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November 16, 2012

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Deepwater Horizon: Two BP workers charged with manslaughter

The US Department of Justice has filed the biggest criminal fine in US history against BP over the Deepwater Horizon disaster in April 2010, and indicted two of the firm’s senior supervisors on manslaughter charges.

A former BP executive has also been charged with allegedly lying to law-enforcement officers and misleading Congress.

The company has pleaded guilty to 14 criminal charges, including 11 counts of manslaughter over the deaths of 11 workers in the explosion, one count of obstructing Congress, and two breaches of environmental legislation. As a result of its admissions, BP will pay $4bn in fines and penalties over five years – the single largest criminal resolution in the history of the United States. It has also agreed to pay $525m to the Securities and Exchange Commission over a period of three years.

As part of BP’s guilty plea, it will retain a monitor for four years, tasked with overseeing safety, risk management and equipment maintenance in relation to deepwater drilling in the Gulf, as well as an independent auditor, who will conduct annual reviews to ensure compliance. The company will also hire an ethics monitor to improve its code of conduct.

In addition to the charges against the company, a federal grand jury returned a 23-count indictment charging the two highest-ranking BP supervisors onboard the oil rig with manslaughter and violation of the Clean Water Act.

“Make no mistake: while the company is guilty, individuals committed these crimes,” said Assistant Attorney-General, Lanny Breuer. “The indictment charges these 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.”

A separate indictment has also been laid against former senior BP executive, David Rainey, with obstructing a congressional investigation and making false statements to law-enforcement officials. Said Assistant Attorney-General Breuer: “The indictment alleges that Rainey, on behalf of BP, intentionally underestimated the amount of oil flowing from the Macondo oil 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.”

In a statement, BP’s group chief executive Bob Dudley said: “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. From the outset, we stepped up by responding to the spill, paying legitimate claims and funding restoration efforts in the Gulf. We apologise for our role in the accident and, as [the] resolution with the US Government further reflects, we have accepted responsibility for our actions.”

Separate civil action, which BP is prepared to “vigorously defend”, is also scheduled to begin in February next year.

Commenting on the pending trial, Attorney-General Eric Holder said: “In that lawsuit, we are seeking civil penalties and a judgement that BP and others are liable for removal costs and natural-resource damages – exposure that could amount to billions of dollars.”

BP said it has taken significant steps to enhance safety and risk management throughout its global operations. It launched an internal investigation immediately after the accident, publicly released the results, and has been implementing all 26 of the investigation’s recommendations.

The company also underlined that it has made key leadership changes, reorganised its upstream business, created a centralised Safety and Operational Risk organisation, and adopted new deepwater drilling standards in the Gulf of Mexico that exceed current regulatory requirements.

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Mikekelly
Mikekelly

Great result so far. Will BP lose the ability to seek government contracts or will it be proscribed as it should?
Civil case will be instructive with punitive damages, no doubt.
This is an example of the importance of where strict liability should apply which the UK seeks to consign to history-recent posts/
But how far up the hierarchy did the responsibility lie? More latent failures perhaps in pushing for well production at all costs

Small
Small

Whilst the right result is on the way to being reached, and I’m not condoning their actions as a company or as individuals, this is the start of a cost recovery period for BP of multiple billions. Welcome to the the most complete example of cost I’ve ever seen. There will be higher prices as a result, which will reach out globaly, meaning that everyone from here to Timbuktu will contribute to the cost of their acts and ommisions.
I see bravardo mistakes from higher level personnel daily.