Union Carbide and Bhopal
Within 72 hours of the toxic gas leak from Union Carbide’s factory in Bhopal, India, thousands had died and, to date, in excess of 25,000 people have prematurely perished. Water, contaminated with toxic chemicals recklessly dumped by the same factory, continues to poison thousands of families living in the area.
A $470m dollar settlement of a civil case was made in 1989 giving the victims just a few hundred dollars each but there was no provision for a clean-up of the toxic mess.
In 1991, Warren Anderson, Union Carbide’s CEO at the time of the disaster, was charged with ‘culpable homicide not amounting to murder’; Union Carbide Corporation itself was also charged with culpable homicide, a criminal indictment whose penalty has no upper limit.
These charges have never been resolved, as Union Carbide, like its former CEO, has refused to appear and face trial in India. Mr. Anderson died, a few months before the disaster’s 30th anniversary, having lived a long, comfortable retirement of luxury in the Hamptons.
Dow Chemical, Carbide’s current owner, refuses to present carbide to the Indian courts and, under a Mutual Legal Assistance Treaty, India sent 4 notices to the US Dept. of Justice to summon Dow to explain UCC’s whereabouts. The DoJ has ignored or obstructed every notice.
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BP and Deepwater Horizon
On 15 December 2010, The United States Department of Justice filed a civil and criminal suit against BP for violations under the Clean Water Act in response to the Deepwater Horizin oil spill in the Gulf of Mexico.
The case was consolidated with about 200 others, including those brought by state governments, individuals, and companies. The Justice Department sought the stiffest fines possible, and said it would seek to prove that that BP “was grossly negligent and engaged in willful misconduct in causing the oil spill.”
The case was carefully watched, because a ruling of gross negligence would result in a four-fold increase in Clean Water Act penalties, and would leave the company liable for punitive damages for private claims.
On August 31, 2012, the US Department of Justice (DOJ) filed papers blaming BP PLC for the Gulf oil spill, describing the spill as an example of “gross negligence and wilful misconduct” The government cited “a culture of corporate recklessness” in their investigation of the events leading up to the blow out.
The DOJ also refused to accept BP’s assertion that the Gulf’s ecosystem has gone through a robust recovery and that the clean-up is largely complete, claiming that there is far more damage than meets the eye and further clean-up may be necessary.
The Justice Department also filed criminal charges against BP employees. Two employees were indicted on manslaughter charges for acting negligently in their supervision of key safety tests.(9) Two employees were charged with obstruction of justice and for lying to federal investigators.(7,10,11) Attorney General Eric Holder said that the criminal investigation is not yet over and that more company officials could be charged. (7,8)
In addition, the U.S. government temporarily banned BP from new federal contracts over its “lack of business integrity”
Gross Negligence Ruling
On 4 September 2014, U.S. District Judge Carl Barbier ruled in the Clean Water Act trial that BP was guilty of gross negligence and wilful misconduct. Under the act fines can be based on a cost per barrel of up to $4,300, at the discretion of the judge.
The ruling meant that BP, which had already spent more than $28 billion on clean-up costs and damage claims would be liable for further damages. The potential fine for the spill under the act is $1,100 to $4,300 a barrel spilled, meaning a fine of up to $21 billion.(8)
BP Guilty Plea & Claims Settlement
On March 2, 2012, BP agreed to settle roughly 100,000 claims filled by individuals and businesses affected by the spill.(1,2) The deal had no specific cap and BP estimated that it would pay approximately $7.8 billion.(3)
On November 14, 2012, BP and the US Department of Justice reached a settlement under which BP agreed to pay $4.5 billion in fines and other penalties, the largest of its kind in US history. BP also agreed to plead guilty to 14 criminal charges related to the rig explosion two years ago that killed 11 people .(7,8)
BP said that before the announced payments, it had spent more than $14 billion on operational response and clean-up costs and $1 billion on early restoration projects, and paid out more than $9 billion to individuals, businesses and government entities.
On January 13, 2013, Judge Barbier approved a medical-benefits settlement. People living for at least 60 days along oil-impacted shores, or involved in the clean-up who can document one or more specific health conditions caused by the oil or dispersants, are eligible for benefits, as are those injured during clean-up.(4)
By December 2013, BP had paid nearly $13 billion in claims to businesses, individuals and the government. Not included in the settlement are claims by US states and federal fines.(1)
BP also agreed to spend $105 million over five years to set up a Gulf Coast health outreach program and pay for medical examinations.(5)
In January 2014, a panel of the U.S. Fifth Circuit Court of Appeals rejected an effort by BP to curb payment of what it described as “fictitious” and “absurd” claims to a settlement fund for businesses and persons affected by the oil spill. BP said administration of the 2012 settlement was marred by the fact that people without actual damages could file a claim.
On 2 July 2015, BP and five states announced an $18.5 billion settlement to be used for Clean Water Act penalties and various claims.(6)
On 5 October 2015 it was revealed that BP would be paying a higher civil settlement of $20.8bn which officials attributed to additional refinements of penalties and amounts that BP had already paid. The deal is the largest ever reached by the Department of Justice with a single entity and resolves what could have been years of legal wrangling.
The final settlement includes:
- $1.256 billion in criminal fines.
- $2.394 billion to the National Fish and Wildlife Foundation, for remediation efforts.
- $1.15 billion to the Oil Spill Liability Trust Fund.
- $350 million to the National Academy of Sciences for oil spill prevention and response research.
- $100 million to the North America Wetland Conservation Fund, $6 million to General Treasury and $525 million to the Securities and Exchange Commission to settle civil charges by the Securities and Exchange Commission that it misled investors about the flow rate of oil from the well.
- $18.5 billion settlement to be used for Clean Water Act penalties within the $20.8bn dmages.(8)
- .(8,12) BP still faces fines under the Natural Resources Damage Assessment and pay-outs to impacted states.
Given the $28 billion for clean-up costs and damage claims paid ahead of the settlement then the overall bill presented to BP for the Deepwater Horizon disaster would appear to be close to $50bn.
- Fahey, Jonathan; Kahn, Chris (3 March 2012). “BP begins to put spill behind it with settlement”. Boston.com. The Associated Press. Retrieved 18 January 2014
- Schwartz, John (3 March 2012). “Accord Reached Settling Lawsuit Over BP Oil Spill”. The New York Times. Retrieved 20 January 2013.
- “BP, plaintiffs reach billion dollar deal in Gulf oil spill” CNN, March 3, 2012
- Thompson, Richard (11 January 2013). “Federal judge approves BP Gulf oil spill medical settlement”. The Times-Picayune. Retrieved 14 February 2013.
- Kunzelman, Michael (11 January 2013). “BP Seeks Gulf Oil Spill Size Ruling From Judge”. The Huffington Post
- McGill, Kevin (2 July 2015). “Gulf States Reach $18.7B Settlement With BP Over Oil Spill”. ABC News. Associated Press. Retrieved 2 July 2015.
- Waldie, Paul (15 November 2012). “BP turned to Wikipedia to estimate size of spill, U.S. alleges”. The Globe and Mail (Toronto). Archived from the original on 2012-11-16. Retrieved 17 November 2012.
- Krauss, Clifford; Schwartz, John (15 November 2012). “BP Will Plead Guilty and Pay Over $4 Billion”. The New York Times. Retrieved 3 February 2013.
- Goldenberg, Suzanne; Rushe, Dominic (15 November 2012). “BP to pay $4.5bn penalty over Deepwater Horizon disaster”. The Guardian (London). Retrieved 17 November 2012.
- Peralta, Eyder (24 April 2012). “Government Files First Criminal Charges In BP Oil Spill”. NPR. Retrieved 17 November 2012.
- Rudolf, John (24 April 2012). “Kurt Mix, BP Engineer, Faces First Oil Spill Charges”. Huffington Post. Retrieved 17 November 2012.
- Ramseur, Jonathan L.; Hagerty, Curry L. (31 January 2013). Deepwater Horizon Oil Spill: Recent Activities and Ongoing Developments (PDF) (Report). CRS Report for Congress. Congressional Research Service. R42942. Retrieved 13 February 2013.