Articles Posted in Toxic Torts

Yes, you read the title of this post correctly: Transocean Ltd., the company that owned the Deepwater Horizon Gulf Oil Rig that blew up last year and proceeded to spew at least 200 millions of gallons of oil into the Gulf of Mexico, is actually awarding financial bonuses to its senior executives for – of all things – the “best year in safety performance in our company’s history.”

I’ve seen a lot of examples of corporate arrogance, lies, greed and deceit, but this has to rank up there with some of the worst. This company contributed to probably the worst environmental disaster and toxic tort this nation has ever seen, with the full effects not yet even being fully measured or fully felt. Its negligence, documented as being fueled by corporate cost-cutting, resulted in the deaths of 11 oil rig workers. It partnered with two other companies – BP PLC and Halliburton, Inc., who flagrantly and consistently lied to the public and to the government about the true nature and extent of the disaster. It contributed to thousands of people losing their jobs or their careers in the commercial fishing and hospitality industries, who are still suffering economically – and it has the audacity to hand out millions in cash bonuses to its executives. As has been said before, “You can’t make this stuff up.”

In regulatory papers filed with the Securities and Exchange Commission (SEC) last Friday Transocean noted “the tragic loss of life” in the Gulf when the rig operated by BP PLC exploded last April. Large of them, wasn’t that? Despite the devastating fiasco that occurred on their rig, the company got out its bean counters, and found a way to claim that it still had an “exemplary” safety record, because supposedly Transocean “met or exceeded” certain internal (i.e., its own) safety objectives regarding the frequency and severity of its accidents. “Safety” accounts for approximately 25 per cent of senior executives’ total cash bonuses at Transocean. Apprarently, greed and negligence account for the other 75 per cent. CEO Steve Newman’s bonus (alone) last year amounted to $374,062. In case you’re curious, the total pay works out as follows: A base salary of $850,000; “perks” of $622,057, which includes housing and vacation allowances (and other things); on top of the $374,062 bonus. Folded into this figure are also Transocean stock options valued at $1.9 million and deferred shares valued at $2 million.

I’ve written a considerable amount in the past about how big corporations and insurers regularly engage in cost-benefit decisions that show little regard for the safety and welfare of average Americans and consumers. If anyone has any doubts about this truth, (notwithstanding the myriad factual examples of corporate greed and disregard for Americans’ safety that have been previously offered by me and many other informed writers,) then consider this: TransOcean Corp., the owner of the Gulf oil rig that blew up on April 20 this year, spewing millions of gallons of crude oil into the Gulf of Mexico in the process, has wasted no time whatsoever in racing to federal court in Houston, Texas, to deny and/or limit liability for the incalculable environmental, financial, and physical damages that have resulted from this calamity.

Eleven rig workers are dead, millions of gallons of crude oil are spewing unstopped into one of the world’s most environmentally sensitive fishing grounds, and numerous industries and countless jobs have been impacted long into the future. The economic and financial harm that are likely to result from this spill could easily run into the billions of dollars, and this company has raced into court to deny that it is in any way responsible for this catastrophe, and to in any event limit its liability to a grand total of $26.7 million. Yes, that’s right: $26.7 million. Why the rather peculiar figure of $26.7 million, you might ask? That’s the claimed value of the rig sitting at the bottom of the ocean. That’s all TransOcean says it should be held laible for – if anything at all – as the result of this calamity. To put it to scale, that’s about 1/100th of what the total damages in this horrific event may eventually come to.

Worse, a federal judge in Houston granted TransOcean’s request, suspending all pending cases against it for the time being. On what basis does TransOcean make this claim? Under an ancient maritime law that allows vessel owners to limit their liability to the value of the vessel and its freight. Known as the Limitation of Liability Act, the law was passed in the mid-1800’s to protect U.S. maritime vessel owners, eliminate risk in some crisis situations, and aid in U.S. competition with foreign ships. Yes, that is the law that TransOcean claims applies to it now, in 2010, in the middle of one of the worst ecological catastrophes on record.

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