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FACTORS IN THE MATRIX THAT SHAPED BP OIL SPILL RECOVERY: LAWS AND LAWSUITS After the spill, America was left asking: What do we do now? Though the average.

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Presentation on theme: "FACTORS IN THE MATRIX THAT SHAPED BP OIL SPILL RECOVERY: LAWS AND LAWSUITS After the spill, America was left asking: What do we do now? Though the average."— Presentation transcript:

1 FACTORS IN THE MATRIX THAT SHAPED BP OIL SPILL RECOVERY: LAWS AND LAWSUITS After the spill, America was left asking: What do we do now? Though the average American thought the answer was simple (clean up the oil and pay people for damages as soon as possible), there was much more to the story that seemed to go unconsidered. American laws, acts, and regulations, as well as exaggerated damage claims and lawsuits, heled to play a significant role in the delay of the BP spill cleanup and recovery. * Citations for collage images can be found on the works cited pages.

2 Overview: What Will Be Covered Laws and regulations which caused poor response actions and limitations: ▪ The Jones Act ▪ EPA Regulation ▪ The Death on the High Seas Act Problems with lawsuits, claims, and compensation. ▪ False or exaggerated claims ▪ Conflicts of interest ▪ Corruption in organizations Lessons to be learned

3 Laws Associated With the Spill Oil Pollution Act of 1990 Securing Protections for the Injured from Limitations on Liability Act (SPILL) The Federal Water Pollution Control Act of 1972 The Clean Water Act The Migratory Bird Treaty Act of 1918 The Jones Act The Death on the High Seas Act of 1920 The Endangered Species Act The Outer Continental Shelf Lands Act The Energy Policy Act of 2005

4 The Oil Pollution Act of 1990 Maritime injury law passed to prevent civil liability in the event of future U.S. coastal oil spills. Created in response to the Exxon Valdez Spill in March of Under this Act, a $75 million cap limitation is set to pay for private party losses. ▪ After the BP spill it was proposed (by both Democrats and Republicans) to raise this cap to $10 billion, but this proposal was rejected.

5 The Jones Act This act prevented the American Government from initially accepting technological aid from foreign nations in Europe, such as the Netherlands, and specifically the Dutch (Bader, 2010) including: - Sand berms - Oil skimmer-equipped ships - extra dredging tools Section 27 of the Merchant Marine Act of 1920: requires that American-built and American-run vessels must be used to transport any and all goods within the waters of the United States.

6 EPA Regulations and Limitations An Environmental Protection Agency Regulation clearly states: “pumping water back into the sea with oil residue is not allowed.” ▪ Despite the Dutch offer to provide skimmers, the American Government declined their assistance because these skimmers put the cleaner, though still oil-residue filled, water back into the ocean. ▪ As of June 8 th, BP had claimed to have cleaned up nearly 65,000 barrels of oil  The skimmers from the Netherlands could have collected that much in a single day (“Inflexible EPA regulations prevented oil spill cleanup”).

7 Death on the High Seas Act (1920) This act covers any deaths which take place at least three nautical miles from any U.S. shoreline. Benefit: pecuniary compensation or providing the families of the deceased with paychecks that the deceased would have earned. Drawback: does not provide compensation “for loss of care and comfort,” or non- pecuniary damages. (Searcey, 2010). act.php&usg=__m4YqZwbQYJMQMAXIzaAO4LBLrn4=&h=281&w=475&sz=35&hl=en&start=80&zoom=1&tbnid=JoSHCLpUCtgQAM:&tbnh=118&tbnw=200&ei=Z1dtTf-aFIPGlQfH8Pj- BA&prev=/images%3Fq%3Ddeath%2Bon%2Bthe%2Bhigh%2Bseas%2Bact%26um%3D1%26hl%3Den%26biw%3D1440%26bih%3D799%26tbs%3Disch:10,2008&um=1&itbs=1&iact=hc&v px=546&vpy=447&dur=689&hovh=173&hovw=292&tx=149&ty=115&oei=JFdtTc7GKML48Abel7iODQ&page=4&ndsp=27&ved=1t:429,r:15,s:80&biw=1440&bih=799

8 Compensation Funds British Petroleum set aside a $20 billion dollar fund for compensation of property damage, business loss, injury, etc. The Oil Spill Liability Trust Fund is a government maintained system which is supported by industry fees and can provide a maximum of $1 billion to people and businesses during an incident. The Energy Policy Act of 2005 raised this cap to $2.7 billion. If all of this money was available...

9 Why did Personal Payout and Compensation Take so Long? ? ? ? ? Sign.jpg&imgrefurl=http://www.irunmybody.com/home/extras/conscious-voices/the-bp-oil-spill-and-higher-oil-prices/&usg=__jmU2Z-upMtpB-Nst-Y8dEXaE- EY=&h=288&w=400&sz=27&hl=en&start=0&zoom=1&tbnid=1HejEA7EFdVtdM:&tbnh=142&tbnw=189&ei=zFhtTenfMs6s8AaCiY2PDQ&prev=/images%3Fq%3 Doil%2Bcovered%2Bdollar%2Bsign%26um%3D1%26hl%3Den%26biw%3D1440%26bih%3D799%26tbs%3Disch:1&um=1&itbs=1&iact=hc&vpx=332&vpy=98&d ur=7083&hovh=190&hovw=265&tx=141&ty=100&oei=zFhtTenfMs6s8AaCiY2PDQ&page=1&ndsp=31&ved=1t:429,r:1,s:0

10 Suits and Claims A wide variety of suits and claims have been applied for including: ▪ bankruptcy of businesses (i.e. fishing, boating, bait) ▪ lost property and lost wages ▪ wrongful death and suits by family members of deceased or illness from dispersants, oil, or fumes (Corexit). ▪ mental problems due to stress and personal injury (including suicide cases) ▪ claims under the Endangered Species Act ▪ Gulf Wildlife legal action from groups including Save the Manatee Club and the Gulf Restoration Network ▪ shareholders sue for being mislead about operational safety. ▪ other class-action lawsuits

11 Problems with Suits and Claims ▪ some applicants lacked proper documentation of their losses or had no documentation at all. ▪ some applicants were simply ineligible. ▪ claims were exaggerated to get more money than they were entitled to. ▪ In other instances, multiple claims were filed for the exact same case. -Initially these false claims caused delay and the true claims were undercompensated. *Some involved in these complications could face criminal fraud charges. (“Gulf Oil Well Rupture: Claims Against BP Take Time,” 2010, “Gulf oil spill claims process under fire,” 2011, and Restuccia, 2010).

12 Problems with Suits and Claims Conflict of Interest: Many federal judges could not preside over the filed claims and court cases, leaving more cases for fewer judges. Jurist Carl J. Barbier, for example, has been given nearly 300 cases, which will obviously cause delay in providing people with the money and answers they want (“BP Gulf Oil Spill,” 2010). url=http://www.louisianarecord.com/news/ deepwater-horizon-contractor-drops-bid-to-replace-barbier-as-mdl- judge&usg=__3PFaT0I1MjuOrPb47YnmV8F__Mk=&h=300&w=200&sz=13&hl=en&start=0&zoom=1&tbnid=MNgFJ6lgTkzT0 M:&tbnh=157&tbnw=105&ei=P2ZtTfCPMIO78gbQhoWPDQ&prev=/images%3Fq%3Djurist%2Bcarl%2BJ%2BBarbier%26um %3D1%26hl%3Den%26biw%3D1440%26bih%3D799%26tbs%3Disch:1&um=1&itbs=1&iact=hc&vpx=716&vpy=257&dur=29 1&hovh=188&hovw=125&tx=67&ty=168&oei=P2ZtTfCPMIO78gbQhoWPDQ&page=1&ndsp=27&ved=1t:429,r:10,s:0

13 Problems with Suits and Claims Kenneth Feinberg (leading the Gulf Coast Claims Facility) accused of: ▪ refusing to disclose information about settlements ▪ hiding his money that BP is paying his firm each month to run the GCCF: $850,000 ▪ encouraging applicants to avoid other firms to file complaints with and insisting that more money will be awarded through the GCCF (which takes away the right to sue BP, thus saving the company more money) (“Important Conflict of Interest Arises with Oil Spill Claims Process,” 2011). ken.php&usg=__yMxLg8oPGp9OFP84mJ38eTuPI9A=&h=328&w=486&sz=169&hl=en&start=0&zoom=1&tbnid=6B7Pe6YeDNGMqM:&tbnh=159&tbnw=212&ei=Hb9tTZnwAcGp8AaDxJyODQ&prev=/im ages%3Fq%3Dkenneth%2Bfeinberg%26um%3D1%26hl%3Den%26biw%3D1440%26bih%3D799%26tbs%3Disch:1&um=1&itbs=1&iact=hc&vpx=147&vpy=110&dur=86&hovh=184&hovw=273&tx=135&t y=60&oei=Hb9tTZnwAcGp8AaDxJyODQ&page=1&ndsp=28&ved=1t:429,r:0,s:0

14 An Interesting Fact: The U.S. Corporate Tax Law Under this law, companies are permitted to claim up to 35% of any losses. ▪ Since BP lost roughly $30 billion yet overpaid in pervious years, it would be possible for the company to claim around $10 billion (Ironic that this was the newly proposed Oil Pollution Act cap) (“BP seeks $9.9 billion tax credit for oil spill costs,” 2010). Question: Where would this $10 billion come from? Answer: From exactly where President Obama promised it would not... the taxpayers. money.jpg&imgrefurl=http://faisalibrahim1.blogspot.com/2010/12/collateralization-of-our-oil-money- is.html&usg=__SXS7NFJUPsn6h_QGOI9BBs9sPkY=&h=400&w=300&sz=16&hl=en&start=0&zoom=1&tbnid=HHFgSqXeq_FzFM:&tbnh=134&tbnw=95&ei=RVptTbmFLML48Abal 7iODQ&prev=/images%3Fq%3Doil%2Bmoney%26um%3D1%26hl%3Den%26biw%3D1440%26bih%3D799%26tbs%3Disch:1&um=1&itbs=1&iact=rc&dur=536&oei=RVptTbmFL ML48Abal7iODQ&page=1&ndsp=31&ved=1t:429,r:0,s:0&tx=17&ty=70

15 Lessons To Be Learned: How Could The Problems Have Been Avoided and What Changes Need To Be Made? “To assure human safety and environmental protection, regulatory oversight of leasing, energy exploration, and production require reforms...” (Saxe, 2011). In America, politics is always put first. If an event such as this were to happen again, the general welfare and safety of the American people should be put before politics (i.e., the Jones Act should have been waived). Amendments need to be made to laws to include non-pecuniary compensation. Specifically, the government and EPA need to step in and enforce more strict regulations and disaster plans, as well as punishment for failure to follow these new enforcements. ▪ i.e. In the Netherlands, a company is given 12 hours to handle an oil spill before the government steps in and takes over the operation (Donovan, 2010). 09.ss_full.jpg&imgrefurl=http://citizensagainstproobamamediabias.wordpress.com/2010/06/page/2/&usg=__7bazXIHFyOdc0VxOem0duAKFN- g=&h=868&w=1200&sz=142&hl=en&start=0&zoom=1&tbnid=ftGh9ZQA7nekUM:&tbnh=148&tbnw=205&ei=3lxtTY26KIH98Ab8nKmPDQ&prev=/images%3Fq%3Dbp%2Boil%2Bjudg e%2Bconflict%2Bof%2Binterest%2Bcartoon%26um%3D1%26hl%3Den%26biw%3D1440%26bih%3D799%26tbs%3Disch:1&um=1&itbs=1&iact=hc&vpx=545&vpy=449&dur=332&ho vh=148&hovw=205&tx=119&ty=117&oei=3lxtTY26KIH98Ab8nKmPDQ&page=1&ndsp=25&ved=1t:429,r:15,s:0

16 In Closing... As previously stated: new strict guidelines and regulations need to be established and safety/recovery plans need to start being thoroughly reviewed before construction and operation should be allowed to commence. - It’s better to be safe than sorry. All information, documents, and plans should be made available to the public. In disastrous events such as the BP oil spill it is crucial for people to help one another. As Geert Visser (Houston’s Consul general for the Netherlands) said: “Let’s forget about politics; let’s get it done” (Bader, 2010). The Present Day: - Legal claims still remain unsettled and many others have yet to receive payments. - Tar balls are still rolling onto the coastline. - Marshlands are still full of thick oil, killing the grass and harming wildlife. - Oil has been found settled (and not degrading) on the seabed. Does this sound like the results of a successful recovery process?

17 Questions?

18 “The technology, laws and regulations, and practices for containing, responding to, and cleaning up spills lag behind the real risks associated with deepwater drilling into large, high-pressure reservoirs of oil and gas located far offshore and thousands of feet below the ocean’s surface. Government must close the existing gap and industry must support rather than resist that effort” (Saxe, 2011). “Deepwater energy exploration and production, particularly at the frontiers of experience, involve risks for which neither industry nor government has been adequately prepared, but for which they can and must be prepared in the future” (Saxe, 2011). The Take Home Message:


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