Saturday, April 9, 2016

Court Confirms BP Settlement with U.S, States in $20.8 billion Deal

With the filing this week of final judgment adopting the consent decree the litigation between BP Exploration and the United States, and the States of Alabama, Florida, Louisiana, Mississippi and Texas has come to an end.

Some, like the Providence Journal lament the $20.8 billion settlement find treatment of BP to be too mild.  But those sums are aside from the massive Deepwater Horizon Settlement Program - a separate class action by private parties.

The governmental settlements sums consist of civil penalties and natural resource damages suffered by the States and the United States.  They include

without limitation: (i) the costs of assessing injury, destruction, loss
of, or loss of use of Natural Resources and the resulting damages; (ii) the costs of restoration,
rehabilitation, or replacement of injured, destroyed, or lost Natural Resources and natural
resource services or of acquisition of equivalent resources; (iii) the costs of planning and
monitoring such restoration activities; and (iv) any other compensation for diminution in value or
loss of use or non-use values of Natural Resources. 
The $5.5 billion civil penalties payable to the U.S. in equal installments over fifteen years - as are the natural resource damages totaling $7.1 billion. Both accrue interest at market rate on 2-3 year government securities.  There is a five year $350 million nine year payment schedule for past due natural resource damage. $250 million additional payments are to be made in annual instalments over eight years.

It is easy to imagine a tougher result but thoughts of criminal prosecution have mostly been put to rest by the difficulty of finding criminal intent.


Editorial: Billions from BP - Opinion - - Providence, RI

  Roughly six years after it was physically stanched, the BP oil spill came to a quiet official conclusion last week. On Monday, a federal judge in New Orleans gave final approval to a settlement estimated at $20.8 billion. Of that amount, $5.5 billion consists of penalties under the Clean Water Act. Much of the rest will be spent on compensation and repairs for environmental damage. Some will go toward reimbursing government costs.
In 2010, millions of gallons of oil spilled into the Gulf of Mexico following a drilling-rig explosion that killed 11 workers. Under the settlement with BP, five Gulf states and numerous local governments will receive payments over the next dozen years. The funds will enable them to ramp up vital restoration work in coastal areas.
The Justice Department has described the agreement, initially announced last July, as the largest environmental settlement in U.S. history.
For a long-suffering region of the country, the settlement’s clearing of the way for environmental repairs is certainly a great step forward. Many Americans well recall scenes of soiled beaches, damaged fisheries and injured wildlife. Hotels, restaurants and related businesses suffered as tourists stayed away for months. Under a separate but uncapped 2012 agreement, BP continues to settle claims from business owners and residents who say they were harmed.
Yet only a handful of BP employees were criminally charged in the spill; they were either acquitted or received light punishment. The company itself paid $4 billion in criminal penalties tied to the rig workers’ deaths. But for the most part, individuals were not held accountable.

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