BP Oil Spill Compensation Fund Emphasizes Geographic Proximity

Internal documents related to BP’s $20 Billion oil spill compensation fund are beginning to paint a clear picture as to how the payouts will be structured.  The documents include e-mails, protocols, claims forms  and legal notes; collectively, they also reveal that the fund emphasizes geographic proximity as a prominent factor in determining eligibility.

Fishermen, including shrimpers and those who process seafood as well as businesses with beachfront property in areas where oil  washed ashore will have the clearest path to getting their compensation. Businesses located miles from the shore but along the highway headed to the beach will most likely not be eligible, according to the documents.

The documents explicitly state that “Economic losses which are more remote, or occurred at a location more distant from the spill, are less likely to be fully compensated.”  Analysts note that the eligibility criteria makes intuitive sense but in practice will disregard many that were profoundly affected by the spill, albeit indirectly.

Businesses that may be excluded include a bait and tackle supply store that supplies the gulf’s fishermen, a gas station along the highway that heads to the Gulf Coast, and beverage suppliers to the affected beachfront restaurants.  Mr. Feinberg, the administrator of the find will perform a case-by-case analysis of what qualifies as beach-front and how payments will be adjusted to account for geographic proximity to the spill.