What If Kenneth Feinberg Resigned Tomorrow?

What If Kenneth Feinberg Resigned Tomorrow?
The Perils of Ignoring a Rights-Based Recovery for America’s Gulf Region

by Monique Harden & Nathalie Walker
Co-Directors and Attorneys
Advocates for Environmental Human Rights

President Obama appointed Kenneth Feinberg to oversee a discretionary fund that is intended to pay for a host of damages arising from the BP oil drilling disaster in the Gulf of Mexico. The discretionary fund is fueled by $20 billion that BP executives have said they will deposit in an escrow account. Mr. Feinberg has emphasized his discretionary authority over the fund by stating that it is he, not the President or anyone else, who will create the terms for recovery. He also warns that the discretionary fund is a better option for Gulf Region residents than pursuing lawsuits. We take issue with both of Mr. Feinberg’s assertions as well as the emerging pattern by both the Bush and the Obama administrations to respond to Hurricane Katrina, subsequent storms, and the BP oil drilling disaster by limiting the recovery of Gulf Region residents and communities to discretionary programs.

Today marks the 100th day since the BP oil rig exploded – a day that brings us closer to the fifth anniversary of Hurricane Katrina on August 29th. It has to be acknowledged that in the aftermath of Katrina and subsequent storms, any program or project, regardless of its intent or impact, can be called “recovery.” The BP oil drilling disaster is taking place in a region where the rhetoric of recovery has been a constant drum beat that over 1,000,000 Gulf Region residents displaced during Hurricanes Katrina, Rita, Gustav, and Ike have heard, without having experienced actual recovery. Before the BP oil drilling disaster, people became all too familiar with a litany of discretionary programs that have worsened the destabilizing effects of displacement. We have seen how these programs have siphoned millions of taxpayer dollars to private developers for projects that entail the demolition of homes and schools to which residents have struggled in vain to return and rebuild. We have also seen how decisions made with discretionary authority have propped up flawed flood control projects that disregard effective restoration of our eroding coastline.

In contrast to a discretionary approach to disaster recovery, our government has been urged by two treaty-monitoring bodies of the United Nations to implement a human-rights based recovery standard in the aftermath of Hurricane Katrina known as the United Nations Guiding Principles on Internal Displacement. This standard, which has been embraced and promoted by our government in foreign countries, establishes concrete steps for achieving full recovery which remains out of reach for America’s Gulf Region. The Obama administration has not implemented the UN Guiding Principles on Internal Displacement despite the fact that communities in the Gulf Region have urged it do so.

The Obama administration is continuing down the path of setting up discretionary programs to address major disasters by appointing one person to determine what recovery will be for the people and the environment harmed by the BP oil drilling catastrophe. Suppose that today Mr. Feinberg exercised his discretionary authority to create a recovery program that made everyone happy. What would happen if he resigned tomorrow? Someone else appointed to the position could exercise his discretion to replace Mr. Feinberg’s recovery program with entirely new terms and conditions.

Notwithstanding Mr. Feinberg’s expertise in handling massive claims in the past, his appointment as a BP oil disaster recovery czar overlooks our right to full recovery that Congress established in the Oil Pollution Act of 1990. While there has been much criticism of the woefully inadequate $75 million cap on liability that applies to accidental oil releases from offshore facilities, there has been virtual silence on the five exceptions in the Oil Pollution Act that remove this liability cap. According to the statute, BP’s liability to pay the full cost of recovery becomes unlimited when its actions leading up to or following the oil drilling disaster meet any one of the five statutory exceptions: 1. gross negligence or willful misconduct; 2. violation of a Federal safety, construction, or operating regulation; 3. failure to report the incident as required by law; 4. failure to provide all reasonable cooperation and assistance requested by a responsible official in connection with oil removal activities; and 5. failure to comply with an order pertaining to unlawful discharges of oil and other hazardous substances from a vessel or the Intervention on the High Seas Act. By enacting this law, Congress recognized that bad actors should not have the benefit of a liability cap.

The information that has come forth since the oil rig exploded shows that BP is a bad actor. We have witnessed months of Congressional testimony by the survivors of the oil rig explosion detailing reports of malfunctions that were ignored by BP and its contractors. A federal regulatory requirement for inspection of the blow-out preventer device on the oil rig had been ignored for years. The Environmental Protection Agency’s request that BP reduce its use of toxic chemical dispersants as part of oil removal activities was met with a resounding “no” from the oil company. Where is the Obama administration in using this information to assert that the actions taken by BP remove the statutory cap on liability?

BP’s bad behavior has not stopped. The company has demonstrated its intent to short-change our recovery from its oil disaster. BP is hiring local environmental and marine scientists in an attempt to restrict their independent research on the environmental damage. For claims arising from its oil drilling disaster, BP has contracted with ESIS, Inc., a company that felt compelled to change its website following public scrutiny of its online statements that its goal is to minimize the amount of pay-outs on such claims. For the purpose of reducing the amount of money it pays to the fishers, shrimpers, and oyster harvesters put out of work by the oil drilling disaster, BP has hired some of them to work on oil clean up and containment. They are now getting the “BP employee treatment” – inadequate training on how to safely remove hazardous oil waste, termination if they wear respirators and protective gear, and termination if they refuse to live in cargo containers stacked on a barge for days on end.

Given that the right to recovery from BP’s damage is already provided by law, the Obama administration must aggressively undertake the task of affirming that BP has no liability limit and that the Gulf Region has the right to a full recovery. It is time that the Obama administration eschews discretionary approaches to Hurricane Katrina, subsequent storms, and the BP oil drilling disaster. To do anything less dooms our communities in the Gulf Region to continued destabilization and a degraded environment, all of which undermine our basic human rights.