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SETTLEMENT AGREEMENT JUSTIFICATION NOV C-93-040 Notice of Violation C-93-040 was issued for °Failure to contemporaneously reclaim certain areas no longer used for operations at the West Portal Area and failure to properly store or dispose of non coal waste located at various sites at both the East and West Portal Areas." A complete description of each area included in this NOV is in the April 4-9, 1993 inspection report. Mr. Thompson, representing Basin Resources, did not contest the fact of the violation. He did object to the proposed penalty in the fault component. The proposed penalty was: History $50.00 Seriousness $1000.00 Fault $1000.00 Good Faith $0.00 TOTAL $2050.00 Fault was assessed for intentional conduct at $1000.00. The reasoning was that various waste items appeared to be intentionally placed and proper disposal willfully avoided. The operator claimed that this was not intentional. There is a shortage of personnel at the mine. In response to the waste materials and old equipment around the demolished warehouse areas, the operator explained that one the warehouses had been destructed in January and February of this year. The contents of the warehouse were for sale or sold and they were waiting for some of the sold items to be claimed. They didn't want to dispose of anything that might be sold. The magnesium chloride tank and other hydraulic fluid drums have been there since last summer. They had samples taken and are looking into how to properly dispose of them. A contractor had been hired to remove the old transformer last summer, but he didn't have a large enough crane to move it and he never returned with the larger equipment. This will be taken of soon. In summary, Mr. Thompson argued that the intentional implications were unfair. Mr. Hernandez felt that taking people off the clean-up and maintenance of the mine site constitutes intentional conduct. Their permit is very specific with respect to how waste will be handled. An intentional decision was made to mine coal and not take care of the permit requirements. My impression is that waste items were intentionally placed where they were, but I don't believe they were placed to intentionally violate permit requirements or performance standards. I believe there is not no one on site supervising personnel to ensure compliance with the requirements. Whether there was a management decision to employ people to mine coal in lieu of performing