By Sarah de Sainte Croix, Senior Contributing Reporter
RIO DE JANEIRO, BRAZIL – Yesterday, Rio’s environment secretary, Carlos Minc, announced that Chevron would be required under state law to undertake an audit to verify the company’s capacity to respond to environmental disasters following the recent oil leak off the coast of Rio de Janeiro.
The audit will be performed by an independent organization chosen by Minc and paid for by Chevron. “It will be an audit of international standard that is expected to cost around US$5 million,” said Minc.
He also stated that Chevron could be made to pay up to R$100 million in damages as a result of the recent accident, more than the initial amount of R$50 million announced last week.
The audit will involve a thorough examination of the company’s operating practices, particularly with regards to environmental safety, and it will look at Chevron’s ability to deal with accidents.
According to a report by Agência Brasil, similar environmental audits have been undertaken in the past by the previously state-owned Companhia Siderúrgica Nacional (National Steel Compnay or CSN), and by the Duque de Caxias Refinery (Reduc).
Such audits have generally resulted in what is known in Brazil as a “TAC” agreement (“termos de ajustamento de conduta”) between the company and the Public Prosecutors Office, whereby the company is obliged to alter and improve its behavior under the terms laid out in the agreement.
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