The Bureau of Safety and Environmental Enforcement’s (BSEE’s) Investigations and Review Unit (IRU) substantially enhances the civil and criminal enforcement of the Outer Continental Shelf Lands Act (OCSLA) and the regulations issued thereunder.
Background
In 2010, in the wake of the Deepwater Horizon oil spill, the Department of Interior renamed the Minerals Management Service (MMS) the Bureau of Ocean Energy Management, Regulation, and Enforcement (BOEMRE). DOI then restructured BOEMRE into three new Bureaus: BSEE, the Bureau of Ocean Energy Management (BOEM) and the Office of Natural Resources Revenue. The reorganization gave BSEE regulatory authority (PDF) over safety and environmental affairs for OCS exploration and production activities.
As part of the restructuring of the MMS, DOI Secretary Salazar established the IRU within BOEMRE via Secretarial Order No. 3304, issued June 29, 2010. The IRU was established (PDF) “to root out internal problems and target companies that aim to game the system.” Its purpose was “to establish the internal capability in BOEMRE” to: (1) promptly and credibly investigate and respond to allegations or evidence of misconduct and unethical behavior by BOEMRE employees and industry; (2) oversee and coordinate BOEMRE’s internal auditing, regulatory oversight and enforcement systems and programs; and (3) assure the ability of BOEMRE to swiftly assess and respond to emerging issues and crises on a Bureau-wide level, including spills and other significant events. Secretary Salazar originally intended the IRU’s functions to continue within the three new bureaus; however, as of fiscal year 2013, the IRU was operating only within BSEE (PDF).
Questions Regarding the Composition and Functioning of the IRU
The IRU describes itself as “a team of professionals with law enforcement backgrounds or technical expertise.” The head of the IRU reports to the BSEE Director. The current head of the IRU was formerly a supervisory special agent with the EPA’s Criminal Investigation Division. The IRU staff includes a federal criminal prosecutor and experienced law enforcement agents.
The Natural Resources Committee for the House of Representatives has questioned DOI about the IRU’s composition and activities. Rep. Richard Hastings (R-Wash.), House Natural Resources Committee Chairman, on behalf of the Committee, said in a letter (PDF) to Secretary Salazar, dated March 4, 2013, “More than two years after its creation, little is known about the IRU’s personnel, organization, and activities.” In particular, Rep. Hastings raised concerns about the IRU’s makeup, pointing to (1) BOEMRE’s 2010 request for $5.8 million (PDF) to equip the IRU and staff it with twenty new employees; (2) a 2012 statement by BOEMRE Director Bromwich “that the IRU would be staffed by prosecutors, investigators, and scientists;” (3) BSEE’s description of the IRU as “a team of professionals with law enforcement backgrounds or technical expertise;” and (4) a 2012 job listing for IRU special investigators noting duties including collecting evidence and witness statements. According to Rep. Hastings, it was “unclear how many people actually work in the IRU, what their backgrounds and expertise are,” whether they “serv[e] in a law enforcement capacity” or are authorized to carry firearms, and “how they are to interact with witnesses or collect evidence. . . .”
Rep. Hastings was particularly concerned that the IRU had been acting as a law enforcement organization beyond its authority and without sufficient oversight by the DOI, Congress or the public, instead reporting only to the BSEE Director. Rep. Hastings requested that the DOI produce any policies and guidance concerning coordination between the IRU and the DOI’s Office of Inspector General (DOI-OIG) or Ethics Office, as well as any status reports or results of investigations provided by the IRU to the DOI-OIG. The Natural Resources Committee has received a response from the DOI, but the DOI response is not publicly available at this time.
IRU Investigations
The IRU shares BSEE’s regulatory jurisdiction. It investigates violations of safety and environmental regulations in parallel with and in addition to ordinary BSEE investigations. Typical BSEE investigations are conducted by BSEE district personnel and are fact-finding proceedings. These investigations may result in the issuance of Incidents of Noncompliance (INCs) with requirements for corrective actions and/or the imposition of civil penalties. See 30 C.F.R. §§ 250.191, 250.1404. In all but the most egregious cases, the typical civil enforcement action has in the past been resolved with the correction of the noncompliance and the payment of any required civil penalty.
The IRU has an investigatory role greater than that of BSEE inspectors. The IRU investigation may be triggered by an accident, a whistleblower, or an INC. The IRU concentrates on matters involving serious personal injury or harm to the environment, or serious risks of such harm. If after a detailed investigation, the IRU determines that a criminal violation may have occurred (i.e., a willing and knowing violation of the statute, regulations, or lease provision, see 43 U.S.C.§ 1350(c)), the IRU may refer the investigation to the DOI-OIG for further investigation. With respect to an investigation that has been triggered by an INC, the IRU or DOI-OIG investigation may continue regardless of whether the INC has already been resolved or any civil penalty paid.
In contrast to the IRU, the DOI-OIG has criminal enforcement authority within the agency. (The DOI-OIG agent is the counterpart to an FBI agent in a regular criminal investigation.) The DOI-OIG may then refer the case to the United States Attorney’s Office for criminal prosecution, which in turn may bring the matter before a grand jury to seek an indictment.
The IRU investigation of an INC may not be apparent to an operator. An operator that has been issued an INC can no longer assume that the matter is closed simply because it corrected the noncompliance and paid a civil penalty—an investigation could be ongoing within the IRU. For example, an operator might only learn of the IRU investigation when it receives a request from the IRU to provide documents and/or make its employees available for interviews. Operators should know that if an investigation proceeds to IRU interviews of the operator’s employees and contractors, the IRU considers the violation to be a serious issue with possible criminal implications. Failure to cooperate in an IRU investigation could itself be construed as a violation of the OCSLA.
The IRU has the authority to interview and take oral statements from employees and contractors. The IRU may tape record the interviews (generally the operator will only receive copies of the tapes after indictment). For reasons of logistics, the interviews are unlikely to take place offshore. The individual who is subject to an IRU interview has a clear right to have his or her attorney present; however, the IRU will have discretion about allowing company attorneys to be present. The interview process itself raises a number of concerns, such as: (1) a government interview is intimidating and scary to employees; (2) the employees may be unaware of their right not to be interviewed; (3) the employees may be unaware of their right to their own counsel at the interview; (4) the employees may be unaware of the possible use of the interviews in a future criminal case; and (5) many employees may not be sophisticated about complex technical terms and actions on a rig or platform, creating a risk of miscommunication of regulatory significance. For these reasons, when the IRU is conducting interviews, it makes sense for the operator to implement a pro-active legal response.
Conclusions
We recommend that operators respond to and treat accident investigations and INCs more carefully than ever. Accidents involving serious injuries and INCs involving serious environmental and safety risks will receive heightened scrutiny by BSEE’s District Office and the IRU. It is not only actual harm, but also the risk of harm, either to an individual or to the environment, that triggers criminal enforcement. The IRU is now a mature organization, staffed with highly capable and experienced investigators tasked with ensuring more active enforcement of BSEE regulations. OCS operators and their counsel should be aware of the heightened risk of criminal investigations and possible prosecution.