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8/27/12

A BP Settlement Should Ensure Criminal Liability, Permanent Sanctions and a Full Public Accounting

Statement of Tyson Slocum, Director, Public Citizen’s Energy Program

The Department of Justice reportedly is seeking a $25 billion settlement with BP that would resolve all civil and criminal damages and liabilities arising from the 2010 Gulf disaster that killed 11 workers and did untold damage to the ecosystem – even though the company’s liability is at least $51.5 billion. The settlement also reportedly would keep both parties out of the courtroom and BP senior management out of jail.

Should the parties settle prior to a trial, any settlement must allow for full recovery of the Gulf Coast region and its communities; deter other companies from putting profits before safety; and involve the disclosure of all information gathered by the government, so the public has a complete understanding of the wrongdoing that killed workers and continues to wreak havoc on the environment.

 The following terms should be applied:

• The settlement should include criminal penalties for the company. The settlement should not resolve the criminal penalties for individuals, including for their roles in the Deepwater oil rig explosion that resulted in the deaths of 11 men. The prosecution of individuals should proceed separately.

• A settlement must place financial responsibility on BP for future environmental and economic costs caused by still-undiscovered damage. The costs to the environment from the release of more than 5 million barrels of oil and hundreds of thousands of gallons of chemical disbursement may not be known for decades.

• Permanent sanctions must be part of the settlement. For example, the government should restrict BP’s access to future and current government oil and gas leases, and bar it from federal contracts for good.

• BP should agree not to deduct from its taxable revenues any future costs and fines associated with the spill. The corporation wrote off nearly $13 billion in spill costs from its 2010 income, thus depriving the Treasury of much-needed money.

• All BP documents related to the disaster must be made publicly available and accessible.

• The settlement should include penalties called for by the full spectrum of laws that exist to protect our environment, wildlife and workers. Damages associated with Clean Water Act violations alone have been estimated at $21 billion. Other laws that must be accounted for include the Outer Continental Shelf Lands Act, the Endangered Species Act, the Marine Mammal Protection Act and the Migratory Bird Treaty Act.

• A proposed settlement between BP and the U.S. government must be placed before the public for review and comment before it is finalized. Settlement terms regarding a corporate crime of this magnitude and impact merits public scrutiny and input.

The Justice Department may face White House pressure to settle before the Democratic convention. And if press reports that a settlement will absolve BP and impose only light sanctions are true, BP, too, will be eager to settle. It is imperative that justice, not political expediency, be the primary consideration at the Justice Department.

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