Profits or Eco-Rights?

An exploration into the problematic priorities of oil sales.

Marinephotobank

A couple of weeks ago, Peruvian fishers were robbed of their livelihoods, and an entire maritime ecosystem was put at detrimental risk. Another massive oil spill has blackened Peru’s usually golden beaches, a fitting new colour for mourning much of Peru’s rich and diverse wildlife. In the words of local fisherman Walter de la Cruz:  “Everything smells like death”

Repsol’s oil tanker “Mare Doricum” was hit by one of the many waves originating from a volcanic eruption near Tonga while unloading crude oil. Out of the 60,000 barrels of crude oil that it was carrying, around 6,000 were spilled into the sea, reaching 21 beaches and the space of 320 football fields in the water. This clean-up will take weeks, if not months, and heavy metals from the crude oil, which are impossible to remove, will affect the marine ecosystem for years to come. 

Repsol denies responsibility, arguing that the Peruvian maritime authority is at fault for not issuing warnings about increased waves. Repsol’s lack of perceived guilt can also be seen in their actions in the aftermath of the spill. The company did not share essential information at the onset of the spill. The contingency plan was chaotic at best and entirely improvised at worst. Whilst some Repsol workers tried to extract the oil from the beaches, the majority of efforts were made by local volunteers, who had no blame for the spill. The company seemed to feel they had done their duty by paying some local fishers to help clean the beaches – a sad irony, considering that the fishers are the group who could do nothing to prevent the spill and are most affected by it. To make matters worse, Repsol did not provide any protective equipment, only dustpans, buckets and plastic bags as tools. At least two volunteers have already been hospitalised.  

However, the Peruvian government argues that Repsol must take responsibility for the damages. When evaluating the risk between danger to lives and ecosystems with potential profitability, international systems must disincentivise the complete devastation of the larger global society. Repsol even stated that its production activity would not be significantly impacted by the devastation it caused to Peru, meaning it continues business with little to no consequences. With minimal internalised effects and the same high profits, oil companies will take the same risk evaluations in the future. However, Repsol should be responsible for avoiding such accidents, considering their influence as the operators of La Pampilla Refinery where the spill happened. The environmental agency of Peru has therefore warned that Repsol may face a $34.5 million fine due to their contribution to the damage on the Peruvian natural landscape. The courtroom should up their game if they wish to make a significant impact – such a fine is hardly a dent in the half-yearly net income of €1,235 billion, nor would it cover the damage done to Peru’s environment. 

Responsibility and liability are complex. An especially complicating factor is an international relationship – a Spanish company cannot be as easily held liable for damage to Peruvian land compared to Spanish land. It has legally been difficult to hold certain groups liable for environmental disasters, since, within the causal chain of events, the environment is considered unpredictable. However, there are some precedent cases establishing liability for the foreign company in cases of oil spills. In such cases, the United Nations Convention on the Law of the Sea becomes the essential reference. Article 145, on the “Protection of the Marine Environment”, requires “prevention, reduction and control of pollution and other hazards to the marine environment, including the coastline, … and (b) the protection and conservation of the natural resources of the Area”. Whilst this duty of protection is addressed at states rather than companies, the fines for oil spills lie within the aims of the Convention. If states hold companies liable for the damage, companies will weigh future risks more carefully, taking preventive measures. This incentivisation is the deterrent effect of the law – to stop actors from repeating actions that are harmful to society. Such a deterrence is necessary – since the Repsol case is just one of many. Market incentives and self-regulation have not solved the issue, nor incorporated ruinous externalities into risk assessments.  Without going into complex legal analysis, Repsol should be held financially accountable for their harmful actions to improve societal and ecological consideration in the future.  

One does not see behind the shocked words of this upcoming legal case that this oil spill is only one of many – a pattern in a value system where oil companies are following their best interests without consideration to the society around them. The difference in attention to this story is due to the spill affecting an international economic area that has been considered more valued – Lima, the capital of Peru, and the most westernised city of the country. The usual victims of environmental disasters, namely indigenous and marginalized communities of the Amazon. These communities not only suffer a regular disregard from tourists for their identities and homes but are also economically disregarded for their lack of influence and relevance within the global trading system. Indigenous peoples are often disproportionately affected by the disastrous consequences of eco-disasters on their health and natural resources. They are more reliant on the natural resources which their environment has to offer and have less highly technical and specialised equipment to deal with the ecological damage (which, incidentally, they did not contribute to). The sudden focus of environmental damage on the richer population, which has a much higher concentration of white and westernised residents, is one example of environmental racism, a systematic global institution of discrimination. 

Multinational corporations like Repsol have, so far, often valued humans in terms of profit and loss. Various communities are valued as lesser due to a more negligible economic impact. In this case, the undervalued communities are the Amazonian indigenous tribes and the risks which are incompletely considered are the impact of oil spills on them. We must recognise that our economic system is creating an ecologically dangerous dystopia. As of yet, no economic innovation has solved the global climate crisis, nor will it in the foreseeable future. Not valuing certain communities and imposing a higher risk on their ecological rights means that more people will be forced into positions of climate refugees, who often remain globally unsupported. We need a revolutionary legal judgement that establishes full responsibility for corporations to consider potential environmental damage. A judgement with a positive societal outcome would recognise a legal framework for corporate social responsibility, forcing a social incentive for multinationals beyond returns to their shareholders. As companies re-evaluate their priorities and recognise the importance of all communities and their rights, our environment and our society will grow to be more healthy – and our oily, blackened beaches may become golden again.