Let the punishment fit the crime
The scope of the damage caused by the massive 2010 BP oil spill in the Gulf of Mexico was far greater than the scope of the damage suffered by the giant British oil company.
Following the explosion aboard the Deepwater Horizon oil rig that killed 11 workers, between 50,000 and 75,000 barrels of oil a day (at 42 gallons to the barrel) flowed into the gulf for 100 days.
BP has spent about $42 billion since then on finally stopping the flow, capping the well and paying into a reparation fund.
Its new proposed settlement with the U.S. Department of Justice, of a host of criminal charges, would add $4.5 billion to that cost.
That is a large sum of money but the federal court handling the case should review it in a broad context. In the third quarter of this year alone, BP had more than $93 billion in sales and more than $5.3 billion in profit, raising the question of whether the settlement constitutes adequate punishment relative to its resources.
There are other factors. The settlement does not end the company's exposure. It faces substantial civil litigation from private parties and is subject to fines under the Clean Water Act that will add at least $3.5 billion and up to $20 billion to its costs for the disaster.
One advantage of the criminal settlement announced this week is that about $2.3 billion of the $4.5 billion would go to projects to restore barrier islands and wetlands and restore more streams in the region to their original paths. All of that is meant to aid environmental restoration and to restore natural defenses against hurricanes.
Before signing off on any individual deal regarding the BP role in the disaster, the courts should consider the traditional goals of punishment and deterrence, but also the potential for such settlements to serve the long-term public interest.