NOVA SCOTIA’S WESTRAY MINE 1

Review of Case
On September 1988 the Toronto based company Curragh Resources Inc.
announced the creation of the Westray coal mine in the village of Plymouth in Pictou
County in Nova Scotia. This mine was supposed to create 300 new jobs in the area and
its reserves of coal were estimated at 45 million tons. From the moment of its
announcement, it received a lot of support from the Nova Scotia government and the
Bank of Nova Scotia that provided them with a loan, with the federal government
guaranteeing 85% of it.
On July 1991, a letter from the Liberal MLA Bernie Boudreau was sent to the
Nova Scotia Labour Minister Leroy Legere warning them that the mine was one of the
most dangerous in the world. Despite all this warnings, on September 1991, the mine
was officially opened. On March 1992, an organizer from the United Steelworkers of
America said in a report that he felt that there will be people killed in the near future. At
this point, neither the government nor the company did something to address the
dangerous situation. Two months later, a spark in the mine caused an explosion that
trapped and killed twenty six miners.
According to Mr. Justice Richard’s report on the tragedy, the accident was caused
by the greed, bureaucracy and incompetence of both Curragh Resources Inc and the
government. There was a lack of ventilation, the miners worked risky tunnels, the
methane detectors were disconnected, safety procedures were done sporadically and there
was a lack of training and indoctrination of miners.
The miners who were not killed in the blast received severance pay for twelve
weeks, which came to $1.2 million. Then, there was a $30 million lawsuit against the
province of Nova Scotia, but the Supreme Court threw it out ruling that the province was
protected from lawsuits under the Workers Compensation Act. The company was
charged with fifty two non criminal counts of operating an unsafe mine and the managers
of the mine were charged of criminal negligence and manslaughter, but in the end none of
the charges proceeded.
Ten years later, the province sold off what was left of the operation to raise
money for the families of the miners. The mine was covered and seeded to grass
entombing the eleven miners whose bodies never made it up from the doomed mine
(Karakowsky, 2005, p. 596 & 597).
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Problem/Issue Identification
1) What are the central facts of the case and the assumptions you are making on the
basis of these facts?
- The facts of the case are that Curragh Resources Inc. was in business for
the sole purpose of making profits at the expense of the safety of the miners.
Therefore they were never interested about being socially responsible.
- The government of Nova Scotia had made a significant investment into
this project and therefore it is evident that they were eager to see the mine turn
in huge profits as promised. This could have been the major reason why the
government did not interfere when it came to light that major safety regulations
and procedures were being ignored.
- It appears that repeated warnings from different sources were completely
ignored by both the company and the NS government possibly in order to avoid
financial investments on safety procedures which ultimately cost the lives of 26
miners.
- Because both the company and the government were partners in this risky
investment, they protected each other from being held accountable. As a result,
justice was never served to the families of the victims and the people responsible
never paid for their crimes. The Government go to hide behind the ‘Workers
Compensation Act’ where as the executives were in Toronto so they did not fall
under the Nova Scotia government jurisdiction.
2) What are the major overriding issues in this case? (what major questions/issues
does this case address that merit(s) their/its study in this course and in connection
with the chapter/material you are now covering)
On one hand Curragh Resources Inc never really cared about its stakeholders and
operated without any kind of safety procedures. On the other hand, the government had a
lot to lose if the company failed and performed loose safety inspections. This
combination of negligence led to a fatal disaster.
3) What sub-issues or related issues are present in the case that merit consideration,
discussion, and action?
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Even when both the government and the company were clearly responsible for the
accident, they found a way to protect themselves and avoid being held accountable for
their crimes.

Analysis Evaluation

4) Who are the stakeholders in this case, and what are their stakes? (Create a
stakeholder map to depict relationships.) What challenges/threats/opportunities
are posed by these stakeholders? What stakeholder characteristics are at work
(legitimacy, power, urgency)?

Stakeholders Stakes Typology (legitimacy,

power & urgency)
Owners Investment, profits Definitive Stakeholder
Managers Job, reputation Definitive Stakeholder
Miners Lives, job, salaries, health, safety, security Dependent Stakeholder
Families of miners Income, security, justice, emotional stress Definitive Stakeholder
Customers Product (coal), job Dependent Stakeholder
Community Safety, security, prosperity Discretionary Stakeholder
Government Taxes, enforcement of the law, public image Dominant Stakeholder
Inspectors Job, reputation Definitive Stakeholder

5) What economic/legal/ethical/philanthropic responsibilities does the company

have, and what exactly are the nature and extent of these responsibilities to the
various stakeholders?
- Economic: To produce goods (coal) that society need, to sell it at fair prices, to
make profits to stay in business and reward its investors, to maximize the long
term financial performance of the company, to provide employees with fair
salaries in exchange for their work and to pay the corresponding taxes to the
government.
- Legal: To follow and abide by the rules and regulations established by the
government, to obey the inspectors mandates on safety issues and to make sure
that proper security measures are in place.
- Ethical: To treat their employees right, to pay them fair salaries, to provide them
with safety and security in the workplace, to hire people from diverse
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backgrounds, to ensure that the organizations’ activities do not harm the

environment.
- Philanthropic: To help to the development of the village by providing charity
donations to build or improve schools and hospitals.
6) If the case involves a company’s or manager’s actions, evaluate what the
company or manager did or did not do correctly in handling the issue affecting it.
The managers handled the company in a very negligent and greedy manner. They did not
care about the safety of their employees (miners) and when they were warned about the
life threatening dangers of the mine, they ignored them and continued using processes
that allowed them to extract the greatest amount of coal possible in the shortest period of
time.

Discussion Questions
7) How could an organization permit such “actions, omissions, mistake,
incompetence, apathy, cynicism, stupidity and neglect” to occur here?
The Nova Scotia government and Curragh Resources Inc. both had vested interests of
over $100 million in this mine and it is evident that they wanted the greatest amount of
profit in the shortest time period possible. The managers of the company were blinded by
their own greed and never thought about the consequences of their negligent acts. They
were not socially responsible and their only interest was to maximize their profits. They
did not want to invest in the security and safety of the mine and employees, and in the
end innocent people paid the heavy price for their disregard.
8) What level of accountability should the government accept for this disaster?
I believe that the Government of Nova Scotia should accept full accountability for this
disaster along with Curragh Resources Inc. First of all because they supported the project
and contributed with a loan to the mine and second because they performed incompetent
inspections and disregarded important measures as useless in order to keep up the coal
production. Even though they were warned about the dangers of the mine, in their
inspections they failed to stop the mine from operating under dangerous conditions.
There were clear faults such as inadequate ventilation design, unauthorized mine layout,
lack of safety training, etc. It is the function of the government to perform proper and
intelligent inspections, because people trust their governance. If in their inspections they
had pointed out that everything was working properly and in reality it was not, we
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strongly believe that the government is responsible for the accident and they should be
held accountable for it to a great extent. What is truly disturbing is that the government
hid behind the ‘workers compensation act’ and decided not to compensate the families of
the dead miners.
9) What lessons do we learn from Westray with regard to holding organizations
accountable for their actions?
It is sad to learn that there is impunity when holding organizations accountable for their
actions especially when they are protected by the laws of jurisdiction. In this case, the
only compensation that was obtained was the severance of 12 week pays for the miners
that were not killed in the blast. All the other lawsuits launched against the government
and the managers of the company were thrown out. If an organization has operations in a
different province than the one they are based in they should be dealt with under the
federal laws of the country. As a result of this organizations will not be able to hide
behind jurisdiction laws. It is highly unfortunate that the executives of this organization
were not brought to justice.
10) Who should be punished? What type of punishment should be exacted?
We strongly believe that the founder, the CEO, the managers of the company and all the
government inspectors who ignored the safety abuses should be punished. They should
all be charged of criminal negligence and manslaughter. This is because they
intentionally ignored the safety procedures of the mine and under their management or
supervision twenty six people were killed. All of this only to save money that they should
have spent on proper security. On the other hand, the province of Nova Scotia should
have paid for the $30 million lawsuit to pay for the expenses and suffering of the families
of the dead miners. This is because they failed to stop the mine from operating even when
the dangers were clear and they were warned about it.

Recommendations
11) What recommendations would you make in this case? If a company’s or a
manager’s strategies or actions are involved, should they have acted the way they
did? What actions should they have taken? What actions should the company or
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manager take now, and why? Be specific and include a discussion of alternatives
(short-term and long-term). Identify and discuss any important implementation
considerations.
The managers should have contacted an expert in mines-safety to help them in designing
a secure place for their people to work at. They should have asked for advice on how to
get the right ventilation to keep methane and coal dust at safe levels. They should have
also planned a layout for miners to work on tunnels to get the coal out safely.
Additionally, they should have never disconnected their methane detectors and should
have practiced evacuation procedures in case an alarm went on. They should have
regularly carried out procedures to stone dust coal to render it non-explosive, not just
before inspections. They should have properly trained miners on how to perform their
jobs safely and what to do in dangerous situations. Finally, they should have hired an
external auditor that frequently came to the mine to make inspections and provide
recommendations to always keep the place in the best possible conditions. We feel that
these are some general and basic procedures and in no event should they have been
disregarded.

References

Karakowsky, Len. (2005). Business and Society: Ethics and Stakeholder Management.
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Nova Scotia’s Westray Mine Tragedy. Thompson Nelson. 1st Canadian Edition

P. 35-38, 72, 73, 596 & 597.