DAILY NEWS Jan 31, 2013 9:01 AM - 0 comments

U.S. court accepts plea resolving criminal claims against BP

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2013-01-31

The U.S. District Court for the Eastern District of Louisiana has accepted BP’s plea resolving all federal criminal charges against the company stemming from the Deepwater Horizon accident, oil spill and response, the company reports.

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Pursuant to the previously announced terms of the plea agreement – reached with the Department of Justice – BP will pay $4 billion over five years and serve a term of five years’ probation, the company noted in a statement Wednesday.

As part of sentencing last November, the court also ordered certain equitable relief. This includes additional actions related to BP’s risk management processes, several initiatives with academia and regulators to develop new technologies around deepwater drilling safety, appointments of a process safety monitor and an ethics monitor, and an annual report by an independent auditor on BP’s compliance with the remedial terms of probation.

“We – and by that I mean the men and the women of the management of BP, its Board of Directors and its many employees – are deeply sorry for the tragic loss of the 11 men who died and the others who were injured that day,” Luke Keller, a vice president of BP America Inc., said during a Jan. 29 hearing in which he addressed the court, the families of the deceased, and other victims of the Deepwater Horizon tragedy.

“BP is also sorry for the harm to the environment that resulted from the spill, and we apologize to the individuals and communities who were injured,” Keller said.

The company reports charges to which BP pleaded guilty include a misdemeanor count under the Clean Water Act, which triggers a statutory debarment, also referred to as mandatory debarment, following sentencing on Wednesday.

“Mandatory debarment prevents a company from entering into new contracts or new leases with the U.S. government that would be performed at the facility where the Clean Water Act violation occurred. A mandatory debarment does not affect any existing contracts or leases a company has with the U.S. government,” notes the BP statement.

The U.S. Environmental Protection Agency (EPA) announced a temporary suspension of numerous BP entities after the company entered into the plea agreement with the justice department last November. “While BP’s discussions with the EPA have been taking place in parallel to the court proceedings on the criminal plea, the company’s work toward reaching an administrative agreement with the EPA is a separate process, and it may take some time to resolve issues relating to such an agreement,” notes the company statement.

BP reports that it has made significant changes since the Deepwater Horizon incident to further enhance safety throughout its global operations. Among other things, the company is implementing the 26 recommendations flowing from its internal investigation of the incident, has made key leadership changes, has reorganized its upstream business, has created a centralized Safety and Operational Risk organization, and has adopted voluntary deepwater drilling standards in the Gulf of Mexico that exceed current regulatory requirements.

In addition, BP quickly set up a process to pay all legitimate claims and established a $20 billion trust to assure Americans that the resources to pay claims, settlements and other costs would be there, the statement says.

To date, BP has paid more than $9 billion to individuals, businesses and government entities, as well as has agreed to a settlement with the Plaintiffs’ Steering Committee, resolving the substantial majority of outstanding private economic loss, property damage and medical claims.

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