Jan. 30, 2004 – A judge this week has ruled that Exxon Mobil Corporation should pay $6.75 billion in punitive damages and interest to 32,000 people adversely affected by the 1989 Exxon Valdez oil spill. US District Judge Russel Holland ordered that the oil giant pay $4.5 billion plus $2.25 billion in interest to fishermen, Alaska natives and others whose land or trade suffered damage following the disaster, which spilled nearly 11 million gallons of oil into Prince William Sound, Alaska.
Sign up to receive NewStandard headlines and extras by e-mail weekday mornings!
This is only the latest in a series of rulings in the 15-year history of the case. The New York Times reports that this is the third attempt Judge Holland has made to award damages the appeals court will uphold. Previous rulings of $5 billion and $4 billion, not including interest, were overturned by the 9th US Circuit Court of Appeals as too large.
A spokesman for Exxon Mobil, Tom Cirigliano, said that the company would again appeal the order, which he called "entirely inconsistent with the law." Cirigliano stated, according to the Washington Post, that Exxon believes the award should be around $25 million, which it has already paid in court-imposed damages. The company also paid $3.2 billion following the spill to cover environmental cleanup and compensation to Alaska residents and businesses.
Judge Holland’s 82-page decision, quoted in the Times, argues that Exxon’s payments so far have not covered the damages inflicted. He wrote that following the spill "the social fabric of Prince William Sound and Lower Cook Inlet was torn apart." He added that it "disrupted the lives (and livelihood) of thousands of claimants and their families for years."
The ruling also emphasized the degree of the firm’s culpability in "allowing a relapsed alcoholic to operate a fully-loaded, crude oil tanker in and out of Prince William Sound, a body of water which Exxon knew to be highly valuable for its fishery resources which Exxon knew, or should have known, were relied on by subsistence fisherman." The captain of the Exxon Valdez tanker, Joseph Hazelwood, despite admitting to drinking vodka on the night of the spill, was previously acquitted of piloting a vehicle while intoxicated. He was instead found guilty of the misdemeanor charge of negligently discharging oil.
The Ecologist magazine reports that the previous awards were overturned following a protracted appeals process, during which Exxon’s lawyers presented articles published in academic journals that argued that juries are incapable of setting punitive damages at a fair level and that such punitive fines do not actually improve safety. According to The Ecologist, the authors of these articles were funded by Exxon.
The ruling comes in the week that Exxon Mobil posted record profits for 2003 -- $21.51 billion, almost double those of 2002. The company indicated that it ended the year with $10.6 billion cash on hand. Canadian Press reports that Exxon Mobil’s director of investor relations Patrick Mulva declined to say whether money had been set aside to pay damages in the case.
The world’s biggest oil company has also come under fire from environmental organization Friends of the Earth International who this week released the findings of two reports that put Exxon Mobil’s contribution to global man-made carbon dioxide emissions at between 4.7 and 5.3 percent. The figures, covering the period 1882 to 2002, were reached by looking at the emissions created by the operations of the company and its predecessors and by the burning of its products.
 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
The report estimates the corporation’s lifetime carbon dioxide emissions, linked to global climate change, to be 20.3 billion tons. Both reports were commissioned by Friends of the Earth and carried out by independent researchers in the US and New Zealand.
