DIRTY DIESEL – How Swiss Traders Flood Africa with Toxic Fuels | Executive Summary
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A Public Eye Investigation – September 2016 Dirty Diesel How Swiss Traders Flood Africa with Toxic Fuels Executive summary 3 Chapter 1 INTRODUCTION 9 Chapter 2 TOXIC GASOLINE: EVERY DAY SIDE OF THE PROBO KOALA SCANDAL 15 Chapter 3 A SILENT KILLER: AIR POLLUTION AND HIGH SULPHUR FUELS 19 Chapter 4 SWISS TRADERS: EMPIRE-BUILDING IN AFRICA’S DOWNSTREAM SECTOR 29 Chapter 5 DANCING WITH DEVILS: SWISS TRADING COMPANIES AND THEIR POLICIES OF MARKET ACCESS 39 Chapter 6 ACROSS AFRICA TO SAMPLE SWISS FUELS 49 Chapter 7 A BLEND OF DIRTY FUELS AND DIRTY POLITICS IN GHANA 65 Chapter 8 DIRTY TRADE FLOWS FROM EUROPE TO WEST AFRICA 81 Chapter 9 BLENDING: THE BASICS 89 Chapter 10 MAKING “AFRICAN QUALITY” FUELS 99 Chapter 11 IN EUROPE AND OFFSHORE: WHERE AFRICAN QUALITY FUELS ARE PRODUCED 113 Chapter 12 CONCLUSIONS: PUTTING PEOPLE BEFORE PROFIT 125 Glossary 134 Annexes 135 Endnotes 148 IMPRINT Dirty Diesel. How Swiss Traders Flood Africa with Toxic Fuels. A Public Eye Investigation, September 2016. | Authors Marc Guéniat, Marietta Harjono, Andreas Missbach, Gian-Valentino Viredaz | Contributors Olivier Longchamp, Urs Rybi, Géraldine Viret | Acknowledgment Oliver Classen, Silvie Lang, Lyssandra Sears | Editor Edward Harris | Publisher Raphaël de Riedmatten | Layout Karin Hutter, karinhutter.com | Print Vogt-Schild Druck AG, Cyclus Print, FSC (recycling) CONTACT Public Eye, Avenue Charles-Dickens 4, CH-1006 Lausanne, phone +41 (0)21 620 03 03, fax +41 (0)21 620 03 00, [email protected], www.publiceye.ch | Donations IBAN CH64 0900 0000 1001 0813 5 | © Public Eye, 2016. Reproduction permitted with editors’ prior consent. COVER PHOTO Ghana, June 2016 © Carl De Keyzer – Magnum A Public Eye Investigation | September 2016 3 Executive summary 3 Chapter 1 INTRODUCTION 9 Executive summary Chapter 2 TOXIC GASOLINE: EVERY DAY SIDE OF THE PROBO KOALA SCANDAL 15 Chapter 3 A SILENT KILLER: AIR POLLUTION AND HIGH SULPHUR FUELS 19 Chapter 4 SWISS TRADERS: EMPIRE-BUILDING IN AFRICA’S DOWNSTREAM SECTOR 29 Chapter 5 DANCING WITH DEVILS: SWISS TRADING COMPANIES AND THEIR POLICIES OF MARKET ACCESS 39 Chapter 6 ACROSS AFRICA TO SAMPLE SWISS FUELS 49 Chapter 7 A BLEND OF DIRTY FUELS AND DIRTY POLITICS IN GHANA 65 Chapter 8 DIRTY TRADE FLOWS FROM EUROPE TO WEST AFRICA 81 Chapter 9 BLENDING: THE BASICS 89 Chapter 10 MAKING “AFRICAN QUALITY” FUELS 99 Chapter 11 IN EUROPE AND OFFSHORE: WHERE AFRICAN QUALITY FUELS ARE PRODUCED 113 Swiss commodity trading companies take advantage of weak fuel standards Chapter 12 CONCLUSIONS: PUTTING PEOPLE BEFORE PROFIT 125 in Africa to produce, deliver and sell diesel and gasoline, which is damaging to Glossary 134 people’s health. Their business model relies on an illegi timate strategy Annexes 135 of deliberately lowering the quality of fuels in order to increase their profits. Endnotes 148 Using a common industry practice called blending, trading companies mix cheap but toxic intermediate petroleum products to make what the industry calls “African Quality” fuels. These intermediate products contain high levels of sulphur as well as other toxic substances such as benzene and aromatics. By selling such fuels at the pump in Africa, the traders increase outdoor air pollution, causing respiratory disease and premature death. This affects West Africa, in particular, because this is the region where the authorised levels of sulphur in fuels remain very high. West Africa does not have the refining capacity to produce enough gasoline and diesel for its own consumption, and so it must import the majority of its fuels from Europe and the US, where fuel standards are strict. Fuels have been on the agenda for some time already. Beginning in 2002, the UN Environmental Programme (UNEP) conducted a ten-year campaign that led in most countries to a ban on lead in gasoline. However, fuels still account for other severe health issues. The issue of sulphur content must be urgently addressed. This report is the result of three years of research by Public Eye (formerly the Berne Declaration). It highlights the contribution by the commodity trading industry to outdoor air pollution in Africa and the related health effects. | © Carl De Keyzer – Magnum A Public Eye Investigation | September 2016 5 THE ISSUE: SULPHUR, A TICKING BOMB pled were Trafigura (operating through Puma, Pumangol, Gazelle THAT NEEDS DEFUSING trading, UBI), Vitol (Vivo Energy with Shell brand), Addax & Oryx Group (Oryx) and Lynx Energy (X-Oil). African mega-cities such as Lagos or Dakar already have worse More than two thirds of the diesel samples (17 out of 25) air quality than Beijing. Rapid urbanisation, the growing num- had a sulphur level higher than 1,500 ppm, which is 150 times bers of cars, and the poor quality of these cars, which are mostly the European limit of 10 ppm. The highest level of sulphur was second hand, partly explains the worsening air pollution in in a diesel sample from one of Oryx’s petrol stations in Mali, African cities. where the sulphur content was 3,780 ppm. Almost half of the The crucial factor though is that most African countries still gasoline samples (10 out of 22) have a sulphur level between 15 permit the use of high-sulphur diesel and gasoline. On average, and 72 times the European limit of 10 ppm. Worryingly, we also African sulphur limits in diesel are 200 times above the Euro- detected other health damaging substances in concentrations pean limit, in some countries this figure is as high as 1,000. that would never be allowed in a European or US fuel. These Sulphur in fuels is crucial to air pollution because of its di- substances include polyaromatics (diesel), aromatics and benzene rect health-damaging effects but also because it destroys emis- (gasoline). In a number of samples, we found traces of metals sions control technologies in vehicles. As long as fuel sulphur that would also contribute to higher emissions of pollutants content remains so high, any efforts to reduce air pollution (for and damage car engines too. example, by modernising Africa’s car fleet) will be in vain. Without rapid and meaningful improvements in fuel quality, traffic-related air pollution will soon be a major health issue THE CONTEXT: TOXIC FUELS BROUGHT TO (see chapter 3). Respiratory diseases such as asthma, chronic ob- AFRICA structive lung diseases, lung cancer and cardiovascular diseases will rise. West Africa is a significant producer of crude oil. But due to its On the other hand the use of ultra-low sulphur fuels (10 lack of refining capacity, the region must import roughly half of parts per million [ppm] sulphur) would immediately halve the its diesel and gasoline, which is high in sulphur, mostly from emissions of pollutants. If done together with the introduction Europe and the US. of cars that use existing emissions control technologies, the Around 50 percent of the fuels imported to West Africa emission of pollutants could be reduced by 99 percent. come from Amsterdam, Rotterdam and Antwerp, collectively known as the “ARA” region (see chapter 8). Trade statistics show 80 percent of the diesel exported from ARA to Africa has THE PLAYERS: THE SWISS TRADING COMPANIES sulphur content at least 100 times above the European standard. This figure soared to an average 90 percent for West Africa, with The fuel business in Africa is very opaque. Over the past de- Ghana (93 percent), Guinea (100 percent), Senegal (82 percent), cade, important shifts have happened, almost unnoticed. As oil Nigeria (84 percent) and Togo (96 percent) receiving the biggest majors pulled out from Africa’s retail business, Swiss trading volumes. companies moved in, expanding downstream to control key as- Based on specific cargoes, official documents from Ghana sets such as storage facilities and hundreds of petrol stations show that, in both 2013 and 2014, diesel imports contained sul- across Africa (see chapter 4). Hidden from view by operating phur levels extremely close to the legal limit. This all happened behind the Shell and Puma Energy brands, two big Swiss trad- even as specifications were changed between 2013 and 2014. ing companies Vitol and Trafigura, together with smaller Swiss This shows how trading companies are able quickly to adapt to companies, have a dominant position in the import and distri- new standards, sticking as close as possible to the limit (see bution of petroleum products in many African countries, espe- chapter 7). cially in West Africa. Other heavyweights, namely Glencore, Swiss trading companies play a major role in transporting Mercuria and Gunvor, that don’t own petrol station networks, fuel from the ARA region, and from the US, to West Africa. In are equally important in supplying African markets. To access the case of Ghana, these companies delivered most of the known markets and increase their market share, they often rely on high sulphur cargoes in 2013 and 2014. dodgy local door-openers or other politically exposed persons (see chapter 5). THE BUSINESS: BLENDING FUELS THE TEST: SAMPLING AT THE PUMP Contrary to what most people might think, fuels such as diesel or gasoline tend not to come straight from refineries. Instead, Public Eye tested fuels sold at the pump by Swiss trading compa- the refineries produce intermediate products, which are nies (see chapter 6). Countries were selected based on their weak then mixed together, occasionally with intermediate products fuel standards and on the presence of petrol stations owned by from other sources (such as the chemical industry). This process Swiss trading companies. We analysed samples from eight coun- is called “blending” (see chapter 9). To make matters more com- tries: Angola, Benin, the Republic of the Congo, Ghana, Côte plex, different types of refineries produce different intermediate d'Ivoire, Mali, Senegal and Zambia.