Saturday, November 24, 2012

Deepwater Horizon: BP’s Civil Fines Could be 10 Times Larger than Record Criminal Penalty

BP’s Civil Fines Could be 10 Times Larger than Record Criminal Penalty

The $4.5 billion oil giant BP has agreed to pay out for criminal misconduct related to the Deepwater Horizon spill is too small to change the company’s business model. Yet more and bigger payments are likely to come.
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BP workers attempt to clean a beach in Pensacola Beach, Fla., in June 2010. 
The BP Deepwater Horizon settlement of $4.5 billion announced Thursday may be the highest criminal fine in U.S. history, but some citizen advocates and environmentalists still say it’s not enough. The 2010 oil spill along the Gulf Coast was the largest single environmental and industrial disaster in the United States and the responsible party is a corporation with one of the worst safety and environmental records on the books.
Compared with its massive profits ($25.7 billion in 2011, according to the BP’s website), the fine is not likely to result in any change in business as usual for the company.

The fine can be paid out over five years and is well within the company’s abilities to manage financially.
“This settlement contains nothing that addresses the institutional problems of BP and its callous treatment of its employees and the environment,” said Tyler Slocum, Director of the Energy Program at consumer advocacy group Public Citizen. The fine can be paid out over five years and is well within the company’s abilities to manage financially.

Slocum says federal sanctions against BP would more effectively deter the kind of negligence that resulted in the Deepwater spill. Sanctions could include preventing BP from earning money via federal contract and forbidding them from leasing federal land. Though it is now a admitted felon, the company remains the largest fuel contractor for the Department of Defense and will earn more through those contracts in the next year than it will pay out in the current settlement.

Jacqueline Savitz, deputy vice president of international ocean advocacy group Oceana, pointed to a lack of progress in legislative protections against the dangers of offshore drilling. “Nothing in this settlement, and no law passed since the spill, prevents the next major offshore spill from happening,” she said in a press release dated November 15.

While many say more remains to be done to hold BP accountable, environmentalists seemed to agree that the company’s financial resources will play an important role in the recovery. The good news here is that BP has yet to face civil claims for its violations of environmental legislation such as the Clean Water Act and the Oil Pollution Act. These civil claims could be more than ten times higher than the criminal fines the company has just agreed to pay. Public Citizen calculates that civil claims against BP could total $51.5 billion, while Oceana put the figure as high as $90 billion.

Attorney General Eric HOlder announced last Thursday that his office is prepared to go to trial in February on the Clean Water Act violations, which various estimates put at between $10 and $21 billion. It is unclear at this time if further violations will be prosecuted.

 Ialeggio says that whenever there is any kind of storm or disturbance in the weather, tar balls wash up on the beach.

The civil trials will make public much of the yet-to-be released data on the extent of the spill’s environmental impact. According to James Ialeggio, a field biologist who helped to conduct post-spill damage assessment, reports of the devastation have been intentionally understated. “My overwhelming impression of the cleanup effort I saw was that it was driven by two things: BP’s desire to minimize its own culpability, and the Gulf region’s effort to minimize the impact on their tourism,” he said.

Ialeggio was with the first out-of-state nonprofit teams to be given access to the area, some two months after the spill. By that time, much of the oil had been hidden by controversial chemical dispersants used for the first time in the Deepwater Horizon spill. The dispersants minimized the appearance of oil slicks by separating them into miniscule particles. Some researchers found that the combination of oil and dispersants had toxic effects.

Meanwhile, oil continues to be discovered. This summer, the Times Picayune reported that a 30-by-30 foot mat of solidified oil had washed up on Louisiana's Grand Isle Beach, not long after BP had declared the area clean. Ialeggio says that whenever there is any kind of storm or disturbance in the weather, tar balls wash up on the beach, though he can’t be sure they are connected to the Deepwater Horizon incident.

BP has indicated it is prepared to fight upcoming civil charges on two major points: They will contest the government’s figures on the gallons of oil spilled, and they will argue for charges of negligence rather than gross negligence, which carries higher penalties. The outcome of the upcoming trial will indicate more about whether financial punishment is adequate in this case.

“The government says that the biggest fine in history equates with justice being served,” said Allison Fisher, Outreach Director of the Energy Program at Public Citizen. “To maintain that narrative, they will really have to come through with the civil charges.”

Signe Predmore wrote this article for YES! Magazine, a national, nonprofit media organization that fuses powerful ideas with practical actions. Signe is an editorial intern at YES! and is currently on leave from studying international politics in Sweden.

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