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.
posted Nov 20, 2012
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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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