1. Best Practices for the Walk-Around Inspection, and Using the Enforcement Process to Improve Your Safety Culture Annual Meeting of the Illinois Mining Institute Marion, Illinois August 26, 2015 Making the MSHA Inspection Process Work for You 1

2. Presenter Maxwell K. Multer 255 East Fifth Street Suite 1900 Cincinnati, OH 45202 Office ^ 513.977.8405 Fax ^ 513.977.8141 maxwell.multer@dinsmore.com 2

3. Dinsmore uses reasonable efforts to include accurate, complete and current (as of the date posted) information in this presentation. The information herein speaks as of its date. Accordingly, information may no longer be accurate as the passage of time may render information contained in, or linked to, this presentation outdated. Dinsmore is not responsible or liable for any misimpression that may result from your reading dated material. This presentation is not a substitute for experienced legal counsel and does not provide legal advice or attempt to address the numerous factual issues that inevitably arise in any dispute. RESPONSIBLE ATTORNEY: Robert Beatty Jr. 3

4. What We Will Be Covering  Information Gathering and the Role of Management During the Inspection  Rules to Guide the Inspection Process  Handling Your Notes  Using the Enforcement Process to Improve Your Safety Culture 4

5. Defining the Role of Management During the Inspection  What is the Purpose of the MSHA Inspection?  This is not a friendly visit to your mine.  The purpose of the inspection is to identify potential violations of the Federal Mine Safety and Health Act of 1977 and the regulations.  Ultimately, this leads to the issuance of enforcement actions and to assess civil penalties designed to force operators to comply. 5

6. Defining the Role of Management During the Inspection  What rights do operators have?  Section 103(f) of the Mine Act states:  “…a representative of the operator and a representative authorized by his miners shall be given an opportunity to accompany the Secretary or his authorized representative during the physical inspection of any coal or other mine…for the purpose of aiding such inspection and to participate in pre- or post-inspection conferences held at the mine. 6

7. Defining the Role of Management During the Inspection  What an MSHA inspector should provide:  Every reasonable effort is to be made to provide both parties with an opportunity to participate in the physical inspection of the mine and in all pre-inspection and post-inspection conference.  What an MSHA inspector may require:  To carry out an orderly and thorough inspection, the inspector should not allow unusual conditions, such as unavailability of a miner representative or a representative of an operator, to delay the start of an inspection.  An inspector may limit the number of participants in the inspection party and he shall determine the scope and number of participants which is reasonable during an inspection. 7

8. Defining the Role of Management During the Inspection  The First Rule of the Walk Around: It is all about the facts. F ind A nd C apture T he S cene 8

9. Defining the Role of Management During the Inspection  The First Rule of the Walk Around: It is all about the facts.  Management is the first line of defense for MSHA enforcement actions.  Only management can capture what occurred during the inspection.  Developing facts that are independent of the mine inspector is crucial to your success in the informal conference and to our success when litigating challenges before the Federal Mine Safety and Health Review Commission. 9

10. Defining the Role of Management During the Inspection  The First Rule of the Walk Around: It is all about the facts.  You must duplicate everything the inspector does:  Take measurements  Take photographs when possible (digital is best)  Document the inspector’s statements  Document the statements of others involved in the inspection 10

11. Defining the Role of Management During the Inspection  The First Rule of the Walk Around: It is all about the facts.  Contemporaneous documentation is crucial because:  Developing facts about what actually happened during the inspection is the only way to refute the inspector’s position.  Without independent facts of the inspection, the inspector’s story will be credited by the conferencing officer during an informal conference and by the Administrative Law Judge at the hearing. 11

12. Defining the Role of Management During the Inspection  The First Rule of the Walk Around: It is all about the facts.  Contemporaneous documentation is crucial because:  Any lawyer can argue the law but a lawyer cannot create the facts of the case.  The inspector will be using the enforcement action and his notes that he took at the time of the alleged violation.  An operator’s best defense is to have contemporaneous notes of the alleged violation.  When legal challenges to MSHA enforcement actions fail it is often because the operator cannot produce firsthand knowledge about the conditions the inspector found. 12

13. Defining the Role of Management During the Inspection  The Second Rule of the Walk Around: Handle the MSHA Inspector with Care.  BE PROFESSIONAL.  Be respectful to the inspector. as your attitude can, and often does, impact the paper that the inspector will issue.  When traveling with an MSHA inspector you should stay with them at all times. 13

14. Defining the Role of Management During the Inspection  The Third Rule of the Walk Around: Remember the Rule of the Four P’s. The inspector has:  Pen  Paper  Power  Photographs 14

15. Understanding What Information is Important  The possibility that an injury or illness might occur (10A).  No Likelihood0 Points  Unlikely10 Points  Reasonably Likely30 Points  Highly Likely40 Points  Occurred50 Points 15

16. Understanding What Information is Important  How severe an injury might be if the situation occurs (10B).  No Lost Workdays0 Points  Lost Workdays or Restricted Duty5 Points  Any injury or illness which would cause the injured or ill person to lose one full day of work or more after the day of the injury or illness, or which would cause one day or more of restricted duty.  Permanently Disabling10 Points  Any injury or illness which would be likely to result in the total or permanent loss of the use of any member or function of the body.  Fatal20 Points  Any work related injury or illness resulting in death, or which has a reasonable potential to cause death. 16

17. Understanding What Information is Important  The number of persons potentially affected if the event occurred or were to occur (10D).  How many miners were actually exposed or were potentially exposed to the condition cited by the inspector? 17 Number of PersonsPoints 00 11 22 34 46 58 610 712 814 916 10 or more18

18. Understanding What Information is Important  A violation is S&S if based on the particular facts surrounding the violation there exists a reasonable likelihood that the hazard contributed to (by the alleged violation) will result in injury or illness of a reasonably serious nature.  National Gypsum Company, 3 FMSHRC 822 (1981) 18

19. Understanding What Information is Important  The elements MSHA must prove to sustain an S&S determination are:  (1) The underlying violation of a mandatory safety standard;  (2) A discrete safety hazard – that is, a measure of danger to safety – contributed to by the violation;  (3) A reasonable likelihood that the hazard contributed to will result in an injury; and  (4) A reasonable likelihood that the injury in question will be of a reasonably serious nature.  Mathies Coal Co., 6 FMSHRC 1 (1984) 19

20. Understanding What Information is Important 2nd Base 3 rd Base Home 1 st Base A discrete safety hazard –a measure of danger to safety and health contributed to by the violation *Most important element [Cause and effect] A reasonable likelihood that the hazard contributed to will result in an injury Violation of a mandatory health and safety standard Reasonable likelihood that the injury will be of a reasonably serious nature 20

21. Understanding What Information is Important  Negligence is conduct which falls below a standard of care established under the Mine Act to protect persons against the risks of harm. That conduct can be an omission or an affirmative act.  The Mine Act requires operators to be on the alert for hazards that can affect employee safety and to take steps to prevent or correct these hazards.  Any failure to do so is negligence. 21

22. Understanding What Information is Important Current point values for the different negligence designations:  None0 Points  Low10 Points  Moderate20 Points  High35 Points  Reckless Disregard50 Points 22

23. Understanding What Information is Important  No Negligence: The operator exercised diligence and could not have known of the violative condition.  Low Negligence: The operator knew or should have known of the violative condition or practice, but there are considerable mitigating circumstances.  Moderate Negligence: The operator knew or should have known of the violative condition or practice, but there were mitigating circumstances.  High Negligence: The operator knew or should have known of the violative condition or practice and there are no mitigating circumstances.  Reckless Disregard: The operator displayed conduct which exhibits the absence of the slightest degree of care. 23

24. Understanding What Information is Important  Unwarrantable failure enforcement actions are NOT based on negligence by the mine operator.  Negligence is defined as “inadvertent, thoughtless, or inattentive.”  Unwarrantable failure enforcement actions are based on “aggravated conduct” on the part of the mine operator – if not, they are invalid as a matter of law. 24

25. Understanding What Information is Important  Allegations of Unwarrantable Failure  The Federal Mine Safety and Health Review Commission has defined “aggravated conduct” as the conduct on the part of the operator which displays:  Reckless disregard;  Intentional misconduct;  Indifference; or  A serious lack of reasonable care. 25

26. Understanding What Information is Important  Here are the factors that courts examine to determine whether an operator exhibited aggravated conduct:  The extent of the violative condition;  Length of time the condition existed;  What efforts were made to abate the violative condition;  Whether the violation was obvious;  Whether the operator had been placed on notice that greater efforts were necessary for compliance; and  The danger posed by the violative condition.  Mullins and Sons Coal Co., 16 FMSHRC 192 (1994) 26

27. Reckless Disregard What efforts were made to abate the condition Length of time the condition existed The extent of the condition Whether the condition was obvious The danger posed by the condition Whether the operator had been placed on notice that greater efforts were necessary for compliance Mullins Factors Serious Lack of Reasonable Care Aggravated conduct is more than ordinary negligence. Indifference (or) Intentional Misconduct (or) Understanding What Information is Important 27

28. The Role of The Company Rep’s Notes  MSHA inspectors take notes – so why do many operators fail to take notes during an inspection?  Remember, it is all about the FACTS.  Your notes are taken in anticipation of potential litigation and as such may be protected as legal work product (this is one reason why involvement of counsel early is ideal).  Your company has the right to review the inspector’s notes through a Freedom of Information Act (FOIA) request.  You can file your FOIA request electronically and normally will have copies of the inspector’s notes within 30 days or your request (a small fee may apply).  MSHA is not entitled to your notes – never provide copies of your notes to any inspector without speaking to your legal counsel. 28

29. Handling Your Notes  Information to include in your notes:  Where you and the inspector traveled.  What the inspector viewed/examined/tested/measured.  Comments made by the inspector  Who the inspector talked to during the inspection (names and job titles are important to know).  How the inspector measured/tested the equipment.  YOUR measurements – do not rely on what the inspector did – take your own independent measurements. 29

30. Help Us Help You  Information to include in your notes:  Relevant individuals – who knows about and/or saw the area that was cited?  Relevant documents – are there examination records, training records, notes taken by foremen or other miners, or anything else that relates to the area or the cited conditions?  Who attended the pre- and post-inspection conferences? 30

31. The Company Representative  The person traveling with the inspector has a great deal of responsibility but they play an important role in defending both their colleagues’ and the company’s interests.  The person traveling with the inspector should not be expected to be an expert on every situation that may be encountered but that person should be able to recognize and identify issues that need to be discussed with the safety department or human resources department.  Once the inspection is complete the person traveling with the inspector should take his handwritten notes and type them into a Word document and save them electronically (while still maintaining the original handwritten notes). 31

32. What to Do After the Inspection  Review the enforcement actions issued by the inspector with the notes take during the inspection.  Note any discrepancies between your notes and what the inspector ultimately stated in the enforcement action.  Review previous inspections (and hopefully previous notes that you have saved) to determine if there are any repeat issues that need to be addressed with the safety department (i.e., guarding issues/accumulations/housekeeping, etc.).  Determine which enforcement actions need to be conferenced with the District and send request within 10 days.  Determine if there is a need for early involvement of counsel. 32

33. Improving Safety and Regulatory Compliance  Operators can improve safety and regulatory compliance by focusing on pre-enforcement awareness training.  Strict compliance with MSHA regulations must be a requirement and not an option.  There must be a willingness to learn from situations where MSHA is correct.  There must be a willingness to educate and train managers to recognize and challenge MSHA when they are wrong. 33

34. Improving Safety and Regulatory Compliance  Operators can improve safety and regulatory compliance by focusing on pre-enforcement awareness training.  Create a culture of safety in the workplace.  The development and maintenance of your company’s safety culture cannot be overstated.  Safety and regulatory compliance must be more than just a slogan.  Safety and regulatory compliance must become personal. 34

35. Improving Safety and Regulatory Compliance  Operators can improve safety and regulatory compliance by focusing on pre-enforcement awareness training.  Devise incentives for good work habits.  Create actual consequences for poor or unsafe work habits.  In some cases employees do not learn the value of safe work habits until it is too late.  Thus, review citations and the company’s notes taken during inspections with all employees so that every miner understands the safety and regulatory compliance issues MSHA is finding at your operation. 35

36. Improving Safety and Regulatory Compliance  Operators can improve safety and regulatory compliance by focusing on pre-enforcement awareness training.  Be humble enough to learn from mistakes.  Be sure to think beyond the abatement of an enforcement action – are there systemic or latent hazards the company needs to address?  Communicate with the miners involved regarding the enforcement action and include the enforcement action in safety talks.  Discuss ways to prevent the reoccurrence of the condition that led to the enforcement action. 36

37. TAKEAWAYS  The Company Rep and the Walk-around Inspection  Be Professional  Take thorough notes and other relevant documentation  KNOWLEDGE IS POWER  Be familiar with concepts of likelihood, severity, negligence, S&S, UWF  Think about what is relevant to the violation being issued and capture the facts  Creating and Promoting Your Safety Culture  Involve your miners  They need to be aware of what is being cited and any recurring issues  Incentivize good work habits  Create consequences for bad work habits  Most importantly – incentivize miners to come up with SOLUTIONS 37

38. Questions? Maxwell K. Multer 255 East Fifth Street Suite 1900 Cincinnati, OH 45202 Office ^ 513.977.8405 Fax ^ 513.977.8141 maxwell.multer@dinsmore.com 38