BP Exploration and Production Inc (BP) has agreed to pay US$4.5
billion, the largest criminal penalty in US history, by pleading
guilty to all charges against it relating to the 2010 explosion of
the Deepwater Horizon oil rig, while two of its senior supervisors
face lengthy jail sentences.
The explosion of the Deepwater Horizon in April 2010 killed 11
workers and caused 4.9 million barrels of oil to spill into the
Gulf of Mexico over 87 days, fouling marshes and beaches, killing
wildlife and shutting vast areas of the Gulf to commercial fishing.
Investigations into the explosion have found time saving and cost
cutting decisions made by BP and its drilling partners were to
blame for the event.
BP has pleaded guilty to 11 counts of felony manslaughter,
violations of the Clean Water Act 1972 (Clean Water Act)
and the Migratory Bird Treaty Act 1918 and an obstruction
of justice charge in respect of an allegation that it concealed the
gravity of the spill from a Congress inquiry.
The US$4.5 billion criminal penalty imposed against BP includes
a US$1.256 billion criminal fine, another US$2.4 billion to be paid
to the National Fish and Wildlife Foundation, a US$525 million
payment to the Securities and Exchange Commission and US$350
million to be paid to the National Academy of Sciences.
However, the penalties do not include the billions of dollars
that will be required to defend civil claims currently underway
across the US in separate proceedings. For example, a federal judge
in New Orleans is currently assessing a proposed US$7.8 billion
settlement between BP and more than 100,000 businesses and
individuals harmed by the spill. The penalties BP have agreed to
also do not prevent the US Government from pursuing civil penalties
under relevant legislation.
Additionally, the two highest ranking BP supervisors aboard the
Deepwater Horizon during the explosion have also been charged with
11 felony counts of "seaman's" manslaughter, 11
felony counts of involuntary manslaughter and one violation of the
Clean Water Act.
The charges against Robert Kaluza and Donald Vidrine arise from
their alleged failure to appropriately interpret key safety tests
conducted in the lead up to the explosion. The Department of
Justice claims that the supervisors "observed clear
indications that the Macondo well was not secure and that oil and
gas were flowing into the well. Despite this, BP's well site
leaders chose not to take obvious and appropriate steps to prevent
The two supervisors now face up to 10 years imprisonment on each
"seaman's" manslaughter count, up to eight years
imprisonment on each involuntary manslaughter count, and up to one
year imprisonment for the breach of the Clean Water Act.
In announcing the charges, US Attorney General, Eric Holder
"...I hope that this sends a clear message to those who
would engage in this kind of reckless and wanton conduct, that
there will be a significant penalty to pay. And that individuals in
companies who are engaged in these kinds of activities will
themselves be held responsible. This is simply not a corporate
plea, individuals... have been charged."
A former BP engineer has also faced charges for obstruction of
justice in relation to his role in deleting text messages and other
evidence following the spill.
The indictment of the two BP supervisors coincides with the
increasing focus by prosecutors in Australia on individual managers
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