Monday, May 31, 2010

Potential Civil Fine of $4,300 Per Barrel in BP Spill

A U.S. Clean Water Act regulation (Federal Register/Vol. 69, No. 30/Friday, February 13, 2004/Rules and Regulations page 7125 - TABLE 1 OF SECTION 19.4.—CIVIL MONETARY PENALTY INFLATION ADJUSTMENTS/U.S. Code Citation 33 U.S.C. 1321(b)(7)(D)-) exposes BP and others to civil fines that are not limited to the $75 million limit on compensation for economic damages. The Act allows the government to seek civil penalties in court for every drop of oil that spills into U.S. navigable waters, including the area of BP's leaking well.

The per-barrel fines could push BP's liability well beyond the cost of cleaning up the spill and paying legitimate claims for economic damages it causes. Cash raised from such fines would be funneled to government pollution funds, which provide economic aid for hazardous material spills. If BP's estimated spill rate of 5,000 barrels per day is accurate, responsible parties could face civil fines of $21.5 million per day, depending on levels of negligence. If the spill rate is 50,000 barrels per day, the civil fines could be $215 million per day. if 100,000 barrels per day, the fines could be up to $430 million per day. (Reuters, 5/26/10)

No comments: