Shocking: 18 Years on and Exxon Still Won't Pay $2.5 Billion for Valdez Oil Spill

By Riki Ott, AlterNet. Posted November 5, 2007.

The Supreme Court's recent decision to hear ExxonMobil's reasons to void the $2.5 billion punitive award in the Exxon Valdez case hit the town of Cordova, Alaska, hard. This small coastal fishing community -- my hometown -- along with the Alaska Native villages in Prince William Sound have borne the brunt of the largest crude oil spill in America's waters; a spill that took place more than 18 years ago, but one that continues to hold the region hostage.

The second painful blow was the high court's decision to not even hear our reasons why the award should be restored to the full $5 billion that a jury of peers decided was necessary to punish the corporate giant back in 1994.

While media pundits, lawyers, and scholars play the Supreme Court's decisions back and forth like a ping-pong ball, people in Cordova share a completely different perspective of this story. It's not about whether the Supreme Court should hear the case. To us, it's about justice and reparation -- making us whole, a promise Exxon made to the community five days after the spill. A promise that Exxon broke before the trial even started five years after the spill.

To us, it's about more than an oil spill, the world's largest oil corporation, and a small fishing community in Alaska. It's about America's failed legal system that inherently cannot dispense justice in the face of corporate globalization.

U.S. corporations have outgrown America's justice system. The system won't work for any community in America that is traumatized by disaster that triggers class action lawsuits -- hurricanes like Katrina, terrorist acts like 9/11, or oil spills like the Exxon Valdez. Yet sociologists warn such disasters will be a hallmark of the 21st century.

People in Cordova wonder how this happened and why our legal system no longer metes out justice. When did "punitive" stop meaning to punish? If the original punitive award of $5 billion was sufficient to change corporate behavior why was Exxon the last corporation to double hull its oil tankers to reduce risk of future spills rather than the first?

Why shouldn't Exxon be expected to pay to clean up its mess, pay penalties for breaking laws, compensate victims for losses, and pay punitive damages? This is what responsible corporations do -- and it's certainly what Americans expect.

The spilled oil -- somewhere between 11 to 38 million gallons (the figure is elusive because as we learned the hard way, the truth was one of the first casualties of the spill) -- created a big mess and broke a lot of federal laws. It shouldn't surprise anyone that Exxon paid $2.5 billion for its cleanup and another $1 billion for penalties. But, it might surprise people who live outside Alaska to learn that taxpayers, not Exxon, paid a majority of that bill. Exxon recouped most of its remaining expense from its insurance companies and from money it paid to settle damages for natural resources -- publicly-owned wildlife and lands.

Further, Exxon rewarded its primary cleanup contractor, formerly VECO, with a cost-plus contract that acted like steroids, bulking up this small-time oilfield service contractor into one of the biggest -- spending, pro-oil lobbyists in the state -- until its fall from grace this year under charges of federal bribery, conspiracy, and more. You may have heard of the ongoing FBI investigation that is sweeping Alaska's politicians -- from state legislators to congressional delegates -- into its widening net.

While that's another story, it serves to illustrate what our justice system deems "good corporate behavior" worthy of consideration to reduce its punitive award.

We ask all of you who share in the cost of this cleanup and the devastation of this spill: How could Exxon fool seemingly everyone into believing that the Sound is now clean, wildlife recovered, and fishing back to "normal"?

How could they fool everyone? Because the reality goes against the "good corporate behavior" meme Exxon has pushed for now nearly two decades in the courts, in the media, and in Congress.

This is our world, our reality: Three of Cordova's five fish processors (canneries) went bankrupt after the spill. The largest one never recovered, leaving the town with not enough capacity to buy and process large salmon returns like this year. Further, the town lost it's only locally owned and operated processor cooperative, leaving fishermen with fewer resources to leverage high grounds prices for their catch. The town tumbled from its ranking as one of the top ten seaports in the nation, based on harvest value, to 53rd after the delayed, spill-related pink salmon and herring population collapses in 1992 and 1993.

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Riki Ott, PhD, is a community activist, a former fisherm'am, and has a degree in marine toxicology with a specialty in oil pollution. She is the author of Sound Truth and Corporate Myth$: The Legacy of the Exxon Valdez Oil Spill and author of the forthcoming book, Not One Drop: Promises, Betrayal, and Courage in the Wake of the Exxon Valdez Oil Spill (Chelsea Green, 2008).