Alberta issues record setting fine to Chinese state-owned oil firm

An Alberta judge has ordered the Canadian arm of a Chinese state-owned oil company to pay the biggest workplace safety fine in the province’s history after the death of two foreign workers at a massive construction project about five years ago.

“The fine is good, but no amount of money can make up for what they did wrong in the first place,” said Wayne Prins, Alberta director of the Christian Labour Association of Canada (CLAC).

“In our view, the fine sends the right message to contractors and people in the industry that you must follow the procedures and rules in place.”

Alberta Provincial Judge John Maher ordered Sinopec Shanghai Engineering Company (SSEC) to pay a $1.5 million fine in a St. Albert court room on Jan. 24.

The fine is related to the deaths of a welder named Ge Genbao, 27, and an electrical engineer named Lui Hongliang, 33, at the Canadian Natural Resources Ltd. (CNRL) Horizon oilsands project.

They were killed on April 27, 2007 at the facility located north of Fort McMurray.

The Chinese temporary foreign workers were welding the wall structure inside a massive storage tank when the roof support structure collapsed onto them.

Two other foreign workers were seriously injured.

Under Alberta’s Occupational Health and Safety Act, 53 charges were laid against three companies in the deaths of Genbao and Hongliang and the injuries of the other workers.

CNRL, who was in charge of the construction site at the Horizon oilsands project, hired SSEC to build the storage tanks.

SSEC is the Canadian subsidiary of Chinese state –owned oil company Sinopec.

Sinopec hired more than 100 temporary foreign workers in China and began work on the construction of two oil storage tanks in late 2006.

SSEC pled guilty to three charges in September 2012 of failing to ensure the health and safety of workers.

The company was given the maximum $500,000 fine for each charge. Despite this fact, some people believe the fine will do nothing to deter them from practices that endanger workers.

“Sinopec didn’t just import workers from the third world, they also imported third-world health and safety standards,” said Alberta Federation of Labour President Gil McGowan.

“Alberta missed its chance to send a message that Chinese companies working in the oilsands need to play by Canadian rules.”

McGowan argued that the fines are too small to make a difference to the massive corporation.

“One and a half million dollars doesn’t even amount to a rounding error in the annual budget of a monstrous global corporation like Sinopec,” he said.

“This fine does nothing to dissuade them from playing fast and loose with the safety of their workforce.”

The original plan was to build the tank walls first, then use them to support the roof while it was under construction.

That plan changed when the project fell behind schedule.

CNRL approved the construction change, but SSEC did not prepare any formal written procedures that should have been certified by a professional engineer.

As a result, other charges in this case include failing to ensure that a professional engineer prepared and certified drawings and procedures; failing to ensure the roof support structure inside the tank was stable during assembly; failing to ensure that U-bolt type clips used for fastening rope wire were installed properly; and failing to ensure that wire rope being used was safe.

“We shouldn’t forget the circumstances that led to the deaths of Genbao and Hongliang,” McGowan added.

“The company did not get the construction plans certified by an engineer. The wires weren’t strong enough to hold up against the wind. It was a complete abdication of responsibility on the part of the employer.”

Crown prosecutors and SSEC lawyers came up with an agreement, which allocates $1.3 million of the fine to create an education program to train temporary foreign workers about their legal rights, as well as workplace health and safety.

The program aims to hire 45 instructors to train about 5,500 workers in a three year period.

Journal of Commerce, Wednesday, Jan. 30, 2013
Byline: Richard Gilbert