Oil company to pay US$700 each in compensation to Peruvian fishermen, others

Mar 24, 2022 News

Peru oil disaster…

Kaieteur News – Peruvian fishermen and others who were affected by the January 15 oil spill disaster in Peru – will receive an advance compensation of US$700 each from Spanish oil giant, Repsol.

Peru’s President of the Council of Ministers, Aníbal Torres.

The advance compensation to the fishermen and others affected by the spill came about as a result of negotiations done by the Government of Peru who is working towards getting Repsol to assume the economic impact of the spill. Due to the fact that a legal process for compensation to the affected families would take a long time, the Government of Peru got the oil giant to sign an advance compensation agreement.
The ecological disaster occurred at one of the La Pampilla Refineries S.A.A. (Repsol) off the Coast of Ventanilla Sea in the region of Lima, Peru. It was reported that the spill was caused by shock waves from an undersea volcanic eruption near Tonga in the South Pacific Ocean. At the time of the undersea eruption, Suezmax tanker, Mare Doricum, was offloading a shipment of Brazilian crude oil at one of La Pampilla refinery’s offshore mooring buoys, and as such, a quantity of the cargo was released.
Repsol had underreported the quantity of crude that was spilled to the Agency for Environmental Assessment and Control (OEFA), an agency attached to Peru’s Ministry of the Environment (MINAM), stating that only 0.16 barrels of crude was spilled, and affecting an area of 2.5m2. However, later investigations by Peru’s OEFA revealed that more than 10,000 barrels of crude had spilled – more than double the amount initially reported by the company and the affected area reaches a size of 11,061 hectares.
According to Peruvian media reports, the Spanish oil giant has signed an agreement with the Government of Peru for the advance compensation to more than 5000 Peruvian families. This was announced by Peru’s President of the Council of Ministers, Aníbal Torres.
According to Torres, regarding the efficient management of risks and threats to the rights of people and their environment, he said, “As a State, it is up to us to do everything possible so that the Repsol company, objectively responsible for these events, repairs and assumes the costs at the environmental, social and economic levels.” In this regard, he stressed that, thanks to the management of the Government, Repsol will assume the economic impact on artisanal fishermen and others affected. He added, “…given that judicial processes of this type may take too long, an advance of compensation of up to 3,000 Soles [US$700] will be granted, which will benefit more than five thousand affected families.”
Torres noted too, that in order to strengthen environmental institutions, he indicated that the Government will present a bill to request the delegation of powers to the Executive Branch, to improve standards in the event of environmental disasters, to address the areas affected by the hydrocarbon spill and the affected population.
Moreover, Repsol in a brief statement noted, “We have signed with the Government of Peru an agreement that will benefit fishermen and traders affected by the oil spill.” To this end the oil giant stated that thanks to the agreement, the affected persons will receive a partial advance of economic compensation to mitigate the impact that the spill have on their labor activities` and that has reduced their income.

File photo of the January 15, oil spill [Photo credit, Peru’s Ministry of Environment (MINAM).

Kaieteur News has reported that last week, a sanction was initiated against Repsol for the underreporting of the quantity of crude that was spilled from one of the company’s refineries and for allegedly reporting false information about the areas that were affected by the oil spill in Peru. For this type of administrative infraction, the oil giant can be fined up to US$1,232,417 – for reporting false information to the OEFA.
In previous reports, Peru’s Minister of Environment, Modesto Montoya, had stated that Repsol was not fulfilling its obligations in relation to the cleaning and remediation of the aftermath of the spill, specifically in the islands off the coast of Peru. As a result of the oil company not fulfilling its obligation in Peru, the Minister pledged that the Peruvian government will use all of the State’s power to prevent irresponsible companies from polluting their environment.
In light of the difficulties the Peruvian government is having with Repsol, to clean-up the oil spill that contaminated their shores and water, the Minister had also cited the importance of legislative reform to adequately deal with companies after oil spills.
Kaieteur News reported that following the devastating oil spill, several Peruvian officials had called for the oil company to offer compensation for the disaster.
The first action taken against the company was by Peruvian judge, Romualdo Aguedo, on Friday, January 28, 2022, who granted the order to prevent four Repsol’s executives from leaving the country. Peruvian media reported that Judge Aguedo imposed an 18-month ban on the grounds of the potential risk that the officials might leave Peru. Among them were: refinery manager, Jaime Fernández-Cuesta Luca de Tena; terminal manager, Renzo Alejandro Tejada Mackenzie; environmental manager, Gisela Cecilia Posadas Jhong and production manager, José Gregorio Reyes Ruiz.
In taking additional steps, Peru’s former Minister of the Environment, Rubén Ramirez on Monday, January 31, 2022, revealed that the government had taken the decision to suspend the company’s hydrocarbon loading and unloading activities. In other words, Repsol’s operation in the country was halted until it can substantially prove that another oil spill will not occur again in its waters.
However, in an update it was revealed that a fuel shortage in Peru had forced the country’s OEFA to lift the suspension on Repsol’s operation temporarily. However, the company was only allowed to continue its operations for 10 days and under supervision from the OEFA. That 10 days period has since come to an end and the Peruvian government has signalled that it has other alternative sources to obtain fuel.
The clean-up and remediation of approximately 12,000 barrels of crude that contaminated the shores and waters of Peru is expected to cost some US$65 million – this was announced by Repsol’s Chief Executive Officer (CEO), Josu Jon Imaz.
As the Government of Peru takes action to protect its people and its environment, Guyana in contrast, continues to give American oil giant, ExxonMobil, permission to operate without full coverage insurance to cater for such a disastrous oil spill. In February, last, ExxonMobil announced that it has commenced oil production at Guyana’s second offshore development area called Liza Phase Two in the Stabroek Block.
Among the oil companies working in Guyana’s backyard is the very oil company –Repsol – that caused the oil spill in Peru.

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