RUNNING FOR OVER
Business SPECIAL REPORT
From the start, the Westraynine was a disaster waiting to happen
When I graduated, I decided to become a millionaire, and someday I wanted to be in a position where I was calling the shots in building mines the right way and creating jobs.
Clifford Frame, chief executive officer of Curragh Inc., in Northern Miner magazine, May, 1992
Nothing and no person with any light to shed on this tragedy will escape the scrutiny of this inquiry.
Donald Cameron, then-Premier of Nova Scotia, on May 15,1992, six days after Curragh’s Westray coal mine exploded, killing 26 men
On the morning of May 13, 1992, Shaun Cornish pulled on his draegerman’s gear and headed back down the Westray mine, where four days before he had been working the day shift. He remembers the equipment wreckage, blown all over the place, and two bodies, burned so black that in the dark, in the coal and the rubble, the rescue workers did not see them until they were literally underfoot. He remembers placing Larry James’s charred remains in a fluorescent orange body bag. He remembers how his fellow rescue workers tried to reach another body, mangled in a twisted mess of machinery. The men reached up, hoping to rip the name tag off the coveralls on the irretrievable body with its “bones all sticking out everywhere.” If anyone could crawl inside Shaun Cornish’s head, these are the snapshots that would appear, four years after a methane explosion sent a ball of flame moving at 4,000 feet a second through the Westray coal mine, blowing to hell what the men who worked there called a rat hole.
Three weeks ago, Cornish had what he hopes is his last appointment with his psychiatrist. “Eventually you realize you’ve got to live with it,” he says.
But there has been no closure. This week, the public inquiry into the disaster reconvenes in Stellarton, across the East River from the mine, for the final days of scheduled testimony. Over the past eight months, Cornish has heard little that he did not already know. From the submissions of technical experts who criticized the precarious state of the mine, to the horrifying testimony of the miners, to the attempted examination of the interwoven pursuits of profit making and political gain, the inquiry has confirmed what Cornish always knew—that Westray, from its opening in September, 1991, was a disaster waiting to happen.
‘If they were not training and monitoring properly, it’s your bloody fault, man’
nine was a disaster waiting to happen
About the only thing Cornish did not expect was the stunning offerings of former Nova Scotia premier Donald Cameron, now Canada’s consul general in Boston. Cameron first blamed the federal government, which, he said, decided to “play some games” and hold the project up for 14 months. That, he said, “resulted in the change of company plans and led to the development of the southwest section where the explosion occurred. Most people would be alive today if this process were allowed to proceed on a normal basis.” Then, Cameron boldly blamed the miners. “Who was it that changed that meter? Who was pressing the reset button so the machine wouldn’t shut down this safety device? Who was shutting off the dust collectors? The bottom line is that that mine blew up on that morning because of what was going on in there at that time.”
Cornish, 40, who now works for a computer programming firm in Halifax, says he “really didn’t think [Cameron] would take it that far and sit there and blame dead men. That’s the oldest cliché. Blame the dead guy, he can’t talk back.” Says Isabel Gillis, one of the most outspoken of the Westray widows: “He’s calling my husband a murderer.” Gillis’s husband, Myles, was 32 when he died of carbon monoxide poisoning the morning of May 9.
This week, Colin Benner, Graham Clow and Trevor Eagles will take the stand in Stellarton. Eagles was an on-site engineer at Westray who worked on mine planning. He should be able to speak to the company’s hasty decision to change courses, moving into the ill-fated southwest section, where the company hoped to retrieve more coal, faster. Clow was a vice-president for Toronto-based Curragh Inc., Westray’s corporate parent. He had worked on a number of Curragh projects, particularly the building of the Sä Dena Hes zinc mine in the Yukon. In the fall of 1991, as the roof kept collapsing at Westray and as production failed to come within a country mile of its sales commitments, Sä Dena Hes was having problems of its own. Having failed to complete its exploration program on schedule, the Yukon mine fell in breach of a covenant with its lender, the Bank of Nova Scotia. “They had two going down at the same time,” says Adrian White, then Curragh’s chief financial officer. The bank’s demand for accelerated loan payments at Sä Dena Hes in April, 1992, exacerbated the cash pressures on Curragh—which was also facing millions of dollars in potential penalties from Scotiabank for failing to meet production targets at Westray.
In 1991, Curragh sent Clow east from Toronto to advise on ground conditions at Westray. After the explosion, Clow was one of the draegermen who joined the rescue efforts. Last month, he was among a group of rescue workers awarded Canadian medals of honor in Halifax. Benner is viewed less sympathetically in Stellarton. In his 1993
book, The Westray Tragedy: A Miner’s Story, Cornish called Benner “the pretty boy they had brought in from Toronto to do all the TV reports” after the disaster. Previously Curragh’s executive vice-president of operations, he was named president of Westray Coal Inc. just two months before the explosion.
Key to Benner’s testimony will be his knowledge of provincial mine safety reports and his assessment of Westray general manager Gerald Phillips and underground mine manager Roger Parry. The only two individuals facing criminal proceedings in the case, Phillips and Parry went to trial on charges of manslaughter and criminal negligence causing death in February, 1995. Benner testified in the spring that he had sent a memo to head
office, via Frame’s chief assistant, Diane Webb, recommending that Parry be fired. The case was subsequently stayed on a technicality; the Supreme Court of Canada will likely decide this fall whether the trial should continue. Phillips was subpoenaed by the inquiry after telling the Halifax Chronicle-Herald in April that “the mine wasn’t safe because of some of the things some of the employees maliciously did.” He indicated then that, if subpoenaed, he would appear. But as of last week, neither he nor his lawyer had responded to the subpoena. Curragh, too, was named in the criminal proceedings, but went bankrupt in 1993, long before the case went to trial. Acting Chief Crown attorney Marc Chisholm will only say that “it remains our intention to proceed against Curragh Inc.”
Benner, Clow and Eagles were relatively small-fry in the Curragh corporate pool. The commission’s strategy had been to hook the biggest fish last. But the inquiry, launched six days after the explosion, has so far failed in its attempts to hear from the man who was chairman, chief executive, controlling shareholder and creator of Curragh, Clifford Frame. In November, federal Justice Minister Allan Rock rejected Nova Scotia Supreme Court Justice Peter Richard’s request for a federal mandate—an authority that would have given him, as inquiry commissioner, the power to subpoena witnesses nationally. The commission then went through the motion of issuing a Nova Scotia subpoena—unenforceable in Ontario, where Frame lives.
It came as a surprise to no one in the Westray investigation that attempts even to serve Frame have been unsuccessful. Ray Wagner, a Halifax lawyer who represents 18 of the Westray families in a civil action against Frame and a host of others, has been trying
THIS IS WORLD WAR 111’
A chronology of events leading to the Westray explosion:
Sept. 1,1988: Five days before a Nova Scotia election, Toronto-based Curragh Resources Inc. announces a $127-million coal mine near Stellarton, N.S. The Westray mine will create about 300 jobs. The next day, Donald Cameron, then Nova Scotia’s industry minister, pledges a $12-million provincial loan.
Sept. 8,1988: Provincially owned Nova Scotia Power Corp. announces a 15-year deal to buy 700,000 tons of coal a year at between $60 and $74 a ton.
Sept. 9,1988: Cameron confirms that Nova Scotia will purchase a further 275,000 tons annually, whether it needs it or not
July, 1989: Curragh halts construction of the mine when federal funding arrangements fail to materialize.
Sept. 14,1990: The Bank of Nova Scotia lends $100 million to the project Ottawa guarantees 85 per cent of the loan.
Feb. 9,1991: Cameron becomes premier after John Buchanan accepts a Senate appointment from Prime Minister Brian Mulroney.
May 23,1991: The first of numerous cave-ins occurs when the roof along 24 m of tunnel collapses, releasing 1,000 tons of rock. No one is injured. The labor department sends an inspector to investigate. The company hires consultants to study the problem.
July, 1991: In a letter to Labor Minister Leroy Legere, liberal MLA Bernie Boudreau warns that the mine “is potentially one of the most dangerous in the world.” The minister responds: “I assume that my de-
partment and the mines safety people are doing as good a job at Westray as they are doing at all other mines in Nova Scotia.”
July 29,1991: Claude White, the province’s director of mine safety, receives the first written report from one of his inspectors that there are serious safety concerns at Westray. The problems include excessive coal dust and methane gas.
Aug. 30,1991: The first trainload of coal leaves Westray for a Nova Scotia Power generating station 11 km away.
Sept. 11,1991: More than 500 guests gather for the official mine opening. Cameron, Curragh CEO Clifford Frame and federal Revenue Minister Elmer MacKay, the area’s MP, cut the ribbon.
Oct. 18,1991: Labor department officials hold a meeting at the mine to discuss roof conditions and the seven rock falls that have occurred since 1989, three in the previous three weeks.
Nov. 4,1991: The labor department issues a written
to have Frame served since May, 1993. He says every time a process server shows up at Frame’s 250-acre spread in Uxbridge, north of Toronto, there’s every sign of life, but no sign of the living. Last week, Frame was not answering the phone at the country estate he calls Curraghdale. “You journalists have been very unfair to him in the past,” says a woman there. “Very, very, I would say, mean.” Russell MacLellan, Liberal MP for Cape Breton/The Sydneys, says Frame has much to answer for. MacLellan shares responsibility for Devco, the federally run Cape Breton coal mine, and he has been pushing for Westray answers from Day 1. “This happened in a company controlled by a man who has been mining in this country for decades,” he says. “How does it happen? How was this allowed to happen?” But MacLellan, too, was not expecting any voluntary involvement from
Frame. “Imagine him coming forward on his own,” he says. “I mean, there would be mountains in Saskatchewan first.”
In what now seems an eleventh-hour move, the commission pushed the province to pass reciprocal legislation to enforce Nova Scotia subpoenas in Ontario. When the law took force in March, Toronto lawyer Alan Lenczner started pursuing Frame on behalf of the commission. But that hunt hit a roadblock when Frame’s own lawyer, Charles Scott, insisted that neither of his clients— Frame and Marvin Pelley, Curragh’s second-in-command—has anything “material” to add to the proceedings. A hearing is scheduled in Halifax on July 26. Even if Nova Scotia upholds its earlier decision, and even if Ontario enforces the application, Frame is likely to appeal. Inquiry head Richard has said he wants to start hearing oral submissions from counsel by the end of this month.
In a Maclean’s interview in March, John « Merrick, chief counsel for the commis£ sion, said there were many reasons why it g was important to get Frame to testify. “We I would like to know how the company be§ came involved with the project, we would f like to know management’s position as to g how the project was developed. We would like their views on some of the statements Cameron on that have been made as to the approach to safety the stand; an that was being displayed.” investigator The jurisdictional chaos has effectively divorced examining an examination of Westray from that of its corpothe wreckage rate parent. And Frame is key to a number of
of a tractor pieces in the puzzle. There is, first, his role in what
inside the Cameron calls the “political swirl” surrounding the mine (left): a financing of the $127-million mine, for which Curtwisted mess ragh anted up just $9 million in cash. Then there is
order telling the company to ensure that men are not working in areas vulnerable to cave-ins.
Dec. 8,1991: After another cave-in, miner Carl Guptill refuses to work under what he considers unsafe roof conditions. He is asked to help clear the area. He complains that the light on his helmet is not working, but his shift boss tells him to work in the dark. He trips over steel plates and injures his back and shoulders. While waiting for help, he says, the shift boss tells
him: “This is World War III down here. There’s bound to be casualties.”
Dec. 10,1991: Guptill makes a formal complaint to the labor department. He reports not only on his injuries but on safety hazards at the mine.
Dec. 16,1991: Guptill meets provincial inspector Albert McLean and other officials. For more than an hour, he says, he tells McLean of safety concerns about coal dust levels, methane gas, overloaded tractors and 12-hour shifts.
McLean later says that the discussion dealt only with Guptill’s injuries.
March 9,1992: Mike Piché, an organizer for the United Steelworkers of America, meets with miners about forming a union. In an internal report, Piché reports that safety is the top issue in the organizing drive. Writes Piché: “I strongly feel there will be someone killed in the near future.”
March 28,1992: Another cave-in releases methane gas in the southwest section of the mine. The area is temporarily abandoned. Air samples taken by inspectors show the methane readings are close to the explosive level.
April 2,1992: McLean sends a memo to White, his boss, reporting on a visit two days earlier to the southwest section. “The methane readings in this area have been recorded from one to four per cent. The methane is coming in waves____
The manager has the situation under control.”
April 29,1992: Labor department officials, including White and McLean, order Westray officials to clear the mine of coal dust and introduce a system to neutralize further accumulation.
April 30,1992: Nova Scotia Power complains that Westray is far short of production targets.
May 9,1992: At 5:18 a.m., a methane explosion in the southwest section rips through the mine. Cameron gets an early morning phone call telling him that miners are trapped. Westray does not know how many are underground.
May 15,1992: Cameron appoints Justice Peter Richard of the Nova Scotia Supreme Court trial division to head an inquiry into the deaths of 26 miners at Westray.
the status of the web of Frame operations in the months leading to the explosion. Even before Scotiabank put pressure on Curragh over the Sä Dena Hes loan payback, the company had been slammed by low commodities prices at its Faro lead-zinc mine in the Yukon. Desperate for cash,
Frame put Westray on the block in the fall of 1991, with Morgan Stanley & Co. in New York City acting as sales agent Louis Cooper, who worked on the file for Morgan, says a number of inter-ested buyers visited the mine.
In November, Pelley notified Nova Scotia that Westray had not been able to reach sales agreements on projected 1993 production. The province had signed a so-called take-or-pay deal with Westray promising to purchase
275.000 tons of coal, on top of the
700.000 tons a year contracted to the province’s electrical utility, should the company fail to find other buyers. The take-or-pay was due to be triggered at the end of 1991. Pelley requested, and was granted, a postponement until June 30, 1992. Cooper says at least one U.S. mining company was examining Westray’s books just before the explosion. At the very least, triggering the take-or-pay clause would have turned up the political heat on Westray at a sensitive stage in its negotiations. In his testimony, Cameron said that the take-or-pay, which he handed the company in September, 1988, 16 months before it
was approved by the cabinet, was only for show.
Curragh, he said, understood it would never see “one red cent” from the contract.
It had been an early commission theory that Frame intended all along to flip the publicly financed mine for a fat profit. Certainly, the surface buildings were as pretty as can be, even if the tunnels underneath served as outhouses for the miners. In late 1991, Frame wrote to former premier John Buchanan assuring him
that the flip theory, much discussed in political circles, didn’t hold water. Nevertheless, the commission would like to know how much cash was being pumped into Westray to address its myriad problems.
As key as Frame is to unravelling the skein of politics and money and Westray, his most important role is more abstract. Frame is a mining engineer, who, at Curragh, drew around him such marquee directors as good friend and longtime lawyer Walter Bowen and former prime minister John Turner, outsiders all. In September, 1991, Benner and Pelley joined the board, as did White. White says there “wasn’t an appearance of impending disaster” at the board level, and he cannot understand why Frame does not come forward. “That’s the bit that’s mystified me for four years,” he says.
But Frame was not known for his consensual leadership style,
and White says he has no idea what the boss knew and when he knew it. Analysing Curragh begs not only an understanding of direct reports going up the chain of command, but an assessment of how Frame discharged his responsibilities, and what head-office systems were in place to ensure safety.
When the inquiry gets down to its final analysis, substantive statements are, instead, likely to focus on health and safety regulations, since updated, and the Coal Mines Regulation Act, a creation of the 1930s, and its enforcement by the province and the mine’s management. Thus, says Ray Wagner, the “corporate veil will be left intact.” In a letter to his shareholders two months after the explosion, Frame said Curragh wanted to know “exactly what happened, and what can be done to ensure it can never happen again.” He later deflected questions as to how the tragedy could have happened, pointing east from his Toronto corporate highrise and, while not naming names, stating that one manager’s “punishment in the end will be his conscience.”
That kind of blame-laying gets under Bob Evans’s skin. Evans is a Toronto-based consultant, much respected for his views on corporate ethics and the accountability of officers and directors. “I’d turn that right around on him [Frame] and say, You’re the one who hires them, you’re the one who’s responsible for their training and development, you’re the one who is responsible for asserting what they will and will not do and then for monitoring that to make damn sure your wishes are being followed. That’s your responsibility as a chief executive and it’s the same responsibility, somewhat reduced, that each of your managers had. If they were not training and supervising and monitoring properly, if they weren’t demanding appropriate safety standards, it’s your bloody fault, man, because in the end you’re wearing the admiral’s cloak. If you put a bunch of people out there who either didn’t know how to or didn’t give a shit about doing a decent job, that ends up back on your plate.’ ”
Chairman and CEO
(90 per cent owned by Curragh)
Underground mine manager
Ten years ago, ethicists would have puzzled over how to translate such seemingly soft issues as leadership and accountability and moral responsibility into something concrete.
are starting to figure out how to do just that. Last year, corporate culture became a basis for criminal liability in Australia. Corporations can now be found criminally responsible for allowing their directors to create a climate that fails to encourage compliance with legal requirements. The new law eliminates the need to unearth the directive memo, the smoking gun, that connects senior decision-makers to their operations.
Sadly, the Westray inquiry has so far failed to come to grips with these concepts, which one commission staff member calls “nebulous.” MP Russ MacLellan does not see it that way at all. In his mind, the line of responsibility is clear. “Let’s not,” he says, “allow the trail to go cold and assume that no one cares any more. That’s just not the case.” □