It is a severe penalty, but BP's past environmental record and
corporate arrogance on display in the midst of the worst environmental disaster in US history make it appropriate. Even the company's venture partner,
Anadarko, says the
Deepwater Horizon catastrophe was the result of "gross negligence or willful misconduct".
US Person stated before that the US government has the legal means to punish British Petroleum PLC for its reckless behavior. That means is federal contract debarment. A criminal negligence conviction for the Gulf disaster would make the case for discretionary debarment stronger, but a difficult conviction is not necessary for federal officials at the Department of Interior or EPA to prohibit award of future federal contracts to BP. The company already has four strikes against it in ten years--three environmental crimes and a deferred prosecution for manipulating the gas market. The EPA has suspended further discussion with BP regarding disbarment cases in Alaska and Texas until the
Deepwater Horizon disaster has been fully investigated. The Texas case involves the BP refinery explosion at Texas City that killed 15 workers. For that incident the company was fined $62 million, and convicted of a felony violation of the Clean Air Act. BP subsequently spilled 200,000 gallons of crude at its Prudhoe Bay pipeline, the largest spill on Alaska's North Slope. The company was convicted of a misdemeanor violation of the Clean Water Act. Both cases involved disregard for safety and environmental precautions in the interest of increasing profit. In both cases the company received statutory debarments that affected only the facilities involved. In a discretionary disbarment an entire company is prohibited from doing federal business. FAR §9.406-1(b)
The key to discretionary contract debarment is a determination that the company has consistently displayed contempt of the regulatory process and carelessness in its operations that has not be addressed by corrective management action. The information coming from the disaster's aftermath so far shows a company more interested in
making profit than safety,
unprepared for a blowout in deep water, obsessed with
controlling information to reduce potential liabilities, and one willing to take
inappropriate risks in operations where other oil companies would desist. On the other end of the balance is the fact that BP is a huge company that did $4.6 billion in business just supplying the US war machine with petroleum. The company operates 22,000 wells across the US, many on federal lands or waters, that produce 39% of the company's profits. A federal contract disbarment would severely hurt the company's future viability. But is it too severe a penalty for the permanent damage being done to an entire sea? Ask the "small people" who live and work along the Gulf Coast. Their lives will never be the same.
