Brazilian path towards the consolidation of domestic oil industry imposes proportional social and environmental responsibilities. This relation holds due to the embedded risks of the business that is commonly associated to major environmental accidents and increasing operational difficulties.
In general, risk management is resumed in contingent plans developed by industry and regulated by government. Regarding the oil sector, international experiences have defined among other initiatives redundancy mechanisms whenever setting contingent plans in order to avoid unexpected failures.
The contingence plan is by nature a preventive instrument designed over principles of sustainability and formulated according to feasible scenarios. Therefore, a consistent plan depends on variables as robustness, strategic planning and the capacity of industry and government to quickly and effectively address the eventual occurrence of accidents in vulnerable areas.
The relevance of a contingence plan varies between sectors depending on the associated risks. The oil drill and extraction is by nature a top ranked risky business that is particularly latent when the extraction occurs in sensible ecosystems or in conditions of operational uncertainty as is the case of Brazil where oil main reserves lay down at the bottom of the Atlantic Ocean.
Since the 1980’s an idea of setting a contingence plan is being discussed in Brazil and a draft of a national contingent plan was finally passed in 2000 through the law 9.996/2000. However, efforts carried out were received with skepticism by specialists and has never been regulated by government. After years of inaction the national contingence plan was finally put under probation in October 2011 when a major oil leakage was identified at the Frade oil reserve, located in the coastal area of the southeast region. The open up of the contingence plan revealed an obsolete and bureaucratic document, inappropriate to cope with the current challenges of deep waters oil drilling. Among its several weaknesses are included the limited duty assigned to the state including the absence of preventive policies. It also misses the definition of responsibilities, a fundamental component of any managerial framework embodied in a contingent plan. Analysts have also criticized the limited boundaries of the penalties defined in the law that is way below the damaged costs usually associated to oil leakage.
After the identification of the fragilities of the national contingent plan, a new document exclusively focused on the oil sector is being formulated under the request of the Brazilian president. A first version of the document formulated according to the current demands of the emerging oil sector is scheduled to be released by the first half of 2012.
Sideriver environment 