Legal, safety issues brought to forefront in aftermath of fatal accident

An explosion at the Sunrise Propane industrial facility Aug. 10, 2008, in North York, Ontario, Canada, killed two people, injured many more, caused damage to more than 100 homes, businesses and schools, and forced the evacuation of 12,000 residents in the surrounding area. The incident received media coverage around the world.

The Ontario fire marshal conducted an investigation and concluded that during or immediately after the transfer of propane from one truck to another, a leak occurred in the transfer hose. The escaping fuel found an ignition source that resulted in the initial and subsequent explosions.

One of the people killed was an employee of Sunrise who had been employed for only a few months at the time of the accident. Investigators learned that Sunrise did not properly train this new employee, alleging that he had “no tools” to perform his job safely.

Sunrise claimed the person had been properly trained but that the training records were destroyed in the fire. The company also presented an employee who was working with the deceased employee at the time of the incident. The employee said he saw the leak and smoke nearby and told his fellow employee to leave immediately. That employee refused, though.

Sunrise was found guilty of two labor violations from this incident: failure to train the deceased employee and failure to maintain a safe workplace. The company was also found guilty of nine environmental violations for this incident.

Two directors of Sunrise were individually found guilty of failure to take reasonable steps to clean up the facility. There was some evidence that in the days following the accident Sunrise transferred substantial sums from its account and then claimed it was unable to pay for the total cost of the cleanup. The province of Ontario paid for a large portion of the cleanup.

Also, about 6,500 people whom the incident affected filed a class-action lawsuit. Their initial claim was $300 million. During the course of the investigation, it was discovered that it was illegal to perform tank-to-tank transfers of propane in Ontario.

In fact, Sunrise was issued a stop-work order from the Technical Standards & Safety Authority (TSSA) of Ontario in 2006 for its illegal tank-to-tank transfers. Sunrise disclosed that tank-to-tank transfers were conducted on a regular basis despite receiving this stop-work order from TSSA.

Following the incident, the government shut down three additional Sunrise facilities because it determined the safety of the site and safety training of its employees were not satisfactory. The incident caused the government to inspect all propane storage facilities in Ontario, and an additional six non-Sunrise facilities were shut down for safety violations.

The parties to the class-action lawsuit reached a tentative settlement that needs court approval. As proposed, it would provide $23 million to claimants and $8 million to affected residents. The settlement provides set amounts for residents displaced from their homes; a range of compensation for injured victims; payment of insurance deductibles and uninsured losses; and payment of lost wages and business interruption losses.

The Sunrise tragedy offers many lessons for those willing to learn. One is that safety cannot be ignored. Sunrise claimed it had trained its employee but that its documentation was destroyed in the fire. Sunrise should have stored this documentation offsite.

Sunrise was viewed as a bad actor as it flaunted the tank-to-tank transfer prohibition in Ontario, despite being issued a prior stop-work order. This type of safety failure is without justification and came back to haunt Sunrise following this incident.

The aftershock to the Canadian propane industry from this incident was dramatic. All propane facilities were subsequently highly scrutinized and inspected for safety violations. Nine more facilities were shut down for safety violations. The value of a robust safety program was fully appreciated as a result.

Learn from the misfortune of others and be vigilant in your training and safety program.

John V. McCoy is with McCoy Leavitt Laskey LLC. His firm represents industry members nationally. He can be reached at 262-522-7007 or jmccoy@MLLlaw.com.