Philippines fines Shell-linked firm for pipeline leak

The government warned the fine could rise substantially until First Philippine Industrial Corp. fully recovered all the oil that had seeped out and was polluting groundwater on the edge of Manila's financial district.

"Under... the Clean Water Act, one of the prohibited acts is discharging, injecting, or allowing to seep into the soil or sub-soil any substance in any form that would pollute the groundwater," Environment Minister Ramon Paje said.

The 43-year-old, 117-kilometre (72.5-mile) underground pipeline supplies more than half of Manila's oil needs. Its shutdown has disrupted supply, with some petroleum grades unavailable at many gas stations.

The pipeline firm was hit with an initial fine of 24.2 million pesos ($548,000) for leakages that began in July when firemen ordered the evacuation of a condominium after oil seeped into a basement garage.

The leak was plugged on November 10, but Paje warned the fine would rise by 200,000 pesos a day until the oil and grease content of groundwater in the area has returned to levels allowed by law.

The Supreme Court has stopped the company from reopening the pipeline until further notice while it resolves a lawsuit filed by 80 families displaced from the evacuated high-rise residential building.

The suit alleges the state of the pipeline endangers their lives as well as their right to an environment free of hazards and pollutants, and seeks a court order compelling First Philippine to install a new pipeline.

First Philippine said it had engaged a foreign clean-up company to remove the pollution.

"FPIC has been undertaking a lot of measures to do what is right for the Bangkal area," its officer-in-charge, Anthony Mabasa, said in a statement.

First Philippine is 60-per cent owned by First Philippine Holdings Corp., with Shell owning the other 40 per cent, according to its website.