通知公告

The last 40 years is littered with the debris of man-made environmental disasters.  The list is long and disheartening including: the 1984 release of toxic gas at Bhopal, the 1989 oil spill in Prince William Sound involving the supertanker Exxon Valdez, the 2010 blowout suffered by British Petroleum’s (BP) Macondo oil well in the Gulf of Mexico and the 2011 meltdown suffered by the nuclear power plant at Fukushima.  These incidents have not only posed environmental challenges but human ones as well.  Recent experience suggests that there are more and less effective ways to deal with the human suffering caused by such disasters.  I will address the problems that have arisen out of BP’s efforts to provide compensation to those harmed by the Gulf oil spill of 2010.  My thesis will be that independence in carrying out any compensation program (no matter how large or small the awards), transparency in the award-making process and some opportunity for victims to voice their claims and feelings are critical if a compensation program is to be viewed as legitimate and satisfactory by society at large.

       When in April, 2010, BP’s oil drilling operation in the Macondo oil field in the Gulf of Mexico calamitously failed; it triggered an 87-day spill that dumped 4.9 million barrels of crude oil into environmentally vulnerable waters.  Potential economic, personal and property loses where huge and the citizenry of the United States was outraged by the disaster.  To assuage political hostility and address legal liability arising under the common law of tort and the Oil Pollution Act of 1990, BP set up a compensation fund presented as a speedy and generous alternative to slow-moving and unpredictable judicial proceedings.  The fund was to be directed by one of America’s most distinguished lawyers, Kenneth Feinberg, who had served with remarkable distinction as the Special Master of the 9/11 Compensation Fund set up to compensate for injuries suffered in the 2001 terrorist attack in New York.  To finance its fund, BP guaranteed the availability of $20 billion – a promise sealed with a handshake between BP’s Chairman and President Barack Obama.

       The fund guided by Mr. Feinberg has distributed upwards of $10 billion and settled as many as 200,000 claims, yet it has not succeeded in overcoming public hostility or laying the legal issues to rest.  Why? It would appear that the BP fund made three critical errors. First, Mr. Feinberg was never truly independent of BP.  He was perceived, rightly or wrongly, to be a representative of the company, whose words and deeds were seen as intended to promote BP’s interests rather than a fair resolution.  This was so much the case that Judge Carl Barbier, the federal judge overseeing a parallel set of court cases (not filed with the fund) eventually enjoined Mr. Feinberg from promoting the fund, finding such promotion an unethical interference with the deliberations of those harmed by BP but undecided about what legal steps to take.  Second, the BP fund failed to operate in a transparent manner.  Its damage calculations and decisions were not clear to potential claimants and, in some cases, raised suspicions about its intentions.  Finally, the fund provided claimants very little opportunity to be heard, such denials of “voice” have been noted by social scientists, including Tom Tyler of Yale Law School, as an invitation to negative reaction.

       When dealing with the human consequences of mass disaster it is critical that the lessons of BP be considered.  No matter how large or small compensation payments are to be, the indepence of those awarding them must be clear.  The process by which awards are made must be transparent so that potential claimants can see that equality and fairness are being respected.  Finally, no matter the size of the claimant pool some sort of opportunity for voice is essential if the process is to win the respect of claimants and social legitimacy.