Oil and gas drilling and transport poses a significant threat to the environment, one that has regularly been understated by the industry. Fraudulent attempts by companies to hide environmental damage or poor emergency preparedness can make this threat much more severe.
Potential frauds include: (1) maintaining false statements in the rig’s mandatory records of its spills and discharges of oil and other materials; (2) incorrect statements on leasing applications regarding potential environmental impact and emergency preparedness; and (3) falsifying the results of safety tests.
Whistleblowers with knowledge of fraud on oil and gas rigs have a host of powerful U.S. laws available to them.
However, whistleblower laws are complex, and it is recommended that whistleblowers consult with a qualified attorney before acting on any information about potential wrongdoing. Through its Legal Assistance Program, the National Whistleblower Center helps connect would-be whistleblowers to attorneys specializing in whistleblower law.
NWC works with an independent public interest law firm, the National Whistleblower Legal Defense and Education Fund (“Fund”), which provides a secure intake form that allows whistleblowers to submit basic information about their case on a confidential basis.
Potential whistleblowers looking for a whistleblower attorney are encouraged to submit their concerns to the Fund’s intake site. Once submitted, the intake form will be reviewed by a highly qualified whistleblower attorney, who may make one of several recommendations.
In order to mitigate the dangers of oil spills and gas emissions in the oceans, the International Convention for the Prevention of Pollution from Ships (MARPOL) was adopted in 1983. The convention includes regulations aimed at preventing and minimizing pollution from ships — both accidental pollution and that from routine operations.
The U.S. adopted MARPOL into its Act to Prevent Pollution from Ships (APPS), which makes it a criminal offense for any person to knowingly violate MARPOL, APPS, or the federal regulations promulgated under APPS. These regulations apply to all commercial vessels, including deep water rigs.
Whistleblowers, who typically are crew members on the vessels and rigs, play a key role in APPS enforcement efforts by providing evidence of dumping of oil and waste products from drilling into the ocean without proper disclosure on the vessel’s record books. Under APPS, whistleblowers are eligible for a monetary reward of up to 50% of the monetary sanctions that the U.S. government receives from the guilty parties.
APPS has been incredibly effective since it was signed into law: the U.S. courts have awarded 205 whistleblowers a sum of approximately $33 million in the 100 recent prosecutions under APPS, and whistleblowers were responsible for 76% of all successful cases from 1993 – 2017.
Another U.S. law that can be used against toxic pollution from offshore rigs is the False Claims Act, one of the most important whistleblower reward laws. Since 1986, it has collected a staggering $43 billion since 1986 for the benefit of taxpayers with $6 billion going to whistleblowers. Under the FCA, violators are liable for treble damages – or three times the dollar amount that the government is defrauded – along with civil penalties for each false claim. Whistleblowers are can receive between 15% and 30% of sanctions obtained.
There are two key features of the FCA that make it uniquely suitable for pursuing environmental crimes: its qui tam provision and the concept of “reverse false claims.” Qui tam gives the whistleblower the opportunity to bring forward a case on behalf of the government if the government declines to intervene for whatever reason. Meanwhile, reverse false claims hinges on the concept that in providing the government with incorrect information on customs forms, lease applications, and the like, the wrongdoer has prevented the government from collecting what it is owed.
The returns for a successful fossil fuel prosecution under the False Claims Act are potentially huge as was shown in 2016 by the record $20 billion settlement with British Petroleum (BP) following the Deepwater Horizon disaster. The settlement included reverse False Claims Act penalties for falsifying offshore lease applications. NWC was one of the groups who advocated for the Department of Justice to include FCA claims as BP misrepresented its safety and emergency response procedures in order to operate under leases from the U.S government.