Petrobras fine doubled as oil spill spreads

Brazil's Environment Ministry has doubled Petrobras's fine for its part in the spillage of 4 million l. of oil in to a river in southern Brazil, according to the country's Environment Minister, Jos�arney Filho. The oil company now faces a penalty of $55.4 million rather than $27.7 million�a figure which may climb to $81.1 million once the environmental protection agency and the ministry's legal department complete reports on the spill.


RIO DE JANEIRO�Brazil's Environment Ministry today doubled Petroleo Brasileiro SA's fine for its negligence in the spillage of 4 million l. of oil in to a river in southern Brazil, according to the country's Environment Minister, Jos�arney Filho. The oil company now faces a penalty of $55.4 million instead of $27.7 million�a figure that may climb to $81.1 million once the environmental protection agency and the ministry's legal department complete reports on the spill.

Petrobras was fined $27.7 million following a 1.3 million l. oil spill off the Rio de Janeiro coast earlier this year, Sarney Filho said. Under Brazilian environmental law, a second such offence during a 1-year period can result in a fine being doubled or tripled. The minister also said that those found responsible for the spill could face jail terms.

Sarney Filho said Petrobras had already started to overhaul the pipelines from the refinery as part of its $555 million nationwide environmental protection program.

"It is unlucky that this accident happened when the company is making such enormous investments," he said.

Petrobras also faces the possibility of being fined a further $28 million fine by the Parana state government, the maximum allowed for environmental problems levied by state authorities.

Cleanup efforts
Petrobras official Eduardo Teixeira Leite said emergency crews have set up more than 30 floating barriers to contain the spill and will try to vacuum the oil off the surface. Specialists from the US firm Clean Caribbean Corp., contracted by Petrobras, have taken over coordination of the cleanup efforts.

Petrobras has been aggressively expanding its activities to keep its competitive edge since the government ended the company's 46-year monopoly on oil exploration and production last year. Environmentalists believe the company's pipelines to be poorly maintained.

There is the fear that Sunday's oil spill at the Petrobras refinery, which is now flowing at around 1 km/hr, could spread to the Iguacu Falls in Foz do Iguacu, Parana, and then to Argentina, the Agencia Estado newswire reported, citing Congressman Fernando Gabeira of the country's Green Party.

Petrobras technicians are working to try to prevent the oil from reaching the city of Balsa Nova, where the Iguacu River splits into several waterways that lead to other cities. In one of these cities, Uniao da Vitoria, the river supplies water to 70,000 inhabitants.

Petrobras's barriers to contain the oil spill have not been very efficient, said Gabeira, suggesting Petrobras might not be using adequate equipment to contain the spill.

Brazil's Foreign Affairs Ministry said it has informed the ambassadors of Argentina, Paraguay, and Uruguay that steps are being taken to prevent the oil from reaching those countries. The ministry's assurances were met with skepticism from Carlos Alberto Gonzales, Paraguay's ambassador to Brazil. Gonzales told the O Globo newspaper: "This spill is worrying not only Brazil, but Paraguay, Argentina, and Uruguay."

According to a Rede Globo TV network report, the refinery equipment suspected to have caused the ecological disaster is 23-years old and was last inspected 6 months ago.

"A $55.4 million fine is not enough to make Petrobras create monitoring proportional to the operational risks it has," said Joao Paulo Capobianco, coordinator of the Social-Environment Institute. "It is very clear that Petrobras is not in any way impacted by these fines, because oil spills are still happening." Capobianco said this oil spill is the seventh since December.

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