Brazil Federal Police Accuse Petrobras of Environmental Crimes

RIO DE JANEIRO - Brazilian state-run energy giant Petroleo Brasileiro could face criminal and civil actions after federal police alleged the company isn't properly treating wastewater from refining and oil production before releasing it into local waterways and the Atlantic Ocean, a police official said Thursday.

"The investigation has been completed and forwarded to the federal prosecutor's office," Fabio Scliar, who heads the federal police's environmental crimes unit in Rio de Janeiro, told Dow Jones Newswires in a phone interview.

According to Mr. Scliar, a federal prosecutor intends to file criminal charges against two executives at a Petrobras refinery after a months-long investigation uncovered evidence that water contaminated with heavy metals and other pollutants has been released from a refinery north of Rio de Janeiro into the Iguacu River.

The investigation also raised questions about how Petrobras treats and discards water produced along with oil at offshore platforms, Mr. Scliar said. Evidence of potential irregularities with treatment of the wastewater was also forwarded to the federal prosecutor's office, which plans to open a civil inquiry, Mr. Scliar said. So far, no criminal misconduct has been discovered related to offshore wastewater treatment, he said.

Petrobras denied the allegations. All contaminated water produced during the refining process is treated and discarded according to law, the company said in an email.

"Water produced with oil on platforms is treated and discarded in accordance with Brazilian law, which is just as rigorous as laws in the U.S. and Europe," Petrobras said. Contaminated water from platforms that lack onboard treatment equipment is sent to other platforms or installations, the company added.

The federal prosecutor also intends to forward the investigation's findings to the attorney general's office in Brasilia, Mr. Scliar said. That will allow all states in Brazil with oil-related activities to accompany the civil inquiry and open investigations, Mr. Scliar added.

The action "will open the debate about how these oil-related residues are being treated," Mr. Scliar said.

Copyright (c) 2013 Dow Jones & Company, Inc.

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