DOMINICAN POLITICS II # 4: OUTSPOKEN REFINERY

UNCLAS SECTION 01 OF 02 SANTO DOMINGO 004805 SIPDIS STATE FOR WHA, WHA/CAR, WHA/EPSC, INR/IAA, EB/ESC/IEC/EPC; NSC FOR LATIN AMERICA ADVISOR; USSOUTHCOM ALSO FOR POLAD; TREASURY FOR OASIA-MAUREEN WAFER; DHS FOR CIS-CARLOS ITURREGUI USDOC FOR 4322/ITA/MAC/WH/CARIBBEAN BASIN DIVISION; USDOC FOR 3134/ITA/USFCS/RD/WH; E.O. 12958: N/A TAGS: DR ECON EFIN ENRG EPET ETRD PGOV SUBJECT: DOMINICAN POLITICS II # 4: OUTSPOKEN REFINERY DIRECTOR REPLACED AFTER GAS LEAK REF: SANTO DOMINGO 4743 ¶1. This is the fourth cable in a series of political reporting on the second year of the administration of Dominican president Leonel Fernandez: Outspoken Refinery Director Replaced After Gas Leak - - - - - - - - - - - - - - - - - - - - - - - - - - - President Leonel Fernandez dismissed outspoken director of the National Oil Refiner (REFIDOMSA) Aristides Fernandez Zucco on October 25, 2005, ostensibly because of a gas leak that affected a large sector of Santo Domingo. Fernandez Zucco had emphatically denied the refinery was responsible for the pungent smell of cooking gas that covered most of the capital from early in the morning of October 24, but subsequent investigation revealed that refinery employees had tried to conceal errors in handling a gas additive. Fernandez selected his energy advisor Eduardo Rodriguez to replace Zucco, who had been a feisty critic of arrangements for purchases of Venezuelan oil. A Bad Odor, Everywhere - - - - - - - - - - - - - - - - Much of western and central Santo Domingo awoke on Monday, October 24 to pungent odors that seemed to indicate a massive leak of cooking gas during the night. The odor was characteristic of ethyl mercaptan, also known as ethanethiol, a substance routinely added as a marker to petroleum gas, which is itself odorless and colorless. The lack of explanation in the media further spurred confusion, verging on panic in some cases. There was speculation of an explosion at REFDOMSA and reports of a fire in a gas bottling plant in northeast Santo Domingo. Secretary of Industry and Commerce Javier Garcia reportedly replied to a reporter that the refinery must be the source. At about 8:30, refinery director Aristides Fernandez Zucco telephoned the widely-watched broadcast on news channel CDN with an emphatic denial that REFIDOMSA was responsible for any leak. He told listeners that the REFIDOMSA general manager had made a thorough investigation, starting at 6 a.m., that the routine cleaning with water of a small tank of ethyl mercaptan on Sunday could not have caused the odors, and that in any case the prevailing winds would not have sent refinery gases over the city. Concern and speculation increased. Many schools closed and initial press reports suggested that children were dropping right and left. In fact, although there were some admissions at hospitals, few seemed directly related to gas toxicity. During the course of the day military investigators detained the refinery,s general manager for several hours for questioning. In the afternoon Environment Under Secretary Zoila Gonzalez told the press that the refinery was the source of the discharge. Director of Civil Defense Gen. Luis Luna Paulino gave the same finding and recommended an investigation. Armed Forces Minister Admiral Sigfrido Pared Perez told local news that there was negligence involved, and the individuals charge of washing the tank did not realize that the northward passage of tropical storm Alpha over the island during the weekend had disrupted weather patterns. The prevailing breeze had reversed, so that the discharged gas was carried northeast across the capital At no time was there any serious threat of a Bhopal-type incident of widespread toxic poisoning. Ethyl mercaptan is non-toxic by inhalation at usual concentrations; the U.S. OSHA standards limit it to 10 parts per million in industrial environments and within cooking gas it is at 30 parts per million. The Dominican National Emergency Commission provided accurate information to the public, stating that the gas was slightly toxic and could cause bronchial irritation, respiratory difficulties, vomiting, and conjunctivitis, in addition to headaches, nausea and loss of consciousness. Reversing Field, Too Late - - - - - - - - - - - - - - - - - - A chagrined Fernandez Zucco made a public apology at a press conference the next day. He confirmed that the discharge and odor did come from REFIDOMSA and said that he had been deliberately misinformed by individuals who sought to escape responsibility for the incident. That same evening Fernandez signed a decree replacing Fernandez Zucco with Eduardo Rodriguez, previously the presidential advisor on energy. Rodriguez, an expert on the petroleum industry, had served as coordinator of the government,s Power Sector Recovery Committee, overseeing efforts to improve collections and sector performance with technical assistance from international donors. Earlier, Rodriguez had served as technical leader of the team that sought ways to reduce subsidies on cooking gas, an effort frustrated first by delays and ultimately by a political decision to avoid protests. Some have speculated that the gas leak incident was a trap laid for Fernandez Zucco or at least an opportune moment to sideline him. Nicknamed &El Chato8 ("Pugnose8), Fernandez Zucco had repeatedly gone public to oppose Venezuelan demands to change shipping arrangements for Venezuelan-financed crude (he lost),to quarrel with Venezuelan ambassador Belisario Landis, to denounce the involvement of Dominican ambassador Miguel Mejia for advocating the Venezuelan position, to deprecate the effectiveness of the Caracas accord and the Petrocaribe agreement, to blame refinery partner Shell for inefficiencies and withholding dividends from the government, and to advocate revising refinery ownership and management arrangements. President Fernandez had gathered all parties for conciliation on September 21 and had emerged with a joint promise to make maximum benefit of the 50,000 barrels per day potentially available to the Dominicans through Petrocaribe. Many had thought that Fernandez Zucco would go, sooner or later; after failing to follow the basic management maxim of &trust but verify,8 on Monday morning &El Chato8 provided the opportunity when he contradicted Javier Garcia, one of the administration,s inner circle. Among an urban population that considered itself half-poisoned already, there were very few defenders for him. ¶2. (U) Drafted by Jehan Jones, Michael Meigs ¶3. (U) This piece and others in our series can be consulted at our SIPRNET web site, http://www.state.sgov.gov/p/wha/santodmingo along with extensive other material. KUBISKE