when you said that we didn't -- it didn't project there would be any -- I'm not necessarily taking these in any order, that that would be any -- we didn't project any violations for the MINER Act, any money for the MINER Act into the new projections. We didn't. We didn't for flagrant violations and we didn't, if I remember correctly, for failure to notify violations. That was two categories. We did for unwarrantable failures. We didn't for flagrant, I think probably because flagrant wasn't a category when we applied it to the 2005 data. And I would dare say to probably anybody in this room, flagrant is probably going to play itself out in the coming months and years in terms of what happens there. In terms of the failure to notify, I think when we applied it to the 2005 data, we had -- there as one violation for a timely -- failure to notify MSHA in a timely manner. And I think that violation had already received the minimum which was over $5,000. So it didn't change, we didn't add anything additionally to the total penalty amounts for that. Now you're sitting here and I know I can see what you want to say to me right now and that is we are whistling "Dixie" if we think we can only get one failure to notify a violation under this new -- now that the new MINER Act has gone into effect which is probably true. MR. GRAHAM: I'm glad you said that to yourself and didn't make me do that. (Laughter.) MS. SILVEY: That's probably true. We probably will get more, but how many more, whether we get 5 or 10, I would probably suggest to you and you may prove me wrong that we probably will not get a whole lot more than a few, quite honestly, and I may be really wrong. So it was with that thought process that we did this analysis. But I do want to talk a little bit about the analysis and to do that I want to go Table 4-9 of the PREA and talk about the -- actually I said Table 4-9. Actually, it's Table 4-11. And the reason I want to do that is is because that kind of shows in a nutshell what we did. And we tried to separate this, the mining sectors and we gave the old proposed penalties. If you apply the penalties under the old proposal, the existing rule and they came out at $24.8 million. And then under the proposed rule, all other things being equal, the penalties came out at $68.5 million which was an increase of roughly $44 million. And that's assuming that mine operators have no change in compliance. Then what we did is and as I said earlier, people can disagree with the assumptions we made and the process by which we -- that we went through. Then what we did, we said that the Congress, in its wisdom, included penalties in the Mine Act because the Congress did believe, rightly or wrongly, that penalties would be an increased incentive for compliance. And so what we then did, we said that if the penalties were to increase, then mine operators would change their behavior and they would expend additional money to improve compliance and we estimated that they would expend roughly $9 million to improve compliance. Now we didn't add that $9 million to the cost of the rule because we felt that $9 million would be the cost of compliance, complying with existing standards anyway. Then we took another step. We said after mine operators would expend that $9 million to improve compliance with the rule, violations would go down. And so therefore, with the improved compliance, violations would go down, penalties would go down from $68 million to $45.7 million. Thereby resulting in a $20 million increase in the proposal as opposed to with no change in compliance, the $44 million. Now as I said we built certain assumptions in, but I just wanted to explain to everybody so they understand those assumptions and you could take issue with them. MR. CHAJET: Ms. Silvey, we do understand the assumptions and we do take issue with them. And if I may point out for the record, the assumption that Sentinels of Safety winner and there are several in this room who both MSHA and the industry and labor groups should be very proud of. MS. SILVEY: We are. MR. CHAJET: To assume in a mine like that is going to reduce its violations by 19 percent because you're raising the penalty from $60 to $120 is an outrageously wrong assumption. MS. SILVEY: Okay. MR. CHAJET: You're looking at the wrong place. You're saying is the industry going to be able to reduce its violations because you're raising a penalty where you should be looking and saying are you going to change the behavior of the inspectors who write violations at an average rate of so many per day, whenever they come to the property and is that going to change because you're changing the penalty system. The leading cause of violations and its relationship to safety is data that MSHA has and has never analyzed. It's the basic mission of the Agency that this proposal has not looked at. What is the relationship to safety of the penalty system and the citation system? What are the leading causes of citations? How do they relate to accidents on site? How does a Sentinels of Safety winner respond to your penalty or not because we have hundreds of mines that go without lost time or injuries. That's not here. MS. SILVEY: Let me say to you that clearly one of the reasons for issuing this proposal is that we hope that it would be a greater mine operator inducement to even more improved compliance. And as I say that I will say to all of you, I was at the Sentinels of Safety presentation the week before last, I think it was, and clearly, we in MSHA as I'm sure the mining industry is as well as the labor segment, that we all are very proud of the Sentinels of Safety winners, people who go hours, millions of hours without a lost time accident and clearly without a fatality. But that being as it's said, the civil penalty structure that MSHA has, you know you work with what you have. I'm not saying that any process can't be improved. And the process that we have now, the statutory criteria that we apply in terms of the proposal of penalties, we do not have a statutory criteria that says that you apply the safety, the injury or illness rate of an operator. Now that's now saying that, you know -- but we look at a lot of factors, but when we look at the statutory criteria that I mentioned in my opening statement. So then what we've done in this analysis is we've made general projections about safety performance and improved safety performance. And that's where we are with respect to this proposal. And not saying that you -- as I said, that we can't improve where we could go. That's part of the reason we're having this public hearing today. So I would just like to make that point in terms of the analysis and what the analysis shows. Do you want to add anything to that, Robert? MR. STONE: Let me make a couple of comments. First of all, in designing this proposed rule, we had central parts of the rulemaking committee, representatives from coal and metal who brought to bear their expertise on what would be an appropriate penalty, what the structure of penalties should be, how to modify penalties to reflect what they think is hazardous and what needs to be modified. In addition, you seem to make the assumption that there are only good mines and bad mines, but I think -- and certainly there are better mines and worse mines, but even the best mines would want to avoid violations and those violations that in some -- they have some relationship to increased risk of injury. And so even the best mines might find some inducement to be even safer. I think absolute safety is the goal, but it's hard to reach. And so further incentives will lead, we hope, to increased safety. But the other thing is that it's not that every mine will have a 19 percent reduction in injuries, sorry, 19 percent reduction in citations. The bad actors, we hope, will have a much more dramatic inducement to reduce their injury rates -- sorry, reduce their citations and ultimately injuries and possibly fatalities because they are the ones that are going to have a much more dramatic impact because they have the much larger number of citations. MR. GRAHAM: Could I ask a question, while I'm thinking of it? You know, the proposed standard doesn't address collection of outstanding penalties that I see. My understanding is that there are some operators that fail to pay large amounts of money and MSHA has no mechanism, if you will, to collect that very easy. I guess there may be a mechanism there, but it's not an easy mechanism to work. MS. SILVEY: That's right. MR. GRAHAM: Why was there not anything in here that have MSHA the ability to collect those fines or penalties from those operators that refuse to pay as opposed to a lot of operators like General Chemical, like the other trona mines in southwestern Wyoming, like a lot of the coal mines that when they get an assessment, we write the check and send it back. And if you have somebody out there that's not paying their bills, it appears or I would assume that there needs to be something in there that gives MSHA the teeth to be able to collect those and give them an incentive, if you will, to pay. (Pause.) MS. SILVEY: No, that's -- let me see. Who has the MINER Act? To your question, the MINER Act -- penalties. Where is it? That's it, thank you. The MINER Act added a change to Section 108? I have the MINER Act right here with me. The MINER Act made a change to Section 108 which amended it to say "for any operator who fails or refuses to comply with any order or decision including a single penalty assessment order that is issued under this act." And I think the thought process was was that was giving MSHA greater teeth in going after just those operators that you talked about. MR. GRAHAM: But does that apply only to the three areas in the MINER Act or does that apply to all -- MS. SILVEY: No, that was all. Yes, that was a change to the injunction provision of it of the act and that's just the general change. MR. CHAJET: Ms. Silvey and members of the panel, we have several basic messages to give you. One is that we think you're kind of operating in a vacuum. You ought to get some outside, independent people that are working in the industry, mine operators, union personnel and put them in a room as an advisory committee and let them look at your data and let them work with you so that you can advance the cause of safety. Because where you're coming from is more of the same. It's just more of the same thing you've got and obviously the Congress wasn't satisfied with that. So what the Congress has said to you is they focused on very serious, very serious hazards and very severe guilt. That's where they came down and said we're changing the penalty structure in the MINER Act for flagrant violations, for unwarrantable violations, things that are of extreme hazard and high levels of fault or guilt. And instead of aiming at that instruction from Congress, MSHA has proposed a rule that goes all over the place, takes non-serious, non-S&S violations, increases penalties in the entire arena and doesn't focus on recalcitrants. As Mr. Graham said, doesn't go in and talk about bad operators that don't pay or operators that have serious violations. It is a broad-brushed more of the same. I'm old enough and so are some other people to recall what led to the minimum penalty. MS. SILVEY: Okay -- MR. CHAJET: I'm not finished. What led to the minimum penalty was in the 1970s. We had congressional oversight hearings and I commend all of you to go back and read them, where we came in with thousands upon thousands of penalties that were issued for the trash cans without lids, for the kinds of things that Mr. Graham talked about. And that resulted in the minimum penalty being proposed to try to focus on serious issues. You're moving away from that. You're moving back wards this everybody is the same. You have likelihood and gravity to consider. You could consider the current leading causes of injuries in likelihood and gravity. You haven't done that. MS. SILVEY: Okay, look, let me ask Mr. Graham, let me ask you a question here, Mr. Graham and that is I have written this down so Mr. Chajet reminded me. You mentioned -- I wrote down three things because I forgot the fourth. In your testimony you mentioned trash cans without lids, broken light bulbs, housekeeping in bathrooms. Have you been issued a lot of violations, citations like that? MR. GRAHAM: I have, over the years, yes. MS. SILVEY: Let's put it in a short time frame. Have you been issued a lot of them like that in the recent past? I want to look at some of those. MR. GRAHAM: I'll give you what I have. MS. SILVEY: Would you send those to me? MR. GRAHAM: I don't know what "a lot" is to me. "A lot" could be three -- MS. SILVEY: I don't know what I'm asking myself, but the categories -- I wrote these three down because that's what when you were talking. Could you send those to me? MR. GRAHAM: Sure. MS. SILVEY: I'd appreciate it if you would send those to me. MR. GRAHAM: The one that sticks out in my mind was the one that we got the last quarter. MS. SILVEY: Okay, that would be a good one. MR. GRAHAM: Where there's a trash can with an orange peel, one. Now granted, I'll give you the facts -- MS. SILVEY: Send that to me. MR. GRAHAM: -- if food is in there, it will be covered. How is that -- if you think penalizing me $112 or $100 or whatever is going to correct that situation and that's going to improve the health and safety of the people at our operation, I don't see where that fits. I don't see where that fits. You have the data. You have the data. Mr. McAteer was infamous for his statement. We have carbon copy accidents that happen over and over again. We have the same causes. You have the data. You know how to find these causes and penalize them and this rule doesn't do that. MS. SILVEY: Okay, the next thing that I wanted to -- you said you would get those to me and I would appreciate it if you would do that. I still have one more comment for Mr. Graham. Jay, do you have anything? MR. MATTOS: I have a couple of things. One thing I wanted to touch on are the assessment issues that you brought up because I do want to get into that a little bit. Pat introduced me as the Director of Assessments. MS. SILVEY: I meant acting Director. MR. MATTOS: I've been acting in there since March. MR. GRAHAM: We won't hold you responsible. MR. MATTOS: Well, no. What you described, the lost checks, bills, some of the procedural problems that we've had at MSHA are unacceptable. We've had that and won't deny that. We're working hard to identify the problems and we've made some headway over the last -- MR. CHAJET: And we have to say that your people in the Solicitor's Office have been extremely cooperative in trying to find the problems and cure them. Everyone has cooperated in trying to fix it. But the amount of work that we've put into the process, on your side and on our side, has been immense. MR. MATTOS: It's unacceptable and we're working to clear that up. Going toward -- or speaking to the issue of the recalcitrant operators who don't pay debt, that's something we've also been working very hard to remedy. We do have things that we can do. The debt collection act specifies how we handle these things and that's where you're getting some of these calls that you shouldn't be getting. We're getting some of those from the Treasury Department. We are currently transferring all of our delinquent debts to Treasury for collection and there are some debts that are going to Treasury that we have to recall because the payments weren't applied to the right place. But we're recalling those things and we're taking care of those. There are fewer and fewer cases of that happening. But they are now the ones who are going after operators who are not paying their civil penalties and may have some tools at their disposal, going to the credit bureaus, attaching income tax returns, things like that. We're taking full advantage of that now. We started doing that at the end of March, beginning of April. I just wanted to comment on that. A little different topic, we were talking about the trash can lids and those kinds of things. Is it your recommendation or are you suggesting that perhaps we identify certain types of violations such as the ones we're discussing here that would get a less severe penalty that need to be in a different category than all of the other citations? MR. GRAHAM: My feeling is and this is just my feeling, I think we should stick with what the MINER Act says. You've got three things there that are what Congress identified through some tragedies that happened that they specifically wanted to address. And those are major items. MS. SILVEY: It's significant for you and I'm kind of -- it's significant for everybody here to know that even prior to the Congress issuing the MINER Act and the President signing it on June 15th, MSHA was in the process of doing a proposed rule for civil penalties which was revised in our existing civil penalty proposal. Then Congress comes, as you accurately said, Mr. Graham, and issued the MINER Act, enacted the MINER Act. And of course, as Henry says and has those three provisions in there that Congress says clearly, MSHA actually more than three for penalties, had a fourth one in there dealing with criminal penalties, but because this is a civil penalty proposal, it does not deal with the criminal penalty aspect. We were in the process of revising our existing proposed rule at the time and so what we did is knowing that the Congress had instructed MSHA that by December 2006 we had to issue final regulations to deal with the things in the MINER Act, so what we did is we merged the two sets of proposals together and that's the proposal that we are here to talk about today. COURT REPORTER: May we take a minute while I change tapes? MS. SILVEY: Yes, sir. (Off the record.) MS. SILVEY: We will now reconvene the Mine Safety and Health Administration's public hearing on the Agency's civil penalty proposal. We are continuing the presentation of the MARG group with Mr. David Graham and Mr. Henry Chajet, so we will continue. MR. GRAHAM: If I could, I'd like to answer the last question that Mr. Mattos posed. I think part of the situation comes in and we talked about trash cans without lids, housekeeping in bathrooms, those kind of things. I feel that there's a -- and I've heard the words "incentive", "disincentive", whatever come up. I don't know whether it's an incentive or a disincentive to have to pay a citation or what, but I don't think applying certain points that increase citations for those type of violations are going to further health and safety for miners. I believe in answering your question what can we do or what should we do, I think we should concentrate on those things that are major in nature. I mean we had the criteria, the S&S criteria and the non-S&S criteria and you know what, to be honest with you, I probably griped about those more than anything. But in retrospect, looking back at them, they're not really that bad. I mean you have certain things that you know are not serious and do not pose hazards. And as Mr. Chajet said, you have the data. Take a look at the total number of citations that you write and put a top 5 list, top 10 list and take it -- and then make a list of the fatalities that we have and see if there's any correlation there, guys. I think you'll find, as we find when we do that, you don't see that correlation. You don't see -- and you know what? You can have a banner year as far as accidents. You can have a banner year, 10, 12 maybe, recordable type accidents. And you get 100 citations. On the flip side, you can have a real bad year and get 30 citations. So I think the thing that I would propose that we do is let's take a look at where our problems lie and if we're going to penalize or incentivize a company, let's look at those things that pose those problems, those things that cause death. Those things that cause serious disabling injuries and concentrate our efforts there. There's where the incentive will be. There's where companies will put the effort. I mean you know to be honest with you, you get a citation for a trash can lid not on a trash can with an orange peel in there, it actually -- guys laugh at that to be honest with you, because they say what does that do? What does that do? You're really protecting me. Not only the salary guys, but the hourly guys too. That doesn't do any good for the Agency. That doesn't do any good for the company. It doesn't do any good for health and safety. Should we put a lid on? Absolutely. That's what it says. That's what we need to do. But how do we incentivize an operation or a company or whatever, how are we going to do that to keep people from getting hurt and killed? MS. SILVEY: I'd like to talk just a little bit, I'd like to use a graphic, maybe just to think about it, not necessarily that this is resolving anything because first of all we all know, I think we would all agree, that when it comes to S&S and non-S&S and those of us who have been here from the beginning and when I say the beginning, the time of the National Gypsum case, you know I think we sort of come to terms with it and that there are some -- there is some judgment involvement and that some judgment on the part of the operators, some judgment on the part of MSHA, that probably there will be some disagreements, but if you were to draw a line and this is not like a bell-shaped curve and you can't see this line, but let's say that there's a straight line drawn across this paper and that about a third of the way from the end of this side I draw this line down. I intersect this horizontal line with a vertical line. And to the right of that I write S&S. And that generally we may all agree that the third to the right of that everything the inspector writes is probably S&S in that category. There might be a little bit of disagreement, but for the most part, let's just say that we all agree. To the left of here, I intersect it about a third on this side, down here and on this side there are all non-S&S and we all sort of agree that these probably are not reasonably likely to resort to a reasonably serious injury or illness. But that leaves a gradation of violations, somewhere in here that either one, there may be some judgment, lack of agreement on, or two, depending on the situation, it may be that this one, a violation in here may be closer to S&S than non-S&S, depending on one or two factors. And so when you talk about non-S&S, I think it's not maybe always good to lump all non-S&S into that these are the ones that you don't focus on, because these are the ones, I think all of us say to professionals might agree, that some non-S&S may, given the right circumstance, lead to an S&S violation. So one of the things I think we try to do in this civil penalty proposal was to get -- now, like we're hearing from you saying that maybe there was a better way to do it, but one of the things we try to do was to get operators to focus equally as much on the ones that are in this gray area, so to speak, and making sure that if there were a condition, that it tended more toward the left than going toward the right with the ones that are clearly S&S. So that's -- you know, obviously, we've heard a lot -- we've taken a lot of comment from the labor segment and from the industry segment on how to treat these non-S&S violations and what we can do is we'll go back and we can take all that into consideration. MR. CHAJET: Ms. Silvey, I appreciate that. I tried the National Gypsum case and we won it because the citations were for broken light bulbs and trash cans without lids and we went then to Congress in 1979 and 1980 and we said to the Congress, there's this penalty structure out there that's providing penalties for broken light bulbs and trash cans without lids, as if they were serious violations. And then you, the Agency s proposal puts you back 20 some years. MS. SILVEY: Okay. We understand what you're saying, but I did ask Mr. Graham and he promised me he would, to send me those broken light bulb and trash can violations. I want to look at them and he promised he'd do that. MR. CHAJET: And I appreciate that. MS. SILVEY: And then Mr. Hooker and I will get together. MR. CHAJET: And we should ask the rest of the industry to send you all the rest of them, so you can get all 77,000 of them that were issued last year. But you have the data. MS. SILVEY: Okay. MR. CHAJET: Remember, our bottom line request to the Agency, right, institute the changes that the MINER Act told you to do. MS. SILVEY: Okay, thank you. MR. CHAJET: Go get an advisory committee, get some advice from people who live with this every day on how you can adjust the likelihood and gravity to take into effect causes of accidents and injuries, on how you can adjust good faith to take into effect not just abatement, but maybe the failure of people to pay penalties at all, on how you can adjust negligence so you're putting more weight on flagrant, more guilty operators, because your system that you have wasn't satisfactory to the Congress. Go outside. Implement the rest after you've had those recommendations. That's out bottom line request to you. MS. SILVEY: Thank you. MR. CHAJET: Thank you. MS. SILVEY: Thank you, Mr. Graham. I'm sorry, I said thank you too quickly. MR. MONTALI: Mr. Graham, I just had one comment here. You mentioned looking at the total number of citations that were issued during the year and relate those to accidents. And that's a very good thought on that. Also, during the last few years, the metal, non-metal industry actually set some records and it's not MSHA's records, it's your record because you're there day in and day out. All the accolades goes to metal and non-metal industry and not to MSHA. One thing though if we take a look of the citations that were issued most frequently and it is on the MSHA website, the standard that is issued the most throughout the nation and of course everybody knows this as guarding. But there's one thing that you try to correlate. With all the citations that you look at the guarding citations, how many fatalities have occurred because of guarding. Yes, we do have some, but it's not the highest. The thing is, the citations that are issued on guarding, how many injuries and fatalities have been prevented by issuing those citations and that's kind of tough correlation to actually come up with. How many did we save because those citations were issued to prevent those injuries versus if they weren't issued, how many more injuries would we have had? So that's a little bit intangible to try to relate that you've seen in recent years, one year we had a number of supervisory fatalities and we tried to have some programs, you know, the SMART, and we also had a program going out speaking to various companies throughout the country regarding this and we see a decline in that now. But I just wanted to make that comment about how many fatalities and serious injuries have we prevented because citations were issued. MR. GRAHAM: You're right, and I agree to some extent with what you say. Don't get me wrong. I'm not saying that the standards aren't protective, they are. But if you look at what's transpired over the years from the inception of the act, which obviously was a good thing if you look at the number of fatalities that we had in the mid-1970s, the late 1970s, to what we have now? You can't argue with the fact that it doesn't work. But things change, you know? We've looked at conditions which is what the standards are, condition-related stuff, for years. Forever. Right? We haven't looked at the people aspect. I'm sorry. We have looked at the people aspect to some extent. But the standards have not reflected anything that deals with people. It's all condition related. Who takes the guards off? Who doesn't put the guards back on? Those are people-related conditions, right? I mean, those are situations where we know a guard has to be on. We know if that guard is not on, somebody can get hurt. But who takes that off and who doesn't put it back on, and why? Those are questions we need to ask in the future. And when we look at these type of committees and things that put together standards and regulations for the safety and health of miners, those are things in the future that we're going to have to look at. Because we're getting away from, I mean we've got the condition-related stuff. We've gotten penalties. We're getting into the penalty aspect again. The next step we have if we're really concerned with safety and health is people-related stuff. MS. SILVEY: Okay, thank you. Thank you all very much. Next we will have Mike Crum, Wyoming Mining. MR. CRUM: Good morning, my name is Mike Crum. M-I-K-E C-R-U-M. I'm speaking on behalf of the Wyoming Mining Association. The Wyoming Mining Association, WMA, appreciates the opportunity to provide comments on a proposed rule on civil penalties. WMA is a state-wise trade association, representing 28 bentonite, coal, trona, and uranium mining companies in Wyoming. Wyoming leads the nation in the production in each of these solid minerals. The WMA shares with Mine Safety and Health Administration a genuine concern for the safety of our miners. Each mining company in Wyoming has multi-pronged approaches to enhance the safety and health of miners and their work place. Although the events at Sego and Darby were tragic, MSHA's approach to a broad-brush shotgun cure-all is not the answer. As a trade association that represents conscientious operators, the WMA takes exception at the quote on page 53055, bottom of the third column, "the intended purpose of civil penalties under the Mine Act is to convince operators to comply with the Act's requirements." WMA members have dedicated safety staff, provide countless hours of training, employ behavior based safety systems, and perform thousands of physical conditions audits per year. The industry, investment, and safety is unparalleled, and totals millions of dollars per year. Members also have sound partnerships with their work forces to promote safety. The key to improve safety and health of miners is engaging every employee and visitor in the safety process and hold them accountable for compliance with all safety rules and regulations. Increasing penalties will not accomplish this fundamental approach to safety accountability unless directed to the root cause of the violation, which in many cases is beyond the control of the mine operator. The scope of control can be determined by evaluating the overall safety program, training provided to miners, policies and procedures in place, and proactive safety efforts that are in place and documented. Operators should receive credit for implemented safety activities that are designed to be proactive and not reactive. It is well understood that any violation of the mandatory safety standard is in fact a violation. However, citations have not shown any correlation with the mechanism of injury. Operators that spend countless hours performing those tasks that are considered upstream safety indicators will be unjustly punished for minor violations of safety standard. The WMA members will also be unjustly punished due to their size alone. Why are higher penalties automatically imposed on larger operations? Is it only because MSHA feels larger operations can afford the penalties? The proposed rule is designed to punish those operators who realistically have safety records -- realistically have better safety records and historically have received many 104(a) non-S&S violations for items such as missing monthly inspection on one fire extinguisher, or a guard that is in place but the bolt wasn't holding it on the bracket. It is with considerable effort and dedication of safety that the WMA's members' citation history shows very few significant and substantial violations and that they have very, very few high negligence violations. MSHA should look closely at the accident data and seek to drive results where the accidents are occurring. In cases where a miner made a conscious choice to disregard a safety standard after receiving training, having access to safety equipment and/or violating company policy, MSHA cites the operator as being in violation when clearly it was a personal choice that caused the accident. The penalty assessments for repeat violations should be considered only for S&S violations. Typically, an S&S violation is one that would have a direct impact on safety and therefore the penalty for repeat violations should only be covered for repeat S&S violations. In regards to the conferencing period, shortening the conferencing time period will neither improve safety, nor provide any advantage for MSHA. The conferencing process is overloaded presently. Shortening the time period will only add to this burden. Operators may react to this in one of two ways. First, if the operator missed the deadline inadvertently, citations that don't go to the conferencing officer will be contested on the penalty assessment. Secondly, operators who are still investigating mitigating circumstances, will send more citations to conference than is necessary just to ensure bases are covered. Both of these situations will further slow the system. The problem with the conferencing process are not within operators taking citations through the proper channels, but rather the inefficiency of the process in general. Some WMA members have had citations in conference for six months at the present time. One citation request for conference was made well within the 10-day time frame, and the company has not received one reply to their request. It is also very difficult to take care of citations at the inspection closeout to try to eliminate the conferencing or avoid the conferencing process when all inspectors participating in the inspection are not present at the closeout. WMA would like to make the following specific recommended changes to the rule. 100.3(c) history of previous violations. WMA recommends that MSHA adopt an 18-month period instead of the proposed 15-month period. An 18-month period will allow for the completion of three regular inspections for surface operations when we're already looking at four or five for an underground operation. This time frame would allow for a more realistic comparison of performance and provide the operation the necessary time to ensure sustainability and improvements or actions and would be a more accurate reflection of violations for inspection day. 100.3(f). The demonstrated good faith of the operator in abating violations. WMA recommends that MSHA reconsider its proposal to decrease good faith efforts to 10 percent from the original 30 percent. This is a considerable reduction and operators who are diligent in correcting violations should receive that consideration. Not all violations are known to the operator and when an operator commits the resources to quickly abate a noncompliance situation, a 10 percent reduction in the penalty does not correlate at times to that effort. Additionally, with the significant increase in potential penalties, the reduction and the recognition of good faith is inconsistent. 100.6(b) procedures for review of citations. WMA recommends that MSHA reconsider its proposal to revise the time frame for requesting a conference. The current 10-day limit is an appropriate time frame that allows adequate time for an organization to determine if a conference should be requested. Due to various shift schedules that exist within the mining industry, it could be expect that an organization will be unable to gather the required information to make the appropriate determination on whether or not to conference a citation within the proposed 5-day time frame. In summary, there are serious problems with the proposed rule which begin with larger penalties for larger operators who contribute greatly to the industry's safety record being as low as it has ever been. These large operators have a proven track record of good-faith safety programs and solid safety performance, including partnership project, safety studies and many other proactive safety practices. Now the Agency intends on punishing them for nothing more than size. Finally, cited safety violations and mechanisms of injury have historically not correlated, so there's no basis for the Agency action to simply raise the monetary penalty. There are better ways to improve the safety record of the industry and WMA would be willing to work with the Agency to find those ways. Thank you for allowing my comments on behalf of the WMA. We will submit comments prior to the -- submit written comments prior to the deadline. MS. SILVEY: Thank you. I'm going to ask, say this for everybody, and that is when you all provide your written comments to us, for those of you who do follow up your comments here today with written comments, when you do, if there are areas in which you disagree with the proposal, when you so state that, then if you have specifics, very specifics in support -- first of all, if you have alternatives, specific alternatives to the proposal, if you would include those. Secondly, if you have specifics, either data or very specific information in support of your alternative, if you would include that, that would be very useful to us in helping us move forward with the final rule that we have to do in a short period of time. I only have a couple of comments for you, Mr. Crum, and that is when you quoted to page 53055 and I guess in some ways I am going to continuously go back to this, that you didn't agree with our statement that penalty, the intended purpose, because that's one of the basic premises behind civil penalties. And either you buy it or you don't quite frankly. And even if you don't buy it, you pretend to because as I said -- I don't mean that literally, but the Congress did and the congressional wisdom, when they passed the Mine Act, they included penalties as one of the tools in the Mine Act, to help induce compliance. So that statement, quite frankly, is a direct quote from the Senate report that accompanied the Mine Act. MR. CRUM: And we understand the quote is 30 years old. MS. SILVEY: Right, that's right. But the Mine Act was amended recently, but then there was nothing done to the basic premise of the civil penalty framework except for the four provisions that were added. So that's the only reason I make that comment. But even as I make it, when you provide your specific comments, if you could -- your written comments, if you could provide specifics, that would be useful for us. Actually, I don't have any other -- one other thing I would say and that's kind of a repeat is the fact that we've gotten a lot of comments today here on size, that the proposal seems to be penalizing the larger operators and I would underscore again that's a reflection of the statutory criteria one being size and as you have -- as some of you have said to me today, to us today, there are different ways that you can apply size and so when you all in your specific comments, if you have different applications or different ways, if you would be -- different alternatives, if you would provide that to us, we would appreciate it. MR. CRUM: In following up on that comment, in looking at the table on metal, nonmetal size, an operator with less than 10,000 hours still gets zero penalty points, if you will. MS. SILVEY: For size. MR. CRUM: For size. MS. SILVEY: Yes. MR. CRUM: Our goes for large operations, it goes from 10 to 20. For the trash can lid that Mr. Graham referred to, it's a violation. It's a violation. It's a violation. MS. SILVEY: Yes, I understand. MR. CRUM: So we get 20 points when a small operator starts out at zero for a citable offense. MS. SILVEY: I understand. MR. CRUM: With the same understanding all the way across the board. MS. SILVEY: I clearly understand. I've got your point. I appreciate it, right. Yes. Okay. Any others? MR. MONTALI: I have one question. You made a statement regarding the 10-day to the 5-day. You were opposed to that for the manager's conference and you did state that there were times that you requested manager's conferences and they were months, in fact, you did make a statement that there's one that was -- actually requested six months ago and you've had no reply as to whether or not it's been granted or when it's going to be held. Is that correct? MR. CRUM: Obviously, I had a little bit to do with the Wyoming Mining Association comments. If you'd hold that comment to the FMC presentation or hold that question. I'd rather answer it there. MR. MONTALI: Okay. MR. CRUM: I'm not necessarily in a position to answer questions for the entire mining association. MS. SILVEY: I understand. Okay. All right, thank you, Mr. Crum. MR. CRUM: Thank you. MS. SILVEY: Next we have Jack Cottrell. Kinross. MR. COTTRELL: Good morning. My name is Jack Cottrell. It's C-O-T-T-R-E-L-L. I'm the corporate manager of Health and Safety for Kinross Gold Corporation. Kinross is a multi-national gold company with surface and underground mines employing approximately 1,100 miners in Alaska, Washington and Nevada. These mines are among the safest in the country, measuring lost time in accident years, not hours. And our Washington mine received a 2005 Sentinels of Safety award. Kinross appreciates the opportunity to comment on the proposal criterion procedures for proposed assessments of civil penalties which were issued in September 2006. Regarding the proposed civil penalties, Kinross wishes to comment on the following issues: One, total number of violations in Section 100.3(c)(1). Repeat violations of the same standard, Section 100.3(c)(2). Negligence in 100.3(d). Four, reducing assessments based on the effects of the assessment on the ability to stay in business. And five, the general comments regarding section 3(a), general discussions in the preamble. When these proposals were considered individually, they seem innocuous, however, when considered as reframing the MSHA penalty structure, the proposed regulations remove mine operators from interfacing with the Agency regarding misinterpretations of the regulations and deny operators the right to contest citations. These proposals, the proposal of relevancies are also largely unsubstantiated. In Section 100.3(c)(1), total number of violations, where this section addresses the total number of violations issued each year and establish a ration based on the number of citations issued for inspection date, Kinross encourages the Agency to stipulate in the regulation and not the preamble that inspection days are based on the number of inspectors on site each day, therefore, if three inspectors are on site for one day, this would count as three inspection days. The section 100.3(c)(2) repeat violations of the same standard. If a pattern of violations is to be established, it must be based on violations that are more seriously than a typical 100.4(a) citation. There are so many variables that enter into a citation and many are paperwork violations or minor exceedences of MSHA rules. Many of these citations are issued because of what is important to the inspector and thus a company may be placed on a pattern violation because of an inspector's philosophy and not of the requirements of the act. Many violations of this nature are contested and vacated and in later sections of the proposal, MSHA is recommending that this proposal be removed. Citations which are inappropriately written must not be held against an operator. The Agency has not explained how this will reduce accidents. Kinross recommends the Agency rethink this proposal and develop a more realistic approach to repeat violations. Section 100.3(d) negligence. Mine operators are required to be on alert for conditions or practices in the mine and to take steps to correct or prevent hazardous conditions and practices. What constitutes being on alert? Kinross mines have task training programs, planned inspections, task observations, risk assessment, accident investigations and safety communication procedures and standards. Does this constitute being on alert? If MSHA truly wants to reduce accident rates, negligence of both the company and the miner must be addressed. Kinross encourages MSHA to be proactive in assisting mining industry and focusing on systems and processes versus the reactive punishment approach. Kinross recommends the good faith standard discussed in 100.3 be increased and provisions added to provide incentives to implement and maintain proactive safety systems. Section 100.3(h). This is the only place noted that discusses the reduction of a penalty and it only addresses a provision if an assessment would adversely affect a business. This, in effect, frames all citations in a pay all or nothing status. Kinross urges the Agency to readdress this issue as it is either unclear or the Agency is constantly trying to limit communications with mine operators. Number 5 in Section 3(a), general discussions in the preamble. Excuse me, yes, it's general discussions in the preamble. This philosophy in the last paragraph is flawed where the Agency states the proposed changes are intended to induce greater mine operator compliance with the Mine Act and MSHA safety and health standards, thereby improving safety and health for miners. As MSHA is aware, in the larger mining community there are five separate industries, namely metal mining, nonmetal mining, sanding gravel, coal mining, and specialty mining. These industries are unique and each has its own set of issues involving safety. Just as the transportation industry has several unique industries within the larger industry, shipping cannot be regulated the same as trucking and trucking cannot be regulated the same as the airline industry. The same is true with mining. Kinross believes the Agency must redirect their thinking and refocus on how to prevent injuries. The Agency must not assume that by penalizing large metal mining companies, small coal or small standard gravel companies will solve their safety and health problems. These proposed regulations suggest this philosophy. When miners receive an industry guard mandated training instructions or willfully violate MSHA safety rules and the Agency does not address the issue, safety is not served. When personal responsibilities are considered and proactive management systems are implemented to manage test training and planned inspections, task observations, risk assessment and safety communications, then a reduction of accidents will occur and miners will be protected. Statistics indicate that miners are injured by how they work, not where they work, yet there is no provision in this proposal to address this issue. The Agency must address the problem before the problem exists and not use the one regulation fits all or the broad brush philosophy to solve problems that do not exist in other mining industries. Regional or local problems must not be the basis to regulate unrelated industries in the mining community. In this regard, increased penalties should be directed to the coal industry since it is the industry that prompted congressional action. Kinross encourages MSHA to abandon the punitive approach of yesterday and address issues proactively and provide incentives to regulations that encourage companies to implement systems and processes that prevent safety issues instead of punish them after the fact. If a punishment tool must be used, it should be the exception, not the rule and Kinross believes the act recognizes this. MSHA has the opportunity with this proposed regulation to improve the way the act is managed and Kinross cannot emphasize enough the need for the Agency to manage the act proactively instead of harboring the punitive approach which has had a limited ability to lower mine accidents. Thank you again for the opportunity to comment on these regulations and considering our concerns. MS. SILVEY: Thank you. I'd just like to make a couple of points here, Mr. Cottrell. Throughout your testimony you said that you would like us to provide incentives instead of punishing operators. And so from that I take it that from your testimony your concept of the penalties is a concept of punishment. I mean like yes, I have to take it. MR. COTTRELL: It certainly isn't a reward. MS. SILVEY: All right. I wanted to follow that and the reason I asked you that is because I think the frames of the Mine Act intended and I think MSHA does and so in carrying out implementing the Mine Act, the Mine Act is -- it's remedial legislation which is meant to be proactive in nature, remedial legislation and which is meant to serve to prevent accident and injuries before they happen. We do that -- the Mine Act, obviously, I don't have to tell you that is set up for doing that in a number of ways. Enforcement, one way. Obviously, compliance, setting benchmarks for health and safety, setting standards. Operators and miners complying with the standards and then enforcement, one of the aspects of enforcement is penalties. But that's all from the standpoint of being remedial and it may be a funny way of sounding and serving as an incentive for compliance. Now people might disagree with that and I guess that's what you're telling me, but I guess one of the things I want so that everybody can see and will understand is that it's only within the framework of the Mine Act that the Agency is issuing this civil penalty proposal. MR. COTTRELL: I probably stand alone in this, but I have no problem with the Mine Act. I think it's a good act. I think it's been managed wrong for the last 40 years. Otherwise, if the punitive actions were effective, you would have seen less citations written. You would have seen less accidents and less problems. If the punitive approach works across the country, our jails would be empty. It simply doesn't work in the mining industry. I've spent probably 90 percent of my time in the field at mines and I've worked in gold mines, copper mines, lead mines, iron mines, all over the country. And in every mine that I've been at, I've literally had to have two different programs. I've had to have an MSHA program and I've had to have a proactive program to implement proactive systems into the management system. I've never seen a relationship between the citations that we've received in any of the mines that I've been at and in the reduction of accidents. The reduction of accidents has always come by having proactive management systems involving the miners and looking at behavioral type systems to get miners to understand the risks of what they're doing and evaluate that risk before they go ahead and do that job. The system -- if the system has been designed to reduce accidents, the penalty system, it doesn't work. And I think what MSHA needs to do is rephrase their question, is why has the penalty assessment system failed to reduce accidents and protect miners? I think that's the real issue on this. MS. SILVEY: Well, in part, I think that we have -- we are talking maybe somewhat -- maybe not totally -- somewhat a little bit of semantics in terms of what tool is what, but I would like to ask you in your closing statement I think you said we would like to see MSHA provide incentives instead of punishing operators. And you talked about the safety programs that you had implemented at your company. If you would -- and you talked about the things that you didn't like in the proposal. If you would then when you talked about the things, a couple of times you did provide some examples of what we -- as a matter of fact, one thing struck me, what we should do differently in the civil penalty proposal. But in every example of where you talked about what we didn't do, the things that you didn't like, if you have something that you would substitute in its place, if you could provide that. I know specifically you talked about the size area, I remember what you didn't like and you gave an example of what we should do in the size area. And so those are the kind of things, that would be very useful to us. MR. COTTRELL: Okay, I agree that there should be a broader approach to solving this issue, that the tragic incidents that brought all this about really didn't need to happen and -- but the system just doesn't seem to be working and I think there needs to be some kind of a natural approach or a larger, broader approach to look at how we can incorporate some of the proactive things into the act. I think the act allows it. It's just everybody is caught up in let's get a bigger hammer and beat people up more. And it isn't working. MS. SILVEY: One of the things, I do want the record to reflect this, is that from almost 40 years since the '69 Coal Act and a little bit more, with the Metal and Non-Metal Act of '66, when you look at, there are things that we do look at as indices of improvement in safety and health. And one of the things that we look at year after year is fatalities. When you look at the fatalities in the mining industry during that passage of time, I do think that we all agree that the fatality rate has improved dramatically in the mining industry over that time. So there has -- programs have to be put in place and as Pete said earlier and the credit clearly doesn't go just to MSHA. The credit really goes to the mining industry Sentinels of Safety session in Washington a couple of weeks ago, so I think that we should acknowledge that credit for the improvements that have been made. Now as I say that and then I agree with you, Mr. Cottrell that with the things that happened earlier this year then greater improvements need to be made. MR. COTTRELL: I haven't looked at the statistics lately, but if memory serves me right, there was a dramatic decrease in fatalities when the MSHA act was implemented. But since then it's been static. It's been up and down. You can probably track it within a certain range and I don't think there's been a downward trend in the last several years. I think it's something that needs to be looked at. So again, why has the penalty system failed in reducing that trend? MR. MATTOS: I think that is a presumption that -- the numbers of injuries and injury rates have been decreasing steadily over time and continue to decrease. When we start looking at fatalities the closer we get to zero fatalities, the number, the statistical significance of the numbers begins -- one fatality increase or decrease, you know. But the injury rates, all categories have been declining and continue to decline. But it's not due to the civil penalty structure, it's a combination of factors, the proactive systems that you were discussing. MR. COTTRELL: But MSHA makes the point quite clearly in these regulations. That's what these regulations aim to do is to reduce the accident rate and it isn't doing that. That's why I think we need to take a broader look at this from an MSHA, company, unions, anybody that wants to participate in this is how do you make this work, how do you hold bad actors accountable and reward good performers. Back in the '80s, MSHA had a program out that we termed it the "dirty 30." MSHA had another name for it, but where they looked at the 30 worst mines in the country and then they went in and tried to help those companies address the issues of why they were having so many accidents. That went on for about two or three years and then it was abruptly canceled and they went back to the let's hit them more with citations. I think there was a window there that there was an opportunity to start affecting the accident rate, but that was thrown away again for stricter enforcement. So it's just -- I don't see that the strict enforcement, you need to have the strict enforcement out there. It has to be there for people who aren't going to comply with the act. But when you have people who are trying to comply with the act and working with it, there should be some incentives and some recognition of that. MR. MATTOS: I had a couple of questions. In your testimony, well, one point and a couple of questions. On the inspection days, the way we count inspection days, if there are three inspectors there, that's three inspection days. That's the way it's currently done and we wouldn't change that. MR. COTTRELL: All right. MR. MATTOS: We'll clarify that as you suggest. This is a question. ON the repeat violation component, you commented on contested violations. I wasn't clear on the point you were trying to make. MR. COTTRELL: The minor 104(a) citations, the garbage can lids, the minor ones, the paperwork ones, can all be brought in and if those keep happening, you get on a pattern of violations type of a program. I don't know if that's going to really reduce any accidents. MR. MATTOS: I think the part of your testimony I'm referring to is on citations that are issued in error or something to that effect? MR. COTTRELL: Yes, the company shouldn't be held accountable for those citations that were improperly written. MR. MATTOS: And those that are vacated, subsequently vacated or -- MR. COTTRELL: It seems like it's going to be harder to contest citations under the new rules. You don't have a chance to go down and talk with the district where you can solve some problems up front. It seems like you're going to have to go right to an ALJ. And it just seems like it's going to be harder to address these issues and our communications is being limited on some of those things. MR. MATTOS: Is there a specific component of the proposal that leads you to think that it would be harder to discuss or contest -- MR. COTTRELL: I think the way that everything is being set up on negligence and how you try and address issues is really -- it's not so much complicated, it's just removing us. It says -- it's almost like we don't want to talk with the district any more, just go talk to an ALJ. I don't think you're going to solve a lot of problems that way. MS. SILVEY: Why do you think that you won't be able, under this proposal you won't be able to talk to the district? MR. COTTRELL: It's the way I read the proposal as I was reading it. If that's wrong, if I got the misinterpretation on that, then I'm wrong. MS. SILVEY: You still will have opportunity to request a conference with a district manager. Now we've heard a myriad of testimony that we should not be shortening the time period from 10 days to 5, so then we have to look at that, but you'll still be able to request a safety and health conference with the district manager. MR. COTTRELL: Isn't there a provision in there that says MSHA has the sole discretion as to which ones are discussed? MS. SILVEY: But that's in the existing rule. There's nothing changed on the safety and health conference, except for the time frame and that's something we're going to go back and look at. MR. COTTRELL: That's not the way that it works right now. Right now I feel like I have an open door. I can go down and talk with the district any time I want to. This seems like I call the district and they say no, we don't even want to talk about that. MS. SILVEY: No. This proposal was not intended to change that at all. MR. COTTRELL: Then it needs to be clarified. MS. SILVEY: I don't think it says that. I didn't think it says that, but you were telling me you thought it said that. MR. MATTOS: The proposed rule is similar to the existing rule in 100.6(c). That's the discretion and it's just combined into all one paragraph. The way we look at these paragraphs, we were reading them and we thought we could make it clearer. MS. SILVEY: We didn't. You can see we didn't. You can see what happens when you think. MR. MATTOS: But the provision that is within the sole discretion to grant a request for a conference, I just read that from the existing rule. We're just carrying over the language. MS. SILVEY: It shows you how you can do some things unintended consequences of what you do. MR. COTTRELL: Change isn't easy. MS. SILVEY: Yes. MR. MATTOS: One other question that I had is on your comment on the ability to stay in business. MR. COTTRELL: It just appeared to me as I read the regulation that the citations were going to become all or nothing. If it didn't affect your business, you were just going to pay the fine, pay the assessment, whatever the assessment was. There was no avenue to go in and discuss that and to really try and lower negligence or lower some of these other aspects where the dollar amount is high. MS. SILVEY: Again, that process doesn't change from the way it is under the existing, the process. MR. COTTRELL: Okay. MS. SILVEY: I don't want to mislead anybody. The 10 days we did propose the 10 days to request a safety and health conference. We proposed that that be reduced to five days, but we got a lot of comment on that and we will have to just take that comment into consideration and we look at that. MR. COTTRELL: And reclarify that, that would be fine. MS. SILVEY: Yes. Anybody else? MR. CROCCO: Let me ask you one question. You talk a little bit about some violations that were out of control of the operator or were acts of individuals. Did you have a recommendation that we could address? MR. COTTRELL: I can give you an example of a horrible accident we had about three years ago. We had an operator who tried to jump a dozer off a beach pad and unfortunately the berm was too high and he had his rigs up too high and he flipped the dozer over and sustained a permanent disability. He's no longer able to work in the mining industry. When MSHA came in and investigated that, they tore our training program apart. And they couldn't find anything wrong with our training program. The employee had been observed three months before doing the job correctly. He was supposed to come down and get some gas and -- or get refueled and then come back up on the pad. He had been observed on a task observation, a formal observation where the supervisor observed him doing the job correctly. MSHA went in and looked at our maintenance program and they tore our maintenance program apart and they couldn't find anything wrong with our maintenance program. So they tore the machine apart. They couldn't find anything wrong with the machine. So then they started looking at our EMT and our emergency response system and they started dissecting that and they couldn't find anything wrong with it. He was packaged right. Medically, he was right. And those people literally saved the man's life. They then wrote us a citation for an employee not controlling his equipment, when in fact, he had had all the training. He had been observed doing it right. He had made a conscious decision to do this and ended up not only destroyed equipment, destroying his life. MSHA wrote us a citation again for the employee not controlling his equipment and marked negligence as moderate. I asked -- MS. SILVEY: Negligence was what? MR. COTTRELL: Our negligence, the company's negligence was moderate. MS. SILVEY: Was moderate. MR. COTTRELL: I asked the inspector and the investigators at the time where our negligence was at. That was four years ago and I'm still waiting for an answer. So sometimes miners violate rules and yet the companies are blamed for those. You do everything right and something still happens. There's no provisions to look at that and to give companies credit where credit is due. MS. SILVEY: Okay, anybody else? Thank you. MR. COTTRELL: Thank you very much. MS. SILVEY: Next then we will have Mr. Crum who is now speak on behalf of FMC. MR. CRUM: Again, my name is Mike Crum. M-I-K-E C-R-U-M. I'm with FMC Corporation out of Green River, Wyoming. FMC appreciates the opportunity to provide comments on the proposed rule regarding the revisions to the violation of penalty assessment regulation. FMC, like MSHA, is genuinely concerned about safety of our miners and has a multi-prong safety program striving for continuous improvement of the safety and health of our miners. Although the events at Sego and Darby were tragic, these unfortunate situations have been within the coal mining industry and not within the metal and nonmetal industry. FMC supports MSHA's agenda of protecting miners and searching for ways to improve the industry. However, MSHA should focus their efforts where the problems occur. MSHA's approach to a broad brush cure-all lumping all mining operations together is simply not the answer. The unfortunate events that occurred at Sego and Darby became media events with politicians attempting to enact knee jerk regulations that do little to improve the overall safety of miners, much less bring focus to the real issues in the industry. As a conscientious operator, FMC takes exception to the quote on page 53055, bottom of the third column, understanding this 30-year old quote, "the intent and purpose of the civil penalties under the Mine Act is to convince operators to comply with the Act's requirements." FMC takes every violation seriously. Our business leaders, our managers are judged. They are held accountable for a non-S&S violation to the same degree as they are for an S&S violation. FMC has a dedicated safety staff, provides countless hours of training, employs behavior-based safety systems, performs greater than a thousand physical conditions per year and has a sound partnership with our union leadership in the safety arena. The key to improved safety and health of our miners is engaging every employee and visitor in the safety process and holding them accountable equally for compliance with all safety rules and regulations, as well as company policies. Increasing penalties will not accomplish this fundamental approach to safety accountability unless directed to the root cause of the violation which in many cases is beyond the control of the mine operator. The scope of operator responsibility can be determined by evaluating the overall safety program, training provided to miners, policies and procedures in place and proactive safety efforts that are in place and documented. Operators should receive credit for implemented safety activities that are designed to be proactive and not reactive. The change in good faith efforts' percentage, if any change is made, should be increased for those operators who diligently correct violations in a timely manner. The proposal is not appropriate for the efforts made to quickly abate violations. It is well understood that any violation of a mandatory safety standard is, in fact, a violation. However, citations that have not shown an correlation with the mechanism of injury has not been considered. Operators that spend countless hours performing those tasks that are considered upstream safety indicators will be unjustly punished for minor violations of a safety standard. FMC and other large operations will also be unjustly punished due to our size alone. In 2006, a year to date, only one fatal accident has occurred at operations with more than 200 employees. Therefore, it begs the question why are larger operations automatically imposed higher penalties? Is it only because we can afford the penalties, at least when our markets are strong? An axiom in American justice is the punishment should fit the crime. This should not be modified just by a number of people, my employees. Fatality numbers for large operations with greater than 500 employees for previous years breaks down as follows: in 2005, 4 of 35 total fatalities; 11 percent. 2004, 2 of 27 fatalities, 7 percent. 2003, 1 of 26, 3.8 percent. 2002, 5 of 42 fatalities, 12 percent. As the above illustrates, large operations account for only an average of 9.2 percent of the fatal accidents that have occurred in the last four years. However, the proposed rule is designed to punish those operations who realistically have better safety records, but may historically have received many 104(a) non-S&S violations for items such as missing the monthly inspection of fire extinguishers out of maybe one, two out of a total of 400 that we may have on property; or a guard that is in place. The only thing that's going to move it is if someone picks it up because a bolt is missing. If inspectors want citations, they can find them in any operation, even the Sentinels of Safety winners' operations who we all command. It is with considerable effort and dedication to safety that FMC citation history shows very few S&S violations and that we have very, very few high negligence violations in our history. MSHA should closely analyze their accident data and look to drive results where the accidents are occurring within the industry. Questions also arise as to the root cause of fatal accidents where the primary cause is conditions or behaviors. In cases where a miner made a conscious choice to disregard a safety standard after receiving training, having access to safety equipment and/or violating the company policy MSHA cites the operator as being in violation when clearly it was a personal choice that caused the accident. Is expanding MSHA's ability for citing individuals unrealistic? MSHA also seeks comments on how to assess repeat violations. The penalty assessments for repeat violations should be considered for S&S violations. Typically, an S&S violation is one that would have a direct impact on safety and therefore the penalty for repeat violations should only be covered for repeat S&S violations. MSHA is also requesting comments on shortening the conferencing time period. Shortening the conference time period will not improve safety nor provide any advantage for MSHA. The conferencing process is overloaded at the present time and shortening the time period will merely add to this burden. Operations may react in one of two ways. First, if the operator missed the deadline inadvertently, citations that don't go to the conferencing officer will be contested on the penalty assessment and taken before the Commission. Secondly, operators who are investigating mitigating circumstances and run out of time will send more citations to conference than is necessary just to make sure all bases are covered. Both of these situations will further bog down the already overloaded system. The problems with the conferencing process are not necessarily with taking the citations through the proper channels, but with the inefficiency of the process in general. FMC has had citations in conference for six months at present time and has also requested a conference back in July on a citation well within the 10-day time period and I have yet to hear a reply on whether or not my conference will be granted. It is also very difficult to take care of citations at the inspection close out, negating the need to conference when all inspectors participating in the inspection are not present at the close out. In addition to the conferencing process, we continue to have problems with assessments. For the past two years, penalty assessments have been wrong. Payments made to one case numbers have been applied to completely separate case number and in one instance, a completely separate mine ID number, even when the desired case for payment is written on the check stub. I have my folks put those on the check stub when I send them to assessments. And citations still in the conferencing process are being assessed and processed when information given to me at the initial conference was that they'd be on hold until that conferencing process has ended. All in all, changing the system now is going to make this process worse, not better. In summary, FMC believes there are serious problems with the proposed rule which began with larger penalties for large operators who consequently and consistently contribute greatly to the industry safety record being as low as it has ever been. These very operators have stepped up to the plate time and time again for partnership studies, safety studies, SLAM initiative, training improvements, etcetera, etcetera. Because we typically have safety records that are good and we have a genuine interest in promoting the safety and health of miners. Now the Agency intends to punish us for nothing more than our size in a way that is inconsistent to the way we have it right now. Shortening the conference time will only bog down an over-burdened system and ultimately will require more MSHA resources to handle the work load with no apparent relationship to increase safety. Finally, cited safety violations and mechanism of injuries have historically shown on correlation, so there is really no basis for the Agency's action to increase monetary penalties. There are other ways to improve the overall industry safety record and I would encourage MSHA to seek that advisory council in addressing this rule. Thank you. MS. SILVEY: Thank you. One of the things that I would like to say on behalf of MSHA is that -- and you accurately said that, Mr. Crum. For the operators who have joined with MSHA in promoting safety and health and who stepped up to the plate and I'm using your language now, to participate in partnerships when MSHA asks for partners. I know some of you did it with the diesel partnership, for SLAM, for other safety studies. We appreciate that because we could not have gotten some of the information to allow us to move forward without your assistance. But as I say that, I will also make the statement that in terms of -- I mean I'm going to go back to the Mine Act now, for accountability purposes because I'm hearing a lot of testimony that -- in terms of talking about behavior and what we ought to do in terms of these safety programs that are put in place that take into consideration miners' behavior and etcetera, etcetera. And while I may not disagree with you, and quite honestly don't, the -- I go back to the Mine Act now and I have to put that before you and say that the accountability in terms of the responsibility for safety and health in the Mine Act and therefore the person to whom MSHA is charged to interact with, in terms of the issuance of a citation and hence, the ultimate issue of a penalty is the mine operator and that's the set up of the Mine Act. MR. CRUM: In comment to your comment there, I'll go back to Mr. Cottrell's example which is a fantastic example of where the citation comes out after a tragic event, the operator has done everything possible to prevent that event from occurring, does the negligence on that piece of paper fit with what the operator has done? MS. SILVEY: Now that's a good question and I don't know -- I mean he gave -- MR. CRUM: I've been there myself. MS. SILVEY: I understand. MR. CRUM: In a couple of other operations and that's what it comes down to, failure to control mobile equipment. MS. SILVEY: I understand. MR. CRUM: Moderate negligence on the operator. MS. SILVEY: And that's where, yes, so I understand that and that's where those types of things are things that are -- when I started out in the opening statement, are decisions made by the inspector at the time of the issuance of a citation and if there are questions about those, those are the things that you talk to the District Managers about and hopefully at some point you reach some type of agreement about them. But clearly that's why part of the various criteria you placed in there, you point out to me negligence is because we should have assigned all of the negligence to which we think that is applicable in the situation that Mr. Cottrell gave. If the operator has done everything that the operator should do and there's nothing else that the operator could do, then the citation should reflect that. MR. CRUM: That particular citation under the new point system, that particular X in the box makes thousands of dollars of difference in that event. MS. SILVEY: I understand. I hear you. MR. CRUM: One of the things that I will be doing with my staff is making sure they all have a very, very clear understanding of negligence, gravity and severity. And as an operator, I'm going to be a fool if I don't take every moderate negligence citation to the conferencing process. MS. SILVEY: I understand. MR. CRUM: In that train of thought that system is going to get even more grossly overloaded than it is now. MS. SILVEY: Well, that's a good segue until the next point and you said that in your testimony and Pete had that question too, but you said you were raising two separate issues, one having to do about a specific conference, but it was one issue before that and I sort of missed that. You said there are two separate issues. MR. CRUM: Yes, I had -- I've got two issues going on right now. MS. SILVEY: Right. MR. CRUM: I have citations in the conferencing process. Up until the point when I got penalty assessment and just finally went to my attorney and said hey, you've got to help me out here. Six months on a half dozen citations, no resolution. Verbal commitment to vacate one. Verbal commitment to have further conversation, didn't happen. I get the penalty assessment, mark the boxes, expecting that these citations were still on hold -- MS. SILVEY: You thought that they were still in the process? MR. CRUM: Still in the process because I had gotten no resolution, no word back basically on what the final decision was. I get a penalty assessment. So I mark the box, send them in. I'm too late because quite honestly, I didn't expect those citations on there based on what I was told at the initial conference. So they denied my contest based on the 30-day time limit that I was over. MS. SILVEY: We'll look into those. MR. CRUM: Just to carry this a step further, I get a call back from the attorney and she asked me, she said well, how can you pay those? I said I didn't pay them. (Laughter.) I have 34 citations on this -- MS. SILVEY: On the thing, the group of things. MR. CRUM: I didn't pay any of them. Yet. Okay? I've got two ID numbers that I'm running with. The penalty assessment that I sent in for 0152 with that number on the check stub for whatever reason was applied to 0639. MS. SILVEY: The one that was supposed to be in, you know -- MR. CRUM: So now I'm in arrears on the first one. MS. SILVEY: Yes, well -- MR. CRUM: That's the one issue which we're just going to continue on. We applied a motion to open the case again, etcetera, etcetera. And then the second one -- MS. SILVEY: Can we get all those numbers from you? MR. CRUM: Absolutely. MS. SILVEY: And the second one? MR. CRUM: The second one was a citation written in July. Sent the email request to the conferencing officer. I still -- it's October 4th. I don't know if that's been denied. MS. SILVEY: We'll get that from you on the break, I mean after -- Pete, did you have a question on that? MR. MONTALI: A couple of questions. Number one, you said that you have a verbal commitment to vacate one and you have another commitment to -- I forget exactly what the second one was. Was this during a conference that you had, a telephone conference with the representative from the District Manager? MR. CRUM: Yes. MR. MONTALI: Okay. MR. CRUM: But I've yet to see the paper vacating that citation. MR. MONTALI: And that was six months ago, approximately six months ago? MR. CRUM: That verbal request was August 14th or that verbal commitment. MR. MONTALI: When you received the assessment for that, did you contact the conference litigation representative to request an explanation as to why you were being assessed when the commitment was that it was to be vacated? MR. CRUM: At that point I talked -- I did talk to the conferencing officer and without my notes I can't remember exactly the entire conversation. MR. MONTALI: If you can send that information with the numbers of the citations and any background information with that, we can take a look at that for you. MS. SILVEY: Thank you. Do you have anything else for us? Thank you very much. We will talk to you on the breaks, so we can follow up, you can provide all the information to us. MR. CRUM: We will submit written comments prior to the deadline. We will also -- there's one other piece that is going to add to the conferencing process, as we talk about it and as we know it now. When an inspector comes into one of our mines in the trona patch, and we may have permissibility violation, every time that's written, it's checked as failed. Every time. I would just about bet without exception -- I'm not certain that the trona patch has ever had an injury or a fatality due to a permissibility issue with our equipment. I mean one of the things that the Agency really needs to look at is region specific. Don't base the trona patch on the potential or the severity of a potential injury based on coal. We're a heck of a lot less flammable than coal. Our ore, in general, is a fire retardant. So some of those things I think we can work with the Agency to bring this to what's reasonably likely to happen in one of our operations in the trona patch. MS. SILVEY: Okay. MR. CRUM: Is it necessarily going to lead to a fatality? We haven't had it in a lot of years. MS. SILVEY: Thank you. MR. CRUM: Thank you. MS. SILVEY: Next we have David Litvin, Utah Mining Association. MR. LITVIN: Madam Chair, members of the panel, I'm David Litvin, L-I-T-V-I-N. I'm president of the Utah Mining Association, but I'm here today to speak for Mr. Fred Fox who had requested to speak. He was from Kennecott Minerals Company. He had a conflict and had to leave and asked that I would please present his comment to the panel. Let me start out by just indicating that Utah Mining Association is the voice of mining in Utah since 1915 and represents essentially all of the mining interests and supplier interests in the State of Utah and we work and present the views of mining with the regulatory agencies in Utah, the Governor's office, the Utah legislature, the media and the public. And in that regard, we have an annual convention which was held for the 91st time this year on August 24th and the theme of the convention this year was Utah Mining Begins With Safety and our keynote speaker was Mr. Dye, head of your Agency and we appreciated his participation. And the goal of the Association and all of the operating companies in Utah is to have totally safe mines and of course, we know that's the goal of your Agency as well and we look forward to working with you and we appreciate you being here on this proposed rule because it's a very important rule for promoting and working towards safe operations throughout the United States. Now in that regard, I will be submitting on behalf of the Utah Mining Association written comments on this rule, but I just wanted to make a couple of verbal points that I think are important. One is what is done on this rule must be viewed in light of what has occurred in the industry of the past year and the political and public reaction to what occurred and what we do now moving forward will also be scrutinized again by the Congress and also by the press, the media, when and if additional incidents occur. So we want to make sure that what's done here and when that media scrutiny occurs or congressional scrutiny occurs, that we give them as accurate a picture as possible of the safety of the mining industry, of the commitment of the mining industry to have safe operations and the progress that has been made in that regard. As we know, the industry continues to get safer and safer and safer over time and that is very important, but we have to be careful that we don't give a misimpression of what's going on and if you lump all violations together, for example, and not distinguish between those which really would not necessarily lead to an injury or fatality with those that would, and then those cumulative violations are looked at, it could present a misrepresentation to the safety efforts of the industry. So I would just urge you that whatever you do, keep in mind that what's done will be scrutinized by the public, by the media, by the Congress again. Now in terms of Kennecott Minerals comments today, Kennecott Minerals is a company that does hard rock mining in several states throughout the United States. It's part of the old Kennecott Mining name, as you're well-familiar with and is currently owned by Rio Tinto of London. But the comment that Mr. Fox had asked me to make goes directly to Section 100.6 of the proposed rule which is the procedures for review and citations and orders and also procedures for assessment of civil penalties and conferences. This issue has been addressed, I think, by every speaker today and so it's obviously a critical issue which we hope you look at very seriously. The time period for requesting health and safety conference has been proposed to be changed from 10 days down to 5 days. There is no compelling reason cited by MSHA or no basis for this change. If you read the section of the rule that goes to change this provision, MSHA only has one statement about the change. It says "MSHA believes that the proposed reduction would result in a more effective civil penalty system because penalties would be assessed closer to the time to the issuance of the citation." Now I don't believe that statement is correct. The purpose of a health and safety conference is to allow the operator to present mitigating circumstances concerning the issuance of the proposed violation. Operators need time to pull together that information. When you have work schedules of people that vary from one mining operation to another, miners may in one operation be flown in or bused in and stay there for many days and then leave and be off for several days. Oftentimes, a mining operation may be curtailed in its production hours, due to the demand for its minerals. It may not be operating seven days a week or may not be operating five days a week. And so to get all the information from the workers that were maybe involved in that particular situation, and to get all that together, all the facts together, five days oftentimes would not be adequate time. And I think to allow for appropriate due process of the law, I think we should continue that 10 days, unless you can show that there's reasons it should be changed and in the proposed rule, you have not done that. So therefore, in conclusion, Kennecott Minerals recommends that MSHA reconsider its proposal to revise the time frame for requesting a health and safety conference. The current 10-day limit is an appropriate time frame that allows adequate time for determining if a health and safety conference should be requested. Because of the various shift schedules that exist throughout the mining industry, it could be expected that a company would not be able to adequately gather the requested information to make the appropriate determination to conference a citation within the proposed 5-day period. I'm sure that Mr. Fox will give his statement to you in writing as well, after this session today and also the Utah Mining Association will be providing a statement as well. Thank you very much. MS. SILVEY: Thank you, sir. Thank you. We now have -- I don't know whether he wanted to speak again. This may be a mistake. David Graham with General Chemical, did he want to speak again? Okay. Then that represents people who signed up. Is there anybody else who wishes to speak? Well, if nobody else wishes to speak, then on behalf of the Labor Department's Mine Safety and Health Administration, we would like to thank you for those of you who came and did speak and those of you who came and may not have spoken but showed an interest in this rulemaking. As many of you said, it is an important rulemaking. The two aspects to it, as we were revising our existing rule, but also it will implement the Miner Act provisions. As I said in the opening statement the record closes October 23rd. For those of you who spoke and made promises to us that you were going to follow up your spoken testimony here today with written comments, I urge you to do so before the record closes on October 23rd and again, on behalf of MSHA and our Assistant Secretary, we thank you for your participation in this rulemaking. The hearing is now adjourned. (Whereupon, at 12:27 p.m., the hearing was concluded.) ?? ?? NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. 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