BP Disaster and Why the Jones Act Needs to Change

June 16th, 2010. By Kristine B

As the oil continues to make its way to shore, countless families try to cope with the economic impact of the BP oil spill. Meanwhile scores of birds and other animals that rely on the sea are dying in unprecedented numbers. But, it may be the deaths of the 11 men on the oil rig platform that could have the biggest impact on future oil drilling. If officials change US Maritime Law—which they should, it’s only right—BP could be forced to pay dearly for its alleged (yes, I’m still using alleged here) role in the oil rig explosion and deaths of the workers.

This week, Pleading Ignorance looks at US Maritime Law and the Jones Act to better understand what happens when a worker suffers injury or death while working on or for a sea-faring vessel or operation.

So, why does US Maritime Law need changing? The current situation is that under maritime law, families of people who die while working at sea are only able to sue for economic damages caused by the death. This includes things such as loss of income, medical bills and so on. They can’t sue for punitive damages. 

The problem is that it’s the punitive damages that hit home with companies like BP—and drive much needed change. Economic damages, in comparison, are relatively small. Here’s an example: say an oil rig worker makes $60,000 a year at the time of his death and still has an approximate working life of 30 years. A company like BP would only have to pay out $1.8 million to his family. That’s not even a tiny dent in BP’s wallet. (BP’s 2009 revenue was $239 billion.)

Punitive damages, however, are assessed as a way of both punishing a company for negligence or malice and (possibly) to deter companies from committing similar acts. In the Exxon Valdez spill, a jury awarded $5 billion in punitive damages for Exxon’s role in the Valdez spill. The Supreme Court later reduced the punitive damages to $507 million. Even $507 million, however, is much larger deterrent from being negligent than $1.8 million. 

Without punitive damages, there is very little incentive for companies to follow proper safety procedures and ensure their workers are safe. Sure, they may say they care about employee safety. But an article co-published by ProPublica and The Washington Post suggests otherwise. 

The article, published June 7, 2010, notes that BP has faced fines for failing to follow proper safety procedures. Furthermore, the company allegedly fired a safety technician for shutting down operations when he suspected a safety issue. In 2005, 15 workers were killed when a Texas City refinery exploded. According to the article, BP disregarded safety and environmental rules, harassed employees not to report issues and delayed inspections. 

Despite assurances BP would change its ways, it appears those changes were not made in time to save the lives of workers on the Deepwater Horizon oil rig. ProPublica reports that investigators are learning that vital sensors, sensors that would have helped to shut down the oil rig at the first sign of trouble, were not working. Furthermore, the investigation reportedly found that BP “skipped key parts of the drilling process intended to prevent a blowout to save roughly $5 million.” 

It seems only fair that a company that violated so many safety and environmental regulations should have to dig deep into its pockets to pay for what it’s done. Here’s hoping lawmakers in Washington make the right decision and change the law so families can sue for punitive damages.

Tags: BP, BP Oil Spill

This was posted on Wednesday, June 16th, 2010 at 2:38 pm and is filed under Pleading Ignorance . Feel free to respond, or trackback. Read our comments policy.