Senators John D. (Jay) Rockefeller IV and Robert Byrd (both D-W.Va.) have introduced legislation to hold mining companies accountable to shareholders for their safety records. Specifically, the legislation (S. 3450) requires that publicly-traded mining companies include serious mine safety violations in their filings with the Securities and Exchange Commission (SEC). Mining companies that fail to properly disclose this information would face SEC penalties. The language was originally introduced as an amendment to the Wall Street reform bill, but did not come up for a vote.
"We need to bring more needed transparency and accountability to the mining industry's safety records," said Senator Rockefeller, who has been pushing for stricter safety oversight and tougher mine safety standards and accountability. "Safety has as much of an impact on a company's long-term financial health as its mining production. This legislation provides shareholders with standard information that can be used to measure and compare safety records across the industry. If we are serious about making the culture of safety a reality, then shareholders need to be informed too."
"I am proud to join my West Virginia colleague, Senator Rockefeller, in cosponsoring this legislation," said Byrd. "Investors ought to know if a company is risking the lives of its workforce, in order to maximize profits for shareholders. When rogue operators try to obfuscate their strategy of putting profits above safety, the penalties must be stern and swift."
Data indicates that the Rockefeller-Byrd legislation would impact publicly-traded companies responsible for nearly 75% of U.S. coal production.
This legislation is needed to provide shareholders and investors with clear, up-to-date numerical data on a company's mine safety record. It would require any publicly-traded mine company to report the following information in their annual and quarterly filings with the SEC:
(1) The total number of significant and substantial violations of mandatory health or safety standards;
(2) The total number of failure to abate orders issued under section 104(b) of the Mine Act;
(3) The total number of citations and orders for unwarrantable failure of the mine operator to comply with mandatory health or safety standards under section 104(d) of the Mine Act;
(4) The total number of flagrant violations under section 110 of the Mine Act;
(5) The total number of imminent danger orders issued under section 107(a) of the Mine Act;
(6) The total dollar value of Mine Safety and Health Administration (MSHA) proposed penalties and fines;
(7) A list of the regulated worksites that have been notified by MSHA of a Pattern of Violation or a Potential to have a Pattern of Violations under section 104(e) of the Mine Act;
(8) Pending legal action before the Federal Mine Safety and Health Review Commission; and
(9) Any mining related fatalities during the reporting period.
In addition, any publicly-traded mining company must issue an immediate disclosure report to the SEC if it:
(1) Receives a shutdown order under section 107(a) of the Mine Act (imminent danger), or
(2) Receives notice that a mine site has a potential or actual pattern of violations.
This type of disclosure is commonly known in the financial industry as an "8-K" filing, which notifies investors of any material event that is important to shareholdersor the SEC.