November 15, 2012

Public Citizen’s take on BP Settlement

We’re stunned. This settlement is pathetic. The $4 billion penalty is equivalent to just a fifth of the company’s 2011 profits.

The point of the criminal justice system is twofold: to punish and to deter. This does neither. It is a weak-tea punishment that provides zero deterrence to BP or other companies. Consider that after the 2005 Texas refinery explosion that killed 15 people, BP pleaded guilty to a criminal charge and paid a fine. Now, after a 2010 event that killed 11 people, BP is again pleading guilty and paying a fine. Zero deterrence.

Although the government is right to pursue manslaughter charges against two individuals BP employees, the settlement is inadequate to address BP’s repeated criminal conduct.

The government must impose more meaningful sanctions. Nothing in this settlement stops BP from continuing to get federal contracts and leases. BP will earn more in annual federal contracts than it will pay in penalties as a result of this. That’s appalling.

Below is earlier statement made just prior to announcement:

The Department of Justice (DOJ) reportedly has reached a multibillion-dollar settlement with BP in which the company will plead guilty only to obstruction of justice for lying to Congress in the disaster’s aftermath. The reports suggest that DOJ will not pursue criminal charges against BP for the events that led to the April 20, 2010, disaster. While civil violations of the Clean Water Act are still pending against the company after this settlement, the lack of criminal sanctions for conduct up to April 20 would be a defeat for the communities and families harmed by the disaster. The single criminal charge is inadequate; remember that two BP subsidiaries were under criminal indictment at the time of the Deepwater Horizon tragedy. Claims arising from the Gulf disaster, which killed 11 workers and did untold damage, puts the company’s liability at a minimum of $51.5 billion.

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.

It is imperative that justice, not political expediency, be the primary consideration at the Justice Department.

Tyson Slocum is Public Citzen’s energy program director. Follow him on Twitter @TysonSlocum.

For further context to Public Citizen’s work on this issue please see:

www.beyondbp.org

http://www.energyvox.org/2012/04/20/the-unlearned-lessons-of-the-bp-disaster/

http://www.energyvox.org/2011/12/14/bp-gulf-offshore-drilling/

http://www.energyvox.org/2011/12/07/beyond-fines-criminal-prosecution-for-criminal-conduct/

http://www.energyvox.org/2011/10/31/bp-rewarded-while-gulf-region-struggles-to-recover/

http://www.energyvox.org/2011/05/17/obamas-drilling-deja-vu/

http://www.energyvox.org/2011/04/19/deepwater-horizon-anniversary-alternet-oil-spill-bp/

http://www.energyvox.org/2011/01/11/congress-should-follow-oil-spill-commission-recommendations/

http://www.energyvox.org/2010/12/09/bp-transocean-and-halliburton-the-three-stooges/