{"operation":"document","citation":"CPF 320045024","title":"COUNTRYMARK REFINING AND LOGISTICS, LLC — Notice of Probable Violation","source_type":"enforcement","agency":"Pipeline and Hazardous Materials Safety Administration","status":"historical","official":true,"published_on":"2004-08-25","effective_on":null,"summary":"CLOSED notice of probable violation citing 195.505(b), 195.505(e), 195.509(a).","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-enforcement-320045024.json","markdown":"https://regulus.evalyn.ai/document/phmsa-enforcement-320045024.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-enforcement-320045024","source_url":"https://primis.phmsa.dot.gov/enforcement-data/case/320045024","body":"Notice of Probable Violation involving COUNTRYMARK REFINING AND LOGISTICS, LLC. PHMSA's enforcement data identifies the cited regulations as 195.505(b),  195.505(e),  195.509(a). The case was opened on 2004-08-25 and is reported as closed as of 2006-10-18. Proposed civil penalty: $50,000. Assessed civil penalty: $16,000. Open the official case record for notices, responses, orders, and the latest status.\n\nOfficial case documents:\n\n320045024_Final Order_11222005.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320045024/320045024_Final%20Order_11222005.pdf\n\n320045024_final order_11222005_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320045024/320045024_final%20order_11222005_text.pdf\n\nCPF_NO_3-2004-5024.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320045024/CPF_NO_3-2004-5024.pdf\n\n320045024_final order_11222005_text.pdf\n\nU. S. Department\nof Transportation\nPipeline and\nHazardous Materials Safety\nAdministration\n400 Seventh Street, S W\nWashington, D C 20590\nMr. Joe Sudholt\nVice President Crude/Products\nSupply and Transportation\nCountrymark Cooperative, LLP\n1200 Refinery Road\nMt. Vernon, IN 47620\nRe: CPF No. 3-2004-5024\nDear Mr. Sudholt:\nEnclosed is the Final Order issued by the Associate Administrator for Pipeline Safety in\nthe above-referenced case. It makes findings of violation, withdraws two of the allegations of\nviolation, and assesses a civil penalty of $16, 000. It also specifies actions to be taken to comply\nwith the pipeline safety regulations. The penalty payment terms are set forth in the Final Order.\nWhen the civil penalty is paid and the terms of the compliance order completed, as determined\nby the Director, Central Region, this enforcement action will be closed. Your receipt of the Final\nOrder constitutes service of that document under 49 C. F. R. $ 190. 5.\nSincerely,\nJames Reynolds\nPipehne Compliance Registry\nOffice of Pipeline Safety\nEnclosure\nCERTIFIED MAIL — RETURN RECEIPT RE UESTED\n\n\n\nDEPARTMENT OF TRANSPORTATION\nPIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION\nOFFICE OF PIPELINE SAFETY\nWASHINGTON, DC 20590\nIn the Matter of\nCountrymark Cooperative, LLP, )\nRespondent\n)\n)\n)\n)\n)\nCPF No. 3-2004-5024\nFINAL ORDER\nOn April 6 — 8, 2004, pursuant to 49 U. S. C. ) 60117, a multi-regional team representing the\nOffice of Pipeline Safety (OPS), Research and Special Programs Administration P. SPA),\nconducted an on-site pipeline safety inspection of Respondent's operator qualification (OQ)\nrecords and procedures in Mt. Vernon, Indiana. ' As a result of the inspection, the Director,\nCentral Region, OPS, issued to Respondent, by letter dated August 25, 2004, a Notice of\nProbable Violation, Proposed Civil Penalty, and Proposed Compliance Order (Notice). In\naccordance with 49 C. F. R. $ 190. 207, the Notice proposed finding that Respondent had\ncommitted violations of 49 C. F. R. Part 195 and proposed assessing a civil penalty of $50, 000 for\nthe alleged violations. The Notice also proposed that Respondent take certain measures to\ncorrect the alleged violations.\nRespondent responded to the Notice by letter dated September 7, 2004 (Response). Respondent\ncontested several of the allegations, offered information to explain the allegations, and requested\nthe proposed civil penalty be eliminated or reduced Respondent did not request a hearing, and\ntherefore has waived its right to one.\nFINDINGS OF VIOLATION\nItem 1(b) in the Notice alleged Respondent violated 49 C. F. R. $ 195. 505(b). This provision\nrequires each operator ensure through evaluation that individuals performing covered tasks are\nquahfied to perform those tasks. The Notice alleged Respondent qualified an individual to\nperform seventeen covered tasks, even though the individual had not completed training\nnecessary for the quahfications. Respondent did not contest this allegation and explained the\nviolation was due to an assignment error. Accordmgly, I find Respondent violated ) 195. 505(b).\nThe Norman Y Mineta Research and Special Programs Improvement Act, Pub L No 108-426, 118 Stat\n2423 (2004), created the Pipehne and Hazardous Materials Safety Administration (PHMSA) and transferred the\nauthority of RSPA exercised under chapter 601 of title 49, United States Code, to the Adrmnistrator of PHMSA\nSee also 70 Fed Reg 8299, 8301-8302 (2005) (delegating authority to the Adnurustrator of PHMSA)\n\n\n\nItem 1(c) in the Notice alleged Respondent violated 49 C. F. R. ) 195. 505(b). This provision\nrequires each operator ensure that individuals performing covered tasks can recognize and react\nto abnormal operating conditions (AOCs). The Notice alleged Respondent failed to ensure\nthirty-one employees performing covered tasks were quahfied to recognize and react to AOCs.\nThe Notice also alleged Respondent failed to ensure eleven contractor personnel were quahfied\nto recognize and react to AOCs.\nIn its Response, Respondent outlined the process it uses to ensure quahfied individuals can\nrecognize and respond to AOCs. The process includes written and verbal instructions given to\nsupervisors. The process also requires evaluated employees, and their evaluators, sign a\nCertification Statement. The Certification Statement reads in part, \"I can perform this task safely\nand can identify and respond to abnormal operating conditions that may occur during the\nperformance of this task. \" (Response, p. 2) Respondent asserted that this process ensures\ncomphance with the qualification program and the regulations applicable to AOCs.\nOPS inspectors found many of Respondent's evaluations properly documented the review of\nAOCs. However, inspectors also found approximately forty-two individual evaluations did not\ndocument the review of AOCs. These evaluations did not include the signed Certification\nStatement required by Respondent's procedures. There is no evidence in the record to show the\nforty-two evaluations identified by OPS inspectors included a required review of AOCs.\nAccordingly, I find Respondent violated $ 195. 505(b) as alleged in the Notice.\nItem 2 in the Notice alleged Respondent violated 49 C. F. R. $ 195. 505(b), (c), and (e). These\nprovisions require Respondent prepare and follow a qualification program to: (b) ensure through\nevaluation that individuals performing covered tasks are qualified; (c) allow individuals that are\nnot qualified to perform a covered task if directed and observed by a quahfied individual; and (e)\nevaluate an individual when there is reason to suspect the individual may no longer be quahfied.\nRespondent places a responsibihty with its supervisors and managers to ensure these three\nelements of the OQ program are followed. Respondent's qualification program also requires\neach qualified individual understand the OQ procedures applicable to their assigned tasks. The\nNotice alleged Respondent's Corrosion Supervisor — a quahfied individual — did not know his\nresponsibihties under Respondent's OQ program. The supervisor allegedly was unaware of his\nresponsibihties to ensure contractor personnel are qualified and nonquahfied personnel must be\ndirected and observed by qualified individuals. The Notice also alleged the supervisor was\nunaware of his responsibility to determine when an individual is no longer qualified to perform a\ncovered task.\nRespondent stated in its Response that it \"beheve[s]\" the supervisor was aware of his\nresponsibilities under the OQ program. (Response, p. 3) Respondent expressed the \"opinion\"\nthat the supervisor knew covered tasks were to be performed by or under direct supervision of a\nqualified individual. (Jd~ Respondent explamed the supervisor mav have had trouble\nunderstanding some of the inspector's questions during the OPS inspection.\n\n\n\n3\nDuring the inspection, the OPS inspector asked the supervisor standard field inspection\nquestions (Protocol 9) and documented the supervisor's responses The supervisor failed to state\nthat he had a responsibility to review contractor qualifications and ensure nonquahfied personnel\nwere appropriately directed and observed. The supervisor stated that it was the responsibility of\nthe Pipeline Integrity Manager to verify contractor quahfications The supervisor was also\nunable to communicate the factors to be considered when determining whether an individual is\nno longer able to perform a covered task.\nThe evidence gathered during the inspection shows Respondent's Corrosion Supervisor did not\nhave the requisite knowledge of his responsibilities under Respondent's OQ program.\nRespondent's statement that it \"believe[s]\" the supervisor was aware of his responsibilities does\nnot rebut this evidence. Respondent did not submit any documentation supporting its opinion\nthat the supervisor knew his responsibilities under the OQ program. Accordingly, I find\nRespondent violated $ 195. 505(b), (c), and (e) as alleged in the Notice.\nThese findings of violation will be considered prior offenses in any subsequent enforcement\naction taken against Respondent.\nWITHDRAWAL OF ALLEGATIONS\nItem 1(a) in the Notice alleged Respondent violated ( 195. 505(b). This provision requires each\noperator ensure through evaluation that individuals performing covered tasks are quahfied. The\nNotice alleged Respondent failed to ensure contractor personnel were qualified to perform\ncovered tasks. Respondent stated in its Response that contractor qualifications are verified and\nexplained the process by which Respondent verifies these quahfications. Respondent reviews\ncontractor qualifications and either accepts them under Respondent's OQ program or rejects\nthem. If Respondent rejects a contractor's qualification, Respondent does not allow the\ncontractor to perform a covered task unless the person is re-quahfied under Respondent's\nqualification program or directed and observed by a qualified individual. Respondent submitted\na \"Contractor Qualification Log\" which documents the verification of contractor quahfications.\nI find the evidence submitted by Respondent shows Respondent verified contractor quahfications\nin accordance with $ 195. 505(b). Accordingly, I am withdrawing this allegation of violation.\nItem 3 in the Notice alleged Respondent violated ( 195. 509(a). This provision requires each\noperator to have a written quahfication program by April 27, 2001. The Notice alleged\nRespondent established its qualification program on June 4, 2002, more than one year after the\ndeadhne. During the inspection, Respondent's Pipeline Integrity Manager confirmed\nRespondent's qualification program was established on June 4, 2002.\nIn its Response, Respondent maintained that it had developed a quahfication program by January\n26, 2001 (hereafter \"original program\"). Respondent submitted a copy of the original program.\nThe cover to the origmal program reads: \"DK~~T\n. . revised I/26i01. \" According to\nRespondent, sometime after the date on the cover, Respondent contracted with a qualification\nspeciahst to enhance the original program. A \"revised program\" was developed by the\ncontractor and implemented by October 28, 2002. There is no reference in the revised program\n\n\n\n4\nto the original program or to the original program's development date. Respondent explained\nthe Pipehne Integrity Manager was not aware of the original program at the time of the\ninspection, because he had started working with the company after the contractor began\ndevelopment of the revised program\nSection 195. 509(a) requires each operator have a written qualification program by April 27,\n2001 Each qualification program developed under this regulation must comply with the\nminimum standards specified in $ 195. 505. If Respondent developed an OQ program that met\nthe minimum standards of $ 195. 505 by April 21, 2001, I must find that Respondent complied\nwith ) 195. 509(a). Section 195. 505 states:\nThe [OQ] program shall include provisions to: (a) Identify covered tasks;\n(b) Ensure through evaluation that individuals performing covered tasks are\nqualified; (c) Allow individuals that are not quahfied pursuant to this subpart to\nperform a covered task if directed and observed by an individual that is qualified;\n(d) Evaluate an individual if the operator has reason to beheve that the\nindividual's performance of a covered task contributed to an accident as defined in\nPart 195; (e) Evaluate an individual if the operator has reason to beheve that the\nindividual is no longer qualified to perform a covered task; (f) Communicate\nchanges that affect covered tasks to individuals performing those covered tasks;\nand (g) Identify those covered tasks and the intervals at which evaluation of the\nindividual's qualifications is needed.\nAfter reviewing Respondent's origmal program, I find the program included each provision\nrequired by the minimum standards of ) 195. 505. The original program had provisions to\naddress the identification of covered tasks, qualifications, evaluations and reevaluations, use of\nnon-qualified individuals, use of contractors, administration of the program, modifications to\ncovered tasks, modifications to the program, record keeping, and other related topics.\nRespondent's original program was developed prior to April 21, 2001. For these reasons, I find\nRespondent's original program comphed with ) 195. 509(a).\nIt is important to note that ) 195. 509(a) did not require Respondent to implement the original\nprogram. Section $ 195. 509(a) required only that Respondent develop the program. A separate\n2\nprovision, ) 195. 509(b), required that the program be implemented (at a later date). There were\nno restrictions prohibiting Respondent from revising the original program prior to its\nimplementation. The label \"DRAFT\" on the cover of the program does not render the program\nnoncompliant. For the reasons stated above, I find Respondent's original program met the\nminimum standards for an OQ program by April 27, 2001, complying with ) 195. 509(a)\nAccordingly, I am withdrawing this allegation of violation\nThe Notice did not allege that Respondent violated ) 195 509(b)\n\n\n\nASSESSMENT OF PENALTY\nUnder 49 U. S. C. $ 60122, Respondent is subject to a civil penalty not to exceed $100, 000 per\nviolation for each day of the violation up to a maximum of $1, 000, 000 for any related series of\nviolations. The Notice proposed a total civil penalty of $50, 000 for the violations alleged in the\nNotice.\n49 U. S. C. $ 60122 and 49 C. F. R. $ 190. 225 require that, in determining the amount of the civil\npenalty, I consider the following criteria: nature, circumstances, and gravity of the violation,\ndegree of Respondent's culpability, history of Respondent's prior offenses, Respondent's ability\nto pay the penalty, good faith by Respondent in attempting to achieve compliance, the effect on\nRespondent's ability to continue in business, and such other matters as justice may require.\nRespondent requested elimination or mitigation of the proposed civil penalty based on\nRespondent's good faith efforts to comply with the applicable regulations.\nItem 1(b) in the Notice proposed a civil penalty of $2, 000. Respondent qualified an individual\nto perform seventeen covered tasks without verifying the individual had completed training that\nwas mandatory for the qualifications. Respondent's failure to verify training prior to issuing\nqualifications increases the risk of an accident caused by human error.\nIn its Response, Respondent explained certain training modules had not been assigned to the\nindividual due to an administrator error. Respondent stated that it was an honest mistake made\nby a new assignment program put into effect to ensure compliance. The individual's supervisor\ndetermined the individual had fulfilled all necessary training because the individual's training list\nshowed all \"assigned\" training had been completed.\nIt was not sufficient for the supervisor to determine quahfication by looking only at the hst of\nassigned training. The supervisor should have determined whether each of the required training\nmodules had actually been completed by the individual. I do not find Respondent's explanation\nwarrants a reduction in the civil penalty for this violation. Accordingly, having reviewed the\nrecord and considered the assessment criteria, I assess Respondent the civil penalty of $2, 000.\nItem 1(c) in the Notice proposed a civil penalty of $10, 000. Respondent qualified approximately\nforty-two individuals to perform covered tasks without ensuring they could recognize and react\nto abnormal operating conditions. Respondent's error could have jeopardized public safety in\nthe event an abnormal condition occurred and could not be immediately recognized or properly\nresponded to. Although Respondent submitted as evidence of good faith an explanation of its\nprocess for ensuring compliance, Respondent did not always use this process, which is evident\nfrom the record. For this reason, I do not find Respondent's explanation warrants a reduction in\nthe civil penalty. Accordingly, having reviewed the record and considered the assessment\ncriteria, I assess P espondent a ci; il penalty of $10, 000.\nItem 2 in the Notice proposed a civil penalty of $4, 000. Respondent's Corrosion Supervisor\ncould not demonstrate requisite knowledge of his responsibilities under Respondent's OQ\n\n\n\n6\nprogram in response to standard field inspection questions. Since Respondent has placed OQ\nresponsibilities with its supervisors and managers, a supervisor's lack of awareness of his or her\nresponsibihties creates a risk that a covered task may be performed incorrectly by an unqualified\nindividual. Improperly-performed covered tasks may lead to an accident. Respondent has not\nsubmitted information that warrants a reduction in the civil penalty for this violation.\nAccordingly, having reviewed the record and considered the assessment criteria, I assess\nRespondent a civil penalty of $4, 000.\nItems 1(a) and 3 in the Notice proposed civil penalties of $4, 000 and $30, 000, respectively.\nSince these items are withdrawn, the proposed civil penalties are not assessed.\nAccordingly, having reviewed the record and considered the assessment criteria, I assess\nRespondent a total civil penalty of $16, 000. Respondent has the ability to pay this penalty\nwithout adversely affecting its ability to continue in business.\nPayment of the civil penalty must be made within 20 days of service. Federal regulations\n(49 C. F. R. $ 89. 21(b)(3)) require this payment be made by wire transfer, through the Federal\nReserve Communications System (Fedwire), to the account of the U. S. Treasury. Detailed\ninstructions are contained in the enclosure. Questions concerning wire transfers should be\ndirected to: Financial Operations Division (AMZ-120), Federal Aviation Administration, Mike\nMonroney Aeronautical Center, P. O. Box 25082, Oklahoma City, OK 73125; (405) 954-8893.\nFailure to pay the $16, 000 civil penalty will result in accrual of interest at the current annual rate\nin accordance with 31 U. S. C. $ 3717, 31 C. F. R. $ 901. 9 and 49 C. F. R. $ 89 23. Pursuant to\nthose same authorities, a late penalty charge of six percent (6%) per annum will be charged if\npayment is not made within 110 days of service. Furthermore, failure to pay the civil penalty\nmay result in referral of the matter to the Attorney General for appropriate action in a United\nStates District Court.\nCOMPLIANCE ORDER\nThe Notice proposed a comphance order with respect to Items 1(c) and 2. Under 49 U. S. C.\n$ 60118(a), each person who engages in the transportation of hazardous hquids or who owns or\noperates a pipeline facility is required to comply with the apphcable safety standards estabhshed\nunder Chapter 601. Pursuant to the authority of 49 U. S. C. ) 60118(b) and 49 C. F. R. ) 190 217,\nRespondent is ordered to take the following actions to ensure comphance with the pipehne safety\nregulations applicable to its operations. Respondent must—\n1. Conduct a review and document whether each of the 42 individuals identified in Item\n1(c) can recognize and react to abnormal operating conditions apphcable to the covered\ntask(s) each is qualified to perform. Conduct any training necessary to ensure each\nqualj fi \" individual can «ecognjze and react to apphcahle abnormal operatjng conditions\nSubmit documentation of comphance within 30 days of receipt of this order.\n\n\n\n7\n2. Conduct a review and document whether each supervisor with responsibilities under\nRespondent's operator quahfication program is fully aware of his or her responsibilities\nunder the program. Conduct any training necessary to ensure that each supervisor with\nresponsibihties under Respondent's qualification program understands his or her\nresponsibilities. Submit documentation of compliance within 60 days of receipt of this\norder.\nSubmit documentation to the Director, Central Region, Office of Pipeline Safety, 901 Locust\nStreet, Room 462, Kansas City, MO 64106 The Director, Central Region, OPS, may grant an\nextension of time to comply with any of the required items upon a written request by the\nRespondent demonstrating good cause for an extension.\nFailure to comply with this order may result in the assessment of civil penalties of up to\n$100, 000 per violation per day, or in the referral of the case for judicial enforcement.\nThe Notice also proposed a comphance order for Item 1(a). Since Item 1(a) is withdrawn, the\nproposed compliance terms are not included.\nUnder 49 C. F. R. $ 190. 215, Respondent has a right to submit a Petition for Reconsideration of\nthis Final Order. The petition must be received within 20 days of Respondent's receipt of this\nFinal Order and must contain a brief statement of the issue(s). The filing of the petition\nautomatically stays the payment of any civil penalty assessed. All other terms of the order,\nincluding any required corrective action, remain in full effect unless the Associate Administrator,\nupon request, grants a stay.\nThe terms and conditions of this Final Order are effective on receipt.\nNOV 22 $05\nacey Ge ard Date Issued\nA oci e Administrat or\nfor 'pehne Safety","truncated":false,"body_characters":21998}