Skanska’s Secrets with Repsol-YPF

ZMO ONLINE-ONLY ARTICLE:

The Swedish construction company Skanska’s oil affairs reveal a corporate identity that is very different from the one conveyed in its home market. Operations in South America 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 among the ethical and legal infractions that Skanska has been associated with in Latin America. Most recently, scandals have loomed regarding 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. 

Skanska’s joint venture partners are notorious giants like Exxon-Mobil, ChevronTexaco, Total Fina Elf, and BP-Amoco, whose operations systematically violate human rights, and create political uncertainty and ecological disasters. 

Skanska’s joint venture partners also include Repsol-YPF, a Spanish-Argentinean oil company, belongs to this group. According to Oilwatch, its operations are some of the most criticized in the world from a human rights and environmental standpoint. 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. In these vulnerable ecosystems oil extraction is continually met with strong local opposition and 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.  

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 pollution and socio-cultural devastation. In Bolivia and Ecuador, in oil fields where they have technical cooperation with Skanska, Repsol-YPF is the subject of legal cases and criticism from native people, and  human rights and environmental organizations. 

Calculated Double Standard 

In Skanska’s Code of Conduct, the company actively distances itself from socially and ecologically destructive operations. On their website one can read how they value “social responsibility” and strive for “sustainable development.” However, entering into a partnership with Repsol-YPF means choosing a completely different side and taking a position in favor of operations that walk over bodies for economic gain. 

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, as highlighted by organizations such as Oilwatch and Acción Ecológica. Together with the Waorani people, Oilwatch has criticized how the companies’ 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). 

When the Swedish independent media group, Yelah.net, went 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 operates under military protection and that private armed forces (mercenaries and paramilitaries) are essential to be able to operate in what he refers to, 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.

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Illegal oilfield burn on Repsol-YPF/Skanska project—photo from Oilwatch

In conjunction with oil exploitation, a poisonous gas is produced which, by law, should be burned off under special conditions. However, for economic reasons, an illegal practice has resulted in these byproducts frequently being released around oil fields—to avoid the taxes and expenses associated with lawful burning. This practice has resulted in numerous toxic pollutants being released, which can cause mminent 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. Even though innocent people have lost their lives, the companies continue with their illegal pollution, completely exempt from penalties and with military protection against local civic opposition. 

The Industry’s Innocent Victims 

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 a 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. 

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 over the river ignited and 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 tried to inspect the oil field, they were denied access to the oil block, while the parties involved denied all responsibility for the event. 

Repsol-YPF has threatened to report the Uceida family for “sabotage,” which has terrified Emilio Uceida’s widow, Nicola Uceida, and other family members. The survivors hve never 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 on land that is now worthless and unusable due to contamination. 

According to a local informer, the company is 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 a result, the villages are economically dependent on the industry, with people becoming indebted slaves. According to the Repsol-mata network and campaign, 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—that Skanska operates. 

The fact that Skanska has promoted itself as an ethical company appears, in light of this duplicity, 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 necessarily anchored in reality. 

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Agneta Enström is an editor and reporter at www.yelah.net, a Swedish independent media group covering activism and politics worldwide. She has recently worked in Ecuador, researching Skanska and oil exploration on indigenous land.