Transnationals in Colombia
Transnationals in Colombia
BOGOTAâ€”The yellow pages here in the Colombian capital show hundreds of transnational companies. Some are marketing products, some are taking advantage of the countryâ€™s varied climates, and others seem to be capitalizing on its minimum wage, about $140 a month. Theyâ€™ve invested billions of dollars into the Colombian economy and are providing thousands of jobs. But many of the firms donâ€™t seem to protect their employees from attacks in Colombiaâ€™s decades-old armed conflict. Last year 184 of the worldâ€™s 213 confirmed killings of union members occurred in Colombia, according to the International Confederation of Free Trade Unions. And many of the companies, including at least 17 U.S. military contractors, profit from the war. A look at four transnational firms shows their complex role here.
Having spent $3 billion in Colombia over the last decade, Colombiaâ€™s largest foreign investor is BP. The London-based company, an outgrowth of a 1998 merger between British Petroleum and Chicago-based Amoco, produces about 35 percent of Colombiaâ€™s oil, the nationâ€™s largest legal export.
BPâ€™s main Colombian complex, Cusiana-Cupiagua, produces 200,000 barrels a day in the northeastern province of Casanare. Since peaking in 1999, the production has declined by 40 percent. A 444-mile pipeline called Ocensa carries the oil to the Caribbean port of CoveÃ±as for export.
The company disappointed shareholders in January when it scrapped Niscota, a $45 million drilling project in neighboring BoyacÃ¡ Province that turned up only water.
U.S. policymakers see the Andean region as crucial because of its oil deposits. Venezuela, the worldâ€™s fifth largest oil exporter, supplies about 13 percent of U.S. oil. Some geologists say reserves in neighboring Colombia could be as large.
In 2002, the U.S. government began earmarking about $100 million a year in military aid to protect an oil pipeline in Arauca Province, just north of Casanare. Guerrilla groups had repeatedly blown up sections of the pipeline, which carries about 100,000 barrels a day for Los Angeles-based Occidental Petroleum. As the aid has flowed in, paramilitary groups have intensified their activity in the province.
Allegations of paramilitary ties have also plagued BP. A British security contractor for the oil company once hired former army Gen. HernÃ¡n GuzmÃ¡n RodrÃguez, linked to a paramilitary group responsible for at least 149 murders. In 1998, government regulator Carlos Vargas SuÃ¡rez was assassinated as he investigated unpaid fines for environmental damage caused by BP and other oil companies.
The company has tried to improve its image in Colombia and other parts of the world. In 2000, BP led an effort to write â€œVoluntary Principles on Security and Human Rights,â€ a set of guidelines for businesses. And Chief Executive Lord Browne tells his employees the companyâ€™s future depends on its social and environmental performance.
Despite such efforts, the World Wildlife Federation and others boycotted a February 24 meeting with BP officials in London. The officials had hoped the meeting would quell environmental protests about a BP pipeline planned to cross Azerbaijan, Georgia and Turkey.
Cincinnati-based Chiquita Brands International has long tried to distance itself from its corporate ancestor, the United Fruit Company, a firm famous for human rights abuse, environmental damage and political interference in Latin America. Chiquita is working with the New York City-based Rainforest Alliance on a program to reduce pesticide use and protect water supplies. And, unlike competitors Dole and Del Monte, Chiquita has signed major labor contracts. By 2001, about 70 percent of the companyâ€™s Latin American workforce (some 15,000 employees) had union representation.
About 10 percent of the companyâ€™s output from the region is produced by 5,000 unionized workers in Colombia. Handling some 440 million pounds of bananas annually, they earn $8-$13 per day, much more than fruit workers who lack a union. The Colombian employees have also won benefits such as health care and company-provided work clothing and equipment.
But Chiquita filed for bankruptcy in 2002, saying European quotas against Latin American bananas had cost the company $200 million a year. To reduce its debt, Chiquita has been selling assets and outsourcing production, making it likely Colombiaâ€™s banana industry will soon resemble Ecuadorâ€™s. In that country, the worldâ€™s leading banana exporter, small companies grow the fruit and bear the brunt of losses due to poor weather, plant disease and labor strife.
In Colombia, Chiquita plans to sell all its holdings, including banana plantations covering more than 15,500 acres in the northern province of Magdalena and a western region called UrubÃ¡. The company is negotiating with CI Banacol, a MedellÃn-based banana producer whose clients include Dole and Del Monte.
The Colombian Banana Workers Union says the sale would lead to layoffs because CI Banacol would fare even worse in Europe than Chiquita has, the BogotÃ¡ daily El Tiempo reported February 28. The union also worries that Chiquita, instead of buying from CI Banacol, would seek cheaper bananas from Brazil, Ecuador and Africa.
As coal production has dwindled in the United States and many other northern countries, Colombia has become the worldâ€™s fifth largest exporter of the fuelâ€™s steaming variety, used for generating electricity and heat, especially in manufacturing. Coal is now Colombiaâ€™s second largest legal export, behind oil, and the industry is expected to grow by 30 percent over the next four years.
Drummond, based in Birmingham, Alabama, accounted for about 38 percent of Colombian coal exports last year, just behind CerrejÃ³n, a company owned by the government until 2000. Drummondâ€™s La Loma, a mine in the northern province of CÃ©sar, employs 1,800 workers. The company plans to open two other mines by 2010.
On some 40 occasions since Drummond arrived in Colombia in 1995, guerrillas have attacked company railcars headed for the Caribbean port of Santa Marta. Drummond has built Colombian military barracks at both La Loma and the port and provides more than 300 army troops at the mine with food and fuel. The troops protect company facilities and screen employees.
And the company has ties to other armed groups, according to the National Mining and Energy Industry Workers Union (SintramienergÃ©tica). During the unionâ€™s 2001 negotiations with Drummond, paramilitaries killed SintramienergÃ©tica President Valmore Locarno and Vice President VÃctor Orcasita. Six months later, paramilitaries murdered Locarnoâ€™s replacement, Gustavo Soler.
Accusing Drummond of complicity in the murders, the United Steelworkers of America and the International Labor Rights Fund filed suit in 2002 on behalf of the slain men and SintramienergÃ©tica in the U.S. District Court in Birmingham. The company has denied involvement and asked for the suit to be dismissed.
On September 29, SintramienergÃ©tica leaders David Vergara and Seth Cure were abducted as they drove from the Caribbean port of Barranquilla to a union meeting in Valledupar, the CÃ©sar capital. As protest letters flooded Drummond officials, the two turned up unharmed October 19.
But death threats have continued. Jimmi Rubio, a union leader at La Loma, received a November message that paramilitaries have a bounty on his head.
DynCorp, the 13th leading recipient of U.S. military contracts, is best known for snaring a $50 million contract in April 2003 to hire and manage 1,000 U.S. officers to police Iraq. But the company, headquartered in Reston, Virginia, has major U.S. contracts in Colombia as well. DynCorp reaped more than $85 million for its work here in 2002, the latest year for which the State Department has released figures.
For its biggest Colombia contract, the company fumigates crops of coca and opium poppy. Protected by U.S.-supplied combat helicopters, DynCorp sprays a powerful herbicide from planes. The fumigation kills not only the raw ingredients of cocaine and heroin, but also food crops and other plants. It draws protest from farmer advocates, health officials and environmentalists. In November, the effects on Colombiaâ€™s national parks sparked debate in the U.S. Congress.
DynCorp faces a lawsuit from farmers in neighboring Ecuador who say the spraying has hurt people and food crops on that side of the border. Filed in 2001 in the U.S. District Court in Washington, D.C., the suit is backed by the International Labor Rights Fund.
U.S. law sets a cap of 400 on U.S. citizens in Colombia employed by government contractors. DynCorp and other contractors sidestep the cap by hiring foreigners. On a DynCorp fumigation mission September 21, Costa Rican pilot Mario Alvarado died when his plane was shot down. He was among at least five U.S. employees of military contractors who died in Colombia last year. At least three others were taken hostage by guerrillas and remain in captivity.
To ward off guerrilla attacks on planes, the Colombian armed forces last August launched â€œOperation Holocaustâ€ in Catatumbo, a coca-growing region in the northern province of Norte de Santander. In its first month, officials say, the operation killed 24 members of the Revolutionary Armed Forces of Colombia (FARC), the nationâ€™s largest guerrilla group. At least seven government soldiers were also killed.
The spraying has been the cornerstone of U.S. aid to Colombia over the years. The U.S. government and the United Nations call the fumigation effective and have published reports citing declines in Colombian coca acreage, especially in the southern provinces of Putumayo and CaquetÃ¡
Yet the cropâ€™s acreage has increased in nearby NariÃ±o, Guaviare and Amazonas, according to a report last year by the weekly magazine Semana. Colombia remains the worldâ€™s largest cocaine supplier and a leading source of heroin for the U.S. market. And the Colombian fumigation seems at least partially responsible for increased coca cultivation in Bolivia, Peru and Ecuador.
With more military contracts in sight, DynCorp was bought last year by California-based Computer Sciences for $950 million.