News Column

BP's Record $4 Billion Penalty for Gulf Tragedy Approved

Jan 31, 2013

Ruth Sunderland

BP has won approval in the US for a record $4bn (pounds sterling 2.5bn) settlement of federal criminal charges from the Gulf of Mexico disaster, in a deal that will fuel controversy over the huge penalties being extracted from UK companies.

The oil giant still faces a multi-billion pound bill from civil claims. BP is one of a list of FTSE 100 listed companies that have been hit by large fines and forfeits in the US.

They include Standard Chartered, which last year paid $667m over sanctions-busting and money-laundering. RBS is next week expecting an even larger Libor penalty than Barclays and pharmaceuticals giant GSK was last year heavily fined over healthcare fraud.

Critics say British companies are being treated more harshly than US ones, including Exxon. The US oil major was fined just $150m over Exxon Valdez in 1989, most of which it did not have to pay because it was given credit for its own clean-up efforts.

Union Carbide, a subsidiary of Dow Chemical, was found not liable by a US judge last year for pollution alleged to have been caused by a 1984 disaster in Bhopal, India.

BP refused to comment on the issue of possible anti-British discrimination, saying it is an international firm that employs 22,000 people in the US.

It has pleaded guilty to 11 manslaughter counts for the workers who died, under a deal struck in November that has this week been rubber-stamped by district judge Sarah Vance.

The criminal settlement includes $1.3bn in fines, surpassing the record corporate criminal penalty of $1.2bn on drugs company Pfizer in 2009.

BP (up 0.25p at 475.9p) is paying $500m to the Securities and Exchange Commission, which accused it of misleading investors over the amount of oil spewing into the water.

In addition to the criminal settlement, it is also in line for a multi-billion dollar tab for federal civil damages and claims for economic losses by US states in a case to be heard next month. It is paying around $8bn to the Plaintiffs' Steering Committee, which has brought claims for individuals and small firms.

Luke Keller, a vice president of BP America, said: "BP understands and acknowledges its role in that tragedy, and we apologise -- BP apologises -- to all those injured and especially to the families of the lost loved ones."

But Judge Vance said she thought BP bosses should have personally apologised to bereaved family members "out of basic humanity."

Source: (c)2013 Daily Mail (London). Distributed by MCT Information Services.

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