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US Government sues BP





deanhills
Looks as though the US Government is suing BP and BP's partners for billions over the oil well disaster in the Gulf of Mexico. This law suit is in addition to hundreds of other law suits filed by fishing interests, hotel chains, restaurants and even condo owners who say the spill ruined their holidays. The state of Alabama is also suing BP and other firms connected with the disaster.

I wonder how they will be able to compute the damages, as there are so many indirect damages, i.e. restaurants on the East Coast depending of fish catches from the Gulf of Mexico etc. etc., and then of course the cost of accountants who have to do all the financial estimates of the costs. Poor BP! Wonder what is going to be happening to BP's shares? Wonder what the impact of this will be on the UK, as well as UK US relations?
Quote:
The Obama administration has sued BP and several of its partners in the oil well disaster in the Gulf of Mexico, potentially exposing them to billions in legal costs.

The action, filed in a New Orleans court yesterday, accuses them of violating safety regulations, and seeks unlimited damages to cover the costs of cleaning up the oil, the losses suffered by local businesses, and the damage done to the environment. "I've seen the devastation that this oil spill caused throughout the region, to individuals and to families, to communities and to businesses, to coastlines, to wetlands, as well as to wildlife," the attorney general, Eric Holder, told reporters.

Aside from BP, the suit names Trans-ocean, which owned the rig, Anadarko Petroleum and MOEX offshore, which were minority partners in the well, and Lloyd's of London. Halliburton, which has come under intense scrutiny in investigations for the faulty design and construction of the cement seal at the bottom of the well, is not listed in the suit. But Holder said the complaint could be amended at a later date, and that criminal and civil investigations into the oil disaster would continue.

Source: Guardian.co.uk
ocalhoun
deanhills wrote:
Poor BP!

I for one don't feel sorry for them...
The only way to get corporations to act responsibly is to hurt their profits (significantly) when they are irresponsible.

If you don't hit them where it matters* and hit them hard**, then they'll never learn. -They'll just accept your petty fines as a cost of doing business.

*Since the only thing that matters to a corporation is profits and stock prices, these are what you must threaten/harm.
**Since some corporations are so huge, the punishment MUST be significantly higher than the profit they made from committing the crime.
This formula could be a guide:
L = Likelihood of them getting caught, and their crime discovered, a ratio, such as 1/20.
P = The amount of profit they reaped because of committing the crime.
F = The amount of funds that need to be confiscated in order to change the corporation's behavior.

F=P/L

So, if a corporation got $20 million in profit from committing a crime that they had a 1 in 20 chance of being caught at, the fine should be $400 million. (or more)
LittleBlackKitten
I don't think it's a BAD idea, but I don't agree with it.

Perfect example. The house my mom bought in the summer had the sewage piped built at an incline years before they even bought it. It was causing a sewage leak in the land, which was backing up the WHOLE STREET. They ended up having to pay to excavate SIX HOUSES for something they were totally unaware was an issue (the sale was private, inspector doesn't check pipe angled 7 feet down, ect) until it was too late, and the only way to fix it was to wait until the sewage ran dry, then dig it all up, and fix the angle of the pipe.

Now, three home owners sued them on the street, and they lost. Why? Because they were unaware of the problem until it was too late, even though the damage cost the area 2 farms and 6 properties, 4 with gardens, ALL OF THEM had animals, pets, or wildlife. 2 horses died, and 6 cats got sick. The farms lost all crops, and the cows had to be put down because they were eating contaminated grass and couldn't be used at all for human use in any sense. The judge basically said they had no way of knowing of the issue until it was too late, so they cannot be held responsible for the debt incurred, and turned the cases over to the original land owner, who built the house herself.

I think BP has the same scenario. They didn't know about the issue until it was too late - no one could have known the leak was prominent on the list of global disasters, unless they were snorkelling and cheking the damn oil basins regularly, which they weren't....

Its a horrible, nasty disaster that BP has to pay to fix - but suing them isn't okay because they could not have possibly known it was an issue until it was TOO LATE. The US government should sue those responsible for allowing those to be there - the very government itself which allows things like that to be PLACED there in the first place, and the very government that has the code to which they must be designed and placed - maybe BP should sue the US government for improper code and inapropriate oil licensing regulations.
ocalhoun
LittleBlackKitten wrote:

I think BP has the same scenario. They didn't know about the issue until it was too late - no one could have known the leak was prominent on the list of global disasters, unless they were snorkelling and cheking the damn oil basins regularly, which they weren't....

Problem is, they should have known about it, but were negligent.

Their crime is not that the oil leaked, their crime was that they were not being vigilant enough to stop such things.

Taking your example of the sewer pipe... If the house had been inspected, and the inspector was supposed to check the angle of the pipe, but didn't... In that case, the house inspector should be liable.
deanhills
ocalhoun wrote:
LittleBlackKitten wrote:

I think BP has the same scenario. They didn't know about the issue until it was too late - no one could have known the leak was prominent on the list of global disasters, unless they were snorkelling and cheking the damn oil basins regularly, which they weren't....

Problem is, they should have known about it, but were negligent.
What about the Government's responsibility in this matter, as it would appear that the MMS just about rubber stamped BP's permits to drill. In this case it was serious as it was a very deep well. I believe there were legislation in place that had proper checks in place, however that a permit had been issued to BP that exempted it from a detailed environmental review, especially for deep wells. I believe the Minerals Management Service (MMS) of the US Interior Dept. was responsible for overseeing projects in that area and equally to blame. I remember when we had this discussion during the summer, or just after the summer that I had dug up plenty about this. I'm almost certain that lots of that will come out during the trial as well. It is highly irresponsible for any Government to just hand over all trust to an oil drilling company with regard to drilling deep wells like the one that caused all the problems without proper checks and regular inspections that had already been provided for in pre-existing legislation. BP should be penalized, but in my opinion there is lots of culpability on the US Government side as well. And maybe in a way they are trying to divert attention from their own negligence and breaking rules that had already been in place by overly focusing on BP as the perpetrator of it all.

To my mind the State of Louisiana should be suing the US Government for negligence for lack of overseeing of the drilling project and giving BP a drilling permit without careful scrutiny and following the rules.
ocalhoun
deanhills wrote:
What about the Government's responsibility in this matter, as it would appear that the MMS just about rubber stamped BP's permits to drill. In this case it was serious as it was a very deep well. I believe there were legislation in place that had proper checks in place, however that a permit had been issued to BP that exempted it from a detailed environmental review, especially for deep wells. I believe the Minerals Management Service (MMS) of the US Interior Dept. was responsible for overseeing projects in that area and equally to blame.


Yes, there's blame for the government, too. They were supposed to be making sure that BP upheld standards, but they did not.
And you can take it a step further, and say that the parent agency of MMS was to blame for not keeping MMS in check, and so on, until you finally get to the point where you can blame every voter (and eligible non-voter) for not electing politicians who would keep them accountable.

"You can delegate authority, but you can NOT delegate responsibility."
It's a popular saying in the military, and holds true in many situations, including this one.
(That said - every failure at every level needs to be punished, or such things can easily happen again.)
menino
I saw yesterday's news where they mentioned that the guy who was supervising the pipes went out on a break, and it could have been averted, if he was doing his job properly.

But in any case, the whole fault lies with BP, not just one guy, as BP should have put preventive measures and failsafes to ensure that these problems don't happen ever..
Billions for BP isn't enough... they should also Fix the problem now.
deanhills
ocalhoun wrote:
"You can delegate authority, but you can NOT delegate responsibility."
It's a popular saying in the military, and holds true in many situations, including this one.
(That said - every failure at every level needs to be punished, or such things can easily happen again.)
Hopefully in the end it will all work out as both sides will probably get their day in the court, and both sides will probably have some of the most expensive and savvy lawyers money can buy. I'm looking forward to it, as both sides are obviously going to be very thoroughly prepared in opposite to one another, and when two sides are as evenly pitched as that, there is a better chance for truth to come out. Unless they are going to be negotiating with one another in secret to withhold some of the information. As that could probably happen as well.
standready
"I just want my life back!"

menino wrote:
as BP should have put preventive measures and failsafes to ensure that these problems don't happen ever...

My understanding is that BP and others cut corners and did not install or properly install certain failsafe items.
Court proceedings should be very interesting.
deanhills
standready wrote:
"I just want my life back!"

menino wrote:
as BP should have put preventive measures and failsafes to ensure that these problems don't happen ever...

My understanding is that BP and others cut corners and did not install or properly install certain failsafe items.
Court proceedings should be very interesting.
We can put it in another way as well. There was really good legislation in place so that BP would not have cut corners. Yet the Government chose not to implement that legislation. So this is a two-way street. The Government gave its power away and who knows there could have been bribes along the way as well, either directly or indirectly in the form of campaign money or whatever.

Just imagine you have a country, and you allow someone to drill there. You have certain laws to ensure that the drilling should be safe for the country. In fact, just a few years before there had been an enormous disaster, the Exxon Valdez disaster, so you have a proper law in place to check on the drilling. Yet the people you have put in charge of that, i.e. the Minerals Management Services have become lax and decided to look the other way as after all BP are experts and know what they are doing? Do you blame only BP? It was the Government after all that put them in place without following due diligence. Nor checking up on them?
menino
I agree with Deanhills, where the legislation of the country didn't enforce proper failsafes, and also to learn from the Exxon Valdez mistakes.

But it is still the responsibility of the company to enforce those failsafes, knowing what would be the outcome.
I guess these countries that allowed them to drill, were ignorant, and also greedy, while BP was just plain greedy.
deanhills
menino wrote:
I guess these countries that allowed them to drill, were ignorant, and also greedy, while BP was just plain greedy.
I doubt that the US Minerals Management Services can be called ignorant, and I won't put it past them that they could have been greedy either, it will have to be proven of course first, but wonder whether there could have been direct or indirect bribes as well. Or perhaps the MMS was just too lazy to do their jobs or became too complacent with rubberstamping permits for BP. BP is greedy, I think it is in the nature of its business that it should be greedy. But the charges can probably only be made with regard to laws that have been broken. BP should obviously be penalized, but some of the cost will have to be shared by the US Government that should have been much more vigilant.
ocalhoun
Don't just sue and punish the organizations though...
Identify individuals in need of criminal prosecution (both within and outside of government).

It's all about risk/reward... and you must make the risk of doing wrong worse than the reward of doing wrong. This philosophy must be applied both to organizations and to individuals in order to be effective.
deanhills
ocalhoun wrote:
Don't just sue and punish the organizations though...
Identify individuals in need of criminal prosecution (both within and outside of government).
Good point Ocalhoun. Wonder whether those individuals are still around however, as they probably have already been identified and if they are not under the axe, axed already? I can just imagine when BP or the Government is to defend itself saying, yes, "oops" this happened, and this is what we did about it, we really tried our best, but this is not really our responsibility. Twisted Evil
I wonder what kind of agreements would have been signed when people get to work for BP? I'm really looking forward to this court case, and hope it will be open for the public and that the media will be able to report on it, hopefully factually correct. Probably will be a good lesson in what not to do when drilling deep wells, both for the Government and the oil & gas industries, not only equipment and safety wise, but management, administration and responsibility and culpability. Smile
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