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<xTITLE>Make Compensatory Payments In The Gulf Coast Now!</xTITLE>

Make Compensatory Payments In The Gulf Coast Now!

by Larry Susskind
June 2010

From Larry Susskind's blog on the Consensus Building Approach

Larry Susskind
We need not wait for a lawsuit or even a federal investigation to start doing something to help the thousands of victims of the oil spill in the Gulf region. The Obama administration should appoint a special master, someone with the same credibility and mediation skill that Ken Feinberg had when he was appointed to administrator the 9-11 Fund. There are many skilled mediators with the experience to oversee the allocation of large compensation funds to thousands of claimants following a court decision regarding corporate liability for an accident or a disaster. In this case, since BP has already indicated that it accepts responsibility for what has happened, it makes no sense to wait.

Once the Oil Spill Master has been appointed, BP should make a payment of at least $2 billion into a Compensation Fund. This could be administered by any one of several large foundations at no or very low cost. Any commercial enterprise that has been adversely affected by the spill (or the failed efforts to clean it up) need only produce a record of what its revenues were during this same period last year and sign a statement indicating that it is unable to operate normally because of the spill, and it would be eligible for immediate aid. The funds would take the form of a non-taxable gift from the foundation. The Special Master and his or her staff would allocate compensation funds to make up for real losses (not emotional distress or punitive damages). Everything allocated over the next six months could be incorporated into whatever the court's final tally is regarding BP's liability and penalties. In the meantime, this would keep the economy of the region alive, protect those at the bottom of the income scale, and allow quick action to protect sensitive environments.

I realize that the Special Master and his or her staff would have to be on the lookout for fraudulent claims, and this would take a little time. But the Special Master could employ private investigators and hold anyone receiving funds criminally liable for any fraudulent claims they might make.

Government agencies could apply to this Fund for money to undertake independent clean-ups of beaches and environmentally sensitive areas along the cost. They might even apply for funds that coastal cities and towns could use to undertake clean-ups. The Special Master would probably need to create a small science advisory committee (calling on university scientists in the region) to quickly review proposed clean-up plans. Since these are not, for the most part, technically complex, the Special Master would only need to determine whether responsible and capable parties had been selected to undertake the clean-ups.

Environmental organizations and industry trade groups might also be allowed to apply to the Fund if they could put together a plan that convinces the Special Master that the money they are requesting will be used to (1) create jobs for those whose livelihoods are immediately threatened by the BP disaster; (2) take short term clean-up actions that will protect fragile environments and threatened species; (3) take short-term actions that will keep the regional economy alive.

By all accounts, BP will eventually owe upwards of $20 billion. So, handing over to a federally-appointed Special Master one-tenth of that amount will hardly affect whatever court battles are to come. The Exxon Valdez penalties (of $6 billion) were ultimately cut in half by higher appeals court. None of that money was allocated for decades after the disaster because of the drawn-out legal appeals process. Those who needed the help the most got nothing in the short term.

Let's not wait for a court decide what BP's liability is. I don't think the company will in any way risk extending its liability by offering to put up $2 billion (less than half of its regular monthly profits) before any court makes a decision about the scope of responsibilities. In fact, a preemptory move of this kind would probably enhance the company's standing in the eyes of the court and in the eyes of the public. The longer we wait to take compensatory action, the more extensive the damage will be.


Lawrence Susskind was born in New York City in 1947. He graduated from Columbia University in 1968 with a B.A. in English Literature and Sociology. He received his Masters of City Planning from MIT in 1970 and his Ph.D. in Urban Planning from MIT in 1973. 

Professor Susskind joined the faculty of the MIT Department of Urban Studies and Planning in 1971. He served first as Associate Head and then as Head of that Department from 1974 through 1982. He was appointed full professor in 1986 and Ford Professor of Urban & Environmental Planning in 1995. As head of the Environmental Policy Group in the School of Architecture and Planning at MIT, he currently teaches four courses (Negotiation and Dispute Resolution in the Public Sector (11.255), International Environmental Negotiation (11.364) taught jointly with the Fletcher School of Law and Diplomacy at Tufts University, Multi-party Negotiation (11.257) taught jointly with Harvard Law School, and Use of Joint Fact-Finding in Science-Intensive Policy Disputes (11.941)), oversees a research budget of approximately $250,000 annually, and supervises more than a dozen masters and doctoral dissertations a year.

From 1982-1985, Professor Susskind served as the first Executive Director of the Program on Negotiation at Harvard Law School -- an inter-university consortium for the improvement of theory and practice in the field of dispute resolution. He currently holds an appointment at Harvard as Vice-Chair for Instruction, and Director of the Public Disputes Program at Harvard Law School. Professor Susskind is responsible for an extensive series of action-research projects, the training of senior executives, and serves on the Editorial Board of Negotiation Journal and as head of the Clearinghouse at the Program on Negotiation. He has developed more than fifty simulations (distributed by the Clearinghouse at the Program on Negotiation) that are used to teach negotiation, dispute resolution, and consensus building throughout the world. 

Professor Susskind is one of the country's most experienced public and environmental dispute mediators and a leading figure in the dispute resolution field. He has mediated more than fifty complex disputes related to the siting of controversial facilities, the setting of public health and safety standards, the formulation and implementation of development plans and projects, and conflicts among racial and ethnic groups -- serving on occasion as a special court-appointed master.

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