On October 12th, the U.S. offshore drilling regulator formally issued sanctions against BP and the major contractors involved in the explosion on the Deepwater Horizon rig. Because of the passage of time and a great public relations campaign by BP, many have forgotten that 11 workers were killed and more than 4 million barrels of oil were spilled into the Gulf of Mexico. The newly-formed Bureau of Safety and Environmental Enforcement (BSEE) filed 15 “incidents of noncompliance” (INCs) against the companies. The agency did not release details of how much the companies may face in fines.
Under the law, the companies face fines of up to $35,000 per day, per incident, for the violations. In its final report on the accident issued in September, the Interior Department outlined infractions committed by the companies. BP, owner of the well, received the lion’s share of the sanctions, with seven notices for violations ranging from failure to protect health and property to failing to keep the well under control at all times.
In a first for the Department, BP’s contractors (Transocean, which owned the Deepwater Horizon rig, and Halliburton, which carried out cementing on the well), also face sanctions. These contractors each received four notices of violations, with Transocean accused of failing to properly maintain the rig’s blowout preventer and Halliburton accused of not properly cementing the well.
The three companies will have 60 days in which to appeal the sanctions. The agency will likely impose civil penalties for the notices once the appeal period has ended. Any fines imposed by the drilling agency would be separate from the ongoing lawsuits by the Justice Department against BP and Transocean. Transocean has already said it will appeal its sanctions.
BP, in a typical public relations ploy, said it has taken steps to enhance safety and that the sanctions show that its contractors also played a role in the spill. In a statement, BP said that it will “continue to encourage other parties, including Transocean and Halliburton, to acknowledge their responsibilities in the accident.” As we have reported, BP and its contractors are embroiled in a number of lawsuits blaming each other for the spill.
Traditionally, the Interior Department has only gone after well operators for rule infractions. But after last year’s spill, the Department has asserted that it has authority to regulate contractors. The decision to sanction Transocean and Halliburton reflects the “severity of the incident” and the Department’s commitment to holding all parties accountable. Michael Bromwich, director of BSEE, said in a statement:
The joint investigation clearly revealed the violation of numerous federal regulations designed to protect the integrity of offshore operations; these INCs are the next step in vindicating the regulatory program designed to protect the interests of the public.
Before all of the fall-out resulting from the wrongdoing by BP and others is over, the sanctions imposed by BSEE will pale in comparison to the amounts paid out to the victims, including individuals, business owners, state governments and the federal government.
Source: Claims Journal
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