DOWNSTREAM OIL THEFT

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Downstream Oil Theft: Global Modalities, Trends, and Remedies A policeman inspects barrels containing stolen diesel fuel, stored in a tire repair shop, during an operation in the municipality of Apodaca, neighbouring Monterrey July 4, 2011. Photo credit: Reuters/Josue Gonzalez. As another example of this community-based protection of illicit hydrocarbons activity, organized gangs will intentionally leave the pipeline taps flowing to allow farmers to come fill up. Even though the spillage has a negative environmental impact, Pemex pays the farmers compensation for the damage to the land and livestock from the spill. So the community essentially double dips, in getting free fuel and payment for the property damage. This is a key “hearts and minds” approach on the part of the criminal groups to ensure community support and loyalty. 48 Government and Law Enforcement Well-known instances of police collusion in major criminals’ evasion of or escape from law enforcement, along with cases like the one mentioned above in which former federal police officers established their own criminal network exploiting their links with law enforcement, suggests that corruption and official complicity in the illicit hydrocarbons trade remain a problem. In July 2015, two senior police officials from Puebla State were caught in the midst of an operation involving thirty-one tanker trucks of siphoned fuel. 49 Similarly, in April 2016, the Army interdicted a stolen fuel convoy being guarded by two state police officers in Hidalgo. The police, together with three civilians, were arrested, and two truckloads with over 4,300 liters of stolen fuel were recovered. 50 Between January 2014 and April 2016, most of the law enforcement personnel arrested for hydrocarbons de tiempo en el triángulo rojo,” Expansión, May 3, 2016, http:// expansion.mx/politica/2016/05/02/el-robo-de-hidrocarburosen-puebla-una-bomba-de-tiempo-en-el-triangulo-rojo. 48 Carlos Loret de Mola, “Como ganar 90 mil dólares en 7 minutos,” El Universal, July 7, 2015, http://www.eluniversal. com.mx/entrada-de-opinion/columna/carlos-loret-de-mola/ nacion/2015/07/7/como-ganar-90-mil-dolares-en-7. 49 “Chief of State Police Arrested for Fuel Theft,” Mexico News Daily, July 15, 2015, http://mexiconewsdaily.com/news/chief-ofstate-police-arrested-for-fuel-theft/. 50 Juan Ricardo Montoya, “Capturan a policías en hidalgo por transportar combustible ‘ordeñado’”, La Jornada, April 10, 2016, http://www.jornada.com.mx/ultimas/2016/04/10/capturan-apolicias-en-hidalgo-por-transportar-combustible-ordenado. ATLANTIC COUNCIL 11
Downstream Oil Theft: Global Modalities, Trends, and Remedies crime were state-level or municipal police officers, though two ex-federal officers were arrested in the state of Guanajuato in early 2015. 51 That same year, when a fuel theft network in the state of Puebla involving local police officers was brought to light, the criminal operation was found to have been abetted by the Puebla secretariat of public security— yet the case resulted only in administrative dismissals, not criminal proceedings. 52 Mitigation Law Enforcement Law enforcement in Mexico faces enormous challenges. Not only is there widespread corruption and collusion with cartels, but the general populace is often uncooperative with efforts to curb hydrocarbons crime. A widespread lack of confidence in the justice system’s ability or willingness to punish actors in hydrocarbons crime has led to what one legal scholar calls “a cycle of criminal impunity,” in which citizens decline to speak out against criminal activity. Attempts to break this cycle, such as “anonymous hotlines,” have failed. 53 The Mexican government has stiffened the relevant penalties. Toward the end of 2015, the Mexican legislature made oil theft a serious crime and increased its penalty from eight to fourteen years to fifteen to twenty-five years. 54 In some cases, neither Mexican law enforcement nor Pemex has demonstrated much discernible interest in following through on allegations of hydrocarbons crime. Between 2004 and 2014, the United States Treasury’s Office of Foreign Assets Control blacklisted nineteen Mexican filling stations for laundering the profits of Mexican cartels. As of March 2015, nine of those stations still held contracts with Pemex. While it may be that investigations by Mexican authorities did not turn up sufficient evidence for legal action, their seeming inaction, along with that of Pemex, raises questions. 55 In recent years, the Mexican government has adapted anti-cartel approaches used in the past in Colombia, 51 “Situación actual,” Etellekt. 52 Ibid. 53 Reinhart, “The Aftermath of Mexico’s Fuel-Theft Epidemic.” 54 Jan Martínez Ahrens, “México castigará el robo de gasolina con el doble de años que la violación,” El País, December 14, 2015, http://internacional.elpais.com/internacional/2015/12/13/ mexico/1450037740_277854.html. 55 David Gagne, “Blacklisted by the US, Mexican Gas Stations Still in Business,” InSight Crime, March, 23 2015, http://www. insightcrime.org/news-briefs/blacklisted-by-the-us-mexicogas-stations-still-in-business. most notably the strategy of pursuing high-profile cartel leaders so as to precipitate disorder and collapse in their organizations. One consequence of this approach is that cartels have devolved into smaller networks capable of maneuvering more quickly. As noted above, this has been the case with the Zetas. Critics have suggested that targeting cartel leaders actually exacerbates criminal violence by collapsing established hierarchies and chains of command and providing openings for the most violent contingents within cartels to assert themselves without organizational checks—in effect, forcibly deregulating a criminal industry. 56 Nonetheless, these policies have resulted in some success. The state of Sinaloa saw a 59 percent decline in hydrocarbons theft from 2014 to 2015. Experts credit this significant decrease to the successful disruption of the Sinaloa Cartel, the most visible development of which was the July 2015 recapture of Joaquín “El Chapo” Guzmán. 57 In some parts of the country, specialized enforcement units have been created for the sole purpose of tackling hydrocarbons theft. In May 2016, for instance, the military integrated fifty elements of the National Army into a newly created Zacatecas Military Garrison that would work in coordination with Pemex officials to guard key central pipelines. 58 In May 2015, President Peña Nieto unveiled Plan Tamaulipas, which involved sending four quadrants of special Army and Navy units to patrol against narco-blockades and protect strategic industry from interference in the northeast. 59 Corporate Responses As mentioned above, Pemex employees have been alleged to participate in the illicit hydrocarbons trade. Regardless, the company has taken some measures to combat trafficking. In February 2015, Pemex announced it would stop transferring “engine-ready” fuel through its pipelines and leave the final mixing stage to the company’s storage plants. 60 It is not yet 56 Geoffrey Ramsey, “‘Acapulco Cartel’ Emerges to Compete with Mexico’s Disorganized Crime,” InSight Crime, February 3, 2011, http://www.insightcrime.org/news-analysis/acapulco-cartelemerges-to-compete-with-mexicos-disorganized-crime. 57 “Situación Actual,” Etellekt. 58 “Inauguran en zacatecas guarnición militar para combatir el robo de hidrocarburos” El Sol de Zacatecas, May 9, 2016, http:// www.oem.com.mx/elsoldezacatecas/notas/n4159586.htm. 59 Arron Daugherty, “Why Success of Mexico’s Oil Security Plan May Not Matter,” InSight Crime, February 3, 2015, http://www. insightcrime.org/news-analysis/why-success-of-mexico-oilsecurity-plan-may-not-matter. 60 Roberto Ontiveros, “Pemex Announces the End of Readyto Use Fuel Shipping to Fight Mexico Gasoline Theft,” 12 ATLANTIC COUNCIL
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PART III Stakeholders and Recommend
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Atlantic Council Board of Directors
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