Tuesday, June 15, 2010

Friday Big Picture- The BP Oil Disaster: Liability Caps Don't Look So Good Now...

Big Oil and other huge corporations have by and large gotten their wish over the last few years when it comes to our legal system. Their billions in lobbying efforts have paid off, most notably in the form of liability "caps" or limits on corporations' liability when they negligently harm the environment. In Ohio these caps extend to victims of medical mistakes and even folks injured by drunk drivers, --you name it. The list of legal protections and limits has become endless.

By now, everyone who's not comatose now knows that, under federal law, BP's legal liability is limited to $75 million for environmental disasters. Here's the illogic expressed by one oil (friendly)(marinated) Senator who has vowed to fight any legislation increasing the cap to $10 billion:

Objecting for the Republicans, Sen. Jim Inhofe (Okla.) said that putting oil companies on the line for unlimited liability would push all but the largest companies out of the offshore drilling business — the same argument he made last week in rejecting the $10 billion cap. In fact, Inhofe said, removing the liability cap could push even the giants of the industry — BP, Shell, Chevron, Exxon-Mobil and ConocoPhillips — out of contention for contracts, leaving only the big nationalized firms (like those in China and Venezuela) to do the drilling.

“If you take the 10 billion [dollar cap] off and make it unlimited,” Inhofe said Tuesday on the Senate floor, “that could very well shut out even the five [oil giants], and leave nothing but national oil companies in a position to be doing [offshore drilling].”

"Unlimited liability." There it is--the main argument for artificial limits placed on corporate malfeasance. Of course, it's a slap in the face to the same notions of "responsibility" and "accountability" these same politicians are famous for talking about. Apparently, you the INDIVIDUAL must exercise personal responsibility in your life (and that's a good thing). But when it comes to corporate accountability for cutting corners and risking workers' lives, an entire ecosystem, and thousands who rely on clean waters for commercial fishing and tourism, we can't have "unlimited liabiity," for corporations, can we?

Therein lies the problems with "caps," whether it's a cap on BP's liability or a cap on your inability to walk or feed yourself due to a preventable medical mistake or a seat belt failure. Caps water down and crush the well accepted societal axiom that "if you break it, you buy it."

All these legal limits sound good on paper until the you know what hits the fan. And now, in the face of an uncontrolled disaster, they don't look so appealing after all.

Hey BP: since you can't "cap" this well, you shouldn't have a "cap" on your liability either. A message that seems to be lost on those who favor these artificial limits on certain forms of arrogance, stupidity, and recklessness.

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