In the midst of a crackdown on contaminating industries, Shell was ordered to “totally close” its principle refinery yesterday due to a long list of violations of environmental safety codes, permits, as well as infraganti petrol contamination observed during routine inspections over a 13 day period, by the Argentine Environment and Sustainable Development Secretariat, the SAYDS.
Large oil tankers arriving this morning from the Atlantic Ocean and up the River Plate, to fill up at the Shell refinery on the Riachuelo river in Buenos Aires, were ordered away, until further notice, or at least until the closure is lifted. This morning, in an extremely tense environment, confused Shell workers entered refinery facilities, while environmental authorities, reappeared to ensure the company begins close-down and that workers only entered to work on activities to correct the violations. According to company sources, it could take as long as 13 days to fully shut down production.
The SAYDS Environmental Compliance Task Force found serious leaks of petrol into the ground, dozens of expired permits of high pressure caldrons, unacceptable management and storage of toxic waste, and the illegal intake and overheated disposal of 18,400,000 liters of water taken hourly from the Riachuelo River (more water than a city of 1 million people consumes), as well as a long list of other violations which drove the federal government to indefinitely suspend Shells permit to operate its main refinery.
The Shell closure comes at an extremely sensitive time for the company, embroiled in a dispute with the national Energy Secretary which accuses Shell of failing to deliver product at peak demand causing petrol shortages at end-of-the-month periods throughout the country. Shell had also run into to problems with the national government over an attempt to raise prices two years ago, which resulted in a public call by the President to boycott Shell. After massive adherence to the call, Shell backed down with price hikes and closed a number of stations, arguing a fall in sales. One financial printed daily (El Cronista) claims the closure is a form of “legal harassment” by the national government. The article argues that closing down Shell the country could experience serious fuel shortages, however, considering elections are only a month away, it seems irrational that the government would chose to generate long fuel lines.
In its defense, Shell points to a deal it struck with the Energy Secretariat to conduct its own audits and inspections, which it does through a private auditing company that suggests that everything is in order. This independent audit scheme is trumped, however, by the recent creation of the emergency River Basin Authority, devised by the SAYDS head. The River Basin Authority unifies jurisdiction, and puts control and compliance fully in the hands of the SAYDS.
In response to claims that the government decision responds to targeted harassment against Shell for recent confrontation with the Energy Ministry, Raul Vidable, the head of the SAYDS Environmental Compliance Task Force, responded that “Shell’s closure is but one of many actions taken against highly visible corporations that are not complying with environmental codes. Yesterday’s closure is the result of a programmed series of inspections, which have already resulted in serious steps taken by the national government to rein in contamination and introduce a control and compliance culture for industry.”
The SAYDS launched a plan recently to clean up the Riachuelo River Basin, on which Shell is located. The Riachuelo is an urban river system abandoned to industrial contamination for nearly 150 years, with nearly 7 million people, living on or near the river, and depending on it for water and as a canal to carry off liquid waste. The plan, which is the subject of great national debate, involves 15 years of investment in basic public water and sanitation investments, water clean up, eradication of illegal waste dumps, relocation of informal settlements, health treatment for victims, and a clamp-down on nearly 1300 industries which are largely to blame for some of the Riachuelo’s environmental problems.
Shell is just one of hundreds of companies that have received over 1500 inspections from the SADYS over the past year. Due to the many years of in operant public environmental controls, companies generally ignore environmental regulations. Lately however, SAYDS inspections almost always result in some form of reprimand, fine, obligation to invest in environmentally oriented reforms, temporary closure, or permanent closure with obliged relocation.
Other highly visible companies that have been penalized with closures or forced relocation include Firestone, Danone, Dow Chemical, and several high profile national companies in the metals, petrol refinery, and tannery sectors. To date, under the Riachuelo River Basin Plan, the SAYDS has conducted 727 inspections, applied 193 preventive measures, and 46 industries have been closed.
Last year, the federal Environment and Sustainable Development Secretariat (SAYDS), which used to sit under the health ministry with meager budget and nearly no political power, was elevated to ministerial status and Kirchner appointed Romina Picolotti, a renown environmental and human rights advocate, quadrupled the budget, and gave the SAYDS carte blanche to do what it had to do to get things right. Picolotti turned to environmental compliance and enforcement, prioritizing the protection of communities affected by environmental degradation, and ensuring the basic tenant that corporations abide by the law, a basic request to industry, but which implies significant corporate investments in environmentally sound management and production process, as well as a change of culture.
In a country where environment was never a priority, this means that industries in sensitive sectors, such as many of the ones found in the Riachuelo Basin, have to finally bring their operations up to environmental standards, or expect, as Shell, and others are discovering, that they will be inspected and forced to comply.
Corporate culture in Argentina has yet to come to terms with environmental compliance, largely because there have never been serious controls, and even when they have occurred, large multimillion dollar operations like those of Shell, could get away with paying ridiculously low fines. “Basically, it used to pay to contaminate”, said Raul Vidable, the head of the Environmental Compliance Task Force.
Shell Argentina sales are US$5.2 billion, and the company has 778 retail outlets in the country. Shell accounts for a total of 19.3% of the petroleum market in Argentina. Its refinery facilities on 120 hectares of land, are located in the Dock Sud area of the Riachuelo, where it unites with the River Plate, and is the largest petroleum refinery facility on the Riachuelo. Five hundred employees work at the Shell refinery.
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