Prince William Sound Aquaculture Corp. (PWSAC) has agreed in federal court to pay $1 million in restitution and fines related to a 2018 incident at the Cannery Creek Hatchery in which spilled waste oil severely burned an employee.
In court documents signed on Oct. 17 for the U.S. District Court in Anchorage, PWSAC agreed to pay the employee, identified in court documents as C.F., $550,000 in restitution, and a fine of $450,000 at the sentencing on Wednesday, Nov. 9.
Geoff Clark, general manager of the hatchery, acknowledged the settlement, but declined further comment due to the upcoming sentencing hearing.
PWSAC also waived all rights to appeal the conviction and sentence imposed, as well as to undergo five years of probation. During that time the salmon hatchery operator is to follow an environmental compliance plan regarding disposal of hazardous waste agreed upon by all parties involved.
The incident involving the restitution and fine dates back to July 27, 2018, when two employees at the Cannery Creek Hatchery, located in a remote area of Unakwik Inlet, were directed to dispose of four 55-gallon drums holding a mixture of waste oil and jet fuel by burning the drums on the site’s open burn pit.
Disposal of fuel drums containing used oil was a long-standing issue at PWSAC hatcheries and there was a historical practice at some sites of burning the drums so they could be crushed and disposed of, court documents said.
The hatchery’s maintenance manager, Michael Tompkins, instructed them to distribute one 55-gallon drum of jet fuel between three other 55-gallon drums containing waste oil, leave the bung holes on the drums open, place the drums on the fire and puncture the drums to increase air flow during the burning, according to court documents. The documents report that the employees placed the first drum on the lit fire using a front-end loader with a fork attachment, and victim C.F. punctured it with a pickaxe. C.F. then determined the practice was too dangerous to perform on the other drums.
The other two employees then placed two more drums on the fire.
At one point, a drum rolled off the fire and the employees attempted to put it back on using their hands, before managing to put it back on the fire with the front-end loader, according to the documents. Neither employee was wearing any personal protective gear.
As they were burning the drums, the hatchery manager, Jon Palmer, stopped by to discuss other matters and did not tell them to stop or otherwise intervene, the documents said.
The two employees took a break and left the area after the drums were placed on the fire. As C.F. returned to the burn pit, one of the drums fell over towards C.F. Jet fuel spilled from the open bung hole and ignited, severely burning C.F. He was medevacked off-site and underwent extensive burn care for injuries that resulted in disfiguring scars on his face, neck and hands, as well as mental health impacts, court documents noted.
His injuries resulted in earnings loss and life care costs of at least $580,951 and possibly as high as $805,663, the court found.
The Environmental Protection Agency’s criminal investigation division was then alerted to the storage and disposal of hazardous waste at the hatchery, and on Aug. 15, 2018, EPA agents conducted a consent search at the site. They found numerous fuel drums at the site in various conditions, including drums with rust, damage and insufficient labeling.
PWSAC ultimately hired a third-party contractor to dispose of waste from hatchery sites. According to shipping manifests, several tons of accumulated hazardous waste and several more tons of various oils and fuels were removed from the Cannery Creek Hatchery alone.
PWSAC has operated the Cannery Creek Hatchery since 1988. Employees live on-site in company residences, with supplies delivered to and from the site via aircraft or the PWSAC’s landing craft boat. Over time the site accumulated various waste oil, fuel and chemical products left over from hatchery operations.
After a 400-gallon diesel fuel spill there in 2013, the state of Alaska filed criminal charges against PWSAC and two of the corporation’s employees. Those charges were resolved in 2017 in a civil settlement that imposed a $55,000 fine and required PWSAC to hire the consulting firm Nortech Environmental Engineering & Industrial Hygiene Consultants (Nortech) to do an environmental audit and prepare an environmental compliance plan for all five hatcheries overseen by PWSAC.
Nortech then prepared Spill Prevention, Control and Countermeasures Plans (SPCCP) for each hatchery. The SPCCP plan for the Cannery Creek Hatchery noted, among its other findings, that the hatchery was storing new and used oil products at various locations without appropriate secondary containment. The SPCCP required corrective measures be made by Dec. 31, 2017. That December, Hatchery Manager Palmer emailed PWSAC management about measures necessary to bring the site into compliance, including the need for additional storage for oil and other chemicals. Six months later, court documents note, Palmer sent another email to PWSAC managers about coming into compliance with the SPCCP, including the need to procure additional storage for oil and chemicals to address what Palmer referred to as “a nasty situation.”
During the interim, Nortech completed its audit of all the hatcheries and circulated a draft environmental audit report to PWSAC managers in April 2018. The audit report noted, among other concerns, that Cannery Creek Hatchery did not have a formal waste management plan, and that solid waste was being burned in an open pit at the site without any official standard of practice for the burning. The report also noted storage of various types of fuel and oils at the site.
Meanwhile the Armin F. Koernig Hatchery spilled oil into Sawmill Bay in June of 2018 while rinsing a mislabeled 55-gallon drum containing diesel fuel. In July that year, the manager of a third hatchery, the Main Bay Hatchery, emailed PWSAC requesting assistance in removing used oil and was told that PWSAC was “working on a strategy for removal,” likely by finding “a site that can stage or burn the used oil.”
