BP CEO: Oil Claim Waivers a ‘Misstep,’ Will Not Be Enforced

May 4, 2010

BP Plc said Monday that waiver clauses in contracts it offered to Alabama fishermen to help fight the Gulf of Mexico oil spill had drawn allegations that it was trying to buy them off to give up the right to sue the company.

“That was an early misstep,” BP Chief Executive Tony Hayward told National Public Radio, when asked about Alabama media reports about a waiver campaign.

“It was a standard contract the team was using,” Hayward said, referring to a contract BP recruiters used to hire fishermen and their boats to assist in deploying booms to help try to contain the oil spill before it reached the U.S. coast.

Alabama Attorney General Troy King told Reuters that although he had no first-hand knowledge of the alleged BP waivers practice, he had been told it involved offers of payments of up to $5,000 to people affected by the oil spill who agreed not to sue the company.

“They’re saying that it was a mistake and that they’ve corrected it. But the fact remains that there are people in Alabama who believe that BP was offering them $5,000 in exchange for a release (from liability),” King told Reuters.

“For many people who live along Alabama’s Gulf Coast, $5,000 is a lot of money,” King said.

BP said the company had never intended to apply the waiver clauses in the contracts in question. It said the clauses have since been stripped out of the waivers and any already signed would not be enforced.

“That was eliminated very early in the process,” Hayward said, adding that about 700 commercial fishing boats were involved in the containment effort in the Gulf.


Hayward did not elaborate on the issue in his interview with NPR, but stressed that BP was ready to pay all legitimate claims tied to the oil spill caused by the accident at its undersea well.

“We have the claims process set up, small claims today that are being paid instantly … bigger claims we clearly have a process to run through,” the BP chief executive said.

BP has not put an estimate on the likely costs of the spill, which follows the explosion and sinking of a drilling rig owned and operated by Swiss-based driller Transocean last month. But analysts say the total bill could exceed $14 billion.

King said there were many unanswered question about the claims process, however. He also said there were people in the state who thought BP had launched a behind-the-scenes campaign to limit its liability in the face of a potential deluge of legal claims.

If true, it would be a very clear case of “bad corporate citizenship,” said King, who added that he would not rule out possible legal action against the company.

King said he and his fellow attorneys-general from Louisiana, Mississippi, and Florida would be writing a joint letter to BP Tuesday demanding that it spell out its commitments as part of the claims process.

“We want to know if they are being responsible. I believe them. I take them at their word. But I want to see it in writing,” King said.

(Reporting by Tom Brown; Editing by Pascal Fletcher and Philip Barbara)

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