ABSTRACT
Organized criminal groups (OCGs) penetrate the hydrocarbons industry at different points along the supply chain. Such infiltration depends largely on the nature of the products available and the permeability of borders. Upstream, where access to crude oil is key, illicit activities generally take root in weak governance, systemic corruption, and corporate organized crime. Downstream, opportunities abound for OCGs to engage in fuel theft, smuggling, or fraud by adulteration and dilution. Furthermore, the greater number of actors downstream makes regulation and due diligence more costly and challenging. The hydrocarbons industry thus confronts an array of challenges ranging from exploration-related risks to retail sales. As some companies have discovered, if they conduct business in areas where organized crime penetrates the industry, they should adopt and sustain meaningful codes of conduct and rigorous auditing, including security and anti-corruption audits, as well as transparency for both revenues and oil and fuel stocks and flows. Companies can also leverage technology to better monitor their supply chains, protect their infrastructures, and maintain effective brand protection programs. It often pays to coordinate with governments in adopting fuel integrity programs and other regulatory mechanisms.
