BP’s November 2012 settlement of the federal criminal charges stemming from the Deepwater Horizon spill left some important issues unresolved. It left open claims for billions in civil penalties and natural resource damages, which go to trial on February 25, 2013. And even though the Gulf of Mexico spill had no connection to BP’s government contracts, the criminal settlement led to BP’s formal suspension [pdf] from federal contracting. The suspension means that BP will be unable to obtain new oil supply or lease contracts with the United States government until the EPA Suspension and Debarment Official finds it to be “presently responsible.”
BP is by no means the only company to have been suspended or debarred as a result of environmental violations. EPA has authority to suspend or debar companies for violating the Clean Air Act, the Clean Water Act, the Comprehensive Environmental Response, Compensation and Liability Act, and the Resource Conservation and Recovery Act. Indeed it is common for the EPA to seek suspension or debarment in environmental crimes cases. A company convicted of violating the Clean Air Act or Clean Water Act may even be automatically suspended or debarred. Although such a mandatory suspension or debarment applies only to the facility where the violation occurred, EPA can expand the sanction to the entire company. That is precisely the approach that EPA took with BP after the Deepwater Horizon spill.
Continue Reading BP suspension offers a lesson on the additional consequences of environmental enforcement