Natural Resources Restoration

The Exxon Valdez oil spill in 1989 contaminated Alaska's south central coastline, including portions of national wildlife refuges, national and state parks, a national forest, and a state game sanctuary. In a 1991 settlement, Exxon agreed to pay $900 million in civil claims in 11 annual payments and $125 million to resolve various criminal charges. The federal government and the state of Alaska signed an agreement to administer the $900 million civil settlement. The agreement created a six-member federal/state trusteeship to review and approve expenditures of the civil settlement funds. Later, this trusteeship became the Trustee Council. This report discusses (1) how much Exxon had paid, to whom the funds had been disbursed, and how the money had been used; (2) whether the Trustee Council has funded activities that may be inconsistent with the agreement and the Council's implementing policies; (3) how the prices paid for land acquisitions compare with government land appraisals; (4) if the public participation process for the habitat acquisition program is similar to that used for other restoration actions; and (5) whether the trust funds are being managed to maximize the overall returns.

GAO noted that: (1) through the end of fiscal year 1997, Exxon had made settlement payments of $620 million; (2) $521 million has been reimbursed or disbursed for various activities; (3) these funds were to: (a) reimburse agencies or credit Exxon for oil spill cleanup or damage assessment costs ($198 million); (b) buy land to protect or enhance damaged resources ($187 million); (c) conduct monitoring, research, or restoration projects ($116 million); and (d) provide administrative, science management, public information and related costs ($20 million); (4) the remaining $99 million represents funds not yet disbursed; (5) most of the activities funded by the Trustee Council appear consistent with the terms of the memorandum of agreement and the council's implementing policies; (6) all of the activities that dealt with habitat acquisition and general restoration and most research and monitoring activities appeared consistent with the agreement and restoration plan in that they were linked to the oil spill, limited to restoration of natural resources in Alaska, and included in the types of restoration activities specified in the memorandum of agreement between the federal government and the state of Alaska; (7) a few monitoring and research projects have been funded even though they have questionable linkage to the spill or appear to run counter to the Trustee Council's policy of not funding projects that would normally be funded by a federal or state agency; (8) the Trustee Council has paid about 56 percent above the government-appraised value for the lands it has acquired; (9) nearly all the amount paid above the government-appraised value is a result of five large parcel acquisitions; (10) for these five acquisitions, involving about 360,000 acres bought outright or containing some type of easement, the council paid from 2 to almost 4 times the government-appraised value; (11) the public participation process followed by the Trustee Council for acquiring land is similar to the process followed for decisions on other restoration activities; (12) GAO found that the council's processes for both habitat acquisition and other restoration activities appear to provide ample opportunities for the public to review information and comment; and (13) the Trustee Council's independent auditors have identified two major ways for increasing returns on settlement funds.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

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