Peru to Sue Oil Giant Repsol for $4.5 Billion Over Oil Spill

Last January, over 10,000 barrels of oil spilled into the Pacific Ocean off the coast of Peru. It was described as the worst ecological disaster around Lima in recent memory. Now, the Peruvian government is seeking damages from the company responsible for that oil spill Repsol.

This is a civil lawsuit, with the government seeking $3 billion in environmental damage and $1.5 billion in damages to locals whose lives were affected by the oil spill. In total, the lawsuit amounts to $4.5 billion in damages. However, according to the BBC, Repsol has denied any responsibility for the oil spill.

Case vs. Repsol Goes Through, Says Judge

The Instituto Nacional de Defensa de la Competencia y de la Protección de la Propiedad Intelectual (INDECOPI) is heading the lawsuit. It is the authority in Peru that promotes the free market and protects Peruvian consumer rights.

A Peruvian judge has already admitted the case filed by INDECOPI, which means it will go through court.

According to INDECOPI, the spill still has destructive effects felt by the people in the region. The Economic Times reports that the institution promises that it is doing its best to make Repsol compensate the people who are living near the contaminated waters.

In addition, hundreds of fishermen and workers in the tourism industry have also lost their livelihood due to the oil spill. Fishermen living near the affected area have staged protests, as they were unable to go to sea because of the spill. Meanwhile, President Pedro Castillo previously commented on the spill, describing it as "one of the biggest ecocides ever on our coasts and seas".

Following the massive oil spill, Peruvian prosecutors have also opened a criminal investigation into the company's role in the incident. The probe is still ongoing, and four of the company's executives have been barred from leaving the country.

Lawsuit vs. Repsol Will Be a Challenge for Peru's Legal System Says, Expert

As it cleans up the spill, Repsol announced that the clean-up would cost the firm around $150 million dollars. However, that is just a small fraction, around a sixteenth, of the company's annual income last year, which was around $2.499 billion.

The disaster was initially thought to be caused by sudden and extraordinary anomalous waves produced by the volcanic eruption in Tonga." However, the oil tanker carrying the oil was later blamed. Despite this, Repsol still maintains that it bears no responsibility for the spill.

One expert, professor in geosciences at the University of Edinburgh, Stuart Haszeldine, said that no established market will buy a clean beach or a seabird colony, and it will be inevitable that these large and powerful oil companies can just deploy cash and lobbyists to delay inquiries into them, as well as shift the blame away from their responsibilities.

Professor Haszeldine also added that this case may be influenced by Repsol's valuation of its reputation and future permissions to operate globally. It will test the strength of Peru's legal system and whether or not it can enforce environmental justice on such a giant multinational company.

This article is owned by Latin Post.

Written by: Rick Martin

WATCH: Peru oil spill: Judge bars Repsol executives from leaving country - Al Jazeera English