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Dirty Diesel


Commodity traders accused of ‘illegitimate’ African fuel trade




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An NGO has slammed Swiss commodity traders for allegedly making handsome profits from selling poor grade fuel to African countries that contains high concentrations of toxic substances, such as sulphur.

Public Eye (known until recently as Berne Declaration) released a report on Thursday that called on traders to stop the legal, but “illegitimate”, practice of selling “African Quality” fuel to countries with low environmental and health standards.

Trafigura and Vitol were named as the principle offenders, in some cases being accused of deliberately mixing fuel with other substances to bring down the quality (a process known as ‘blend dumping’), before selling them it to countries such as Ghana, Ivory Coast, Zambia and Mali. The report also pointed a finger at Addax & Oryx Group and Lynx Energy for allegedly shipping poor grade fuel to Africa and dispensing it through petrol stations that they own.

Public Eye researchers spent three years in Africa measuring the quality of fuel, sifting through documents and tracking the shipments of fuel. “By selling such fuels at the pump in Africa, the traders increase air pollution, causing respiratory disease and premature death,” the report concludes.

Damage to health

“Swiss-based trading companies, as well as others, increase their profit by blending low quality intermediate products, producing fuels that the traders know will damage health unnecessarily.”

Vitol responded by accusing Public Eye of getting some of its basic facts wrong, particularly the alleged role that traders have in dictating the quality of fuels that are exported to Africa. It also said that its relationship with a partner company had been misrepresented. Vitol said it took its health and safety responsibilities seriously.

“In Africa, governments control and manage the import of fuels and only they are able to determine local fuel standards. It is a government’s prerogative to define the country specification and local refining capability may be a key influencing factor,” Vitol said in a written statement.

“Vitol does not control the supply chain, in which product from various suppliers, including major oil companies, is comingled, and Vitol therefore is unable to determine the quality of fuel sold at the pump.”

Trafigura had yet to respond to swissinfo.ch questions at the time of publication.

Regulations

The Public Eye report called on African countries to raise the regulatory bar that currently permits the sale of poor quality fuels. It also demanded that the Swiss government implement “mandatory human rights and environmental due diligence requirements for Swiss companies”, to prevent them from selling products that fall below European standards.

Ironically, Africa exports some of the purest crude oil, but has to import most of its finished products because countries lack sophisticated refineries, according to Public Eye

The Swiss-based NGO has long campaigned for tougher binding regulation on the Swiss commodity trading sector which accounts for one third of the world’s trade in crude oil and related products. It wants an independent regulatory body to oversee the industry, with similar powers to the financial market regulator.

In 2013, the Swiss government rejected the need for new binding regulations for the industry, saying that international rules governing the trading of commodities had strengthened sufficiently to allow traders to self-regulate in Switzerland.
 

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