BP and the federal government have reached a $4 billion dollar settlement related to the Deepwater Horizon tragedy and its cleanup, in which the company will plead guilty to 11 felony counts of Misconduct or Neglect of Ships Officers relating to the loss of 11 lives; one misdemeanor count under the Clean Water Act; one misdemeanor count under the Migratory Bird Treaty Act; and one felony count of obstruction of Congress. The resolution is subject to U.S. federal court approval. An April 20, 2010 explosion and fire on the Deepwater Horizon oil rig off the Gulf coast, killed 11 workers and triggered an environmental catastrophe of massive proportions.
“All of us at BP deeply regret the tragic loss of life caused by the Deepwater Horizon accident as well as the impact of the spill on the Gulf coast region,” said Bob Dudley, BP’s Group Chief Executive. “From the outset, we stepped up by responding to the spill, paying legitimate claims and funding restoration efforts in the Gulf. We apologize for our role in the accident, and as today’s resolution with the U.S. government further reflects, we have accepted responsibility for our actions.”
In eliminating the possibility of any further federal criminal charges against the company based on the accident, BP now plans to focus more fully on defending itself against all remaining civil claims.
“We believe this resolution is in the best interest of BP and its shareholders,” said Carl-Henric Svanberg, BP’s chairman. “It removes two significant legal risks and allows us to vigorously defend the company against the remaining civil claims.”
At a press conference in New Orleans Nov. 15, Assistant Attorney General Lanny A. Breuer announced that the Deepwater Horizon Task Force filed a 14-count information and guilty plea agreement in New Orleans federal court earlier in the day. The information charges BP Exploration and Production Inc. with 11 counts of felony manslaughter; violations of environmental laws, including the Clean Water Act and Migratory Bird Act; and obstruction of Congress. The fine is the largest highest criminal fine in U.S. history.
“Perhaps the greatest tragedy is that the deaths of the 11 men onboard the Deepwater Horizon could have been avoided,” said Breuer. “The explosion of the rig was a disaster that resulted from BP’s culture of privileging profit over prudence; and we allege that BP’s most senior decision-makers onboard the Deepwater Horizon negligently caused the explosion. We hope that today’s acknowledgement by BP of its misconduct – through its agreement to plead guilty to 11 counts of felony manslaughter – brings some measure of justice to the family members of the people who died onboard the rig.”
Breuer added that the DOJ unsealed the same day a 23-count indictment charging BP’s two highest-ranking supervisors onboard the Deepwater Horizon with manslaughter and violation of the Clean Water Act. The indictment charges the two BP well site leaders with negligence, and gross-negligence, on the evening of April 20, 2010. “In the face of glaring red flags indicating that the well was not secure, both men allegedly failed to take appropriate action to prevent the blowout,” said Breuer.
A separate indictment also was unsealed, charging a former senior BP executive, David Rainey, with obstructing a congressional investigation and making false statements to law enforcement officials. The indictment alleges that Rainey, on behalf of BP, intentionally underestimated the amount of oil flowing from the Macondo well. Rainey allegedly cherry-picked pages from documents, withheld other documents altogether and lied to Congress and others in order to make the spill appear less catastrophic than it was.
Not a Win for Victims
While BP appears relieved by the settlement, believing it to be in shareholders’ best interest, others have been quick to call the settlement – and lack of criminal charges against BP – a “defeat,” rather than a win.
“The lack of criminal sanctions for conduct up to April 20 [is] a defeat for the communities and families harmed by the disaster,” said Tyson Slocum, director of Public Citizen’s Energy Program. “…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. ”
Slocum said he thinks any settlement should have been large enough to allow for full recovery of the Gulf Coast region and its communities; deterred other companies from putting profits before safety; and involved 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. ”
Tom O’Connor, executive director of the National Council for Occupational Safety and Health, said the BP settlement shows a need for a stronger Occupational Safety and Health Act that allows for more criminal sanctions on “negligent employers.”
“Since OSHA was created in 1970, there have been more than 200,000 workplace deaths, yet only a tiny percentage of these led to criminal enforcement,” said O’Connor. “Between 2003 and 2008, only 10 criminal cases were brought for violations of the OSH Act, despite the fact that OSHA conducted nearly 10,000 fatality investigations during that time.”
Calling BP’s $4.5 billion fine “a drop in the bucket” compared to its $5.5 billion profit last quarter alone, O’Connor added: “Real justice for the 11 workers killed in the Deepwater Horizon explosion would be a strengthened OSH Act that allows for proper sanctions for all employers whose negligence lead to the loss of lives of their employees.”
“Settlement terms regarding a corporate crime of this magnitude and impact merits public scrutiny and input,” said Slocum. “It is imperative that justice, not political expediency, be the primary consideration at the Justice Department.”