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Last Update: May 21, 2008
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SHELL to Invest US$60 million in Environmental Improvements
Refinery Closure Lifted in Argentina
Buenos Aires – September 11, 2007 – Seven days after the federal environmental authority closed SHELL's largest Latin American oil refinery, the President and CEO of SHELL Argentina, Juan José Aranguren struck a deal with federal Environment Secretary Romina Picolotti , in which Shell promises to bring its refinery up to compliance of environmental norms and standards. Shell will invest US$60 million to revamp its refinery, improve its petroleum storage facilities, and toxic waste treatment and management, upgrade its control systems, monitor and control is gas emissions, install infrared leakage detectors, and address soil contamination. Shell also presented a temporary 90-day permit obtained from the provincial government authority to extract the 18,400,000 liters of water which it was extracting illegally until the closure. In exchange, the Secretary of Environment and Sustainable Development (SAYDS) will temporarily lift the refinery closure imposed last Friday and monitor Shell's compliance progress.
Many believed closing down Shell was impossible, or politically unviable, especially considering the incumbent administration is up for election next month, and that Shell delivers 20% of Argentina 's consumer supply of diesel and gasoline. Cutting off such a stream of fuel would lead to price hikes and long lines at the fuel pumps, claimed El Cronista , the leading Argentine financial daily, as well as Shell executives who claimed the government was discriminately picking on the company.
But dozens of compliance violations were more than obvious in the 200-page document submitted as evidence for the closure by the SAYDS. Following a 13-day inspection by the SAYDS environmental control and compliance team, Shell was found to be in violation of a long list of laws and regulations, including operating 700 high pressure boilers, and storage containers with expired permits, or many of which were not declared before authorities. SHELL extracted hourly from the Riachuelo River , the amount of water consumed by a city of 1.1 million with absolutely no authorization. Toxic waste was being improperly handled, and numerous infraganti petroleum leakages were found during the inspection.
The agreement between Shell and the Federal Government of Argentina, sets a global example of how environmental legal compliance can be achieved when government commits to enforcing environmental norms and regulations, when control teams are properly trained, and when the political will to crack down on contaminators exists. It also shows how companies can and will conform to the law , when obliged to.
The Secretariat of Environment and Sustainable Development (SAYDS), is carrying out a massive 15-year plan to clean up the Riachuelo River and its basin. At least 1200 industries have operated on or near the river and have polluted for years and even decades, without environmental controls, many like Shell, without permits, and in a state of complete impunity. “Impunity is over”, says Raul Vidable, head of the control and compliance team, and in charge of the SHELL sting operation, “Dozens of companies like Danone, Bridgestone Firestone, Dow Chemical and now Shell, have been temporarily closed or forced to relocate due to compliance problems. We have carried out over 1500 inspections, and in several hundreds of cases, fined or forced companies to develop investment plans, or make immediate structural changes to comply with environmental laws”.
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