March 13, 2018

Responsibility and Accountability for the BP Oil Spill; Criminal Fallout?

It has been called the worst oil spill in U.S. history, a disaster that “doesn’t stop” as if “Katrina sat on top of New Orleans for six weeks without going away.”[1] The images of pelicans drowning in crude oil and reports of 20,000 to 40,000 barrels of oil a day spewing into the Gulf of Mexico has caused the majority of Americans, by a 2-to-1 margin, to support criminal charges for those responsible for the spill.

The spill started on April 20, when the Deepwater Horizon rig exploded off the coast of Louisiana. 11 workers on the rig were killed when it exploded. Since the spill, everything from caps on the leaking pipe to stuffing dirt in the pipe have been attempted to stop the flow of oil. Nothing has stopped the oil.

We are overwhelmed by the environmental and personal impact, but what will be the legal fallout?

The administration recently opened an investigation into the disaster, and BP could face charges under a number of federal laws as a result. Charges could fall under:

  • The Clean Water Act for possible civil and criminal penalties;
  • The Oil Pollution Control Act of 1990 for cleanup costs;
  • The Migratory Bird Treaty and the Endangered Species Act for penalties for injuries and death to birds and wildlife; and
  • The National Environmental Policy Act and the Best Conventional Pollutants Control Technology, both of which prohibit oil spillage.

Civil fines could easily reach into the hundreds of millions of dollars. Felony charges have also been discussed, which would require a showing that BP acted in a knowingly dangerous manner. U.S. Attorney General Eric Holder has stated that he plans to “prosecute to the fullest extent of the law” any person or entity determined to be responsible for the spill.[2] However, if misleading conduct, false statements, concealment or withholding of information by BP is discovered, another whole litany of charges could abound. Under the Clean Water Act, any “responsible corporate officer” may be charged with a violation for knowingly placing another person in danger, which could carry a 15-year prison sentence.

These charges may or may not be affected by BP’s recent agreement to establish a $20 billion escrow account. The escrow account will compensate U.S. businesses and employees who have been hurt by the oil spill, but will not be used for fines and other civil penalties. However, BP will likely seek institution of a mechanism requiring escrow beneficiaries to waive their right to any judicial remedy. The Obama administration claims the escrow is without strings or promises for leniency or clemency. If true, this does not bode well for BP or its executives.

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[1] George Haddow, a disaster management consultant from New Orleans and prior senior Federal Emergency Management Agency (FEMA) official under President Clinton. Helen Cooper and Peter Baker, U.S. Opens Criminal Inquiry Into Oil Spill, N.Y. Times, June 1, 2010, available at http://www.nytimes.com/2010/06/02/us/02spill.html.

[2] Id.