Following last year’s indictments of Arkema Inc. (Arkema) CEO Richard Rowe and plant manager Leslie Comardelle, a Texas grand jury recently indicted Mike Keough, Arkema’s Vice President of Logistics, in connection with allegations that Arkema failed to provide adequate emergency response information to response officials. Along with this indictment, recent charges against Intercontinental Terminals Company and the hiring of several additional prosecutors reflects Harris County District Attorney’s increased focus on prosecuting environmental and safety crimes. This trend of increased accountability for companies after high-impact incidents was also highlighted in California, where a federal judge overseeing Pacific Gas and Electric’s (PG&E) probation ordered PG&E board members to visit Paradise, CA, which was destroyed in the 2018 Camp Fire.
The Harris County District Attorney’s Office is pursuing additional charges against Arkema in connection with an organic peroxide release and fire at its facility in Crosby, Texas during Hurricane Harvey. The hurricane, which resulted in historic rainfall and flooding in South Texas between August 25 and September 2, 2017, caused a loss of power at Arkema’s Crosby plant that disabled refrigeration units, eventually causing the decomposition and release of stored organic peroxides.
In April, Harris County DA Kim Ogg announced that Mike Keough, Arkema’s Vice President of Logistics, had been indicted by a Harris County grand jury for felony assault. According to the available records, the charges appear to stem from Arkema’s failure to provide adequate emergency response information to response officials who suffered bodily injury as a result of entering an area with toxic fumes. The charges were filed under the same case alleging that Arkema failed to adequately assess risk and compared Arkema’s risk model to a neighboring facility. This is the second round of indictments for Arkema executives – a grand jury indicted CEO Richard Rowe and plant manager Leslie Comardelle in connection with the incident – and highlights the various pathways of criminal liability that can arise from an allegedly inadequate assessment of hazards.
The charges are also indicative of the Harris County DA’s increased focus on prosecuting environmental crimes. In April – after the charges against Keough were announced – the Harris County Commissioners Court approved $850,000 to hire four additional environmental prosecutors and two full-time investigators. During the same month, the Harris County DA’s Office filed five misdemeanor charges against Intercontinental Terminals Company (ITC), the owner of a petrochemical facility in Deer Park, Texas that experienced a large fire in its aboveground storage tanks in March. According to the DA, the incident caused discharges of xylene and benzene into the Tucker Bayou, which flows into Galveston Bay. The Texas Water Code allows penalties of up to $100,000 for a person other than an individual for unauthorized discharges of water pollutants. The penalty limit increases to $250,000 for “intentional or knowing” unauthorized discharges.
The charges against Arkema and ITC – as well as last year’s indictment of two Arkema executives – represent significant efforts on the part of a local authority to criminally prosecute chemical corporations and individual officers for process safety incidents. Although this can be viewed as a departure from how Texas has treated chemical accidents in the past, where criminal charges have generally not been brought based on a release resulting from the failure of safety and environmental management systems, it highlights a nationwide trend of holding companies increasingly accountable for their inadequate prevention of or preparation for high-impact incidents.
This trend has also been highlighted recently in California, where a federal judge overseeing Pacific Gas and Electric’s (PG&E) probation following the 2010 San Bruno pipeline explosion and subsequent criminal conviction ordered PG&E board members to visit Paradise, CA, which was destroyed in the 2018 Camp Fire. The judge asserted that PG&E had violated its probation resulting from the San Bruno criminal matter by failing to disclose to the court a criminal misdemeanor probe and $1.5 million settlement with the Butte County, CA District Attorney’s Office in connection with the smaller Honey Fire in 2017, which is alleged to have resulted from PG&E equipment. The judge also ordered the PG&E board members to visit the San Bruno location where the explosion occurred.
In addition to reflecting a broader trend of criminalization of environmental and safety incidents, the PG&E case highlights the challenges associated with follow-on actions resulting from probation requirements and subsequent incidents.