Chevron, Transocean Accused of 'Environmental Crime' in Brazil Over Oil Spill

March 21, 2012
Federal prosecutor calls for $5.5 million bond for each company, plus $550,000 bail each for 17 charged executives.

Federal prosecutors in Rio de Janeiro on Wednesday accused U.S. oil giant Chevron (IW500/2) and 17 executives of "environmental crime" in connection with a major spill off southeastern Brazil last November.

The country's national oil regulator estimates that 2,400 barrels of crude were spilled in the incident, which led authorities to suspend all of Chevron's drilling operations and to deny the company access to huge new offshore fields.

The U.S. firm rejected Wednesday's charges as "outrageous and without merit" and vowed to defend itself and its employees.

The federal prosecutor's office said in a statement that it was charging "Chevron, oil drilling contractor Transocean and 17 executives with environmental crime and damage in connection with the oil spill."

George Buck, the president of Chevron's Brazil unit, and three other company officials "sought to frustrate the work of the prosecution by presenting a misleading emergency plan," and by "altering documents shown to the authorities," it is alleged.

The oil spill "affected the entire maritime ecosystem, which could lead to the extinction of species, as well as the region's economic activities, in addition to damage caused to the state," it said, quoting prosecutor Eduardo Santos de Oliveira.

Prosecutors called for the "seizure of all assets of the accused, including 11 senior officials and employees from Chevron and five from Transocean." A judge will now decide if the executives are to face trial.

The statement called for payment of bail of $550,000 for each person accused and $5.5 million for each company.

"These charges are outrageous and without merit," Chevron said in a rebuttal.

"Once all the facts are fully examined, they will demonstrate that Chevron and its employees responded appropriately and responsibly to the incident. Chevron will vigorously defend the company and its employees."

Chevron said it has collaborated "transparently and completely with all the appropriate Brazilian government authorities."

It provided "relevant information" and "timely transportation to the incident site for several National Petroleum Agency officials, federal police officers and other authorities."

"There is no technical or factual evidence demonstrating any willful or negligent conduct by Chevron or its employees associated with the incident," the U.S. firm added.

Earlier Wednesday, Carlos Minc, the environment secretary, accused Chevron of "unprofessional conduct" and said he favored barring the oil company from operating in Brazil until it pays for recent spills at the Frade field it operates off the Rio de Janeiro coast, including a minor one earlier this month.

He said there would be "no impunity" for foreign oil companies operating in Brazil and added: "We must set an example with Chevron."

"If [foreign] firms have the best technology, take all the precautions, they will be welcome; if not, they won't be," he told reporters.

To date, the U.S. oil giant has not paid "a single cent" for two fines totaling $54 million imposed after the November spill, Minc said, announcing new measures requiring companies to disclose the main conclusions of their geological studies.

Brazilian President Dilma Rousseff, meanwhile, stressed the "importance of oil" for this booming South American country, which is already the world's sixth largest economy.

"Companies which will come to operate and those already here must know, without exception, that existing safety procedures are meant to be respected," she warned in Rio during the inauguration of the new head of the National Petroleum Agency.

Copyright Agence France-Presse, 2012

See Also:

Report: Chevron at Fault in Brazil Oil Spill

Chevron Execs Barred from Leaving Brazil

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