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Brazil mulls fund to combat oil leaks

Bnamericas
Brazil mulls fund to combat oil leaks

Brazilian lawmakers are mulling the idea of creating a fund to combat the effect of oil spills on the coast.   

The debate comes as a lower house commission (CPI) was meeting to investigate the source of an oil spill that has been affecting scores of beaches in the northeast and southeast regions since August, in what is considered the country’s biggest offshore disaster to date.   

The CPI was set up last month to identify the origin of the spillage and propose measures to prevent new leaks. The navy has been investigating the origin of the spill for months but has yet to reach a conclusion. Molecular analyses concluded the oil was from Venezuela.  

“The Brazilian parliament has the responsibility to be at the center of this debate and build a more efficient state not only for the investigation and prevention of natural disasters but also more efficient in damage mitigation,” congressman João Campos, who requested the creation of the CPI, recently argued.   

Oil institute IBP, which is giving technical support to the government and started studies to identify the origin of the oil, believes the country is learning from the accident and information from the case could be used to create good response practices to emergencies.   

“Every oil leak on the scale of what happened in Brazil brings lessons and IBP will be aware of the discussion to identify the best way to contribute to combatting spills, whether they come from ships or from oil and gas exploration and production,” the institute told BNamericas through its press office.   

Specialists, however, say creating a fund with resources from producing companies to deal with spills in the future would not be the best solution since the operators currently working in Brazil already follow best practices and are unlikely to cause similar incidents.   

Anderson Dutra, an associate member at consultancy KPMG, argues that such a fund could cause legal disputes, as firms that will not contribute could be the ones needing to use it. He said that in order for it to work it would be necessary to impose a tax on the entire sector, which would also be complicated.   

“I'm more in favor of strengthening supervision and improving operational efficiency. Upgrading inspections is important because Brazil already has robust legislation, so it could equip monitoring authorities that could carry out better prevention works,” Dutra told BNamericas.   

Petrobras, Total, Equinor and Shell, the companies with the largest production offshore Brazil, did not comment on the idea.   

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