AMN 468
Issues and Crisis Management
Module One: Crisis Analysis Report
Crisis: BHP Train Derailment
Crisis Date: November 5th, 2018
Lecturer: Catherine Batch
Student: Adam F. Smith. n10094296
Company: BHP.
Market capitalisation: $133.2 Billion
Founded: 1885
CEO: Andrew Stewart Mackenzie
Background. Broken Hill Property Company, Phillip Charly first mined Silver in 1885 on a mining claim staked by Charles Rasp in 1883. BHP now has mines producing Iron ore, Coal, Petroleum, Copper, Natural gas, Nickel and Uranium. (BHP, 2019)
Crisis Event: November 5th, 2018, BHP was forced to derail one of its trains (MO2717) which had become a runaway. The 2km long train was carrying 16,000 litres of diesel and 30,000 tonnes of Iron ore and travelled for almost 1 hour unmanned reaching a top speed of 168km/h, and at the moment of derailment was travelling at 110km/h.
| Time | Date | Event |
| Approx 0200hrs | 5/11/2018 | Train MO2717 leaves Yandi Junction |
| 0325hrs | 5/11/2018 | Train carriages experience brake cable fault |
| 0330hrs | 5/11/2018 | Train pulls in to “Hester siding” to inspect issue (fault) (brake cable had become disconnected automatically stopping the train) |
| 0335hrs | 5/11/2018 | Driver exits the train to inspect carriages to find the fault without applying manual braking system |
| 0420hrs | 5/11/2018 | BHP service crew apply carriage brakes to the wrong train in Hester Siding |
| 0440hrs | 5/11/2018 | Train starts to accelerate leaving driver behind |
| 0516hrs | 5/11/2018 | The sun rises in Western Australia (daylight) |
| 0530hrs | 5/11/2018 | BHP HQ in Perth remotely derails the train |
| 5/11/2018 | Crews and bosses start arriving at crash site to inspect the damage and start the clean-up. | |
| 6/11/2018 | Western Australian Premier issues a statement saying that it was “Very concerning” and that “extraordinary measures had to be taken” | |
| 6/11/2018 | BHP issues a statement “We plan to use stockpiles at Port Headland to continue exports while this issue is resolved” “We expect it will take one week to clear the debris” | |
| 6/1/2018 | Initial media reports start estimating the train crash to have cost $300m and up to $55m a day in lost revenue. | |
| 7/11/2018 | BHP in talks with the “Chinese” and concedes that it will run short of supply of Iron ore up to 5 million tonnes a week till the rail line reopens. | |
| 19/12/2018 | Train Driver (Frick) losses his job at BHP | |
| 28/12/2018 | Train Driver (Frick) starts negotiations with BHP for unfair dismissal but it is rejected. | |
| 10/01/2019 | Former BHP driver files for unfair dismissal with the F.W.C. |
| 25/02/2019 | Former BHP driver receives confidential payout |
The significance of the two images above is that this train had 268 carriages full of Iron ore, plus 4 locomotives, and after the derailment, only 24 carriages remained undamaged. (Kagi, 2019)
Just over 1 hour after the train had departed Yandi Junction, an alarm was activated in the head locomotive of BHP Iron ore train MO2717. The alarm was triggered by a brake line failure in one of the 268 carriages. The alarm on the train automatically activates the train braking procedures. The train was able to pull in to Hester siding were the driver of the train (Mr Frick) exited the locomotive, but after initial findings, didn’t follow BHP procedures by applying the Emergency braking system (Image below left).
Mr Frick, shortly after exiting the train contacted a maintenance crew to help apply all the manual brakes (Image above right) to the carriages of the 2km long train, but when they arrived at Hester siding, they mistakenly applied the brakes to another empty train also at the siding. (Rimrod, 2019)
At 0440 hrs on the 5th of November, train driver Mr Frick hears an air release, and the train starts moving forward. The movement was initiated due to the automatic braking system releasing 1 hour after the initial fault caused it to automatically brake. Mr Frick was unable to run fast enough to get back in the head locomotive, and BHP train MO2717 became a run away.
Shortly after, Mr Frick contacted BHP Head office in Perth to advise of the crisis and give the details of the incident. Executives at time then had an emergency meeting and it was decided to intentionally derail the train at an appropriate location which was a “set of points” at Turners siding, 120km south of Port Headland.
The resulting incident resulted in 244 of the 268 Iron ore carriages to be completely destroyed and the 4 locomotives responsible for powering the load, the accident also destroyed 2km of B.H.P.’s private railway line. The cost of the wreckage was estimated at $300 million. No people were injured in the accident which was very lucky as the unmanned train at some stages reached 168km/h and many of the rural rail crossings do not have level crossings with flashing lights or boom gates.
Mr Frick 7 weeks later was sacked by B.H.P., a week before Christmas. On the 28th of December, 2018 Mr Frick contacts B.H.P. about being unfairly dismissed but the claims are rejected by B.H.P. on the 10th of January Mr Frick contacts Fair Work Australia and sues B.H.P. for unfair dismissal and the case is settled privately out of court on the 25th of February for an undisclosed sum of money.
Initially I really like the course of actions by Mr Frick, and the automatic braking of the locomotives and it certainly was convenient that it happened just before Hester siding, which is a rail yard on the main rail line.
Image of Hester siding, Western Australia.
Unfortunately, this is where the story goes bad. Mr Frick should have applied the emergency brake before leaving the head locomotive, this single action would have prevented the crisis. While the introduction of a B.H.P. maintenance crew was an excellent idea, it was poorly executed because they applied the manual brakes to the wrong train.
I believe that because this was the early hours of the morning, before sunrise, this factor also added to the complexity of the crisis.
The runaway train (MO2717).
This is a real recipe for disaster, and could have majorly increased the complexity of the disaster, because
- The train was travelling at speeds unexpected, unmanned through rural rail crossings that have no warning devices.
- The rail network, built and privately owned by B.H.P. has a maximum working rated speed of 110kmh, yet this train was traveling at speeds up to 168km/h.
- If the deliberate derailment of MO2717 failed, it would be at the terminus at Port Headland in under 60 minutes were many more lives could have been at risk.
- The sheer weight of this train, even just the payload alone of 46,000t, means it would destroy anything that got in its path.
- If the derailment failed, is it plausible to call in the services of the Air Force to create a derailment?
The handling of Mr Peter Frick.
In all fairness, Mr Frick did earn the right to be dismissed, his failure to follow procedure in applying the Emergency brake was the number 1 reason the train became a runaway, and thus, caused the world’s longest train wreck ever scene. While it could be considered that the maintenance crew, that was initiated by Mr Frick also failed in their duties, could be partly to blame, it is considered that the driver of the train is supposed to wind on the manual brakes as he walks down the train, which he didn’t.
If I was B.H.P. Executives, I also would have rejected his claims for compensation, because after all is considered, he is at fault. If the Emergency Brake was faulty, or the company didn’t have procedures in place, then yes, he may have had a claim, but both of these were in place at the time of the incident.
The union must have helped Mr Frick with his approach of the Fair Work Commission, as this is a high-profile case which was reported on around the world and being that it looks like he was successful in putting a positive case forward for compensation.
The Clean-up.
Given that the site of the incident was only 120 km from the port, and just over 200km from the mine, B.H.P. had sufficient resources to handle the clean up internally, even though it was a significant task. The train carriages became scrap metal and a reasonable amount of Iron ore was recovered, and later continued on to eventually reaching the stock pile in Port Headland, as did the 24 undamaged train carriages.
Further damage.
At the end of the financial quarter B.H.P. suffered a 6% loss in stock value due to the crisis, which would not have helped Mr Frick’s case with the Fair Work Commission. (Thompson, 2018)
While Mr Frick, the train driver was in communication with the B.H.P. control centre in Perth, I believe more could have been communicated from something like a “Play book” for these types of scenarios.
Better identification of the train is needed as the maintenance crew started applying the brakes to the wrong train, which could have been fixed if the trains were properly labelled.
Better maintenance procedures for train carriages, including their brake lines, and rolling parts to insure these types of events are kept to a minimum at least.
Better exit strategies for staff after time of crisis, which includes executives and members or the board, as well as operational staff.
