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Obama to create BP oil spill compensation fund, increase industry regulation

By Sarah Miley

[JURIST] US President Barack Obama [official website] on Tuesday announced the latest plan of action [transcript] for tackling the BP oil spill [BBC backgrounder, JURIST news archive], including the development of a compensation fund, a long-term restoration plan and prevention of future disasters through stronger regulation. Obama will meet with BP chairman Carl-Henric Svanberg [professional profile] on Wednesday to discuss the establishment of a compensation fund that will be subsidized by BP to indemnify the workers and business owners harmed as a result of the oil spill. In order to ensure that all legitimate claims are paid out in a fair and timely manner, the fund will be administered by a third party. Obama has also appointed Secretary of the Navy Ray Mabus [official website] to develop a long-term Gulf Coast Restoration Plan, which will be designed by states, local communities, tribes, fishermen, businesses, conservationists and other Gulf residents. BP will also be responsible for funding the restoration projects. Obama reiterated the prevention goals of the National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling established last month [JURIST report]. The bipartisan commission members, which were announced on Monday [press release], are charged with identifying the causes of the BP oil spill and developing options to mitigate future occurrences through laws, regulations and agency reform. Obama also announced the appointment of Micheal Bromwich [press release], a former federal prosecutor and Inspector General for the Justice Department, as head of the Minerals Management Service, which has been plagued with corruption and notorious for its cozy relationship with oil companies. The president stated that "[Bromwich's] charge over the next few months is to build an organization that acts as the oil industry's watchdog - not its partner." Obama closed his speech from the Oval Office by reiterating his commitment to tackle the crisis created by the oil spill.

The federal government continues examining its options for dealing with the oil spill and future drilling regulations. Last week, Obama called for new oil pollution laws [statement; JURIST report], emphasizing the need to need to update the Oil Pollution Act of 1990 [materials], a piece of legislation that was passed in the aftermath of the Exxon Valdez oil spill [backgrounder]. Obama also called on Congress to pass energy reform legislation, several versions of which have been introduced [JURIST report] in recent months. Earlier this month, US Attorney General Eric Holder [official website] announced that the Department of Justice [official website] would be reviewing whether any criminal or civil laws were violated by BP [JURIST report]. Holder cited several statutes being examined by government lawyers including the Clean Water Act [materials] and the Oil Pollution Act. Obama held a press conference in May to announce new regulations to mitigate future oil spills [JURIST report] and the current plan of action for resolving the crisis created by the ongoing spill in the Gulf of Mexico. The government suspended several offshore drilling activities including exploration of platform locations in Alaska, pending lease sales in the Gulf and Virginia, and the drilling of 33 deepwater exploratory wells in the Gulf. The government also suspended the issuance of new permits to drill deepwater wells for six months. The White House is keeping a daily chronology of events [text].

Full post as published by JURIST - The Paper Chase on June 16, 2010 (boomark / email).