- BP will pay $18.7bn after the justice department and four states sued
- Money will be divided among states and earmarked for cleanup projects
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| The 2010 disaster at BP’s Deepwater Horizon oil rig caused devastating pollution in the Gulf of Mexico. Photograph: Gerald Herbert/AP |
BP has
agreed to pay a record environmental fine of $18.7bn to settle legal actions
brought by the US and several states over the fatal 2010 Gulf of Mexico oil
spill.
The US
justice department, along with the states of Louisiana, Mississippi, Alabama,
Texas and Florida, all sued BP for damages not covered by the company’s earlier
settlements with businesses and individuals harmed by the worst offshore spill
in US history.
The
settlement ends all litigation between BP, the states and the US government and
allows the company to pay over 18 years. BP’s share price rose on the news.
Last
September, judge Carl Barbier, who has overseen the tortuous legal case
resulting from the disaster, ruled BP had been “grossly negligent” in its
handling of the well. The decision opened up BP to the highest possible fines.
The company
will pay $7.1bn in “natural resource damage assessment”, and the money will be
divided among the states and earmarked for environmental cleanup projects
related to the spill. BP was fined $5.5bn under the Clean Water Act.
Some
environmentalists were disappointed with the fine, which has yet to receive
court approval. Jacqueline Savitz, vice-president for Oceana in the US, said:
“If the court approves this proposal, BP will be getting off easy and ‘we the
people’ will not be fully compensated for the natural resource damages that we
suffered, and the law requires that the public is made whole for those damages.
“For these
two payments alone, Clean Water Act violations and natural resource damages, BP
would be getting away with less than half of what the law would justify,” she
said. “The court should not let BP get off the hook without fully compensating
Americans for what was lost. A low-end settlement would not only cheat the
public, but it would send the wrong message to BP and the other companies that
drill in our oceans, telling them that they may not have to pay for the future
damages they cause.”
The 2010
explosion at the Deepwater Horizon oil rig cost 11 lives and resulted in 4.2m
barrels of oil spewing into the Gulf over 87 days, according to the US
government.
BP argued
the volume of the spill was far lower. Barbier eventually ruled BP was
responsible for the release of 3.1m barrels. The spill affected the shore of
the Gulf coast from Louisiana to Florida. Its impact on seafood and wildlife is
still being assessed.
Louisiana
attorney general James “Buddy” Caldwell said: “This agreement is the result of
five years of hard-fought litigation and intense scientific research, and it
provides Louisiana the coastal restoration and compensation it needs following
the Deepwater Horizon disaster.”
He said
Louisiana, the state most affected by the spill, was recovering more than $10bn
from BP – more than any state has ever recovered for this type of case. “This
agreement lets us focus right away on improving the state without further
litigation delays and appeals that could take years. I am extremely pleased by
the work done by the court and all the parties in this matter to reach an
agreement that will bring great and historic benefits to Louisiana and the
Gulf.”
“Five years
ago we committed to restore the Gulf economy and environment and we have worked
ever since to deliver on that promise,” said BP chairman Carl-Henric Svanberg.
“We have
made significant progress, and with this agreement we provide a path to closure
for BP and the Gulf. It resolves the company’s largest remaining legal
exposures, provides clarity on costs and creates certainty of payment for all
parties involved.”
More than
five years after the disaster, environmentalists and Gulf residents are still
counting the cost. Fatalities among dolphins and other marine life have surged
in the spill’s aftermath.
“No
monetary award can ever undo the destruction of the Deepwater Horizon disaster.
But, while we look forward to additional details, today’s agreement, the
largest environmental settlement in American history, represents a significant
step toward justice for the Gulf Coast ecosystems, economies and communities
that were damaged by the disaster,” Fred Krupp, president of the Environmental
Defense Fund, said in a statement. “More than five years later, this agreement
between the five Gulf states, BP and the department of justice brings real hope
for the future of the Gulf Coast.”
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