Transocean fined $400m, with $1b more to come
WASHINGTON – The Justice Department announced this week that Transocean Deepwater has plead guilty to a violation of the Clean Water Act (CWA) for its illegal conduct leading to the 2010 Deepwater Horizon disaster, and was sentenced to pay $400 million in criminal fines and penalties.
The fines and penalties imposed on Transocean are the second-largest environmental crime recovery in U.S. history – behind the $4 billion criminal sentence imposed on BP in connection with the same incident.
During the guilty plea proceeding, Transocean admitted that members of its crew onboard the Deepwater Horizon, acting at the direction of BP’s well site leaders, known as “company men,” were negligent in failing to investigate fully clear indications that the Macondo well was not secure and that oil and gas were flowing into the well.
A separate proposed civil consent decree - which resolves the United States’ civil CWA penalty claims, imposes a record $1 billion civil Clean Water Act penalty, and requires significant measures to improve performance and prevent recurrence - is pending before U.S. District Judge Carl J. Barbier of the Eastern District of Louisiana.
“Transocean’s guilty plea and sentencing are the latest steps in the department’s ongoing efforts to seek justice on behalf of the victims of the Deepwater Horizon disaster,” said Attorney General Eric Holder in a statement. “Most of the $400 million criminal recovery – one of the largest for an environmental crime in U.S. history – will go toward protecting, restoring and rebuilding the Gulf Coast region.”
Transocean’s guilty plea was accepted, and the sentence was imposed, by U.S. District Judge Jane Triche Milazzo of the Eastern District of Louisiana. During the guilty plea and sentencing proceeding, Judge Milazzo found, among other things, that the sentence appropriately reflects Transocean’s role in the offense conduct, and that the criminal payments directed to the National Academy of Sciences and National Fish and Wildlife Foundation are appropriately designed to help remedy the harm to the Gulf of Mexico caused by Transocean’s actions. The judge also noted that the fines and five-year probationary period provide just punishment and adequate deterrence.
Under the order entered by the court pursuant to the plea agreement, $150 million of the $400 million criminal recovery is dedicated to acquiring, restoring, preserving and conserving – in consultation with appropriate state and other resource managers – the marine and coastal environments, ecosystems and bird and wildlife habitat in the Gulf of Mexico and bordering states harmed by the Deepwater Horizon oil spill. This portion of the criminal recovery will also be directed to significant barrier island restoration and/or river diversion off the coast of Louisiana to further benefit and improve coastal wetlands affected by the spill. An additional $150 million will be used to fund improved oil spill prevention and response efforts in the Gulf through research, development, education and training.
Transocean was also sentenced, according to the plea agreement, to five years of probation – the maximum term of probation permitted by law.