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Business Report : Green group calls on Shell to replace Sapref refinery

By Ann Crotty

Johannesburg – Shell Accountability Group, a global network of environmental groups, has called on Shell to replace, at an estimated cost of $6 billion (R43 billion), the Durban-based refinery that is jointly owned by it and BP through the SA Petroleum Refineries (Sapref) joint venture.

The call was made in a report, which was published to coincide with the release of Shell’s financial 2006 results, written by a coalition of environmental, human rights and community groups.

It calls on Shell to use some of its multibillion-dollar profit to begin to clean up the damage it has caused to communities and environments across the globe. The report offers proposals and figures for where and how it should repair some of the damage it has caused in nine communities around the world.

Referring to the Sapref refinery in Durban, which was built in 1963, the report states that there have been multiple fires and explosions due to ageing infrastructure and lack of maintenance.

“The litany of problems the refinery and pipeline cause has been well documented since 1998. Shell has refused to commit to permanent solutions to the problems. For example, instead of replacing the old and rusted pipelines, it fixes them to last until the next leakage appears.”

The authors of the report claim that during apartheid the maintenance of the refinery “was poor and not up to standard”, adding that “Shell has already admitted that it was using inferior rust detection systems in this plant to that used at a similar plant in Denmark”.

Because of these years of neglect, the report states that no amount of “patchwork” will make the refinery safe and that an entirely new plant needs to be constructed.

Such a project would also require that tanker traffic and fuel pipelines are moved away from residential areas.

Yesterday Sapref said that it was committed to continually improving its operational and environmental performance, and had implemented several initiatives to reduce its environmental impact.

“We have invested over R590 million in environmental improvements in recent years. Although expert opinion informed us that we did not need to replace our product transfer pipelines, we are investing R340 million to replace all seven of the lines to ensure their integrity well into the future,” it said.

The report’s $6 billion estimate is based on a the cost of building a comparable refinery in Richards Bay that will be built by Drako Oil by 2010.

One of the contributors to the report, Hannah Griffiths of the UK-based Friends of the Earth, said the report had only included figures that it was certain of. Analysts’ criticisms that the report overstated the problem had to be seen in the context of analysts focusing only on financial performance and downplaying the environmental and social impact of Shell’s operations, she said.

Published on the web by Business Report on February 1, 2007.
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