Document bJdnaw1BBKVBJLg6Vjz4R5mg

THE COMPANY - SUITE 400 118B5 LACKLAND ROAD 51 LOUIS, MO G3i4G~*236 TELEX 98-8554 February IS, 1988 Mr. Vince L. Kontny President and CEO Fluor Daniel 3333 Michelson Drive Irvine, CA 93740 Dear Vince t This is a brief overview regarding the OSHA citations that Doe Run received last week. , - 1 --* * detail in the forthcoming Februc VJAHipg Attachments / FLUOR -06578 `to- ID' FT \u c 1 mCn r\UN i EL ivj: widbriTidU r A , t-1693 POP 4;'L..FC'., v ,.r< / /f//,vv.T:c c-y/f E/':Act i PREPARED UNDER DIRECTION OF COUNSEL , TO 1 J* Zelmu FROM; Dan Vornber g through Walter Novotny DATE; 2/10/S8 SUEJ; .The background of the OSHa te&d Standard and the Strategies of the Primary Laad Producers in Attempting to Comply with that Standard In 1970 the Willi ams -Steiger Act known as the Occupational Safety and health Act was passed. It created the National Institute of Occupational Safety and Health (MIOSH) for research and empowered the Secretary of Labor to administer portions of its provisions including the establishment of Health and Safety Standards * initially by adopting consensus or government standards and later by detailed analysis. The responsibilities of the Labor Department have been carried out through the Assistant . Secretary of Labor for the Occupational Safety and Health. Administration (QSHA) "within the Department of Labor, The initial regulations wero promulgated, thereafter, which included the American Conference of Governmental Hygienist * s recommendations on acceptable air concentrations in the work place. For lead, this level was 200 micrograms per cubic meter. . Other standards applicable to lead were adopted on a general basis requiring various administrative controls but in a relatively nonspecific; way. In 1974 t OSHA decided to inspect all of the primary lead operations in the United States by monitoring for air lead levels and Issuing citations requiring engineering controls to reduce air lead levels to the 200 level. Also, administrative requirements were mandated such as the restriction of smoking and eating in the work place. Herculaneum received citations at that time and developed a plan to install certain engineering controls, ks might be expected, it was impose idle to install those controls in a relatively short time and an extension was granted by OSHA under a provision of the rules called "Petition for Modification of Abatement Date (PMA) ," which modified the time to Install equipment. These extensions continued year after year. Sometimes, this occurred because of multi-year projects, work stoppages at our own plant, or equipment delivery delays. Other extensions occurred because the initial project was installed and subsequent air monitoring indicated that the air level standards had not been met and, consequantly, othar projects were then devised, . In 1975, OSHA decided to review and revise its lead program and to issue a "comprehensive lead standard" which would package In one regulation ell of the detailed engineering, respiratory And administrative procedures that they thought were appropriate1 This culminated in a 1978 rule-making which became effective early the next year. The final standard was more stringent than the originally proposed standard. It; required a 50 air level, specifically daeigned changehoused and cafeterias, mandatory reapitatory control where present engineering wao not effective;, company provided clothing, the removal or workers from the FLUOR - 06579 work place when medical monitoring shoved they exceeded & prefer ibed level of lead, the protection of earnings while this medical removal was occurring, end numerous other very specific regulations, The medical remove.! lave1 choeen was 50 mlcxograms per 100 grams of whole blood, much more stringent than the 80 level generally supported by industry, A number of facets of the standard were phased in with time including the blood lead removal levels and ton years was allowed, until 1989, to achieve the air load standard through engineering controls (Because of .. court delays, this da to later became 1991.) The industry was shocked, A broad based legal challenge was mounted by the Load Industries Association; but the courts finally rejected all of the arguments, and the last appeal was exhausted in 19B1, In general, the affirmative actions of the industry, including both Buick and Herculaneum, were to move forward with changehouse and cafeteria construetion projects, implement mandatory respirator wear, lower medical removal levels, modify numerous other administrative programs and training programs, and continue to deal with engineering controls under the 1974 citation PMa strategy. While it ie difficult to separate OSRA lead controls from community air lead controls and sometime* difficult to separate them from process improvements, each of Doe Run1t facilities spent in the order of $10 million each since 1078 on capital Improvements and increased costs significantly with training, monitoring, HKP removal costs, respirators, and numerous personnel to administrate, operate, and maintain new programs and equipment. (The Bureau of Mines has been working on an estimate of the total costs of these programs.) Both St. Joe and Amur Lead of Missouri, in anticipation of strict enforcement of this unachievable utandard, stepped up efforts to identify c new generation of technology, St, Joe invested a million dollars in support of the QSL research in Germany, When efforts their seemed marginal, they spent about $12 M in developing a chemical process begun earlier by BOM which leached concentrate with Ferric Chloride, purified and crystalicod out Load chloride. The final step was an electrolytic production of metal In a process, step developed with ALCOA. Unfortunately, the process was far more expensive than anticipated due to the poor cell efficiency achieved, Oth&r processes were also visited and studied, AMAX, likewise, made a review of these technologies and provided concentrates for a. trial run in Finland of the Outokumpu Oy flash smelting and electric slag cleaning process, At that time none of the processes were determined to bo cither technologically or economically feasible. Both companies continued to monitor the progress on these processes. With the inauguration of the Reagan Administration and the announcement that they would be moving on "Regulatory Reform," the lead Industry saw an opportunity to get a review of what it envisioned as an impossible standard to achieve, certainly with regard to air levels and possibly with regards to blood lead goals, Since various industry segments within L1A had different needs, the various groups within the industry diverged In regard to haw to sock CO take advantagE of regulatory reform. The primary lead industry brainstormed all passib 1b options short of legislative relief including variances, extended settlement agreements in the conte^ of enforcement actions, and new rule"making. A revised "integrated FLUOR - 06580 FEB^lt-'bb lib 12; 0& if: it HUfib 2 1 hKE 5025 ttwy? Pm4 due n.ur i u mu: Oi-J2rl 7'loU b U4 primary standard" war draftad and proposed by St, Jo, A meeting of principals( John Writhe, Bob Muth, and Allen Booth, was set up in 1982 with Thom Auchter , then Assistant Secretary of OSHA, to indicate the seriousness of tho need for relief, On the day, prior to th& matting, however, ASAACO announced that it had been moo ting separately and intended to execute a three way agraamont, a "tripartite Agreement" between OSUa , the union, and ASAkCO as a method of managing what was expected tinder th$ IftAd standard. These agreements vould be renewed every thret years. St. Joe. and AHAX felt these agreements raised serious Iftgal issues and would be subject to political whiplash since any of the three parties could withdraw. They could also become integrally intertwined in the collective bargain prococa with time, St, Joe, at that time, was *cil1 hopeful that something "permanent" could emerge from tho process that would survive changes in political administrations. Unfortunately, the current administration wac learning about this time that the American press and th& American voter were not sympathetic to ''regulatory reform." Aftar the defection of ASAJlCO, each company took its own counsel as to how to approach the problem. In May of 1983, St, Joe applied to OSHA for a permanent variance with support of the local Teamsters 688. Tho variance sought three major forms of relief: (1) $10 million of additional projects were proposed ovr a 6-year period as an initial cap on engineering control expenditures, (2) that blood lead triggers would be ratcheted up or down to keep the impact of the number of MRP's at a fixed percentage of the work force, (3) that respirator protection factors would be adjusted to allow currently available respirators to continue to be used, We held endless meetings with policy and variance people in Washington over a several year period discussing the merit and legality of our approach and OSHA arguing the acceptability of tripartite, We had inspection? of the plant and engineering control plans were proposed. OGUA knew flum the!i own consultant's report (Charles Rivers Associates) that the standard was not achievable and had modified, as mandated by the courts, their position to state that only those controls economically and technically achievable were'required. St, Joe contemplated forcing a showdown on the permanent variance through the hearing and court process, AMAX, in the meantime, had been able to reduce thair blood leads even faster than the other primaries, partially due to work interruptions, partly due to a younger work force, and partly due to their cleanroom concept. At any rate, while the rest of the industry was still receiving variances. AMAX took the t*p to ratchet to the final 50 blood load standard, With this step taken thus one of the potentially business threatening problems solved, they decided to abandon the concept of "permanent relief" and apply for a 5-year FHA relying,on the old 1974 citations. This relief was obtained in 1985, 'Interestingly, It may have boon $t Joe'a dogged insistence on tho permanent step that made OSHA accept AMaX'e rather clever proposal rather than hanging on for tripartite, This step was taken successfully and following behind that <s permanent respirator variance was requested, Asking for a 10 fold inct-fess* in the allowable concentration for u6 of the atandard half face negative pressure respirator. In the end, after a laborious interchange, OSHA gave them a 2,5 fold increase and a complicated set of conditions to go With it including a prohibition against further blood lead relief. This: relief was not achieved until thb ftpring of 1986. FLUOR - 06581 18-88 18:08 T- 8F HOMESThKE 5028 51087 P01 FED- 10-. '88 TUE 10: Oo ID: DOE RUN TEL NO: 81 *4$91 7180 8 503 P05 $ t. Joe, observing political realties and AMAX's success, also gave up the allusion of-permanent relief and applied for 6 Dive year PMA, which was granted effective February, 1986, In December of 1986, the final ratcheting to the 50 blood load standard was made, end application for a permanent respirator variance was filed , That varianco ie still pending. It wac reasonabl e to believe at. this point, early 1986, that OS HA had mado its peace with the Primary Lead Industry and we would be allowed to coexist by continuing to improve our facilities within the structure of the five year PMA's. ASALCQ, having arguably spoiled the possibility of permanent relief for the industry with their tripartite agreements, decided in late 1986 that these were not the Eutopia's that they originally envisioned, As they' began expiring, they had five of them, they decided not to renew them, As a result, a letter vas sent out indicating that all of the ASAJRCO facilities should bo given wall to wall inspections to determine compliance with the lead standard, following the expiration of the agreements. While this has not been done in all cases , thfy have been initiated in tho East Helena smelter and are about to close that inspection. While it is too early to fully analyze the impact of the recent inspections at Herculaneum, it is not clear that the rules of the process have changed, OSHA has visited the plant at least once a year over this decade without any prior Indication of deficiency in our program, or with the reliance on PMA'a. . FLUOR- 06582