Compelled to steal
On 18 January, seven weeks into the new presidency of Andrés Manuel López Obrador, a fuel pipeline exploded in Tlahuelilpan, in the state of Hidalgo, north of Mexico City. A gasoline pipeline had been illegally tapped and as hundreds of locals gathered to fill containers with the gushing oil, an explosion and subsequent fire killed at least 98 people and left 60 more in hospital. While Mexico mourns those lost in the tragedy, it also asks itself serious questions about illegal pipeline activity, corporate corruption and widespread poverty.
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Organised crime is likely to blame for the tapping activity: analysts agree that the tappers of the pipeline probably weren’t opportunistic thieves, but instead co-ordinated criminals working in a network that involves complicit locals, gang members and bribed or coerced oil company officials. The siphoned fuel is thought to be re-sold to colluding gas stations and distributors, who sell it at cheaper rates.
Gangs are estimated to have stolen US$3 billion equivalent in fuel from Mexican state-owned oil company Pemex in 2018. According to officials, gang members drilled illegal taps into pipelines 12 581 times in the first 10 months of 2018; that’s about 42 per day. It’s a huge problem for the nation and one which President Andrés Manuel López Obrador is keen to stamp out.
As one of his first acts as President, AMLO (as he is often called) ordered the shutdown of several of the country’s most theft-vulnerable pipelines, sending 4000 troops to guard the pipeline assets and fuel depots, and deploying helicopters to scan the skies for thieves. Fuel from Mexican ports was shipped via truck instead of pipeline, which caused massive delays at filling stations and forced AMLO to reopen most of the pipelines after a few weeks.
On the day of the explosion, military personnel were dispatched to the site of the tapping but stood back as hundreds of people took their fill. A week earlier, people in a different town had attacked soldiers who had tried to stop them from illegal tapping.
AMLO swiftly assumed responsibility for the disaster. At a news conference, he said: “we have the conviction that the people are good, that they are honest, that if they arrived at these extremes, these practices, it’s because they were completely abandoned” by the state. Keen to characterise his administration as different to those that came before, his approach to the fuel theft strikes a markedly compassionate note previously missing in the country’s dialogue on crime.
Under former President Enrique Peña Nieto, the oil industry was liberalised, allowing for foreign investment. This raised retail prices and gave the gangs an opportunity to undercut prices at the pump. Fuel theft was tolerated for years, punished by martial law and largely considered the price of doing business in the country, but organised crime has become more sophisticated and both drug and oil crime has infiltrated deep into society. During Nieto’s term, Mexico fell 30 rungs on Transparency International’s world corruption ranking.
AMLO’s leftist leaning, light-handed dealing with fuel theft has drawn both praise and criticism. He campaigned as a ‘Mr Clean’ type and takes a moral approach to the business of governing, with sensitivity to the hardships of his people.
But now he has an uphill climb: it’s a challenge to fight crime effectively and be empathetic to those driven to partake in crime by poverty and lack of opportunity. It will also be a challenge to root out corruption in government and corporate environments. Earlier this year, it was alleged in the trial of a cartel gang member that Nieto took a US$100 million bribe from drug lord Joaquin ‘El Chapo’ Guzman during his presidential tenure.
Pemex employees and officials have long been suspected of involvement in fuel theft. The company is also being scrutinised for possible delays in shutting off the pipeline once the rupture had been detected. Pemex is reported to have closed the valve approximately four hours after detection. Mexico’s pipelines are vulnerable to attack and are patched up, needing modernisation. US$10.4 billion was allocated for pipeline maintenance two years ago, but work has yet to begin. Meanwhile, the country is investing in more tanker trucks for future oil transport.