BP Spill Compensation Battles Rage On

Joseph Keefe
Monday, April 21, 2014

BP pays billions in compensation but some claims still unpaid; Oil still appearing on beaches in Gulf of Mexico. Company says claims process is flawed, not all oil from spill.

Four years after the Deepwater Horizon spill, oil is still washing up on the long sandy beaches of Grand Isle, Louisiana, and some islanders are fed up with hearing from BP that the crisis is over.

Jules Melancon, the last remaining oyster fisherman on an island dotted with colourful houses on stilts, says he has not found a single oyster alive in his leases in the area since the leak and relies on an onshore oyster nursery to make a living.

He and others in the southern U.S. state say compensation has been paid unevenly and lawyers have taken big cuts.

The British oil major has paid out billions of dollars in compensation under a settlement experts say is unprecedented in its breadth.

Some claimants are satisfied, but others are irate that BP is now challenging aspects of the settlement. Its portrayal of the aftermath of the well blowout and explosion of its drilling rig has also caused anger.

"They got an advert on TV saying they fixed the Gulf but I've never been fixed," said Melancon, who was compensated by BP, but deems the sum inadequate.

The oil company has spent over $26 billion on cleaning up, fines and compensation for the disaster, which killed 11 people on the rig and spilled millions of barrels of oil into the Gulf of Mexico for 87 days after the blast on April 20, 2010.

That is more than a third of BP's total revenues for 2013, and the company has allowed for the bill to almost double, while fighting to overturn and delay payments of claims it says have no validity, made after it relinquished control over who got paid in a settlement with plaintiff lawyers in March 2012.

The advertisment that most riled Dean Blanchard, who began what later became the biggest shrimp company in the United States in 1982, was the one first aired by BP on television in late 2011 that said "all beaches and waters are open".(https://www.youtube.com/watch?v=hoOfIR4Vk1o)

At that time almost 50 square miles of water in Louisiana were closed to fishing, according to the state's Department of Wildlife and Fisheries. Seven fishing areas are still closed, three where Blanchard says he would usually get his seafood.

Asked about the discrepancy, BP, which made the cleanup advertisments to help the affected states bring visitors back, said there was no scientific basis for the water closures and that all studies had found that seafood was safe to consume.

PERCEIVED INJUSTICE

Perceived injustice, between those who got payouts and those who did not, has divided the small community on Grand Isle, 50 miles (80 km) south of New Orleans. Within sight of a line of deep sea oil rigs, it was one of the worst-affected areas.

Long streaks of oil marked the sand where a couple of tourists walked barefoot and small tarballs, which environmentalists say contain the most toxic form of oil, had collected on part of the beach when Reuters visited in October to report on the legacy of the spill.

The Gulf Restoration Network, an environmental group which monitors spilt BP oil, says it is still appearing in Grand Isle. The group saw what it called "thousands of tarballs" there on April 9th and collected some of them for testing.

A BP spokesman said only very small quantities of material from the Macondo well were washing up and they did not threaten human health.

Under the settlement, claims for lost income or property damage have been easier for individuals and large businesses than small companies or start-ups without detailed accounts.

"People are really upset here because a lot of people got a lot of money but many people didn't," said waitress Jeanette Smith at Starfish Restaurant, the only eatery in Grand Isle to have managed to stay open seven days a week since the spill.

Melancon said his claim for economic damage was rejected as a lot of transactions were in cash. He was offered more than a million dollars for property damage but says he lost more than six times as much and has so far only received around $400,000 of the compensation money he was allocated.

Some islanders, however, say compensation has been fair.

Terry Pazane, 48, a shrimper on Grand Isle since he was 15, found out in late January that he will be compensated just over $300,000. "You got your paperwork together, they got you paid," he said. "If you can't prove nothing, you don't get nothing."

The oil company said it could not comment on individual claimants but that the Fifth Circuit Court of Appeals in New Orleans had found the settlement scheme was "fair, reasonable, and adequate to all".

BP has maintained, both via the media and the courts, that the settlement has been too generous in some cases.

Along with video images of its clean-up, BP regularly runs full-page advertisments in U.S. newspapers highlighting what it says are flaws in the handling of the settlement it had agreed to avoid having to fight costly individual lawsuits.(https://www.thestateofthegulf.com/bp-advertisements/)

In one, concerning a claim by a shrimp fisherman, BP said a lawyer within the settlement programme, which is responsible for deciding the amount of payouts, took a cut. The office of claims administrator Patrick Juneau declined to comment.

Businesses of all kinds in New Orleans said they suffered from the spill because visitors stayed away due to concerns over the city's signature Gulf seafood, even though the oil that flowed into the ocean near the mouth of the Mississippi did not reach New Orleans itself.

The settlement does not compensate everyone. Just 20 out of over 3,000 claims for failed business have been paid so far, according to the settlement website.(http://www.deepwaterhorizoneconomicsettlement.com/docs/statistics.pdf)

But BP has argued in the New Orleans court that claims administrator Juneau should prove losses were caused by the spill. The court threw out that argument, but the company has asked for its case to be heard again.

Blaine LeCesne, a professor at Loyola University College of Law in New Orleans, said BP's actions were understandable but possibly counter-productive.

The settlement it had agreed to was "more than fair ... virtually assuring that every individual or business affected by the spill may be compensated for their actual losses and beyond", LeCesne said. But he said BP was losing goodwill by retroactively challenging the settlement's validity because of its unanticipated cost.

BP said its "efforts to assure the integrity of the claims process" had been misrepresented and that it continued to be committed to the Gulf while defending its interests "in the face of absurd awards made to claimants whose alleged losses have no apparent connnection to the spill".

BP has argued that it is not the claimants but rather the lawyers, who can charge big fees for negotiating claims, who are the biggest winners from the spill.

OYSTER, SHRIMP SHORTAGE


In the aftermath of the spill, oysters have been among the biggest losers. They have fared worse than any other seafood, partly because their immobility made them unable to swim away from the oil and partly because they could not survive the fresh water diversions opened along the Mississippi to protect Louisiana's precious wetlands from oil seeping in.

Owners of oyster leases can claim $2,000 per acre for property damage in the most affected areas, whether or not they have been using the leases.

Al Sunseri, who, with his brother Sal, runs the oldest oyster company in the United States - P&J Oysters, in New Orleans's French Quarter - said processors like them had been dealt a bad hand in comparison with the oyster farmers.

The Sunseris reckon they are handling just 55-60 percent of the oysters they used to. Before the spill they employed 11 oyster shuckers to take off the shells, now they have just one, working part time.

"BP ruined our business," said Al. "All the money they've spent on this marketing thing, and it's like, we don't even have anything to market."

Blanchard says he is handling 15 percent of the local shrimp that he did before the spill. The shrimps, he says, either swam away from the oil or were killed or mutated by the spill and its aftermath. He is suing BP for $111 million.

BP said all tests had shown that Gulf seafood was safe to consume and there had been no published studies demonstrating seafood abnormalities due to the Deepwater Horizon accident.

But a study published on March 24, led by the U.S. government's National Oceanic and Atmospheric administration, found the spilt BP oil caused "serious defects" in the embryos of several species of fish, including tuna and amberjack.(http://www.pnas.org/cgi/doi/10.1073/pnas.1320950111)

In response, BP said the concentration of oil used in the experiments for the study was "rarely seen in the Gulf during or after the Deepwater Horizon accident" and that the paper provided no evidence for a "population-level impact" on fish.

In one of its latest advertisements, the oil major said the outcome of what it said was its fight to return the settlement to its intended purpose would affect future decisions by other companies in similar positions.

"Will they accept responsibility and do the right thing? Or will the lesson be that it's better to deny, delay, and litigate - with victims potentially waiting decades for compensation?"


By Jemima Kelly

Maritime Reporter April 2015 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

People & Company News

Taiwan's Yang Ming Marine to Add Bigger Vessels to its Fleet

Yang Ming Marine Transport Corporation, Taiwnanese global shipping and logistics services company,  will take delivery of 14 large-sized ships over the next two years,

Hapag-Lloyd Adds North Europe-USEC Service

Hapag-Lloyd will open a new weekly service between North Europe and the US East Coast, the company said in its press release.     The new route – to be christened

Khamenei Says Iran Nuclear Weapons are a U.S. "Myth"

Iran's Supreme Leader Ayatollah Ali Khamenei told military commanders on Sunday the United States had created the "myth" of nuclear weapons to portray Iran as a threat,

Offshore

Chevron Hires Norce Endeavour for Thailand Ops

Solstad Offshore ASA (SOFF) has fixed the 2011-built 18,000 dwt crane barge Norce Endeavour to Chevron for work in Thailand next year for around 200 days.   Solstad

2 Damen Tugs for KOTUG’s European Harbor Towage

Damen Shipyards Group delivered two sister tugs ATD 2412 ‘ZP Bison’ and ‘ZP Bear’ to strengthen KOTUG’s European Harbour Towage. On April 8th 2015, the sister

PSV Launching Ceremony at Gondan

At high tide today at Gondan Shipyard in Figueras, the New PSV (TBN) for the Norwegian Ship-Owner, Simon Møkster Shipping, was launched. Different personalities

Finance

China Shipbuilders may Merge to Stay Afloat

The China's four state-run shipping-related companies  are reportedly in the initial phases of combining units in order to beef up the national shipbuilding industry, says local media.

Seaspan Takes Delivery of New Containership

Seaspan Corporation (SSW) has accepted delivery of a 14000 TEU containership, the YM Wellhead.    The new containership, which was constructed at Hyundai Heavy Industries Co.

'Make in India’ - the Newbuzzword in Indian Shipping Sector

The Prime Minister Narendra Modi's  'Make in India’ initiative offers a plethora of opportunities in the maritime sector, particularly in shipbuilding, with the

Environmental

Shipping is Cutting CO2 Emissions

London-based shipping advisors Drewry Supply Chain Associates said that shipping liner operators have made significant inroads into cutting CO2 emissions.   In

Naval Authorities Rely on OSE Separators from GEA

The trend of modernizing ships and fitting them with more efficient separator systems, which has been noticeable since 2014 particularly in Europe and North America,

MacGregor's Pusnes bow loading systems for Suezmax Tankers

MacGregor, part of Cargotec, has secured contracts to supply Pusnes bow loading systems for three newbuild shuttle tankers intended for operations in Brazilian waters.

Energy

Khamenei Says Iran Nuclear Weapons are a U.S. "Myth"

Iran's Supreme Leader Ayatollah Ali Khamenei told military commanders on Sunday the United States had created the "myth" of nuclear weapons to portray Iran as a threat,

New CEO for Evergas

Evergas has appointed Steffen Jacobsen as CEO of the company as of 8 May 2015 Mr. Jacobsen joined Evergas 1 February 2015 as Vice President, Fleet after almost 35 years in Maersk.

Icebreakers Ordered for Neft’s Novy Port Project

Aker Arctic’s icebreaker design selected for Gazprom Neft’s Novy Port project   Aker Arctic and Vyborg Shipyard have confirmed a contract for the design of two

Maritime Safety

USN Names Littoral Combat Ship

Secretary of the Navy Ray Mabus announced today that the next Freedom-variant littoral combat ship (LCS) will be named USS St. Louis. The future USS St. Louis,

China Snubs G7 Declaration on Sea Row

Reacting to recent declaration of  the Group of Seven (G7) major nations' Foreign Ministers on maritime , China said “the situation of this region is generally stable,

Arctic Offshore Rig Gets USCG Escort

U.S. Coast Guard (USCG) crews escorted heavy lift ship Blue Marlin as it toted a controversial 38,000-metric-ton drilling rig into Port Angeles, Wash., Friday. Blue Marlin,

 
 
Maritime Careers / Shipboard Positions Maritime Contracts Maritime Security Maritime Standards Navigation Offshore Oil Salvage Ship Simulators Sonar Winch
rss | archive | history | articles | privacy | contributors | top maritime news | about us | copyright | maritime magazines
maritime security news | shipbuilding news | maritime industry | shipping news | maritime reporting | workboats news | ship design | maritime business

Time taken: 0.2389 sec (4 req/sec)