Monday, 10 May 2010

Trafigura: Should They Have Known – Follow-up

Those who read Thursday’s post may remember that I said I’d follow that up.  This is that follow-up.

In Thursday’s post I made the point that, since the extraction of gasoline from gasoline slops, the dumping of the aqueous waste and the black market in gasoline was very well-known in Abidjan, it was reasonable to expect Trafigura to have known about it.  I used quotes from two articles by Dr Busch to support my contention [1 and 2].

Dr Busch was invited to comment before my article was published and his response raised questions about my analysis.

After several emails and quite a bit of effort I elicited Dr Busch’s meaning. The full email exchange is shown at the end of the post.

The clarification of Dr Busch’s meaning is thus in my words.

The black market in gasoline products was well-known for many years as was the dumping of waste products from the French–run refinery.  What was new and was unknown before the dumping of the Probo Koala waste was the market in gasoline slops (from ships) from which gasoline was removed and the aqueous waste dumped.

If true this would ease, but not remove, the question of whether Trafigura should have known about the “stealing” of gasoline from slops.

One question I asked in Thursday’s post is still outstanding.

Is Dr Busch correct?

Is the clarified situation an accurate description of the situation?

I have no reason to disbelieve Dr Busch but also I don’t know him from Adam and so I should treat what he says with some scepticism as should readers of what I write.  I know I write fairly but others cannot know if that is true or not.

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1   DR GARY K BUSCH to CalumCarr 3 May 9.26

The key point in this question is when all the evidence of a black market in recycled slops was known. The answer is that it was unknown to the shippers (and to me) until the events of the Probo Koala became known. There is another company in Abidjan, ITE, who had been handling virtually all the slops disposals in Abidjan. It had storage facilities and an incinerator to process the waste. There had been no evidence of anything improper in the handling of these wastes in the twenty-odd previous ships arriving at Abidjan from May 2005 to July 2006.

When the story of the Probo Koala broke the Ivorian authorities started to investigate the improprieties associated with the black market. The information became known and made available by the drivers who testified that recycling was a common practice. It  then became a public issue.

It was the local port agent which had contacted Trafigura to recommend Tommy as a substitute for ITE and tendered all the necessary certificates. It should be stressed that there was nothing improper about the delivery to Abidjan. The Port Authority was present at the delivery; the various port agents were present as well as the city authorities which is the custom and practice. Not one of these officials who were on board the vessel and in the port raised any queries about the delivery.

It was only when the drivers dropped their loads in the dumps (in several cases a few days after the discharge of the vessel) that the problems became known.

Technically, Trafigura's liability for the slops ended as the slops passed through the discharge flange of the vessel. That is the nature of marine discharge regulations. As they passed out of the pipe from the vessel Trafigura had, by marine law and custom,  transferred title and responsibility to the local agent to whom it was consigned. This was supported by the presence of the Port Authority which supervised the transfer and who issued the necessary documentation.

It is unfair and unreasonable  to make the assumption that Trafigura acted improperly in using Tommy as its agent. Tommy was recommended by the local shipping agent and the Port Authorities as a competent handler of these slops. Indeed, the Government agencies had issued Tommy with  certificates showing that Tommy was qualified. The Port Authority officials and Ministry officials  were present throughout the discharge. In the absence of any knowledge, or suspicion, that there was some recycling or black market in slops processing, what more could a company like Trafigura do?

For your guidance I attach a list I compiled from local records of the previous vessels discharging slops in Abidjan. There were no problems with these and no claims of illegal discharge. Why should Trafigura anticipate problems when the previous deliveries of slops were conducted without issue?

MARINE SLOPS DELIVERED TO ABIDJAN May 2005-July 2006

Date Vessel

Quantity

Client Quay Local
Agent
22 May 05 Kyrnikos

152.00

Tacoma Petroci ITE
27 Feb 05 Giacinta

54.50

Addax Petroci ITE
20 Mar 05 Chem Oceania

51.00

Addax Petroci ITE
19 Apr 05 Zhong Hoa

82.00

Addax Petroci ITE
29 Apr 05 Chem Oceania

47.00

Addax Petroci ITE
21 May 05 Asprey

71.50

Addax Petroci ITE
02 Jun 05 Conny

80.00

Ocean Oil Petroci ITE
23 Jul 05 Chem Oceania

152.00

Addax Petroci ITE
27 Jul 05 Algonquin

67.00

Trafigura Petroci ITE
7 Sep 05 Chem Biscay

45.25

Addax Petroci ITE
13 Sep 05 Tradewind Explorer

115.00

Addax Petroci ITE
01 Oct 05 Asprey

91.00

Addax Petroci ITE
24 Oct 05 Akti-N

40.00

Trafigura Petroci ITE
19 Nov 05 Zhong Hua

84.00

Addax Petroci ITE
30 Nov 05 Zhong Hua

9.60

Addax Petroci ITE
1 Dec 05 Asprey

68.00

Addax Petroci ITE
12 Jan 06 Zhong Hua

67.00

Addax Petroci ITE
27 Jan 06 Tradewind Explorer

191.00

Addax Petroci ITE
23 Feb 06 Tradewind Explorer

127.50

Addax Petroci ITE
24 Mar 06 Chem Biscay

77.00

Addax Petroci ITE
08 Apr 06 Chem Biscay

80.00

Addax Petroci ITE
09 Apr 06 Asprey

73.50

Addax SIAP ITE
09 May 06 Tradewind Explorer

20.00

Addax Petroci ITE
13 Jun 06 Songa Anne

153.70

Shell (Stasco) Petroci ITE
14 Jun 06 Chem Biscay

102.50

Addax SIAP ITE
24 Jun 06 Asprey

72.00

Addax SIAP ITE
21 Jul 06 Port Louis

150.60

Trafigura SIAP ITE
22 Jul 06 Chem Biscay

56.00

Addax Petroci ITE

 

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2 CALUMCARR   to Dr Busch   3 May @ 15.45

I should point out up front that I do NOT state or imply that Trafigura did anything illegal in Abidjan.  I am not seeking to show or suggest that that they may have done something illegal.  Even if I knew Trafigura had done something illegal  - which I don't - I wouldn't say so because my pockets aren't deep enough.  I don't know and so the issue doesn't arise.

I don't question the point at which Trafigura's legal responsibility passed to others nor have I assumed that Trafigura acted improperly in using Tommy.

I do question whether they might have known, considered the possibility, that their waste was being "black-marketed". 

You say in your message of today that neither you nor the shippers was aware of this black market until after the Probo Koala.  You wrote,

"There had been no evidence of anything improper in the handling of these wastes in the twenty-odd previous ships arriving at Abidjan from May 2005 to July 2006."

but yet, as I understand you,

"There were twenty other ships arriving in Abidjan that year whose oily slops were removed from the vessels. These, too, were to have been incinerated. Instead they were picked up by the local waste oil mob and processed to remove the gasoline from the slops water.” [From Environmental Queens of Hearts] 

Please correct me if I'm wrong but I think you are saying that the waste from these ships was "black-marketed" but there was no evidence at the time that this was so.

Also please correct me if necessary but you state that

"this black market is known to everyone in Abidjan." [Environmental QoH]

and

"Everyone in the Ivory Coast government and the Port Authority has known that since 1965 there has been a parallel market in petroleum products. The slop tanks of incoming vessels are regularly drained and the water waste disposed of, leaving gasoline or diesel residues which are sold in the black market." [Change without progress etc].  

I am surprised then, given how widespread was the knowledge of the black market, that neither Trafigura's Abidjan office nor its shipping agents was aware of that market.  I accept though that neither might have been aware.

I pursue the "Trafigura case" because I feel that there is more relevant information to come out.  I am pursuing truth and understanding and that is why my Trafigura blog posts have been much more measured and balanced than most writing about them.

_____________________________________________

 

3  DR BUSCH    to CalumCarr   3 May @ 16.17

I apologise if I was not clear. When I said that this was going on since 1965 I was not referring to the black market in fuels. I was referring to the practice of the local refinery dumping its waste products in Ivoirian dumps; the stuff the French were excavating. There was black muck everywhere. This was known to the people in Akuedo and the other dumps - they would have needed to be blind to miss it. However, the recycling of the fuels did not involve the dumping of wastes at the dump sites so they passed unnoticed until the wastes of Tommy were added to the dumps.

When the authorities examined the dump sites after the Probo Koala they were surprised to see such an accumulation of petrochemical wastes which they then attributed to the Probo Koala (as opposed to the French-run refinery).

This has been the source of a lot of confusion. If I have added to the confusion I apologise. The twenty-odd boats arriving earlier did not generate wastes as they were recycled not dumped which is why the Probo Koala dumping caused such a stir.


I understand that you are genuinely seeking the truth. This appeared to be the case which is why I wrote to you initially as opposed the other websites discussing the case. If I can give you any other answers, feel free to ask.

_____________________________________________

 

4 Dr BUSCH     to CalumCarr     3 May @ 19.28

I have no problem with your publishing my response.I have no personal axe to grind but would like the public to understand that there really are two sides to the argument and that a balanced view requires serious consideration of the facts.

I concede that Trafigura was not very good in responding to its critics in any co-ordinated way which contributed to the misunderstandings

You should also know that there was a sustained political campaign undertaken with this inside the Ivory Coast where rebel supporters in the divided country used the Probo Koala incident as a means of bashing the President, Gbagbo. Some, as the journalist who showed up at the journalists' conference in Geneva, were leading a campaign to blame the disaster on the President's wife.

This was a party political issue in Abidjan and connected with the upcoming election. This was more of a political struggle in the Ivory Coast than an environmental problem; made worse by the squabbling over the payouts and the greed of the competing victim groups. Crises like this bring out the worst in many people and are perpetuated for a variety of unrelated  ambitions.

_____________________________________________

 

5  CALUMCARR    to Dr Busch     4 May @ 11.48

I'm very confused about 1965, dumping and gasoline black market.  Let me put my two confusions to you.

a "Everyone in the Ivory Coast government and the Port Authority has known that since 1965 there has been a parallel market in petroleum products.” [Change without progress etc, July 2008]

This states quite clearly that the black market was known by authorities since 1965.

BUT in your email of 3 May at 4.17pm you wrote:

"When I said that this was going on since 1965 I was not referring to the black market in fuels" [your email to me 3 May @ 4.17pm]


I'm sorry, Gary but that is exactly what you said in July 2008.  One quoted statement must be incorrect.

 

b "The slop tanks of incoming vessels are regularly drained and the water waste disposed of, leaving gasoline or diesel residues which are sold in the black market."    [Change without progress etc, July 2008]


AND


"This recycled fuel was sold in Abidjan and the waste water dumped in Akuedo and the other dump sites."  [Environmental Queens of Hearts]

Clearly there was dumping of material at dump sites albeit you refer to the dumping of waste water.

But yet you stated,

"However, the recycling of the fuels did not involve the dumping of wastes at the dump sites so they passed unnoticed  until the wastes of Tommy were added to the dumps." [Your email to me, 3 May @4.17pm] 


Here you deny that waste was dumped before Probo Koala incident. 

I acknowledge that the dumping of waste prior to the Probo Koala was predominantly aqueous but the waste was dumped.

Either the first two statements are incorrect or the last one is wrong.   Which?

I apologise, Gary, for being picky but these points are crucial to an understanding of the situation.

_____________________________________________

 

6 Dr BUSCH     to CalumCarr     4 May @ 14.01

What was dumped was exactly that - waste water. There was nothing else in it as all the hydrocarbons had been removed.

What was being dumped on a regular basis was thick black refinery waste. No one knew that water from the fuel recycling residues were being dumped as lots of industrial waste water from a variety of industries  and municipal waste water were regularly dumped in these sites.

Only when Tommy dumped the Probo Koala wastes did people learn that the slops waters had been added to the mess.

While you might be having difficulty in differentiating waste water from recycled slops I can assure you that there is a difference. I am sorry if this is not clear to you. Everybody dumped waste water in the dumps. It turns out that some of this waste water was that separated from slops but no one knew because it was just like other waste water. When it had caustic soda in it it became recognisable.

_____________________________________________

 

7  CALUMCARR    to Dr Busch     4 May @ 16.27

Thanks.

Re my second point and your reply:

Our differences would be resolved if the following sentence:

"However, the recycling of the fuels did not involve the dumping of wastes at the dump sites so they passed unnoticed  until the wastes of Tommy were added to the dumps."

in your email of 3 May was altered very slightly as follows:

-    remove "did not involve" and replace with "involved only"

-    remove "wastes" and replace with "waste water"

-   remove "they" and replace with "this"

The relevant part of your email of 3rd May @ 4.17pm would then read:

"However, the recycling of the fuels involved only the dumping of waste water at the dump sites so this passed unnoticed until the wastes of Tommy were added to the dumps."

I have no difficulty with that modified sentence. 

Clearly the waste water should not have been dumped at Akuedo or elsewhere but I accept that the effect of the dumped waste water would be negligible in comparison with the other noxious wastes.

Re my first point.  You haven't answered.

_____________________________________________

 

8  Dr BUSCH     to CalumCarr     4 May @ 17.14

Yes that sentence would be clearer.

On the first point. There was a black market in fuels since 1965 with products produced from 'bunkered' (stolen) crude oil from Nigeria. Most were produced at the SIR refinery and circulated (without tax paid) around Abidjan. A large quantity was smuggled to the rebel North.

These black market fuels were not produced from waste products but from dubiously sourced crude oil refined at the refinery. The tradition was to turn a blind eye as to the source and to buy it from tankers which would deliver the fuels for cash.

This large black market in fuels provided the backdrop for the recycled slops which fed into it. However, the Probo Koala slops were an anomaly and cast doubt on the quality of the circulating black market fuels.

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