John D. Copeland
BP’s Deepwater Horizon oil spill in the Gulf of Mexico caused the worst environmental damage in U.S. history, damaging thousands of acres of beaches and fragile wetlands, killing large numbers of marine life and devastating the lives and businesses of thousands of Gulf Coast residents.
It also damaged the credibility of those responsible for the spill and its cleanup.
Early mistakes
The Obama administration failed to grasp the magnitude of the Deepwater Horizon oil spill and relied too long on BP to fix the problem.
After calls for help from Gulf state governors and pressure from politicians, the president declared his administration would take control of the problem. To Obama’s credit, he tough-talked BP into setting up a $20 billion fund to pay for damages and appointed attorney Ken Feinberg the fund’s czar.
But the president then harmed the Gulf coast states with inexplicable decisions. The administration refused the offer of cleanup help from other nations. Hundreds of foreign cleanup vessels remained anchored uselessly nearby as the spill spread.
The administration’s biggest blunder was its moratorium on deepwater drilling off the coast, a move it justified based on a report prepared by scientists, who were said to have recommended the moratorium. The scientists involved quickly denied that they made any such recommendation.
With midterm elections at hand, the president seemingly lost interest in the Gulf disaster.
Feinberg’s role
Feinberg seemed a good choice to handle damage claims. He gained a reputation for fairness by successfully managing the Sept. 11 disaster and Virginia Tech shooting victims’ funds.
However, Feinberg’s credibility with Gulf Coast residents and officials took a beating almost immediately. Feinberg seemed unprepared to handle the 336,000 claims filed with his office, which set up a two-tiered system. Claimants could get either six months of emergency payments for lost income without losing their right to sue BP for damages or take a one-time lump sum payment and give up their right to sue.
Claimants felt pressured to take lump-sum payments but found it difficult to determine their losses so quickly. It took months after filing a claim before Feinberg’s office approved or disapproved it, and claimants said they often received only a pittance of what they claimed.
He now must decide what to do about the thousands of claims filed by businesses hurt by bad publicity. For example, the oil spill never reached Florida beaches. Florida business owners claim, however, that negative publicity about the spill kept tourists away and cost them billions in profits.
So far, Feinberg’s office has paid out only $2.1 billion of the $20 billion fund. While he makes up his mind about claims, his law firm collects $850,000 a month in fees for his work.
Deception by BP
BP lost credibility with the public almost immediately. BP repeatedly lied about the extent of oil spewing from its well into the Gulf. Questions remain unanswered about whether BP sacrificed safety for profits in drilling the well.
Its greatest deception was its multimillion-dollar public relations campaign. BP used its employees with ties to the Gulf Coast to promise that BP would cleanup every drop of oil from the spill. It could not keep its promises.
BP, the U.S. Coast Guard and various state agencies of Alabama, Mississippi and Florida quietly signed an agreement that BP needed only to clean the tourist beaches, such as Gulf Shores and Orange Beach, until no visible oil remained. BP left oil beneath the sands untouched. Private beaches and beaches less visited by tourists received scant attention.
On Sept. 19, BP announced on its Web site the end of its Gulf cleanup operations. It closed its hotline for handling complaints and ended its Qualified Community Responder Program that provided jobs for unemployed Gulf coast residents affected by the spill. BP’s promises meant nothing. Litigation over damages caused by BP’s oil spill is just starting and will last for years.
John D. Copeland, J.D., LL.M., Ed.D., is an executive in residence at The Soderquist Center for Leadership and Ethics and a retired professor of business at John Brown University in Arkansas. He’s also a Kallman executive fellow at the Center for Business Ethics at Bentley University in Waltham, Mass. He can be reached at jdcethics@gmail.com.[[In-content Ad]]
