Magaziner: Lawsuits filed against BP, Plains All American for oil spills affecting R.I. pension system

PROVIDENCE – The Employees’ Retirement System of Rhode Island is pursuing leadership roles in two class action lawsuits against BP and Plains All American for oil spills that affected investors and the environment, General Treasurer Seth Magaziner said Thursday.

Magaziner, who issued a news release about the lawsuits, said they accuse the companies of “reckless behavior, misrepresentation and fraud” related to the oil spills, and that they cost the state pension fund as a result.

“To protect the pension investments of hardworking Rhode Islanders, we are seeking restitution for the financial harm caused to the pension system by Plains All American and BP’s environmental recklessness,” Magaziner said in a statement.
“Plains and BP misled their investors by telling us they were complying with environmental laws and regulations when they were not. After the environmental disasters they caused, both companies downplayed the extent of the destruction,” he said.

The release said that Houston-based Plains All American Pipeline, which had an oil spill off the coast of California in May, was responsible for the largest oil spill there in 25 years, and that BP’s 2006 oil spill in Prudhoe Bay “was the largest ecological disaster caused by a failed pipeline in the history of oil exploration in Alaska.”

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After the spill, the price of Plains securities declined by nearly 30 percent. Rhode Island’s pension system lost $3.9 million on its investment in Plains securities from Feb. 27, 2013 through Aug. 4, according to papers filed with the court.

The lawsuit against BP alleges that the company intentionally failed to disclose the foreseeable risk that oil production at Prudhoe Bay, Alaska, would have to be shut down or curtailed due to the condition of it pipelines, which were severely corroded from its maintenance and monitoring practices.

Rhode Island’s pension system lost approximately $150,000 due to the BP spill.
“Treasurer Magaziner and his staff recognize the economic impacts of the environmental damage caused by BP and Plains All American, and we applaud them for these two class action lawsuits,” Meg Kerr, director of Clean Water Action Rhode Island, said.

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