Industrial barrel investigation goes national; Wisconsin plants hit with 16 violations, fines

Federal regulators have expanded their investigation of industrial barrel refurbishing plants nationwide, examining operations and safety at 13 facilities in nine states.

The multi-agency investigation initially focused on three such facilities in the Milwaukee area, where a Milwaukee Journal Sentinel investigation uncovered a host of problems endangering workers and residents.

The U.S. Department of Transportation recorded 16 violations at the three plants, including not properly cleaning and reconditioning the 55-gallon barrels, failing to give employees adequate training and not keeping required paperwork, according to a Notice of Probable Violation issued Aug. 31 to Container Life Cycle Management.

The department's sanctions are the latest development as regulators continue to investigate the plants in Milwaukee, St. Francis and Oak Creek.

The Wisconsin Department of Natural Resources earlier found 19 environmental violations at the plants.

The U.S. Environmental Protection Agency and the U.S. Occupational Safety and Health Administration also both continue to investigate. The EPA's own inspectors got sick as they talked to residents about smoke and odors near the St. Francis plant.

The action comes following a Milwaukee Journal Sentinel investigation in February that revealed environmental problems and dangerous working conditions at the three Milwaukee-area plants, as well as facilities in Arkansas, Indiana and Tennessee.

Workers at the plants said chemicals were routinely mixed together, triggering dangerous reactions that resulted in chemical and heat-related burns, injuries from exploding barrels, breathing difficulties and other health problems.

The Journal Sentinel findings were based on 16 hours of audio recordings by a whistle-blower; hundreds of pages of documents, including internal injury reports and safety audits; as well as public records and interviews with workers, regulators and experts.

Dangerous chemicals have been mixed together and washed down floor drains, and plumes of smoke from unknown chemical reactions have been released into neighborhoods, workers told the Journal Sentinel. Fires have erupted at the plants, fouling the air and posing a danger to nearby homes, the investigation found.

Container Life Cycle Management, known as "CLCM," is a joint venture majority-owned by Ohio-based Greif Inc., an industrial packaging giant. The plants refurbish 55-gallon steel drums and large plastic chemical containers, cleaning them for reuse or recycling. The three Milwaukee-area plants operate as Mid-America Steel Drum.

Inspectors from the U.S. transportation department's Pipeline and Hazardous Materials Safety Administration assessed fines against the company totaling $31,880 following inspections in February and March.

The agency's maximum penalty is $78,376 unless there is a death, serious injury or substantial destruction of property. Its average penalty in fiscal 2015, the last year for which data was available, was $7,822; the median fine was $4,800 that year, according to department data.

Following visits to the three Milwaukee-area plants, DOT officials launched inspections into 10 other industrial drum reconditioning facilities in eight states, according to a source familiar with the agency's investigation.

It's the first indication that regulators are examining operations at a larger swath of the barrel reconditioning industry.

The 13 U.S. facilities being inspected make up EarthMinded Life Cycle Services, a network of independent drum reconditioning companies across the nation and the world.

Company promises fixes

In response to the DOT actions, Greif spokeswoman Debbie Crow said the company has addressed all of the agency's "claimed violations."

"The Department of Transportation regularly inspects facilities like ours, and CLCM has always been, and will continue to be, willing to open its facilities for inspection by governmental agencies," Crow said.

DOT officials declined to comment on the violations, citing the ongoing investigation.

Several elected officials, including U.S. Sen. Tammy Baldwin (D-Wis.), have called for an investigation into the plants following the Journal Sentinel reports.

Following the release of the DOT violations report, Baldwin issued a statement saying, in part, “Our work here is not done and I will continue to demand answers. We must ensure these workplaces and our communities are safe.”

RELATED: Chemicals left in barrels leave workers and neighborhoods at risk

RELATED: Environmental problems plague the barrel reconditioning business

RELATED: Leftover chemicals heighten the risk of barrel fires at refurbishing facilities

Surprise inspection sought

Department of Transportation inspectors were among the group of regulators who visited the plants in the Milwaukee area in February and March.

EPA officials reported that inspectors were forced to wait until the company's attorney arrived and during the tour inspectors suspected they were not seeing typical operations, as required by federal law.

Federal prosecutors in Milwaukee took the unusual step of asking a federal magistrate judge to approve search warrants that authorized surprise inspections.

During a later visit, two EPA investigators became ill while interviewing residents around the St. Francis plant, reporting nausea, dizziness and difficulty breathing.

The state DNR, which also was on the inspection, cited the company for 19 violations, according to 250 pages of enforcement reports released to the Journal Sentinel.

The company was cited by the DNR for handling hazardous waste without permits; failing to keep required records; misrepresenting information on permit applications; sending hazardous ash to landfills not permitted to receive it; and continuing to send putrid odors over neighborhoods three years after similar smells were recorded.

The company issued a statement saying the company's plants have been inspected by the DNR in the past but such violations were not noted, adding, "the items asserted by the DNR attempt to implement a new regulatory framework for the reconditioning industry that has not previously been imposed by federal or state authorities."

The company spokeswoman, Crow, has not elaborated on that further.

Enforcement meetings between the company and DNR were held last month. The case remains open.

DNR spokesman James Dick said the department continues to review additional documents supplied by the company.

"We are working closely with U.S. EPA on this matter and conclusion of the enforcement aspects could take some time, but in the interim the company has corrected or is actively taking steps to correct many of the issues that have been identified," Dick said in a statement.

The DOT violations include inadequate testing and certification of drums, training violations, and not notifying the agency of changes made to processes that had been approved by the agency, according to the document.

The company has promised to address the violations by buying new equipment, filing revised permits and conducting training, the DOT report said.

The DOT increased the fines because there are multiple counts of the same violation but then cut about $8,000 because the company took steps to fix the problems.

COMPANIES INSPECTED

Here is a list of the industrial barrel plants being inspected by the U.S. Department of Transportation. They are the U.S. facilities in the EarthMinded network:

Container Life Cycle, Ludlow, KY

Drumco of Tennessee, Memphis, TN

Mid-America Steel Drum Co, Inc., Milwaukee, WI

Mid-America Steel Drum Co, Inc., St. Francis, WI

Mid-America Steel Drum Co, Inc., Oak Creek, WI

Indianapolis Drum Service, Indianapolis, IN

Drumco of Arkansas, Arkadelphia, AR

West Texas Drum LTD, Baytown, TX

West Texas Drum LTD, Odessa, TX

CMS, LLC - Los Angeles, CA

CMS, LLC - Bay Area, Hayward, CA

CMS, LLC - Portland (Steel Drum), Portland, OR

CMS, LLC - Portland (IBC & Plastic Recycling), Portland, OR

Raquel Rutledge of the Journal Sentinel staff contributed to this report.

Read the investigation

To read the Milwaukee Journal Sentinel's "Burned" investigation, into safety hazards at drum reconditioning plants, go to jsonline.com/burned.