Whitehouse: Oil Companies Should Pay for Mistakes
Washington, DC - This morning, U.S. Senator Sheldon Whitehouse co-chaired a hearing of the Senate Judiciary Committee titled "The Risky Business of Big Oil: Have Recent Court Decisions and Liability Caps Encouraged Irresponsible Corporate Behavior?" The hearing featured testimony from a family member of one of the workers killed in the April 20th explosion on Deepwater Horizon.
In his opening statement, Whitehouse said "I believe that Congress must do whatever it can to prevent another family from having to hear that their loved one has perished on an oil rig... Unfortunately many of our current laws - whether by statute or court decision - cap the liability of big oil corporations, both for worker injuries and deaths, and for harms to the environment. Rather than making responsible parties pay for harm done, they foist this burden onto the families of the lost and onto the American taxpayers. As a result, corporations lack proper market incentives to act responsibly. That must not continue. Congress must act."
A full transcript of Whitehouse's statement, as delivered, is below.
Thank you Chairman Leahy, for holding this hearing, and thank you for inviting me to co-chair it.
Like you, I believe that Congress must do whatever it can to prevent another family from having to hear that their loved one has perished on an oil rig. Congress must also take every available measure to avoid the environmental destruction that we are seeing unfold day after day as this spill continues. Gordon Jones, and ten other men, died. The Gulf has been devastated. Something has to change.
How did it come to this? Well, we already know that BP, Transocean, and Halliburton failed to meet important safety standards. They undertook risky drilling without a proper degree of care -5,000 feet below the surface of the Gulf, 18,000 feet to the oil reservoir, amid methane hydrate deposits that are highly dangerous when they get inside the drill column. They were irresponsible. The result was tragedy.
Sadly, key regulatory agencies also appeared to have been asleep at the switch, shirking their responsibilities to protect our oceans and American workers at sea. I am convinced that something was fundamentally amiss at the Minerals Management Service at the Department of Interior. I strongly suspect that MMS had long since been captured by the oil industry and had ceased to serve the public interest.
But regulatory agencies, even when functioning properly, never have been America's sole line of defense against disasters. We also should make sure that it is in a corporation's clear, economic interests to adhere scrupulously to the law. Meaningful civil and criminal fines and damages are one crucial tool for ensuring that a corporation takes proper precautions to avoid tragic errors. In contrast, a corporation that does not have to pay for its mistakes does not have to worry about making them.
Unfortunately many of our current laws - whether by statute or court decision - cap the liability of big oil corporations, both for worker injuries and deaths, and for harms to the environment. Rather than making responsible parties pay for harm done, they foist this burden onto the families of the lost and onto the American taxpayers. As a result, corporations lack proper market incentives to act responsibly. That must not continue. Congress must act.
These restrictions on liability are unfortunately consistent with a tax upon the institution of the jury by powerful corporate interests. The Founders put the jury in the Constitution and Bill of Rights three times, and for a reason: to ensure that in at least one forum of government, the powerful and the powerless have equal standing. Not for nothing did DeTocqueville describe the jury as "a mode of the sovereignty of the people." That is as true today as it was at our nation's founding. The tide of corporate money that influences politics stops at the hard, square corners of the jury box, and that is why corporations fight so hard to attack the institution of the jury.
You know this as well as anyone, Mr. Chairman, and I am proud to cosponsor the legislation you are introducing today. It will eliminate the strange quirks in American law that, left unchanged, would result in the survivors of the eleven men killed on the Deepwater Horizon being treated unfairly. The Senate should pass that legislation promptly. I also urge my colleagues to support two bills that I have introduced. The first would raise penalties for worker safety and environmental violations under the Outer Continental Shelf Lands Act. The second would overturn the Supreme Court's regrettable Exxon v. Baker decision that capped maritime punitive damages at the level of compensatory damages. The Exxon Court believed that predictability for corporations was more important than deterring corporate misconduct. I disagree.
The people of my home state Rhode Island - the Ocean State - would put our environment and our safety ahead of profits for irresponsible corporations. In fact, that is exactly what Rhode Islanders have done. John Torgan, the Narragansett Baykeeper in Rhode Island, has submitted a letter which I will introduce for the record, cataloguing the legislative and regulatory reforms put in place after the 1996 North Cape/Scandia oil spill off South Kingstown.
Rhode Islanders know what an oil spill can do to an ecosystem. We know just how important penalties and fines are to keeping seafarers safe and marine ecosystems healthy. Like my fellow Rhode Islanders, I insist that, in the future, oil companies do everything they can to prevent needless deaths and catastrophic environmental harm, whether in the Gulf, off the coast of New England, or anywhere in our great country. Today's hearing is an important step toward that goal, and I applaud you for holding it Mr. Chairman. Thank you very much.
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