Gulf of Mexico shrimpers and crabbers, who have reported diminished catches since the BP oil spill, are being offered a more generous settlement package because of lingering uncertainties over the safety of their seafood.
On Wednesday, Kenneth Feinberg, who is overseeing payments from a $20 billion compensation fund for victims of the 2010 oil spill, said he would offer shrimpers and crabbers four times their documented losses in 2010 to settle their claims against BP. Feinberg said the new formula, which doubles previous potential payments, was the result of uncertainty over the "marketability" of Gulf shrimp and crabs and not based on biological damage to the stocks.
"It is not biological, it is more market-driven," Feinberg said. "We see no evidence in the Gulf that there is long-term biological impact."
On its website, the Feinberg-directed Gulf Coast Claims Facility said it recognized "the ongoing uncertainty regarding the state of the commercial harvesting of shrimp and crabs in the Gulf and the uncertainty of any ongoing impact from the spill."
Also Wednesday, Feinberg said businesses and individuals in Florida outside of the Panhandle and in Texas would have to meet new stricter standards to be eligible for compensation. Losses in those areas will "no longer be presumed to be the result of the oil spill," the new methodology says. Oil from the spill did not reach either Texas or the Florida peninsula in large quantities.
Feinberg said about $6 billion has been paid so far to compensate businesses and individuals for the April 20, 2010, drilling rig blowout and spill off the coast of Louisiana. Eleven workers were killed when the Deepwater Horizon rig exploded.
The heftier offer is unlikely to assuage many shrimpers and crab harvesters who say the claims process has been unfair. Many commercial fishermen have opted to not take a final payment and settle their claims against BP and instead are seeking interim claims payments, which also lets them sue BP. Those payments are scheduled to end in August 2013.
Clint Guidry, the head of the Louisiana Shrimp Association, which counts 600 shrimpers among its members, criticized Feinberg for not paying enough interim claims and generally not treating commercial fishermen fairly. He questioned whether Feinberg would do much better with the new formula.
"Four times zero is still zero if he's not putting out the money," Guidry said. "If the money's not coming out, it doesn't matter what formula he comes out with."
Guidry also said that the future of shrimp stocks was uncertain. Many fishermen believe the BP spill and the dispersant used to break up the oil damaged shrimp stocks.
So far, about 4,000 people and businesses connected to the shrimping and crabbing industries have settled claims, Feinberg said.
But thousands of crabbers and shrimpers are holding out and are planning to sue BP in court rather than settle. A trial begins in New Orleans next February over the spill.
Ervin A. Gonzalez, a Florida lawyer on the plaintiffs' steering committee for the upcoming trial, said Feinberg's latest offer for shrimpers and crabbers was inadequate. He said he was speaking for his clients and not for the steering committee as a whole.
"If you start with the wrong base number, increasing it by four doesn't make it fair," Gonzalez said. "Waiting a year or two to get fully compensated makes a lot of sense rather than taking peanuts."
Gonzalez also said Feinberg's new rules for the Florida peninsula and Texas were based on geography and "not reality." He said people and businesses in Texas and the Florida peninsula have legitimate claims against BP that would be denied under the new rules.
Many fishermen say their lives and livelihoods do not fit into the formulas that Feinberg has come up with.
For example, Tommy Vanacor, a 63-year-old operations manager at seafood wholesaler and retailer Les Crabe Des Allemands, said his business was set to open on May 1, a few days after the spill, and didn't' open until this past July because of the uncertainty in the industry. Under his scenario, because the company wasn't making a profit, Vanacor said its damage claims have been rejected.
"The business has filed a claim, and as yet we have received zero," he said. "I will probably have to wind up hiring an attorney for me and the business."
Gulf Coast Claims Facility: http://www.gulfcoastclaimsfacility.com/