Welspun putting workers at risk, OSHA says 

Worker safety at issue for the corporate recruit.

click to enlarge WELCOMING: Gov. Mike and Ginger Beebe, Little Rock Mayor Mark Stodola and Welspun officials at the company's dedication ceremony in 2009. - CONSULATE GENERAL OF INDIA, HOUSTON
  • Consulate General of India, Houston
  • WELCOMING: Gov. Mike and Ginger Beebe, Little Rock Mayor Mark Stodola and Welspun officials at the company's dedication ceremony in 2009.

In April of 2009, at a ceremony celebrating Welspun's expansion of its nearly new facility in Little Rock, Gov. Mike Beebe talked about how special the steel pipe manufacturing company was, comparing it to a "first date" that you "have a special feeling, a special place for." The ceremony was a lively one and featured Indian music (Welspun is an Indian company) and local officials sporting Hindu tilakas, red dots on their foreheads.

But according to Occupational Safety and Health Administration records, the company - which has benefited from numerous state and local tax breaks since coming to Arkansas - has a safety record that isn't so special when it comes to worker safety – dozens of federal findings of safety violations.

Between March of 2009 and February of 2010, Welspun was cited by OSHA, as a result of three inspections, for two "serious" violations and two "other" violations, including the failure to provide "a place of employment which was free from recognized hazards that were causing or likely to cause death or serious physical harm to employees." Fines for those violations totaled $5,000.

In one of those incidents, in July of 2009, Welspun was cited for failure to ensure proper crane operation procedures that put employees at risk of being "struck by hazards." In March of 2010, the company was again cited for improper crane operation procedures that "exposed employees to a fall of approximately 20 feet." 

Last December, one worker, Frederick Bogar of Jacksonville, was killed and another man was injured when both were trapped between pipes weighing approximately 20,000 pounds each. Gloria Bogar filed a complaint in Pulaski County Circuit Court, suing Welspun for the wrongful death of her father – "a direct result of the defendant's negligence," the complaint says. The incident is still under investigation by OSHA.

In June last year, just months before the accident that killed Bogar, OSHA fined Welspun $5,000 for an incident in which an employee sustained "severe leg injuries." The citation says Welspun employees were exposed "to the hazard of entrapment between [transfer] lifts and pipe." In late January, Welspun was issued another round of citations by OSHA for 21 health and safety violations found during an August inspection. The company was fined $88,000, but has the right to contest those violations.

Richard Janicki, senior vice president for Welspun, says the facility is a safe place to work and the accident rate at the plant is lower than other companies in the industry.

"It's absolutely a safe place and as a matter of fact," Janicki says. "All steel mills and pipe mills are graded on a total incident recordable rate. It's the number of OSHA-recordable injuries per 2,000 man-hours worked. The average for the industry is between seven and eight [per year]. Our average last year was 1.9. So we're well under the industry average. The year before that we were around three, so we were still under it. We've been well under the industry average."

An OSHA spokesperson could not confirm Janicki's claim, saying it's difficult to compare companies' safety records because "all are very different as to size, location, violations, etc."

Welspun was welcomed with open arms, and open wallets, by state and local officials. When the company broke ground in 2007, promising $100 million in investment and 300 new jobs, it received $3.25 million from the state's Economic Infrastructure Fund, a $5 million bond guaranty from the Arkansas Economic Development Commission and a $6 million bond guaranty from the Arkansas Development Finance Authority. Welspun also received performance-based incentives including a sales tax rebate for materials, income tax credits on 10 percent of total investment and a rebate on payroll for newly created jobs for 10 years. 

When the company expanded in 2010, more incentives came, including $2 million from Gov. Beebe's Quick Action Closing Fund. The company also receives tax breaks from the city of Little Rock. Mayor Mark Stodola says other companies receive similar breaks, but that doesn't give the city any sway over how a company operates. 

Those health and safety rules have been handled for years through the regulatory areas of the federal government," Stodola says. "You never want anyone to get hurt or injured or on the job so I would imagine the safety issues that are under review by the management there to do whatever they can to prevent those things from happening. It's not something they want to see happen and I'm sure they pride themselves on safety and that they're reviewing it to make sure that this doesn't happen in the future."

Matt DeCample, spokesman for Gov. Beebe, also says a company's safety record has no bearing on the types of incentives they receive. 
"I'm pretty certain that nothing with the incentives is tied into that," DeCample says. "As far as state government goes, the Department of Labor are the ones who would have any type of oversight or sway there. The fact that we obviously helped to bring them here does not put us in a unique position versus any other company that might be addressing similar issues. It doesn't put us in a different position."

As for what happens next, Janicki says he plans to meet with OSHA officials to discuss the recent citation and fine within the next couple of weeks. He says the company will take issue with some of the violations cited by the regulatory agency and work to correct the rest. 

"They've been working with us," Janicki says. "We've abated everything that they've pointed out. We got the citation, however we get to have a hearing on that. That is not final. What was issued was strictly preliminary and now we get to meet with them and discuss that point-by-point. That's a normal procedure that you go though. It's called an informal conference, where you meet with the director and walk through point-by-point and come to some agreement, because this is strictly the inspector's opinion at this point in time."

OSHA officials say the investigation over the death at the plant will be concluded within six months.

Welspun's negative press don't end with safety violations. Questions have also been raised about the quality of the company's product. In 2009, the Pipeline and Hazardous Materials Safety Administration released a bulletin detailing an investigation of seven pipelines in the United States. Their investigation showed five of the seven contained significant amounts of defective pipe. A report by the environmental group Plains Justice summarized the findings: "A number of companies are implicated in producing defective pipe, but it appears that Welspun Corp. Ltd (Welspun), an Indian steel pipe manufacturer, produced most of it. For example, according to released documents, Welspun was responsible for 88 percent of pipe with expansion anomalies."

Janicki, who wasn't asked about the pipe quality issue in the interview about worker safety, wasn't immediately available for comment on this report.

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