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BP Oil Spill Settlement Approved at $20 Billion by US Judge


04/05/2016


BP Oil Spill Settlement Approved at $20 Billion by US Judge
Resolving years of litigation over the worst offshore spill in the US history, a federal judge in New Orleans granted final approval on Monday to an estimated $20 billion settlement over the 2010 BP oil spill in the Gulf of Mexico.
 
$5.5 billion in civil Clean Water Act penalties and billions more to cover environmental damage and other claims by the five Gulf states and local governments is included in the settlement that was first announced in July last year. The judgment has given 16 years to the oil company to pay up the settlement amount.
 
In what is being termed as the largest environmental settlement in U.S. history as well as the largest-ever civil settlement with a single entity, it is estimated by the Justice Department that the settlement will cost the oil giant as much as $20.8 billion.
 
BP had been fund to be “grossly negligent” by the U.S. District Judge Carl Barbier in an earlier ruling in connection to its offshore rig explosion that killed 11 workers and caused a 134-million-gallon spill.
 
Settlement with businesses and residents who claimed that the spill cost them money was reached by BP in 2012. A protracted court battle over subsequent payouts to businesses followed the deal which didn’t have a cap. Many of the claims are still being processed by a court-supervised claims administrator.
 
An estimated more than $53 billion would have to be expended by BP in costs that are related to the spill that includes its initial cleanup work and the various settlements and criminal and civil penalties.
 
 “We are pleased that the Court has entered the Consent Decree, finalising the historic settlement announced last July,” BP spokesman Geoff Morrell said in an email.
 
The settlement was praised by U.S. Attorney General Loretta Lynch.
 
“Today’s action holds BP accountable with the largest environmental penalty of all time while launching one of the most extensive environmental restoration efforts ever undertaken,” Ms. Lynch said in a statement.
 
The decision clears the way for the state to receive critical coastal restoration funding, said Gov. John Bel Edwards of Louisiana where delicate coastal marshes were damaged by the oil. Among those touting the settlement was Alabama Attorney General Luther Strange who acted as a coordinating lawyer for the five Gulf states.
  
Judge Barbier’s ruling “ends a long sad chapter in American environmental history. The question that remains is whether we have learned enough from this tragedy to prevent similar environmental disasters in the future,” said David Uhlmann, a University of Michigan law professor and former chief of the Justice Department’s environmental crimes section.
 
There were lingering complaints that some of the BP payments may be tax-deductible for the oil giant even as the overall reaction to the settlement was positive. Although other settlement costs could be taxable deductable, the court documents states that the civil penalties will not be tax deductible.
 
 “We are saddened to learn that the gross negligence of BP continues to enjoy taxpayer subsidies,” Lukas Ross of Friends of the Earth said in an emailed news release
 
(Source:www.thehindu.com) 


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