About VA Response
VA Response is an innovative service provided by Veirano Advogados to assist clients during any crisis arising from incidents in the oil and gas industry and crises with dams. VA Response offers proactive advice and rapid team mobilization, ensuring that clients are prepared and can provide appropriate responses to address the incident and mitigate its impact.
VA Response leverages the collective experience of the Firm’s lawyers and our track record in supporting clients through emergencies and crises, as well as drawing on our unique full-service capabilities. The service offers our clients seamless support for measures that anticipate, prepare for, respond to, and mitigate risks associated with incidents that have the potential to harm life, the environment, assets, and reputation.
Over the years, major accidents in the oil and gas (O&G) industry have proved their potential to change outcomes for companies profoundly, affecting their financial and reputational future so substantially that recovery becomes extremely challenging and sometimes even impossible. In the aftermath of each new incident, regulation becomes more complex and demanding, third-party involvement and activism gains support, and the public perception of potentially polluting industries deteriorates.
In both current and projected scenarios of oil price and demand, it is clear that companies involved in the O&G industry are struggling with lower margins while operating with the same high risks. A significant oil spill, for example, may have a significant impact on the environment and on human and animal life, in addition to immense financial losses through penalties and reparation of damages. The result can be sky-rocketing risk perception by investors, increased operating costs, and reduced access to financing sources. Together, these factors can – and often do – cause the demise of the companies involved.
The consequent efforts of the O&G industry to improve safety standards, reduce the number of serious accidents, and refine and standardize preparedness and response procedures have been admirable. Systems such as the Incident Command System (ICS) and Incident Management System (IMS) have become widespread, setting clearer protocols and lines of accountability. Extensive lists have been drawn up of the expected and recommended responsibilities of and actions by the designated incident commander, the operations, planning, logistics, and finance/administrative teams, and those in other support roles.
The inclusion of legal advice within these systems is less clearly defined. Appointing team members with responsibility for providing legal support is considered to be subject to the discretion of each organization, taking into account the appropriate level of involvement, accountability, and reporting of such members. The systems make only very broad reference to the responsibility to provide legal advice, make appropriate revisions to documents, and ensure compliance with agreements, laws, and regulations.
In our experience, this is because it is still very challenging to anticipate, fully assess, and standardize the role of lawyers in preparing for and responding to an incident. O&G industry incidents present a unique requirement for a tailored and multidisciplinary approach involving several fields of law. This skill set is unlikely to be found in a single in-house lawyer or even a team of in-house lawyers because their core accountabilities are usually broader, as is required for supporting business operations as a whole. This deficit can be exacerbated by the necessity to respond quickly to an incident, as those most qualified to step in and coordinate legal support may not be in a position to advise immediately.
Moreover, the complexity of Brazilian regulation presents a particular challenge. Statutory rules and case law, overlapping jurisdictional and institutional authority, and the approach taken by prosecutors usually result in a large number of claims and potential defendants, as concepts such as vicarious liability and joint liability are widely applied.
Brazilian environmental laws provide a case in point, establishing broad and far-reaching liability for pollution. Superior Court of Justice precedents have on some occasions established that civil liability for environmental damages applies equally to parties that
- caused the damage
- failed to take action when supposed to do so
- allowed the actions of polluters, either expressly or by omission
- financed the polluting activity
- benefited from the actions of polluters or the polluting activity.
Prevention and efficient response therefore concern all those engaged in any potentially polluting activities, such as companies within the O&G industry. License holders (operators and non-operators), ship and installation owners and operators, cargo owners, and service providers may each have a role to play and risks to manage.
Considering the potential of an incident to expose multiple parties to risks and liabilities, it is not advisable to rely on the response capabilities and actions of others. Parties with primary and secondary responsibilities to clean up and mitigate the incident will have different levels of involvement in response activities, but inertia is not an option for any party that may be directly or indirectly held liable.
VA Response has been developed with all these challenges in mind.