United States: The State Of Environmental Crime Enforcement: A Survey Of Developments In 2012

Last Updated: April 22 2013
Article by Steve Solow and Anne M. Carpenter

The authors1 of this article, in their latest annual review of environmental crime enforcement, look at the prosecution of the Deepwater Horizon oil rig explosion and spill, which resulted in a guilty plea in 2012 by BP Exploration and Production Inc. and the largest environmental penalty in U.S. history. The authors also discuss the importance of corporate Compliance and Ethics programs, the government's ability to assess the adequacy of those programs, and the lessons federal agencies can learn if they tap into their own enforcement experience as they develop regulatory programs.

DEEPWATER HORIZON UPDATE

The Criminal Plea

On November 15, 2012, the U.S. Department of Justice (DOJ) announced that BP Exploration and Production Inc. had agreed to plead guilty to felony manslaughter charges, obstruction of Congress, and misdemeanor environmental violations for the Company's role in the Deepwater Horizon blowout. Similar to other criminal environmental cases, the charges in the plea focus on both the incident itself, as well as the company's response to the government's investigation into the cause of the incident and extent of the incident's harm.2 Specifically, the company pleaded to 11 felony counts of seaman's manslaughter under 18 U.S.C. § 1115, one felony count of obstruction of Congress under 18 U.S.C. § 1505, one misdemeanor count of negligent discharge under the Clean Water Act, 33 U.S.C. §§ 1319(c)(1)(A) & 1321(b)(3), and one misdemeanor count for violation of the Migratory Bird Treaty Act (MBTA), 16 U.S.C. §§ 703 & 707(a).3 The plea imposes an historic $4 billion in fines and penalties and includes extensive conditions for the five year probation term including the retention of three external monitors, as discussed in more detail below.4

The charges in the plea, and BP's liability, are founded on the alleged actions of three BP employees during and in response to the incident, as discussed in more detail below. The manslaughter, Clean Water Act, and MBTA charges are premised on the actions of Robert Kaluza and Donald Vidrine, BP's well site leaders. Kaluza and Vidrine were indicted in November 2012 on 11 counts of seaman's manslaughter, 11 counts of involuntary manslaughter under 18 U.S.C. § 1112, and one count of negligent discharge in violation of the Clean Water Act for the men's alleged negligence during their supervision of the well's negative pressure test.5 The obstruction charge is premised on the actions of David Rainey, BP's vice president of exploration in the Gulf of Mexico, who was indicted in November 2012 for one felony count of obstruction of Congress and one count of felony false statements relating to his alleged misstatements regarding oil flow rate estimates for the Macondo well.6

The U.S. District Court of the Eastern District of Louisiana accepted the plea on Jan. 29, finding that the plea's charges reasonably reflected the severity of the offense, that the terms of the probation were designed to prevent BP from returning to ''business as usual'' through oversight of BP's compliance with the plea terms and the law, and that the monetary penalty dwarfed all others imposed in the history of the United States.7 Of the $4 billion in fines and penalties imposed by the plea, $1.15 billion is a Clean Water Act fine that must be paid to the Oil Spill Liability Trust Fund and $100 million is an MBTA fine that must be used to carry out wetlands conservation and restoration projects in the Gulf Coast or otherwise benefit migratory bird habitat.8 Of the remaining fines, $2.394 billion will be apportioned by the National Fish and Wildlife Foundation (NFWF) to the affected Gulf Coast states to remedy and eliminate harm to the natural resources caused by the spill, and $350 million will go to the National Academy of Sciences to conduct oil spill response projects designed to remedy harm from the Macondo spill and prevention projects to reduce the risk of future harm.9

The Terms of BP's Probation

The extensive terms of BP's five year probation are also unprecedented in scope. Under the plea, BP must retain three external monitors, create internal monitoring centers, undertake process evaluations and improvements, enhance transparency and reporting measures, institute additional employee training, and devise technology improvement projects. A process safety monitor must be retained by BP to review, evaluate and provide recommendations for the improvement of BP's process safety and risk management procedures, including a major hazard risk review of deepwater drilling-related process safety barriers and mitigations.10 An ethics monitor must be retained to review and provide recommendations for the improvement of BP's Code of Conduct and the company's implementation and enforcement of the code in order to prevent future criminal and ethical violations with respect to interactions with regulatory and enforcement authorities.11 Finally, an independent auditor must be retained to review and report on the terms of BP's compliance with the terms of the probation.12 All three monitors will provide their findings to the government.13

BP must also create a real-time monitoring center for its drilling operations at either its Houston office or another location. The center must monitor well control data for all BP owned or contracted rigs with a subsea blowout preventer (BOP).14 BP must also create a new crisis management organization, including two crisis management centers employing at least six crisis management professionals to assist in oil spill response training and drills.15 Further, BP must maintain a safety organization that has the authority to intervene or stop any operation that it deems unsafe.16

The company must conduct Safety and Environmental Management System (SEMS) Audits, per 30 C.F.R. Part 250, for all of its contracted rigs and platforms, and must require that all its rig contractors join the Center for Offshore Safety, which requires its members to conduct SEMs audits.17 Each time BP, or one of its contractors installs a BOP, a third party must verify that all testing and maintenance of the BOP was performed per the manufacturer's recommendations and the American Petroleum Institute's (API) Recommended Practice 53.18 Moreover, all cement designs used by BP for the primary cementing of casing and hydrocarbon bearing zones in deepwater well operations must be reviewed by BP subject matter experts and provided to the Bureau of Safety and Environmental Enforcement (BSEE) within a reasonable time period.19 Cement slurries must be lab tested and the tests must be witnessed by a BP engineer competent to evaluate the testing or by a competent third party that is independent of the cement provider.20

BP must revise its Oil Spill Response Plan to include provisions regarding maintenance of a supply of dispersant and fire boom for use during an uncontrolled long-term blowout, contingencies for maintaining an ongoing response to such a blowout, measures and equipment necessary to recover discharge on the water's surface, information regarding remote sensing technology to detect oil spills and track oil slicks, communication systems between response vessels and spotter personnel, a shoreline protection strategy, and source abatement and control plans for blowouts.21

The Company must develop a control competency assessment plan for its personnel with oversight of deepwater drilling operations, which must include competency requirements for the recognition, response and remediation of well control events, specified training for those competencies, and corrective actions for personnel that do not identify those competencies.22 Additionally, the Company must create a public website that provides lessons learned, annual progress reports on compliance with the terms of its probation, and annual summaries of any recordable safety incidents, days away from work, and hydrocarbon spills.23

Finally, the Company must undertake two pilot projects to improve operational safety in deepwater drilling and two pilot projects to enhance technology in of the following three areas: (1) BOP functionality, intervention, testing and activation, (2) well design, or (3) real-time monitoring of drilling operations.24

The Basis for the Plea: Involuntary Manslaughter Charges

The manslaughter charges in BP's plea are founded on the Company's statement that Kaluza's and Vidrine's supervision of the negative test on the Macondo well and their alleged failure to alert the rig's engineers of instability indications were breaches of the applicable duty of care and were the proximate cause of the deaths of 11 men and the pollution that resulted from the blowout.25 BP's plea, however, in no way binds the individuals in their separate criminal cases. The three defendants remain innocent until proven guilty, and the burden of proof to demonstrate their guilt lies with the government.

The manslaughter charges facing the individual defendants stem from two separate statutory provisions with differing standards of liability. Seaman's manslaughter under 18 U.S.C. § 1115 requires a lower degree of negligence to support a conviction than the involuntary manslaughter under 18 U.S.C. § 1112, which incorporates elements of common law manslaughter, and requires ''criminally negligent'' conduct involving a gross deviation from the standard of care that a reasonable person would exercise under the circumstances.''26 Under the Seaman's Manslaughter Act, 18 U.S.C. § 1115, however, a person employed on a vessel is criminally liable for ''misconduct, negligence or inattention'' to duty that causes the death of another. Courts have found that only ordinary negligence, not a heightened mens rea, is required to sustain a conviction under the plain language of Section 1115.27

Therefore, to prove the 11 counts of seaman's manslaughter, each of which carries a maximum sentence of 10 years in prison, the government faces a relatively low burden of proof of intent. The government, however, must still establish the defendants breached a required duty and this duty was the proximate cause of the deaths of the 11 men. In its indictment of Kaluza and Vidrine, the government alleges that the men, as BP's Well Site Leaders, had ''a duty to maintain well control at all times'' which included ensuring the ''negative testing [on the well] was conducted in accordance with the standard of care applicable in the deepwater oil exploration industry.''28 According to the government, Kaluza and Vidrine allegedly breached this standard, triggering the blowout that led to death of the 11 men, by failing to phone on-shore engineers to advise them of issues identified during the negative pressure test, failing to adequately account for abnormal readings during the test, by accepting an allegedly ''nonsensical explanation'' for the abnormal readings, and by failing to adequately investigate the abnormal readings and determining the negative test was a success.29

The government's core claim of liability relates to the negative pressure test, thus, they must prove, beyond a reasonable doubt, that the defendants breached the relevant standard of care for performing the negative pressure test. Notably, the National Commission report regarding the disaster indicates ''there was no standard procedure for running or interpreting the [negative pressure] test in either [Minerals Management Service] regulations or written industry protocols'' and the ''regulations and standards did not require BP to run a negative-pressure test at all.''30 Further, BP ''had no internal procedures for running or interpreting negativepressure tests, and had not formally trained their personnel on how to do so.''31 Even if the government is able to prove a breach of an applicable standard of care, causation must also be shown.32 As noted in last year's article, the defendants may argue that the causation between their specific conduct and the rig explosion is too attenuated to establish criminal liability, given the warring theories regarding the behavior of the safety barriers and hydrocarbons in the well and the effect of the multiple independent and intervening actions conducted by the well partners.33

The Basis for the Plea: Clean Water Act and MBTA Charges

Under the Clean Water Act, an entity may be held liable for either a knowing (felony) or negligent (misdemeanor) violation for the unpermitted discharge of oil in connection with activities under the Outer Continental Shelf Lands Act (e.g., offshore oil drilling). See 33 U.S.C. §§ 1319(c)(l)(A) & 1321(b)(3). As expected in this case, and as in most oil spill cases, only negligent charges were brought because it is clear that neither the company, nor a particular individual, intended for the spill to occur.

As noted above, with regard to prosecution of the individuals, the government must actually prove, beyond a reasonable doubt that the defendants deviated from a required standard of care and that this deviation was the cause of the discharge. The legal standard applied in such cases is ''simple negligence,'' or the failure to exercise the appropriate degree of care.34 In last year's article, the authors explained that while the majority standard for a negligent discharge was ordinary negligence, there was ''still no controlling precedent in the Fifth Circuit addressing whether an ordinary or gross negligence standard applies in criminal CWA proceedings.''35 However, in May of 2012, the Fifth Circuit spoke directly to the issue and found that the appropriate standard is ordinary negligence.36 Even with the lower standard of liability, the government still faces obstacles, similar to those described above, with regard to establishing an appropriate duty of care37 and proximate causation.

The MBTA charges, however, are strict liability violations that do not require a showing of intent. To establish a misdemeanor violation of the MBTA, the government need only prove that migratory birds were harmed or killed, regardless of what the defendant intended or knew. MBTA charges are absent from the individual indictments, but the BP plea notes that the Kaluza's and Vidrine's alleged negligent discharges of oil, attributable to BP, caused the deaths of migratory birds, including Brown Pelicans, Laughing Gulls, Northern Gannets, and other protected species.38

The Basis for the Plea: Obstruction of Congress Charge

The charges for obstruction of Congress in the BP plea are premised on the actions of David Rainey, who allegedly provided false and inaccurate spill estimates to Congress.39 According to the plea, Rainey withheld information and documents relating to multiple internal estimates of the flow-rate from the Macondo well that showed flow rates higher than the disclosed 5,000 barrels of oil per day (BOPD), including as high as 96,000 BOPD.40 Moreover, Rainey allegedly falsely represented that the flow-rate estimates were the product of the generally accepted ASTM methodology, even though the estimates were allegedly the product of a methodology devised by Rainey using a Wikipedia entry about oil spill estimation.41 Additionally, Rainey allegedly inserted language in a May 24, 2010 letter to Rep. Edward Markey (D-Mass.) stating that an increase in BP's worst case discharge estimate from 60,000 BOPD to 100,000 BOPD was based on new pressure data, even though Rainey allegedly learned of the worst case estimate on April 21, 2010.42

In its enforcement of Rainey, the government must prove, beyond a reasonable doubt, that Rainey's obstruction was intentional. To rebut this standard, it is likely that the defense will argue Rainey actually possessed a good faith mistaken belief that the well was discharging only 5,000 BOPD when in fact it was discharging much more.

The Suspension and Debarment of BP

On Nov. 28, 2012, BP was suspended from contracting with the federal government, which means that the company will not be able to enter into new federal contracts and will not be able to obtain new leases to drill on federal lands. The suspension, which temporarily excludes BP from federal contracting pending completion of an investigation or legal proceeding was based on the Company's ''lack of business integrity'' as evidenced by the conduct underlying BP's criminal plea.43

The suspension does not impact existing contracts and may be lifted upon showing of ''present responsibility.''44

However, on Jan. 29, once the court accepted BP's plea and the company's conviction was final, the federal government became statutorily obligated under the Clean Water Act to exclude the company from any federal contracting.45 Under 33 U.S.C. § 1368(a), federal agencies ''may not enter into any contract with any person, who has been convicted under Section 1319(c)'' until the Environmental Protection Agency ''certifies that the condition giving rise to such conviction has been corrected'' and the defendant is ''presently responsible.''46 As part of the suspension and debarment process, the government often requires external monitors to track and report on the progression of a suspended or debarred party's ''present responsibility.'' To account for this possibility, the BP plea explains that the ethics monitor, required under the terms of BP's probation, may (upon petition to DOJ) be replaced by, or have its duties combined with that of, a suspension and debarment monitor.47

Remaining Issues in the Deepwater Horizon Criminal Investigation

The criminal investigation into the Deepwater Horizon disaster did not end with BP's plea and conviction. The government continues to investigate other rig partners that played a role including Halliburton Energy Services Inc., the well's cement provider, and Andarko Petroleum Corp., which shared a lesser working interest in the Macondo well with BP. The government may also seek to bring negligent Clean Water Act violations against these companies based on their actions leading up to the blowout.

On Jan. 3, DOJ announced that Transocean, the owner of the Deepwater Horizon rig, agreed to plead guilty to negligently violating the Clean Water Act for its role in the blowout of the Macondo well.48 The plea was accepted by the U.S. District Court for the Eastern District of Louisiana on Feb. 14.49 The plea imposes the second largest criminal monetary penalty for violation of the Clean Water Act, totaling $400 million.50

According to the government, Transocean, along with BP, had a duty to maintain well control, which included the responsibility to conduct safe drilling and rig operations, to ensure the safety of personnel onboard the rig and to prevent accidents that could impact the environment.51 As part of this duty, according to the government, Transocean personnel were required to take appropriate action during the negative test in accordance with the applicable standard of care in the deepwater oil exploration industry.52 As in the BP plea, the Transocean plea states that Transocean and BP personnel observed abnormal pressures during the negative test, but deemed the test successful despite these abnormalities and did not adequately investigate the source of the abnormal pressures.53 Following the negative test, at BP's instruction, Transocean displaced the heavier drilling mud in the well with lighter seawater, which allegedly underbalanced the well and allowed hydrocarbons to migrate up the wellbore leading to the blowout.54 Unlike BP, Transocean neither named nor implicated specific individuals in the overview of Transocean's actions proceeding the blowout in its plea.

Under the terms of the plea, $150 million of the $400 million penalty must be paid to the National Fish and Wildlife Foundation for the acquisition, restoration, preservation, and conservation of the marine and coastal environments, ecosystems and bird and wildlife habitat harmed by the Deepwater Horizon spill.55 An additional $150 million of the penalty will be paid to the National Academy of Sciences to fund improved oil spill prevention and response efforts in the Gulf through research, development, education and training.56 Finally, Transocean was sentenced to five years of probation, under which the Company is required not commit another federal, state, or local crime, notify its probation officer of any pending criminal prosecutions, and provide its probation officer full access to all of the Company's business operating locations.57

Separately, the civil trial regarding the Deepwater disaster began on Feb. 25 and is moving forward without any public indications of further settlement discussions between the parties. Transocean settled its civil claims with the government on Jan. 3 in conjunction with the company's criminal plea, for a $1 billion civil penalty.58 In October 2011, Anadarko settled with BP to resolve private liability for plaintiff compensation claims. Under that settlement, Anadarko paid BP $4 billion and transferred its stake in the Macondo well back to BP in exchange for BP's indemnification of Anadarko for any private torts claims arising from the disaster.59

Post-Deepwater: New BSEE Regulations For Offshore Drilling

In August 2012, the BSEE announced final rules providing prescriptive deepwater drilling safety requirements.60 These rules were provisionally implemented soon after the Deepwater Horizon blowout under an emergency rule-making process and established new standards for integrity testing of well casing and cement, third-party certification and verification requirements, BOP specifications and testing, and standards for specific well control training.61 The interim rule also incorporated by reference detailed voluntary standards promulgated by API. The final rule addresses the requirements for compliance with these API documents, enhances the description and classification of well-control barriers, defines testing requirements for cement, clarifies requirements for installation of dual mechanical barriers, and extending BOP requirements to well-completions, workovers, and decommissioning operations.62

Another requirement of the BSEE regulations promulgated in the wake of the Deepwater Horizon disaster is the implementation of Safety and Environmental Management Systems by regulated entities. SEMs audits are specifically required in the BP plea, as described above, per 30 C.F.R. Part 250.63 According to BSEE, SEMS are a nontraditional, performance-focused tool for integrating and managing offshore operations.64 BSEE explains that SEMS focus attention on the influences that human error and poor organization have on accidents, require continuous improvement in offshore safety and environmental records, encourage the use of performance-based operating practices, and promote the public interests of offshore worker safety and environmental protection.65 The SEMS rules require that regulated parties implement the practices in API's Recommended Practice 75, which outlines development of the program for offshore operations.66

According to Frank Friedman, a widely regarded consultant on environmental and safety compliance programs and the author of the Practical Guide to Environmental Management,67 the new BSEE SMES rules are akin to the OSHA Process Safety rules, which established a regulatory framework for process safety in hazardous chemical operations. Friedman explained that the:

SEMS rules establish, in even greater detail, the basis for control of process hazards related to off-shore development. In many ways these are ''best practices'' that go beyond just offshore operations, such as management of change, preventive and predictive maintenance and appropriate management of same. The rules include mandatory implementation of management systems and hazard analysis of all Outer Continental Shelf (''OCS'') facilities. The rules also require mandatory evaluation of contractors. By establishing such specific requirements, a greater compliance burden is placed on the OCS operator. In the past, an operator might argue that governing regulations were vague and the best practices were not clear.

With these specific and detailed regulations and extensive requirements, such a defense is limited and increases the potential for criminal prosecution.68

Thus, in the coming years, the more prescriptive and voluminous regulatory environment that now blankets offshore drilling may well create a new focus area for criminal environmental enforcement.

Ultimately, as industry operations move forward under this new regulatory regime, and the legal liabilities for the disaster are determined, what will the Deepwater case mean for future environmental criminal enforcement. Considered below are a series of issues related to the Deepwater case that go beyond the government's enforcement under federal law, including how this and other criminal enforcement cases can illuminate failures or weaknesses that are not just in the regulated community, but in regulatory programs themselves.

To read this article in full, please click here.

Originally published in Bloomberg BNA's Daily Environment Report, March 15, 2013

Footnotes

1 The authors would like to thank Katie Noble, Paralegal, Katten Muchin Rosenman LLP, for her assistance in researching the environmental criminal cases indicted or disposed in 2012.

2 See U.S. Dep't of Justice, Press Release, BP Exploration and Production Inc. Agrees to Plead Guilty to Felony Manslaughter, Environmental Crimes and Obstruction of Congress Surrounding Deepwater Horizon Incident (Nov. 15, 2012). See also 221 DEN A-1, 11/16/12.

3 BP Plea ¶ 1.

4 Id. ¶ 4.

5 See BP Plea, Exhibit A; Kaluza & Vidrine Indictment ¶¶ 25-68.

6 See BP Plea, Exhibit A.

7 See Reasons For Accepting Plea Agreement, United States v. BP Exploration and Production Inc., No. 2:12-cr- 00292-SSV-DEK, at 6, 11, 18 (E.D. La. Jan. 30, 2013). See also 20 DEN A-10, 1/30/13.

8 See BP Plea ¶ 4.

9 See BP Plea, Exhibit B ¶¶ 34-37.

10 See BP Plea, Exhibit B ¶ 1.a.

11 Id. ¶ 1.b.

12 Id. ¶ 26.

13 Id. ¶¶ 4, 26.

14 Id. ¶ 12.

15 Id. ¶ 15.

16 Id. ¶ 25.

17 Id. ¶¶ 5-6.

18 Id. ¶ 9.

19 Id. ¶ 11.

20 Id.

21 Id. ¶ 20.

22 Id. ¶ 10.

23 Id. ¶ 23.

24 Id. ¶¶ 21, 22.

25 BP Plea, Exhibit A.

26 See U.S. Sentencing Guidelines Manual § 2A1.4 (2012).

27 United States v. O'Keefe, 426 F.3d 274, 278-79 (5th Cir. 2005) (affirming the lower court finding that ''Congress did not intend that proof of negligence or heat of passion would be required for a conviction under § 1115''). See also United States v. Schroder, 2006 WL 1663662, at *2 (S.D. Ala. 2006) (citing the O'Keefe decision for the proposition that § 1115 requires only ordinary negligence for liability); United States v. Pruett, 681 F.3d 232, 242-43 (5th Cir. 2012) (same).

28 Kaluza & Vidrine Indictment ¶ 16.

29 Id. ¶¶ 17-24.

30 NAT'L COMM'N ON THE BP DEEPWATER HORIZON OIL SPILL & OFFSHORE DRILLING, REPORT TO THE PRESIDENT: DEEP WATER, THE GULF OIL DISASTER AND THE FUTURE OF OFFSHORE DRILLING at 119 (Jan. 2011).

31 Id.But see Van Schaick v. United States, 159 F. 847, 850-51 (2d Cir. 1908) (finding that, in a prosecution of a captain of a vessel for manslaughter, based on negligence, misconduct, and inattention to duty, it was no defense that government inspectors had failed in their duty to properly inspect the vessel and its safety appliances, and had wrongfully issued a certificate of inspection).

32 The government merely states in the indictment that the ''negligent and grossly-negligent conduct of defendants Kaluza and Vidrine proximately caused the deaths'' of 11 men and the ''discharge of large and harmful quantities of oil into the Gulf of Mexico.'' See Kaluza & Vidrine Indictment ¶¶ 23- 24.

33 See generally Nat'l Acad., Interim Report On Causes Of The Deepwater Horizon Oil Rig Blowout And Ways To Prevent Such Events, at 14-16 (2010) (management decisions vacillated between individuals and combinations of various companies and personnel changes occurred just prior to sensitive procedures).

34 United States v. Hanousek, 176 F.3d 1116 (9th Cir. 1999) (conviction of railroad project supervisor under § 1319(c)(1)(A) where he failed to cover an oil pipeline near a project site with protective materials and one of his workers accidentally ruptured the pipeline with a backhoe, causing oil to spill into a nearby river); see also United States v. Ortiz, 427 F.3d 1278, 1283 (10th Cir. 2005) (''[A]n individual violates [the negligent discharge provision] of the CWA by failing to exercise the degree of care that someone of ordinary prudence would have exercised in the same circumstance.'').

35 See United States v. Pruett, 2011 WL 2894631 (W.D. L.A. July 15, 2011), at *5-6.

36 United States v. Pruett, 681 F.3d 232, 242-43 (5th Cir. 2012) (citing United States v. Hanousek, 176 F.3d 1116 (9th Cir.1999); United States v. Ortiz, 427 F.3d 1278, 1283 (10th Cir.2005)).

37 See Nat'l Acad., Interim Report On Causes Of The Deepwater Horizon Oil Rig Blowout And Ways To Prevent Such Events, at 15 (2010) (''standards for education, training, and professional certification of private-sector decision-making personnel involved in drilling operations are relatively minimal compared with other safety-critical industries'').

38 See BP Plea, Exhibit A.

39 A BP Drilling and Completion Engineer, Kurt Mix, was separately indicted on two counts of obstruction of justice in May 2012 for the alleged deletion of text messages relating to post-spill flow rate assessments. See United States v. Mix, No. 2:12-cr-00171-SRD-SS (E.D. La. indictment entered May 2, 2012).

40 Id.

41 Id.

42 Id.

43 2 C.F.R. §§ 180.700(b) (''the suspending official may impose suspension only when that official determines that . . . [t]here exists adequate evidence to suspect any other cause for debarment listed under § 180.800(b) through (d)'') , 180.800(d) (''A Federal agency may debar a person for . . . [any] cause of so serious or compelling a nature that it affects your present responsibility.'')

44 EPA has outlined a number of factors to be considered in determining present responsibility, including whether a company maintains a corporate environmental compliance program, has in place a hotline program and a central point of contact for environmental compliance, conducts and documents environmental training, and uses independent auditors for compliance assessments. See U.S. Env. Prot. Agency, Items for Consideration When Evaluating Contest Submissions, available at www.epa.gov/ogd/sdd/info.htm.

45 33 U.S.C. § 1368(a). Moreover, once BP's conviction was accepted by the court, the government, under 2 C.F.R. § 180.700(d), was granted the discretion to debar BP (in addition to the required statutory exclusion). A debarment institutes the exclusion for a set period of time and is a final determination that a person is ''not presently responsible.'' See also 2 C.F.R. § 180.605.

46 Id.

47 BP Plea, Exhibit B ¶ 1.b. 48 See U.S. Dep't of Justice, Press Release, Transocean Agrees to Plead Guilty to Environmental Crime and Enter Civil Settlement to Resolve U.S. Clean Water Act Penalty Claims from Deepwater Horizon Incident (Jan. 3, 2013). See also 03 DEN A-11, 1/4/13.

49 See id.. See also 32 DEN A-14, 2/15/13.

50 Transocean Plea ¶ 4(a).

51 Transocean Plea, Exhibit A ¶ 3.

52 Id. ¶ 9.

53 Id. ¶ 11.

54 Id. ¶¶ 11-13.

55 Transocean Plea, Order ¶ 2.

56 Transocean Plea, Exhibit B1.

57 Transocean Plea ¶ 4(c).

58 See Partial Consent Decree Between The Plaintiff United States Of America And Defendants Triton Asset Leasing Gmbh, Transocean Holdings LLC, Transocean Offshore Deepwater Drilling Inc., And Transocean Deepwater Inc., In re Oil Spill by the Oil Rig Deepwater Horizon, No. 2:10-md-02179- CJB-SS, at 9 (E.D. La. Jan. 3, 2013).

59 See Julia Werdigier, Ending Dispute, Well Partner Settles With BP for $4 Billion, N.Y. TIMES, Oct. 17, 2011, available at http://www.nytimes.com/2011/10/18/business/bp-recovers-4-billion-from-anadarko-for-gulf-spill.html. See also 201 DEN A-4, 10/18/11.

60 See Final Rule, Oil and Gas and Sulphur Operations on the Outer Continental Shelf—Increased Safety Measures for Energy Development on the Outer Continental Shelf, 77 Fed. Reg. 50856 (Aug. 22, 2012). See also 158 DEN A-11, 8/16/12.)

61 See Interim Final Rule, Increased Safety Measures for Energy Development on the Outer Continental Shelf, 75 Fed. Reg. 63346 (Oct. 14, 2010).

62 Id.

63 See Final Rule, Oil and Gas and Sulphur Operations in the Outer Continental Shelf—Safety and Environmental Management Systems, 75 Fed. Reg. 63610 (Oct. 15, 2010).

64 See U.S. Bureau of Safety & Envtl. Enforcement, Safety and Environmental Management Systems - SEMS, available at http://www.bsee.gov/Regulations-and-Guidance/Recently-Finalized-Rules/SEMS/index.aspx.

65 Id.

66 See 75 Fed. Reg. 63610, 63649.

67 FRANK B. FRIEDMAN, PRACTICAL GUIDE TO ENVIRONMENTAL MANAGEMENT (11th ed. 2012).

68 Email Interview with Frank B. Friedman, Frank B. Friedman & Associates, LLC, EHS & Risk Management Consulting (Feb. 23. 2013).

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions