Peru hits Repsol with another US-multimillion dollar fine over oil spill

Jan 06, 2023 News

Kaieteur News – Almost one year after a refinery owned by Spanish oil giant, Repsol, leaked approximately 12,000 barrels of crude into the Pacific Ocean – which is shared with Peru’s western border – the country on Wednesday imposed more fines on the oil company.

According to Peru’s Environmental Assessment and Enforcement Agency (OEFA), an agency attached to the Ministry of the Environment, three additional fines were imposed on Repsol amounting to over US$5 million.

The OEFA stated that the first fine was imposed for not submitting the required information to the agency, given a situation of environmental damage.

Image of the oil spill in Peru. (Photo: Municipality of Ventanilla)

The second fine was imposed for non-compliance with an administrative measure referring to securing the area, carrying out containment, recovery and cleaning in the bay area of the Protected Natural Areas and in other affected marine areas, and the third fine was imposed for non-compliance with an administrative measure related to securing the area, containing, recovering, and cleaning the oil spilled in the affected seawater; as well as, carry out the verification sampling of the water and sediments of polycyclic aromatic hydrocarbons (HAPs or PAH’s) in the affected area as a result of the environmental emergency.

Kaieteur News had reported that on January 15, 2022, thousands of barrels of crude were spilled from one of Repsol’s La Pampilla refineries off the coast of Ventanilla in the region of Lima, Peru. It happened when an Italian-flagged tanker, Mare Doricum, was unloading at one of Repsol’s refineries.

Since then, the oil giant has been forced to pay over US$11 million in fines.

Also, the company was also slapped with a US$4.5 billion lawsuit in relation to the oil disaster.

The oil spill had contaminated Peruvian waters, blackened several of the country’s beaches and disrupted the livelihood of artisanal fishermen.

Kaieteur News had reported that in May 2022, Peru’s consumer protection agency, National Institute for the Defense of Competition and Protection of Intellectual Property (INDECOPI) approached the 27th Supreme Court of Peru and filed a civil lawsuit seeking US$3 billion for environmental damage and US$1.5 billion for damages to locals and consumers.

With the admittance of the oil lawsuit, it means that the matter will now go to court. Repsol, a company that is also operating here in Guyana, has since denied responsibility for the spill and said that it sees the legal claim as “baseless, inadmissible, and inconsistent.”

This publication had also reported that as a result of the spill the country had announced its plans to have legislative proposal for the creation of a guarantee fund against environmental disasters.

It was stated that this would require all companies operating in Peru to sign the guarantee fund before they will be allowed to start production.

The aforementioned action was one of many taken by the Peruvian Government.

The first action taken against the company was by Peruvian judge, Romualdo Aguedo, on January 28, 2022, who granted an order to prevent four Repsol’s executives from leaving the country.

Judge Aguedo has imposed an 18-month ban on the grounds of the potential risk that the officials might leave Peru and not honour their obligations in the country.

Shortly after the oil spill, the Peruvian Government had suspended the company’s hydrocarbon loading and unloading activities. Subsequently, a fuel shortage in Peru forced the country to lift the suspension on Repsol’s operation temporarily. Repsol was only allowed to continue its operations for 10 days and under supervision from a state agency – that operation has come to an end.

Due to the impact the oil spill had on Peru’s fishermen, the Peruvian Government had ordered the oil giant, to pay a total of US$1400 compensation to each citizen affected by the spill. The Government took the aforementioned route since a legal process for compensation to the affected families would take a long time.

Nevertheless, the Peruvian authorities through INDECOPI filed a lawsuit against Repsol, for a total of US$4.5 billion.

Peru’s fight to get the oil company to take responsibility for the environmental disaster – comes even as the Guyana Government had threw out a motion that was seeking full liability coverage from oil companies for oil spills.

Despite promising to press ExxonMobil Guyana (Esso Exploration and Production Guyana Limited) on the issue to have the parent company (ExxonMobil) for the Guyana Operations sign on to binding full coverage insurance, the Irfaan Ali led administration has shifted that responsibility to the Environmental Protection Agency (EPA).