Fair Finance International and partners call on Repsol investors on May 30 to vote “No” on Item 3: Non-Financial Information Statement 2024
In the run up to Repsol’s Annual General Meeting taking place in Madrid on Friday 30th May, Fair Finance International, Oxfam and CooperAcción are calling on investors to vote “No” on Item 3 relating to the Approval of the Non-Financial Information Statement 2024.
On January 15, 2022, the largest oil spill in Peruvian history occurred when a pipeline broke during the offloading of oil from a tanker to a refinery owned by the Spanish company Repsol. 12,000 barrels of oil were spilled into the sea, the devastating consequences of which are still being felt today.
The extent of the damage to the environment and impact on local communities is, however, being misrepresented by Repsol. Although its Consolidated Statement on Non-Financial Information and Sustainability Information "states that "[t]here were no significant operating expenses or investments in 2024 related to environmental incidents and deposits," there are multiple legal, financial, regulatory, and insurance risks still facing the company as a result of the oil spill. As a result, there are potentially billions of dollars of fines, legal penalties, and remediation costs pending, that amount to far above those mentioned in its Annual Reports.
“Repsol faces serious financial risks in rehabilitating the region affected by the oil spill, which is not acknowledged in its Statement” says Kees Kodde of Fair Financial International. "The company initially claimed it would cost $150 million USD to clean up the spill, but by 2024 the costs were reported as $438 million USD. Yet this statement of additional costs neither accounts for nor includes projections for the full costs of addressing the damage from the La Pampilla oil spill or the companies' actions in relation to the incident.”
The legal and regulatory risks surrounding the fallout from the disaster are also unaccounted for in the Statement. At present, two lawsuits, two criminal cases, and 22 administrative cases are underway. Repsol has already been fined over $75 million USD due to its failure to maintain safety protocols at the La Pampilla refinery and to harms caused to people living and working in areas affected by the oil spill. The company is, at this time, considered to be facing over $5.7 billion USD in legal and regulatory risks.
Furthermore, none of the over 20 remediation plans that Repsol submitted to the Peruvian government have been approved, with relevant authorities considering them to contain "incomplete, insufficient, and - in some cases - erroneous information" this presents a major risk to investors.
"Repsol continues to deny responsibility for the environmental damage caused by the January 2022 oil spills on the coast of Lima — despite its liability having been formally established by administrative proceedings in Peru. This is evidenced by the numerous fines and sanctions imposed by regulatory authorities”, says Ady Chinchay of Oxfam Peru. "Therefore, Repsol must fully remedy the damage to the affected flora, fauna, and ecosystem, and guarantee fair and comprehensive compensation for all individuals and communities harmed by the spill."
Photo source Mary tierra from the report "Did Repsol Clean Up the Mess?" by CooperAcción
Repsol’s actions in the aftermath of the disaster and now cause significant financial risk to its investors as well as reputational risk resulting from ongoing false and misleading statements about the spill. It is for these reasons, that Fair Finance International and partners CooperAcción and Oxfam, recommend a vote against Proposal 3, Approval of the Non-Financial Information Statement 2024, at Repsol S.A.'s 2025 AGM.
Please find a Factsheet about the case here.
Please find the Briefing sent to investors here.
ENDS
For more information, contact kees.kodde@oxfamnovib.nl or adyrosin.chinchay@oxfam.org
