Swedish company Skanska’s oil affairs in Latin America demonstrate ethical and legal infractions including falsified invoices, bribery scandals, extortion, environmental destruction and serious violations of human rights.
This article is part 4 in a series by Agneta Enström
Swedish company Skanska’s oil affairs in Latin America manifest a topsy-turvy logic and crude practices resulting from neo-liberal globalization. Upon a closer inspection of Skanska’s adventures in the global South, a corporate identity emerges that is very different from the one conveyed in its home market. Operations within the oil industry are distantly removed from all legal, ethical and ecological principles that Skanska has sworn to uphold in its Code of Conduct and Corporate Policy.
Falsified invoices, bribery scandals, extortion, environmental destruction and serious violations of human rights are ethical and legal infractions that Skanska has been associated with in Latin America. Most recently, scandals have loomed ever closer regarding primarily the company’s operations in the controversial but economically lucrative gas and oil sector, to cite the notorious “Skanska case” in Argentina as one example.
In The Company of The Oil Mafia
Within the multinational oil industry that operates in the southern hemisphere, violations of human rights and environmental laws are more the rule than the exception. Through their collaborations with the major oil companies in the South, Skanska deserves a closer look on this issue. Especially since some of the company’s joint venture partners are notorious giants such as Exxon-Mobil, ChevronTexaco, Total Fina Elf and BP-Amoco, along with several other companies in the global oil industry, and whose operations systematically violate human rights, create political uncertainty and ecological disasters where they operate.
Skanska’s joint venture partner, Repsol-YPF, a Spanish-Argentinean oil company, belongs to this group. According to Oilwatch, their operations are some of the most criticized in the world from a human rights and environmental standpoint [1]. Despite that, Skanska works with Repsol-YPF in some of Latin America’s most vulnerable regions (including the Amazon rainforest in Ecuador, Peru and Bolivia), which are characterized by vulnerable ecosystems and where oil extraction is criticized and continually met with strong local opposition [2]. Repsol-YPF is involved in a number of legal cases involving crimes against both national and international environmental laws, as well as human rights and the rights of native populations.[3]
In Argentina alone (where the company has the largest gas and oil fields in the Mapuche people’s territories), the company is the subject of at least four different legal cases involving serious pollution and socio-cultural devastation. However, even in Bolivia and Ecuador, in oil fields where they have developed technical cooperation with Skanska, Repsol-YPF is the subject of legal cases and criticism from native peoples, human rights and environmental organizations.[4]
Calculated Double Standard
In Skanska’s own Code of Conduct, it states that the company actively distances itself from socially and ecologically destructive operations and on their website one can read how they value “social responsibility” and strive for “sustainable development.”[5] However, entering into a partnership with the above-mentioned oil company, when it comes right down to it, is choosing a complete different side and taking a position for an operation that literally walks over bodies for economic gain. The schizophrenic concept that is Skanska’s recipe for success makes for bizarre
reading when comparing its actual practices to the ethics that the company communicates in Sweden:
“We continually strive to reduce our physical environmental impact. We do this in
many ways. We develop tools that facilitate a project’s daily environmental efforts,
intensify efforts to minimize energy consumption in buildings and work for the safer
management of chemical products and the elimination of environmentally destructive
substances.”[6]
Weapons and Bribes
The Yasuni national park, a UNESCO-protected nature reserve and the native territory of the Waorani people, is situated in the heart of the Ecuadorian Amazon. There, Skanska and Repsol-YPF are operating under very controversial conditions, something that organizations such as Oilwatch and Acción Ecológica have highlighted. Together with the Waorani people, Oilwatch has criticized how the companies’ violent advance is taking place under the protection of military forces and private security teams. Oilwatch’s book, “Atlas Amazónico”, describes how the company has committed the most terrible violations of human rights in the particular area of Yasuni (oil block 16) where Skanska has worked for a longer period of time with Repsol-YPF.
When the Swedish independent media group, Yelah.net [7], went undercover to meet with Skanska’s regional manager in the Ecuadorian Amazon, Milton Diaz, numerous times during 2006, he confirmed the militarized situation that the oil industry creates and in which Skanska actively participates. He explained that Skanska also operates under military protection and that private armed forces (read mercenaries and paramilitaries) are essential to be able to operate in what he refers, disparagingly, as “banana republics.”
In Ecuador, where Diaz oversees Skanska’s oil activities in the rain forest, the local population, authorities and environmental organizations have directed harsh criticism towards the operation. According to Marcos Baños, from the environmental inspection unit in the Amazon province of Orellana, Skanska has been negligent from an environmental standpoint as well as a purely legal one, a problem that they have attempted to bribe themselves out of.
However, it is not just in Ecuador that Skanska is behaving badly. There are also
concrete facts regarding the company’s negligent and reckless activities in Bolivia.
Bolivia – a Highly Dangerous “Banana Republic”
In conjunction with oil exploitation, a poisonous gas is produced which, by law, should be taken care of and burned off under special conditions. However, an illegal practice has resulted in these byproducts, for economic reasons, frequently being released around oil fields to avoid taxes and the expenses associated with lawful burning. This practice has resulted in numerous toxic and unnecessary pollutants being released, which can also result in imminent mortal danger since the emissions form stores of explosive gas.
In oil fields in the Bolivian Chapare, where Skanska works with Repsol-YPF, this has resulted in catastrophic consequences for the local population, and even though innocent people have lost their lives, the companies continue with their illegal polluting practice.[8] In Latin America, they are obviously able to operate in a climate completely exempt from penalties and with military protection against local civic opposition.
In June 2005, Repsol-YPF’s gas emissions around an oil field in Bolivia (Chapare-Surubí D) resulted in an explosion in which people from the local native village were killed. Skanska works with Repsol-YPF at the same field (overseeing technical aspects of the exploitation), without acknowledging any responsibility whatsoever for the hazardous situation that the oil production generates.
The Industry’s Innocent Victims
Those affected by the gas explosion in Bolivia included 45-year old Emilio Uceida and his two sons who, during the evening of the accident in 2005, were out on a fishing trip by the river next to their home. When one of the family members lit a cigarette lighter, the gas that had been released out over the river ignited, upon which the father and his sons started burning. Emilio Uceida and his 13-year old son Edgar Uceida burned to death, while the other son, 18-year old Mario Uceida, received such life-threatening burns that he still remains in hospital care. His condition is critical and he will suffer from pain and invalidity for the rest of his life.
It was not until a week after the tragic event that the company allowed the Bolivian authorities into the area for a criminal investigation. When the various authorities and organizations from the Cochabamba province later visited the area to inspect the oil field, they were denied access to the oil block, while the parties involved persisted in denying all responsibility for the event.
Repsol-YPF has also threatened to report the Uceida family for an “sabotage”, which has terrified Emilio Uceida’s widow, Nicola Uceida, and other family members. Nor have the survivors received any form of compensation or pension, despite major economic hardships resulting from the loss. Instead, the oil company built a cement house for them along the oil road and on land that is now worthless and unusable due to contamination.[9]
An Enslaving Death Industry
According to a local informer, they are still releasing gas into the area and leaks from the exploitation operation are contaminating the land and waterways, making it difficult or impossible for the local population to live off the land and remain self-sufficient as they used to be. This has also resulted in the villages becoming economically dependent on the industry, with people becoming indebted slaves since the companies know how to exploit their vulnerable situation. According to the Repsol-mata network and campaign, which is fighting the outrages committed by Repsol-YPF and the oil industry, it is common knowledge that the companies in Chapare make frequent use of indebted slaves, but that it is difficult to prosecute cases legally, since the people fear reprisal actions.
Chapare in Bolivia is just one of many oil regions where companies put their agenda ahead of human lives and ecosystems. It is in this context – of an industry whose mafia-like operations terrorize the local population, string along the local authorities and destroy entire ecosystems – the Swedish giant Skanska’s activities in Latin America are occurring.
The fact that Skanska has promoted itself as an ethical company appears, in light of this duplicity (of on the one hand promoting “Sustainable Development” and on the other hand exploiting oil) as an ironic confirmation of a shameless double standard and hypocrisy. It is also a reminder that marketing concepts such as “Corporate Social Responsibility” and “Green Technology” are not at all necessarily anchored in reality.
At present, Skanska, the Swedish constructionist that promote itself as a “green builder”, continues to extract oil in regions where native people are being wiped out due to the predatory exploitation of the Amazon’s black gold.
Organisations who are fighting against companies like Skanska and Big Oil in Latin America are Oilwatch, Acción Ecológica, the Repsol-mata network and campaign, among others, as well as organizations for tribal people’s rights like Survival International.
Agneta Enström is an editor and reporter at www.yelah.net. Yelah is a Swedish independent media group, uncovering activism and politics worldwide. She has recently worked in Ecuador, researching Skanska and oil exploration on indigenous land. Contact Agneta Enström at nettila@hotmail.com
More Information:
Oilwatch – http://www.oilwatch.org/
Repsol-mata network and campaign: http://repsolmata.info/
Accion Ecológica: http://accionecologica.org/webae/index.php
Survival International: http://www.survival-international.org/
Notes:
[1] Oilwatch: http://www.oilwatch.org/
[2] Acción Ecológica, environmental organization in Ecuador: http://www.accionecologica.org/webae/index.php
[3] Repsol-mata network and campaign: http://repsolmata.info/
[4] Repsol-mata network and campaign: http://repsolmata.info/
[5] Skanska Code of Conduct: http://www.skanska.com/files/documents/pdf/code_of_conduct.pdf
[6] Skanska Code of Conduct: http://www.skanska.com/files/documents/pdf/code_of_conduct.pdf
[7] Skanska on Yelah.net: http://www.yelah.net/articles/tema20070619
[8] http://repsolmata.info/
[9] http://repsolmata.info/