NEW ORLEANS (CN) – The Department of Justice has written to Kenneth Feinberg, administrator of BP’s $20 billion Gulf Coast Claims Center, to urge him to step up his work. Associate Attorney General Thomas Perrelli wrote to Feinberg: “The role of the GCCF is to satisfy the obligations of the responsible parties to compensate those harmed as a result of the Deepwater Horizon oil spill under the Oil Pollution Act – in whatever amount ultimately is required. It is not to preserve the $20 billion fund that BP has established or to return money to BP.”
Feinberg and the Gulf Coast Claims Center receive money from BP to distribute to the public, with BP as a “responsible party” under the Oil Pollution Act.
New Orleans Federal Judge Carl Barbier last week ruled that Feinberg and the Gulf Coast Claims Facility cannot call themselves completely neutral or independent from BP, since BP is paying their bills.
Judge Barbier added that Feinberg and the GCCF are necessary because the Oil Pollution Act requires BP as a “responsible party” to set aside money to pay the claims of those who have been damaged by the oil spill.
In the penultimate paragraph of his 3-page letter to Feinberg, Perelli wrote: “I note the negative public response to comments made by you concerning your view about the total amount of claims likely to be paid by the GCCF. I know those comments have been taken out of context, and that you have taken steps to clarify them. I will simply confirm what you have already said: The role of the GCCF is to satisfy the obligations of the responsible parties to compensate those harmed as a result of the Deepwater Horizon oil spill under the Oil Pollution Act – in whatever amount ultimately is required. It is not to preserve the $20 billion fund that BP has established or to return money to BP. As Judge Barbier’s decision yesterday noted, ‘BP does not control [the GCCF’s] evaluation of individual claims,’ and this is an element of your independence that must never be compromised.” (Brackets in original.)
On Page 2, Perrelli wrote: “OPA does not create categories of eligible and ineligible claimants. Rather, in determining whether a particular damage resulted from the spill, the GCCF must examine the facts and circumstances of each claim and ascertain whether the harm asserted by the claimant occurred ‘as a result of’ the oil spill and is a type of harm, such as lost profits, covered by OPA. In so doing, it is relevant to consider the nature of the economy from which the claim arises. In many parts of the Gulf, tourism is the economic engine on which many industries and professions depend.”
The winter of 2009-10 was particularly frigid, delaying the season for harvesting blue crabs, shrimp and Gulf fish. The late-opening seasons fatefully coincided with the April 20 explosion of BP’s Deepwater Horizon rig, which killed 11 and set off the worst oil spill in history.
Many Gulf fishermen who had spent the season gearing up for yearly harvests that typically bring them their entire year’s pay never got to work.
Fishermen and -women were not the only ones hurt by the spill. Restaurants, hotels, charter boats, tour groups and all other tourism-driven businesses were also affected by the disaster.
Perrelli wrote that the GCCF is “entering another critical period for the people of the Gulf.”
“April 20, 2010 ushered in a lost season for many in the Gulf, as communities, businesses, and workers that depend on a summer of strong revenue saw their bookings drop, their ships stay in port, and their hours cut. To ensure that 2011 is not a lost season as well, and to turn the page on the spill, the next few weeks and months will be critical. Businesses in the Gulf that have suffered harm as a result of the Deepwater Horizon explosion and oil spill need to be investing in their businesses and marketing themselves now to avoid losing another year of revenue and to continue the revitalization of the Gulf that is a national priority. This is a matter of urgency.
“The impact of the spill on the lives of the people of the Gulf cannot be overstated. For them, the GCCF – an entity whose mission is to fulfill the obligations of responsible parties under the Oil Pollution Act and to make people of the Gulf whole, consistent with the statute – has a critical role to play in the future of their communities. Resolving claims efficiently, fairly, and swiftly is more important than ever. There are several areas that I would highlight for your particular attention.
“First, over the past several months, we have reiterated that the Oil Pollution Act requires BP and other responsible parties to pay for damages that arise ‘as a result of’ the oil spill. Notwithstanding the terminology concerning causation used in the various GCCF protocols, you must apply OPA’s standard. …
“As we enter this most critical period, I urge you to take a second look at the categories of eligible and ineligible claims that the GCCF applied with respect to emergency advance payments.
“As noted above, OPA does not create such categories. Rules of decision regarding a particular industry that may make sense further inland may be wholly inapplicable for that industry in a purely coastal community that depends on visitors whose plans changed as a result of the spill. Communities that can demonstrate pervasive effects of the spill on their overall economy should have that evidence credited. The National Pollution Funds Center will issue its rulings based on the particular facts and circumstances of these claims, and the GCCF should, too.”
Perrelli’s letter concludes: “Your immediate attention to these issues will go a long way toward fulfilling BP’s commitment, and the GCCF’s responsibility, to provide a fair and efficient process that serves the needs of the people of the Gulf.”