Peabody Energy: Changed from the Top Down

All-out commitment from its CEO launched a safety transformation for this award-winning coal company.

• By Jerry Laws
• Nov 01, 2006

ACHIEVING safety excellence in mining is neither easy nor inexpensive, but sometimes it can be done relatively fast. St. Louis-based Peabody Energy has won four Sentinels of Safety awards, many Holmes Safety Association awards, and numerous federal and state mine rescue champion's trophies in the past decade, but its safety record was so-so as recently as 1990, said Dave Beerbower, the coal company's vice president of safety for the past 14 years. The catalyst for a radical change in Peabody's approach to safety came that year when new CEO Irl F. Engelhardt took over.

Beerbower said Engelhardt was intensely committed to safety because his father had died in a trucking accident when Irl was a child. "The first thing that he did was to start a new safety initiative, just raising the expectation level for all of our employees and laying out there what his vision was for safety within the company. And we really started to improve immediately starting in 1990," Beerbower said. "We went from an incident rate of 16, which is 16 accidents per 200,000 manhours, to 4 to 4.5 [by 1994-95]. It was a 75 percent improvement, roughly. And that was directly the result of the way we managed safety. We required it of our front-line supervisors and the mine managers to take it very seriously and to work on some very strong ways to build teams at the mines, eliminating hazards and looking at ways we could make our mines safer.

"It's not just talking about safety," he explained. "It's actually holding managers accountable for their safety performance, letting them know that unsafe mines are just not the way we're going to do business."

Supervisor and peer observations are part of the safety approach at Peabody, which is the world's largest private-sector coal company. Teams at all levels are the framework for its program. An executive safety committee that includes current CEO Gregory Boyce, Beerbower, and group executives from each region meets two to three times annually and communicates new initiatives to a 14-member central safety and health team of operational and safety managers from various regions who work more on tactical matters. Each mine has a safety and health team of nine to 15 members, including the operations manager, mine foreman, miners, and supervisors. Audits examine how these teams are working, what they do with their data, and how they ensure the quality of observations made at each mine. Peabody gathers best practices and posts them on an intranet site so other mines can benefit, while representatives from each region who are on the central team also bring good practices back home. Information flows up and down in this way, Beerbower said.

When Boyce took over, he brought in DuPont Safety Resources for guidance to begin looking at behaviors. Starting in 2003 with a clear vision statement ("We will operate safe workplaces that are incident-free."), the company brought in its 175 senior operations and safety managers for a two-day seminar where the CEO explained his vision and expectations for safety. "It was a big push for some of these guys," Beerbower recalled. "I think we still had some managers who said, 'Look, no matter what I do, people are still going to get hurt.' We really had to attack that mindset."

What came next, in 2004, was three days of safety observation training for 1,100 line supervisors, including one full day devoted to practicing the techniques on miners working in a nearby mine. When this phase ended in early 2005, Peabody started one-day sessions for all 7,400 hourly workers to help them understand the observations weren't punitive, but instead were intended to gather data and identify unsafe practices that can lead to accidents. Each mine collects its data and enters it into a database that has great value for spotting trends, Beerbower said. "We require the front-line supervisors to do one [observation] every day, and in those observations there can be up to 30 to 40 individual items that they're looking at. To date, we have well over 600,000 items that we have audited. This is just over the course of a year or so."

About 96 percent of these 600,000 items are positive/safe behaviors, he said. "We've reinforced those positive behaviors as well as worked to correct those unsafe behaviors. We're working to improve the quality of the observations. Do I believe there's only 3 to 4 percent unsafe behaviors throughout the company? No. But we're constantly improving the process."

Asked how much the behavioral effort cost, Beerbower answered, "You know what? I don't know. It might seem strange that I don't know the cost, but the benefit of working for a company like this is that the CEO has given us whatever resources we need to improve. If we believe it's the right thing to do, he says, 'Do it.' "

Peabody Energy has a comprehensive, zero-tolerance drug testing program, as well as an employee assistance program to help any worker who has a drug problem and voluntarily seeks help. Any contractor that comes to work on its sites must have a drug testing program.

Efforts to Control Drug and Alcohol Abuse
Mining and construction are two of the industries in which workers self-report the highest levels of alcohol and drug abuse on SAMHSA national surveys. The director of SAMHSA's Center for Substance Abuse Treatment, Dr. H. Westley Clark, noted in an April 2006 Substance Abuse Treatment Advisory on OxyContin® that prescriptions for it were generally 500 percent above the national average in the counties of far southwest Virginia, where coal mining and farming are the major occupations. Clark's advisory said many reports of abuse are from economically depressed, rural areas housing labor-intensive industries such as logging and coal mining.

"The data does seem to show that there has been an uptick in terms of abuse of prescription drugs, of which OxyContin is one. Both OxyContin and the highly dangerous and addictive illegal drug methamphetamine have a history of hitting the rural areas first," said Elena M. Carr, the drug policy coordinator in the Office of the Assistant Secretary for Policy at the U.S. Department of Labor. "Kentucky and Wyoming, which are among the top coal-producing states, also are two states that have been hit a lot by methamphetamines. Those two drugs, I would say, are of paramount concern in the industry."

Carr became the agency's drug policy coordinator in 1997. There was a period of inaction on this issue as far as the mining industry went, but during the past two years it has again become a top concern for state and federal officials, she said. A summit to discuss the extent of drug use by miners took place in December 2004 that was co-sponsored by MSHA and the states of Kentucky, West Virginia, and Tennessee. "The summit was organized, I would say, within a period of three weeks," Carr said. "It was a one-day summit, and there were over 200 participants. And many of them were from businesses within the industry; some of them were also state and MSHA officials. In my time dealing with this issue, it's very rare to get that kind of attendance and participation from industry around this issue. The only time that I saw that to that extent was when the federal government began regulating or discussing regulations in the late 1980s. But this was really significant. From my observation, it [showed] there is a serious impact on safety and productivity, or the industry representation would not be so high."

MSHA issued an advance notice of proposed rulemaking Oct. 4, 2005, for a potential rule that could require drug and alcohol testing programs in all types of mines. Sixty-five comments came in, with many mine operators saying they believed in testing but did not welcome a federal regulation. (The ANPRM and comments received are online at http://www.msha.gov/REGS/FEDREG/ANPRM/2005/05-19846.asp.) The public hearings held to discuss the rule were intended, in part, to gather data linking drug and alcohol use to miners' injuries and deaths. MSHA must have such data to justify a rule, but little data documenting the connection was forthcoming, Carr said.

"I think there's a logical connection that alcohol and drugs impair one's ability to function safely. It impairs coordination, reaction time, it impairs thinking and decision-making. So I think there is an obvious connection," she said. "Do we have the data to show that this is causing a lot of accidents in mining? Not beyond really the anecdotal or the individual company reports."

There was lots of interest within the mining community in having MSHA require testing that follows the DOT procedures. "But that, in my opinion, had some shortcomings in that one of the drugs of concern was OxyContin, and the Department of Transportation regulations, though extremely prescriptive, don't address OxyContin," Carr said. Though committed to finalizing the rule, MSHA got busy with other safety concerns after the Sago Mine explosion last January; plans for publishing a proposed rule have been delayed until next year.

Carr was scheduled to present a new training module at the TRAM Conference held Oct. 10-12, 2006, at the National Mine Safety and Health Academy in Beckley, W.Va. The module contains tools and guidance for use by miners who suspect a co-worker is using drugs or alcohol on the job.

"I really feel like certain occupations, such as mining, have a great opportunity to use the power of the peer, to self-enforce," she said. "If they're working in the mines, their life is dependent on the safety of their co-workers. They have a great investment in making sure their co-workers are safe and drug free. And yet, a lot of times, not just in mining but in many industries, folks just don't want to address the issue head-on. They'll cover up for individuals or make excuses or just try to stay out of that person's way."

She has presented the module to MSHA state grantees who conduct training in every state, and it will be made available on DOL's Working Partners site (www.dol.gov/workingpartners). The Professional Miner Program of the 90-year-old Joseph A. Holmes Safety Association (www.holmessafety.org/prominer/index.htm), which has recognized at least 10,000 miners, asks them to pledge to be role models for safe, drug-free, alcohol-free workplaces. Several states certify miners, and Kentucky this year tied its certification to a drug and alcohol testing requirement; its law requires employee assistance programs and says mines that adopt a drug-free program certified by the Office of Mine Safety and Licensing are eligible for a 5 percent worker's compensation credit. Several states offer such discounts.

Peabody Prepares the Next Generation
Peabody Energy is working right now to prepare for retirement of a large swath of its experienced miners. It is putting new hires through a nine-week training class that includes hands-on experience plus work in simulators. The newcomers are schooled in small mines that are near four training centers located in southern West Virginia, western Kentucky, Indiana, and Wyoming. When the first center opened, management was concerned that recent incidents would reduce the number of people interested in a mining career, Beerbower said.

"What we found was just the opposite, for us," he said. "A lot of people who had mining in their families, generationally, the fathers and the grandfathers would be saying, 'You're not going to work in the mines until Peabody starts to hire.' Now we're starting to hire, and these folks are coming out of the woodwork." In West Virginia, 500 to 600 applications came in for about 20 jobs the company posted. More than 1,000 people showed up for a job fair in the Midwest.

"We teach these young people the right way to do the work," Beerbower said. "When they hit the mine, they're ready to step into the workforce. It's working out very well."

He said having champion mine rescue teams has really helped Peabody Energy built its safety culture. The company has six competition teams and is adding more because the MINER Act requires them to be located nearer to the operations than they have been. Peabody also has fire brigade teams in every underground mine, he said.

The new federal law requires Peabody to make some changes in its operations, such as meeting the law's prescription for stationing additional self-contained self rescuer devices in underground coal mines, Beerbower said. But a law can't instill a safe culture, he added. And while MSHA helps by providing a second set of eyes to make sure good practices are in place, "quite honestly, that's the baseline we start from," he said.

This article appeared in the November 2006 issue of Occupational Health & Safety.

This article originally appeared in the November 2006 issue of Occupational Health & Safety.