Rail Firm Behind Lac-Megantic Explosion Poorly Audited Before Disaster, Government Report Finds

By Allison Lampert

LAC-MEGANTIC, Quebec, Aug 19 (Reuters) - The Canadian government did not adequately audit the rail company at the center of last year's Lac-Megantic oil-by-rail disaster in which 47 people died, the Transportation Safety Board (TSB) of Canada said on Tuesday.

In its final report into the accident, the independent government agency called for more thorough audits of safety management systems and said more physical defenses, such as wheel chocks, or modern braking technology, were needed to prevent runaway trains.

Montreal, Maine and Atlantic Railway Ltd (MMA), the company that operated the train, filed for bankruptcy protection last year.

"Transport Canada did not audit MMA often and thoroughly enough to ensure it was effectively managing the risks in its operations," the TSB said in a statement. MMA was a company with a weak safety culture, it added.

The disaster occurred after a single engineer parked his train for the night on a main line uphill from the small town of Lac-Megantic. The train of oil tankers started rolling after the brakes failed and eventually derailed, exploding into balls of fire and flattening the center of the town.

An official watchdog said last November that Canadian officials were not doing enough to ensure rail safety due to inadequate audits, ill-trained staff and too little focus on high-risk railroads.

Authorities in both Canada and the United States have been trying to improve the safety of transporting crude oil by rail, an increasingly common practice in North America.

"This booming industry - where unit trains were shipping more and more oil across Canada, and across the border - ran largely unchecked," said TSB chair Wendy Tadros.

"Transport Canada knew about some of the problems at MMA, but the follow-up wasn't always there. Instead, the focus was on making sure railway companies had a safety management system, not how they were using it and whether it was effective."

In April, acting on earlier TSB recommendations, the Canadian government will require that older rail cars used for carrying crude oil be phased out by May 2017.

Quebec authorities have charged the train driver and two rail officials with criminal negligence. (Writing by David Ljunggren in Ottawa; Editing by Chizu Nomiyama and Jeffrey Benkoe)