Date: 201509
Local time of day: 1201-1800
Location: ZZZ.Airport, US
Light: Daylight
Aircraft: B767-300 and 300 ER
Operator: Air Carrier
Operating under: Part 121
Flight plan: IFR
Mission: Passenger
Flight phase: Parked
ATC / advisory: Ramp ZZZ
Reporter organization: Air Carrier
Reporter function: First Officer; Pilot Flying
Reporter qualification: Flight Crew Air Transport Pilot (ATP)
Human factors: Workload; Training / Qualification; Situational Awareness; Communication Breakdown; Distraction
Second reporter function: Captain; Pilot Not Flying
Anomaly: Deviation / Discrepancy - Procedural FAR; Deviation / Discrepancy - Procedural Hazardous Material Violation; Deviation / Discrepancy - Procedural Published Material / Policy; Flight Deck / Cabin / Aircraft Event Other / Unknown
Detector: Person Flight Crew
When detected: Pre-flight
Result: Flight Crew FLC complied w / Automation / Advisory; Flight Crew Took Evasive Action; General Work Refused
Contributing factors: Company Policy; Procedure
Primary problem: Procedure

Narrative: We are required to refuse shipments that contain Li-ion batteries; per the guidance provided in FM Part I; if the packaging is damaged. Specifically; the ostensibly 'idiot-proof' labels on the packages (and copied in our FM Part I) states the following in ALL CAPS and BOLD PRINT:DO NOT LOAD OR TRANSPORT PACKAGE IF DAMAGEDOn THREE separate occasions; Company Personnel missed or ignored significant and obvious damage to large containers which had Li-ion batteries; nearly resulting the loading of this damaged pallet; uninspected; on our 767 and; the next day; a 777.Also; one of the four large containers indicated a quantity of '1;500 pieces.' Thus; we are led to assume that that many batteries; in such a large container; only had a weight of 5 kg/11 lbs; which is; coincidentally; the exact limit allowed. Company ground staff had three contacts/opportunities to visually identify the obvious damage to the cases; yet in these three inspections no one noted significant case damage to a well labeled Li-ion battery shipment. The first was when I happened upon the pallet because [it was pointed out to me] the pallet's net was loose. I [notified] the captain. He returned to the ramp with me and we both refused the shipment because of this obvious case damage. We later learned that when Company [Personnel] attempted to re-ship the pallet on the next day's Flight; a 777; they did so having NOT inspected the contents for damage using the Li-ion protocols. We were later told; they 'thought it had been refused because the net was loose.'The next day's [Company] personnel also failed to note the case damage and were preparing to load it on a 777 prior to the FO's refusal.The next day's FO was pre-warned of the damage; he noted nothing had been inspected and the damage was obvious.This incident is an indictment of the current standard of the training and/or performance of Company [Personnel.] If this practice is left uncorrected; it will likely result in a completely avoidable inflight fire; hull loss and the loss of many lives.We do not; normally; open these shipments. However; in this case we were OBLIGATED to do so. As a reminder; the documents attached to one of the cases reflected a battery count of '1;500 pieces.' (Yet they only weighed 5 kg.) Thus; this inspection would have been an excellent opportunity to accomplish a shipper veracity check and learn exactly how Li-ion this shipment contained . . . .Given that the FAA has reported that some cargo fire suppression systems are unlikely to be effective in fighting a Li-ion fire; it is critical that damaged Li-ion containers NOT be placed on our aircraft until required inspections are accomplished. As it stands today; it is obvious that we have been lucky. Significant training and operational changes are needed to ensure that Company [Personnel] are aware of the implications of a Li-ion cargo fire on our aircraft; and why it is critical that all adhere to the warning label instructions; and that any case damage Li-ion containers be removed and inspected ASAP.


Second narrative: During the walk around; the FO noticed a pallet of containers holding lithium batteries; with damage to at least one of the containers. I went down to look at it and concurred with my FO. The crew chief also concurred; so naturally the shipment was rejected. I notified operations and dispatch. I understand the same pallet with the damaged containers showed up to be loaded the following day and was also rejected. A lot more caution and vigilance needs to be exercised; especially with hazmat such as lithium batteries.


Synopsis: A B767 flight crew detected a damaged LI-ION shipment and had it removed as per the FOM. The next day shipping clerks attempted to ship the same damaged container but were prevented because the flight crew was forewarned.