PEP
In the context of Union Carbide , developments in respect of hazardous
industries
have to be understood . Here is a reaction from the ANSWER Coaltion of the
United States in respect of the ongoing negotiations of the US administration
with BP . We cannot become a functioning democracy without a study
and understanding of issues which we confront and the objective and
purpose of legislative policy and executive decisions and what they
represent camouflaged behind the legalese and the complex terms used
which can be seen through are decisions which affect the lives of our citizens.
When Union of India pays it pays from the citizens contribution to the
exchequer and even the poorest of the poor pay indirect taxes on commodities
purchased . Indirect taxes paid by millions contribute more the exchequer
than Income Tax and Corporate Taxes. THEREFORE THE ARGUMENT THAT
THE GOVERNMENT OF INDIA WILL PAY THE OUT THE DIFFERENCE IN
LIABILITY BETWEEN A LIABILITY WHICH IS CAPPED AND THE ACTUAL
DAMAGE IS AN ARGUMENT ADVANCED BY POLICY MAKERS AND
LAWYERS ACTING IN THE INTEREST OF TRANSNATIONAL COMPANIES
WHO ARE BEING SUBSIDISED BY THE UNION OF INDIA , HOWEVER
THE FINAL LIABILITY FOR ANY PAYMENT BY THE UNION OF INDIA
IS THAT OF THE INDIAN CITIZEN THE POOREST OF THE POOR .
When State governments encourage communal clashes and killlings
as a political divergence and then to assuage sentiment declare the
payment of compensation the payment is not made by CORPORATE
AND FINANCIAL INTERESTS WHO HAVE FUNDED THE COMMUNAL
RIOT OR ATTACK , IONCE AGAIN IT IS THE PEOPLE OF INDIA
WHO PAY .
Niloufer Bhagwat
----- Original Message -----
From: ANSWER Coalition
To: [email protected]
Sent: Thursday, June 17, 2010 6:40 AM
Subject: What does the BP "escrow" deal really mean?
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What does the BP "escrow"
deal really mean?
People all around the country have put so much pressure on the Obama
administration that it had to "do something" to look like it was standing up to
BP. The announcement today of a so-called $20 billion escrow fund from BP would
never have happened without mass pressure. But does this fund truly respond to
the needs of the people in the Gulf Coast states?
Too much is at stake for people to let down their guard and accept the
"feel good" sound-bite version of what took place today in the meeting between
President Obama and BP's executives.
The White House and BP are creating a mythology, or "spin," on what the
tentative agreement signifies.
It is noteworthy that BP's executives are very happy with the new
agreement. Their necessary goal as a corporation is to maximize profits, and
not to pay damages to all of those who have been harmed. As the Washington Post
reported after the meetings, "Behind the scenes, the company had signaled what
it expected from Wednesday's meeting-and the company appears to have gotten
exactly what it wanted."
It is quite clear to us, even though much more will be revealed in the
coming days and weeks, that we have to accelerate the movement for justice.
This agreement is not only inadequate but attempts to shield BP from paying all
the damages and compensation for lost work, ruined small businesses, and a
devastated ecosystem.
At first glance, one would believe, based on the headlines that the
Obama Administration compelled BP to set aside $20 billion dollars in an escrow
account to meet the needs of people and communities harmed by BP's criminal
negligence.
But this is actually a great deal for BP.
The facts on the "escrow" account
The "escrow account" in 2010 is not $20 billion dollars. BP will put in
$3 billion dollars in the third quarter of 2010 (ending September 30) and
another $2 billion in the fourth quarter (ending December 31). Thereafter, it
will have to make installments of $1.25 billion each quarter for the next three
years.
This means that the necessary money will not be available to pay the
tens of billions in losses that are real and immediate. It also means that
people and businesses will have to get in line.
The real number for the escrow account in 2010 is $5 billion-six months
from now at the earliest. To put this in perspective, BP has been bringing in
between $26 billion and $36 billion annually in profits on revenue of $250
billion, and pays out more than $10 billion in dividends yearly.
According to a report in Forbes, BP could absorb $35 billion in spill
costs before it would have a "material impact" on its operations. But instead,
it will be allowed a paltry $5 billion a year, in an installment plan over four
years.
Another measure of perspective can be had by comparison of this $5
billion per year voluntary set-aside to the accumulated potential fines and
penalties under the Clean Water Act. BP can be fined $4,300 per barrel of oil
spilled as a consequence of gross negligence. With the recent acknowledgment
that the spill volume is 60,000 barrels per day, that is a potential penalty of
over $250 million per day. Put another way, every 60 days accumulates a
potential $15 billion fine under the Act. The voluntary arrangement to set
aside $5 billion per year is meager in comparison.
This, of course, reflects Obama's unwillingness to exercise legal
authority against BP. Department of Justice lawyers could be initiating
prosecutions for the accumulated fines, but aside from the announcement of
potential investigations, this has not occurred.
Obama denies that his deal with BP will function as a cap on its
liability, but this remains to be determined. The deal appears to functionally
provide a shield for BP. As one investment advisor told the Wall Street
Journal, the agreement puts "an end to the financial bleeding," and allows
investors to assess what BP's total liabilities might be. So while President
Obama stresses that the plan is not a cap on liability, it certainly appears as
one. The installment terms of the payments themselves limit the amounts that
will be made available while people are seeking claims.
Mr. Feinberg to the rescue-again
President Obama announced that the fund will be administered by Kenneth
Feinberg, a Washington lawyer who made $5.7 million in his law practice in
2008. Mr. Feinberg has played a particular role in Washington at the time of
virtual uprising against the banks and bankers' bonuses. He was appointed to be
the "pay czar" by Obama reviewing and approving many of the obscene bonuses
doled out to AIG and other executives after they were bailed out with hundreds
of billions of dollars of taxpayers' money. As Reuters wrote today, "He has
been hailed for soothing the egos of Wall Street executives clutching on to big
paychecks, while still looking tough to a general public shocked by massive
payouts to firms on a government lifeline."
There is very little other information about how claims will be
processed. There will have to be determinations made as to what, in the
parlance of both BP and President Obama, is a "legitimate" claim. While Obama
stated that anyone can file a claim, that doesn't mean that the claim will be
accepted or paid. Nor does it appear that the decision-making process will
include any of the affected Gulf coast residents or their representatives from
the fishers, shrimpers, crabbers, unions, small business people and workers in
the tourism and recreation industry, local elected officials, clergy, and
independent scientists and environmentalists.
Details must be forthcoming about claims payments and standards. Can we
expect tens of thousands of people to receive checks by the end of the month?
One thing is clear: The limited level of the fund necessarily means that claims
cannot be paid equivalent to the damages incurred right now.
The creation of the so-called escrow fund was the result of a
nationwide mass movement. Now is the time to step up our organizing to make
sure that we have the kind of escrow fund that can really meet the needs of the
people and repair the vast environmental damage caused by BP.
Today, while BP executives and the Obama Administration
met, Seize BP volunteers and organizers were again in
front of the White House.
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