Following “many months of discussions and assessments,” the EPA announced an agreement that will allow BP to again enter into contracts with the U.S. government, including obtaining new deepwater leases in the Gulf of Mexico. 

The 53-page document resolves all administrative matters relating to suspension and debarment of, and statutory disqualification resulting from, charges, including criminal charges, brought against BP.  Those charges include 11 counts of seaman’s manslaughter resulting from the Deepwater Horizon blowout in the Gulf of Mexico in April 2010.  Since November 2012, the EPA suspended 25 BP entities and disqualified BP Exploration and Production Inc. from performing federal contract work at its corporate facility in Houston, Texas. 

In developing the agreement, the EPA coordinated with the Department of Interior, the Defense Logistics Agency, and the U.S. Coast Guard.

Independent auditor

Under the 5-year deal, BP must retain an independent auditor, approved by the EPA, who will conduct an annual review and report on BP’s compliance with its obligations.  Among other areas, the auditor will review BP’s maintenance of ethics and compliance programs that include requirements that BP employees report discovery of any violations or potential violations of legal obligations and BP’s issuance of a “zero-tolerance statement” against any form of retaliation against employees or contractors who raise good-faith concerns regarding compliance, safety, and/or ethics.

Code of Conduct

The many other provisions BP must satisfy under the agreement include:

• Maintenance of policies and/or standards and control processes designed to prevent, detect, and remediate unethical or illegal conduct with respect to BP’s U.S. businesses.
• Provision of training on BP’s Code of Conduct for all new U.S. employees hired on or after July 1, 2014.
• Application of sanctions to employees found to have breached the Code.  Such sanctions may include oral or written warnings, loss of variable compensation, dismissal and referral to appropriate authorities for civil or criminal proceedings, and other appropriate actions, depending on the nature of the breach.
• Maintenance of a bonus incentives program for employees that make outstanding contributions to the company's ethical culture and regulatory compliance assurance.
• Maintenance of a safety, ethics, and environmental assurance committee that conducts monitoring to ensure that management or mitigation of significant BP risks of a nonfinancial nature is appropriately addressed by BP’s chief executives.
• Extensive oversight of contractor performance regarding process safety management for deepwater drilling rigs.
• Submission of a consolidated annual report to the EPA on compliance by covered entities of the agreement.

BP drops lawsuit

The safety and operations, ethics and compliance, and corporate governance terms in the agreement include those contained in a remedial order stemming from BP’s 2012 plea agreement with the U.S. Department of Justice and the U.S. Securities and Exchange Commission.

As part of the agreement, BP will drop the lawsuit it filed in federal court in Texas for improper statutory disqualification and suspension.

The agreement