March 1, 2012

Mining Industry Equipment Manufacturers: Stuck Between a Rock and a Hard Place MSHA


By Katie Jeremiah

Spring 2012

With the simple stroke of a Mine Safety Health Administration ("MSHA") inspector's pen, mine operators may face huge monetary penalties, total shutdown of operations, or even prison time for failing to comply with MSHA regulations.

Equipment manufacturers play a critical role in a mine operator's compliance with MSHA regulations. Mine operators look to equipment manufacturers to provide them with equipment that will meet MSHA standards, which can be ambiguous and subject to the interpretation of the MSHA inspector. Equipment manufacturers face fines of up to $10,000 and five years' imprisonment under section 110(h) of the Mine Act if convicted of falsely representing that their equipment complies with MSHA regulations.

Although the purpose behind MSHA's enforcement power is respectable — preventing death, disease, and injury from mining and promoting safe workplaces for miners — mine operators are finding 100 percent compliance to be problematic, if not impossible. There is little bright-line guidance as to what conditions violate MSHA regulations, and in many cases the agency will not recognize compliance with industry standards, such as the International Organization for Standardization (ISO) or the Society of Automotive Engineers. Consequently, equipment manufacturers are unable to assure customers that new equipment will not require an immediate retrofit to satisfy MSHA's interpretation of subjective standards, leaving them stuck between a rock and a hard place MSHA.

Who is MSHA Anyway?

MSHA operates under the United States Department of Labor to regulate the safety and health of America's mining industry. This includes all mines and mineral processing operations in the United States, ranging from large coal mines to small two-person sand and gravel pits. MSHA regulates every aspect of mine safety from employee training and emergency communication systems to equipment safety and dust and noise control. The agency investigates mine accidents and complaints, develops mandatory safety and health standards, assesses and collects penalties, and reviews mine operators' training plans.

Why is Compliance Difficult?

MSHA regulations are vague at best; for example:

"[S]afe means of access shall be provided and maintained to all working places"

"[M]oving machine parts shall be guarded to protect persons from contacting moving parts that can cause injury."

These subjective standards lead to differing interpretations of what is deemed to be "safe," what constitutes a "working place," and what scenarios an inspector may imagine in which a person would contact "moving parts." These are just the first of a long line of questions that need bright-line answers, to which MSHA invariably responds, "performance standards are determined by the present circumstances in each case."

What Does This mean for Customers?

The lack of bright-line rules is especially frustrating for operators that have invested millions of dollars and countless hours purchasing and setting up new equipment only to find that MSHA considers the equipment unsafe. Additionally, the modifications that the inspectors require to abate the citations often risk sacrificing equipment warranties. Worse yet, the retrofitting of equipment may even present fresh safety issues as a result of modifying the original equipment design, which has undergone hundreds, if not thousands, of hours of safety testing under original design conditions. Nevertheless, operators have little option but to comply. When MSHA issues a citation for a violation of a standard, the operator becomes subject to fines ranging from $112 up to $70,000 for a single citation, $220,000 for "flagrant" violations, and up to $500,000 for repeat criminal violations.

Although the threat of large fines is real, it is the cost of abating the condition that has caused some operators to question whether they should continue to remain in the business. This is especially true for companies who operate with nearly identical configurations on multiple sites — the operator risks even greater penalties for continuing to operate while knowing the condition is not in compliance with MSHA standards. In a recent enforcement blitz, operators with new truck scales have been cited because inspectors have deemed the manufacturer-provided 9-inch rub rails insufficient and have been requiring that the scales be retrofitted so that the rails extend to mid-axle height of the largest truck traversing the scale. Although the initial citation was only $112, the cost of retrofitting the equipment to comply with this new interpretation could reach $40,000 for a single scale.

What Can You, as an Equipment Manufacturer, Do?

Use contract language. Disclaim any representations that the equipment complies with MSHA regulations. Even if an original equipment manufacturer (OEM) is certain that the equipment is safe, the risk that MSHA will find a condition that does not comply with the regulations is high. Unless the OEM is willing to accept the risk of a $10,000 fine and five years' imprisonment, this disclaimer is necessary.

Provide documentation to customers on safety certifications recognized by MSHA. In limited circumstances, MSHA allows inspectors to use certification documents to show that equipment complies with the regulations. For instance, a June 2010 Program Information Bulletin from MSHA stated that inspectors can use documentation showing that the equipment is ISO 2867-certified to determine whether safe access, fall prevention, and fall protection is being provided on self-propelled mobile equipment. Because the burden is on the operator to provide this documentation, it is important that manufacturers forward the proper information and educate the customer on how it may be used in a MSHA inspection.

Become familiar with enforcement trends. OEMs should stay in touch with their customers, industry associations, and attorneys familiar with recent MSHA enforcement trends.

MSHA provides a public database (the Mine Data Retrieval System, available at that shows each operator's history of violations, including reference to the MSHA standard cited. It may be beneficial for OEMs to check this database regularly and open a dialogue with its customers about how the OEM may better serve the customer's equipment needs with improved design or retrofit alternatives.

By staying ahead of the curve, OEMs may be able to innovate methods to modify equipment designs that satisfy MSHA without invalidating equipment warranties or compromising safety or equipment performance. This is an excellent value-added service that allows OEMs to keep in touch with their customers, prevent future liability for any potential product defect claims, and provide opportunities for new business.

Help define the law — comment on proposed rulemaking and actively educate legislators on equipment safety. In light of recent mine disasters, Congress is under pressure to draft more restrictive legislation, and MSHA is under overwhelming pressure to ramp up enforcement activity. Lawmakers should be better informed about what OEMs have done to make equipment safe for miners and should be discouraged from requiring after-market modifications to equipment absent a showing that the modifications would provide a safer workplace. As a manufacturer, you should actively participate by commenting on new proposed rulemaking and by contacting legislators. An attorney who is versed in mining law issues or your local mining industry association can keep you informed of opportunities to submit comments.

As an OEM, it is important for you to understand the role that MSHA plays in your customers' businesses and the liability that you have under MSHA as a business that offers equipment for sale to the mining industry. By knowing the rules, familiarizing yourself with enforcement trends, and participating in rulemaking you will help define the future of the industry and add immediate value to your mining customers.

Spring 2012

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