# COUNTRYMARK REFINING AND LOGISTICS, LLC — Notice of Probable Violation

- **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:** Not available
- **summary:** CLOSED notice of probable violation citing 195.505(b), 195.505(e), 195.509(a).
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- **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.

Official case documents:

320045024_Final Order_11222005.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320045024/320045024_Final%20Order_11222005.pdf

320045024_final order_11222005_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320045024/320045024_final%20order_11222005_text.pdf

CPF_NO_3-2004-5024.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320045024/CPF_NO_3-2004-5024.pdf

320045024_final order_11222005_text.pdf

U. S. Department
of Transportation
Pipeline and
Hazardous Materials Safety
Administration
400 Seventh Street, S W
Washington, D C 20590
Mr. Joe Sudholt
Vice President Crude/Products
Supply and Transportation
Countrymark Cooperative, LLP
1200 Refinery Road
Mt. Vernon, IN 47620
Re: CPF No. 3-2004-5024
Dear Mr. Sudholt:
Enclosed is the Final Order issued by the Associate Administrator for Pipeline Safety in
the above-referenced case. It makes findings of violation, withdraws two of the allegations of
violation, and assesses a civil penalty of $16, 000. It also specifies actions to be taken to comply
with the pipeline safety regulations. The penalty payment terms are set forth in the Final Order.
When the civil penalty is paid and the terms of the compliance order completed, as determined
by the Director, Central Region, this enforcement action will be closed. Your receipt of the Final
Order constitutes service of that document under 49 C. F. R. $ 190. 5.
Sincerely,
James Reynolds
Pipehne Compliance Registry
Office of Pipeline Safety
Enclosure
CERTIFIED MAIL — RETURN RECEIPT RE UESTED



DEPARTMENT OF TRANSPORTATION
PIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION
OFFICE OF PIPELINE SAFETY
WASHINGTON, DC 20590
In the Matter of
Countrymark Cooperative, LLP, )
Respondent
)
)
)
)
)
CPF No. 3-2004-5024
FINAL ORDER
On April 6 — 8, 2004, pursuant to 49 U. S. C. ) 60117, a multi-regional team representing the
Office of Pipeline Safety (OPS), Research and Special Programs Administration P. SPA),
conducted an on-site pipeline safety inspection of Respondent's operator qualification (OQ)
records and procedures in Mt. Vernon, Indiana. ' As a result of the inspection, the Director,
Central Region, OPS, issued to Respondent, by letter dated August 25, 2004, a Notice of
Probable Violation, Proposed Civil Penalty, and Proposed Compliance Order (Notice). In
accordance with 49 C. F. R. $ 190. 207, the Notice proposed finding that Respondent had
committed violations of 49 C. F. R. Part 195 and proposed assessing a civil penalty of $50, 000 for
the alleged violations. The Notice also proposed that Respondent take certain measures to
correct the alleged violations.
Respondent responded to the Notice by letter dated September 7, 2004 (Response). Respondent
contested several of the allegations, offered information to explain the allegations, and requested
the proposed civil penalty be eliminated or reduced Respondent did not request a hearing, and
therefore has waived its right to one.
FINDINGS OF VIOLATION
Item 1(b) in the Notice alleged Respondent violated 49 C. F. R. $ 195. 505(b). This provision
requires each operator ensure through evaluation that individuals performing covered tasks are
quahfied to perform those tasks. The Notice alleged Respondent qualified an individual to
perform seventeen covered tasks, even though the individual had not completed training
necessary for the quahfications. Respondent did not contest this allegation and explained the
violation was due to an assignment error. Accordmgly, I find Respondent violated ) 195. 505(b).
The Norman Y Mineta Research and Special Programs Improvement Act, Pub L No 108-426, 118 Stat
2423 (2004), created the Pipehne and Hazardous Materials Safety Administration (PHMSA) and transferred the
authority of RSPA exercised under chapter 601 of title 49, United States Code, to the Adrmnistrator of PHMSA
See also 70 Fed Reg 8299, 8301-8302 (2005) (delegating authority to the Adnurustrator of PHMSA)



Item 1(c) in the Notice alleged Respondent violated 49 C. F. R. ) 195. 505(b). This provision
requires each operator ensure that individuals performing covered tasks can recognize and react
to abnormal operating conditions (AOCs). The Notice alleged Respondent failed to ensure
thirty-one employees performing covered tasks were quahfied to recognize and react to AOCs.
The Notice also alleged Respondent failed to ensure eleven contractor personnel were quahfied
to recognize and react to AOCs.
In its Response, Respondent outlined the process it uses to ensure quahfied individuals can
recognize and respond to AOCs. The process includes written and verbal instructions given to
supervisors. The process also requires evaluated employees, and their evaluators, sign a
Certification Statement. The Certification Statement reads in part, "I can perform this task safely
and can identify and respond to abnormal operating conditions that may occur during the
performance of this task. " (Response, p. 2) Respondent asserted that this process ensures
comphance with the qualification program and the regulations applicable to AOCs.
OPS inspectors found many of Respondent's evaluations properly documented the review of
AOCs. However, inspectors also found approximately forty-two individual evaluations did not
document the review of AOCs. These evaluations did not include the signed Certification
Statement required by Respondent's procedures. There is no evidence in the record to show the
forty-two evaluations identified by OPS inspectors included a required review of AOCs.
Accordingly, I find Respondent violated $ 195. 505(b) as alleged in the Notice.
Item 2 in the Notice alleged Respondent violated 49 C. F. R. $ 195. 505(b), (c), and (e). These
provisions require Respondent prepare and follow a qualification program to: (b) ensure through
evaluation that individuals performing covered tasks are qualified; (c) allow individuals that are
not qualified to perform a covered task if directed and observed by a quahfied individual; and (e)
evaluate an individual when there is reason to suspect the individual may no longer be quahfied.
Respondent places a responsibihty with its supervisors and managers to ensure these three
elements of the OQ program are followed. Respondent's qualification program also requires
each qualified individual understand the OQ procedures applicable to their assigned tasks. The
Notice alleged Respondent's Corrosion Supervisor — a quahfied individual — did not know his
responsibihties under Respondent's OQ program. The supervisor allegedly was unaware of his
responsibihties to ensure contractor personnel are qualified and nonquahfied personnel must be
directed and observed by qualified individuals. The Notice also alleged the supervisor was
unaware of his responsibility to determine when an individual is no longer qualified to perform a
covered task.
Respondent stated in its Response that it "beheve[s]" the supervisor was aware of his
responsibilities under the OQ program. (Response, p. 3) Respondent expressed the "opinion"
that the supervisor knew covered tasks were to be performed by or under direct supervision of a
qualified individual. (Jd~ Respondent explamed the supervisor mav have had trouble
understanding some of the inspector's questions during the OPS inspection.



3
During the inspection, the OPS inspector asked the supervisor standard field inspection
questions (Protocol 9) and documented the supervisor's responses The supervisor failed to state
that he had a responsibility to review contractor qualifications and ensure nonquahfied personnel
were appropriately directed and observed. The supervisor stated that it was the responsibility of
the Pipeline Integrity Manager to verify contractor quahfications The supervisor was also
unable to communicate the factors to be considered when determining whether an individual is
no longer able to perform a covered task.
The evidence gathered during the inspection shows Respondent's Corrosion Supervisor did not
have the requisite knowledge of his responsibilities under Respondent's OQ program.
Respondent's statement that it "believe[s]" the supervisor was aware of his responsibilities does
not rebut this evidence. Respondent did not submit any documentation supporting its opinion
that the supervisor knew his responsibilities under the OQ program. Accordingly, I find
Respondent violated $ 195. 505(b), (c), and (e) as alleged in the Notice.
These findings of violation will be considered prior offenses in any subsequent enforcement
action taken against Respondent.
WITHDRAWAL OF ALLEGATIONS
Item 1(a) in the Notice alleged Respondent violated ( 195. 505(b). This provision requires each
operator ensure through evaluation that individuals performing covered tasks are quahfied. The
Notice alleged Respondent failed to ensure contractor personnel were qualified to perform
covered tasks. Respondent stated in its Response that contractor qualifications are verified and
explained the process by which Respondent verifies these quahfications. Respondent reviews
contractor qualifications and either accepts them under Respondent's OQ program or rejects
them. If Respondent rejects a contractor's qualification, Respondent does not allow the
contractor to perform a covered task unless the person is re-quahfied under Respondent's
qualification program or directed and observed by a qualified individual. Respondent submitted
a "Contractor Qualification Log" which documents the verification of contractor quahfications.
I find the evidence submitted by Respondent shows Respondent verified contractor quahfications
in accordance with $ 195. 505(b). Accordingly, I am withdrawing this allegation of violation.
Item 3 in the Notice alleged Respondent violated ( 195. 509(a). This provision requires each
operator to have a written quahfication program by April 27, 2001. The Notice alleged
Respondent established its qualification program on June 4, 2002, more than one year after the
deadhne. During the inspection, Respondent's Pipeline Integrity Manager confirmed
Respondent's qualification program was established on June 4, 2002.
In its Response, Respondent maintained that it had developed a quahfication program by January
26, 2001 (hereafter "original program"). Respondent submitted a copy of the original program.
The cover to the origmal program reads: "DK~~T
. . revised I/26i01. " According to
Respondent, sometime after the date on the cover, Respondent contracted with a qualification
speciahst to enhance the original program. A "revised program" was developed by the
contractor and implemented by October 28, 2002. There is no reference in the revised program



4
to the original program or to the original program's development date. Respondent explained
the Pipehne Integrity Manager was not aware of the original program at the time of the
inspection, because he had started working with the company after the contractor began
development of the revised program
Section 195. 509(a) requires each operator have a written qualification program by April 27,
2001 Each qualification program developed under this regulation must comply with the
minimum standards specified in $ 195. 505. If Respondent developed an OQ program that met
the minimum standards of $ 195. 505 by April 21, 2001, I must find that Respondent complied
with ) 195. 509(a). Section 195. 505 states:
The [OQ] program shall include provisions to: (a) Identify covered tasks;
(b) Ensure through evaluation that individuals performing covered tasks are
qualified; (c) Allow individuals that are not quahfied pursuant to this subpart to
perform a covered task if directed and observed by an individual that is qualified;
(d) Evaluate an individual if the operator has reason to beheve that the
individual's performance of a covered task contributed to an accident as defined in
Part 195; (e) Evaluate an individual if the operator has reason to beheve that the
individual is no longer qualified to perform a covered task; (f) Communicate
changes that affect covered tasks to individuals performing those covered tasks;
and (g) Identify those covered tasks and the intervals at which evaluation of the
individual's qualifications is needed.
After reviewing Respondent's origmal program, I find the program included each provision
required by the minimum standards of ) 195. 505. The original program had provisions to
address the identification of covered tasks, qualifications, evaluations and reevaluations, use of
non-qualified individuals, use of contractors, administration of the program, modifications to
covered tasks, modifications to the program, record keeping, and other related topics.
Respondent's original program was developed prior to April 21, 2001. For these reasons, I find
Respondent's original program comphed with ) 195. 509(a).
It is important to note that ) 195. 509(a) did not require Respondent to implement the original
program. Section $ 195. 509(a) required only that Respondent develop the program. A separate
2
provision, ) 195. 509(b), required that the program be implemented (at a later date). There were
no restrictions prohibiting Respondent from revising the original program prior to its
implementation. The label "DRAFT" on the cover of the program does not render the program
noncompliant. For the reasons stated above, I find Respondent's original program met the
minimum standards for an OQ program by April 27, 2001, complying with ) 195. 509(a)
Accordingly, I am withdrawing this allegation of violation
The Notice did not allege that Respondent violated ) 195 509(b)



ASSESSMENT OF PENALTY
Under 49 U. S. C. $ 60122, Respondent is subject to a civil penalty not to exceed $100, 000 per
violation for each day of the violation up to a maximum of $1, 000, 000 for any related series of
violations. The Notice proposed a total civil penalty of $50, 000 for the violations alleged in the
Notice.
49 U. S. C. $ 60122 and 49 C. F. R. $ 190. 225 require that, in determining the amount of the civil
penalty, I consider the following criteria: nature, circumstances, and gravity of the violation,
degree of Respondent's culpability, history of Respondent's prior offenses, Respondent's ability
to pay the penalty, good faith by Respondent in attempting to achieve compliance, the effect on
Respondent's ability to continue in business, and such other matters as justice may require.
Respondent requested elimination or mitigation of the proposed civil penalty based on
Respondent's good faith efforts to comply with the applicable regulations.
Item 1(b) in the Notice proposed a civil penalty of $2, 000. Respondent qualified an individual
to perform seventeen covered tasks without verifying the individual had completed training that
was mandatory for the qualifications. Respondent's failure to verify training prior to issuing
qualifications increases the risk of an accident caused by human error.
In its Response, Respondent explained certain training modules had not been assigned to the
individual due to an administrator error. Respondent stated that it was an honest mistake made
by a new assignment program put into effect to ensure compliance. The individual's supervisor
determined the individual had fulfilled all necessary training because the individual's training list
showed all "assigned" training had been completed.
It was not sufficient for the supervisor to determine quahfication by looking only at the hst of
assigned training. The supervisor should have determined whether each of the required training
modules had actually been completed by the individual. I do not find Respondent's explanation
warrants a reduction in the civil penalty for this violation. Accordingly, having reviewed the
record and considered the assessment criteria, I assess Respondent the civil penalty of $2, 000.
Item 1(c) in the Notice proposed a civil penalty of $10, 000. Respondent qualified approximately
forty-two individuals to perform covered tasks without ensuring they could recognize and react
to abnormal operating conditions. Respondent's error could have jeopardized public safety in
the event an abnormal condition occurred and could not be immediately recognized or properly
responded to. Although Respondent submitted as evidence of good faith an explanation of its
process for ensuring compliance, Respondent did not always use this process, which is evident
from the record. For this reason, I do not find Respondent's explanation warrants a reduction in
the civil penalty. Accordingly, having reviewed the record and considered the assessment
criteria, I assess P espondent a ci; il penalty of $10, 000.
Item 2 in the Notice proposed a civil penalty of $4, 000. Respondent's Corrosion Supervisor
could not demonstrate requisite knowledge of his responsibilities under Respondent's OQ



6
program in response to standard field inspection questions. Since Respondent has placed OQ
responsibilities with its supervisors and managers, a supervisor's lack of awareness of his or her
responsibihties creates a risk that a covered task may be performed incorrectly by an unqualified
individual. Improperly-performed covered tasks may lead to an accident. Respondent has not
submitted information that warrants a reduction in the civil penalty for this violation.
Accordingly, having reviewed the record and considered the assessment criteria, I assess
Respondent a civil penalty of $4, 000.
Items 1(a) and 3 in the Notice proposed civil penalties of $4, 000 and $30, 000, respectively.
Since these items are withdrawn, the proposed civil penalties are not assessed.
Accordingly, having reviewed the record and considered the assessment criteria, I assess
Respondent a total civil penalty of $16, 000. Respondent has the ability to pay this penalty
without adversely affecting its ability to continue in business.
Payment of the civil penalty must be made within 20 days of service. Federal regulations
(49 C. F. R. $ 89. 21(b)(3)) require this payment be made by wire transfer, through the Federal
Reserve Communications System (Fedwire), to the account of the U. S. Treasury. Detailed
instructions are contained in the enclosure. Questions concerning wire transfers should be
directed to: Financial Operations Division (AMZ-120), Federal Aviation Administration, Mike
Monroney Aeronautical Center, P. O. Box 25082, Oklahoma City, OK 73125; (405) 954-8893.
Failure to pay the $16, 000 civil penalty will result in accrual of interest at the current annual rate
in accordance with 31 U. S. C. $ 3717, 31 C. F. R. $ 901. 9 and 49 C. F. R. $ 89 23. Pursuant to
those same authorities, a late penalty charge of six percent (6%) per annum will be charged if
payment is not made within 110 days of service. Furthermore, failure to pay the civil penalty
may result in referral of the matter to the Attorney General for appropriate action in a United
States District Court.
COMPLIANCE ORDER
The Notice proposed a comphance order with respect to Items 1(c) and 2. Under 49 U. S. C.
$ 60118(a), each person who engages in the transportation of hazardous hquids or who owns or
operates a pipeline facility is required to comply with the apphcable safety standards estabhshed
under Chapter 601. Pursuant to the authority of 49 U. S. C. ) 60118(b) and 49 C. F. R. ) 190 217,
Respondent is ordered to take the following actions to ensure comphance with the pipehne safety
regulations applicable to its operations. Respondent must—
1. Conduct a review and document whether each of the 42 individuals identified in Item
1(c) can recognize and react to abnormal operating conditions apphcable to the covered
task(s) each is qualified to perform. Conduct any training necessary to ensure each
qualj fi " individual can «ecognjze and react to apphcahle abnormal operatjng conditions
Submit documentation of comphance within 30 days of receipt of this order.



7
2. Conduct a review and document whether each supervisor with responsibilities under
Respondent's operator quahfication program is fully aware of his or her responsibilities
under the program. Conduct any training necessary to ensure that each supervisor with
responsibihties under Respondent's qualification program understands his or her
responsibilities. Submit documentation of compliance within 60 days of receipt of this
order.
Submit documentation to the Director, Central Region, Office of Pipeline Safety, 901 Locust
Street, Room 462, Kansas City, MO 64106 The Director, Central Region, OPS, may grant an
extension of time to comply with any of the required items upon a written request by the
Respondent demonstrating good cause for an extension.
Failure to comply with this order may result in the assessment of civil penalties of up to
$100, 000 per violation per day, or in the referral of the case for judicial enforcement.
The Notice also proposed a comphance order for Item 1(a). Since Item 1(a) is withdrawn, the
proposed compliance terms are not included.
Under 49 C. F. R. $ 190. 215, Respondent has a right to submit a Petition for Reconsideration of
this Final Order. The petition must be received within 20 days of Respondent's receipt of this
Final Order and must contain a brief statement of the issue(s). The filing of the petition
automatically stays the payment of any civil penalty assessed. All other terms of the order,
including any required corrective action, remain in full effect unless the Associate Administrator,
upon request, grants a stay.
The terms and conditions of this Final Order are effective on receipt.
NOV 22 $05
acey Ge ard Date Issued
A oci e Administrat or
for 'pehne Safety
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