May 19, 2008

Colombia’s Economic Growth Fueled by Repression

by Garry Leech

Over the past five years Colombia has achieved impressive economic growth as foreign investment has increased dramatically. According to most analysts, it is the policies of President Alvaro Uribe that have created the security conditions required by foreign companies to operate in the country. A significant portion of Colombia’s economic growth has resulted from investment in the country’s extractive sector, reflecting the confidence of foreign investors in the capacity of the Colombian military to safeguard their operations in the country’s rural conflict zones. However, analysts who praise the Uribe government for Colombia’s economic growth often ignore the fact that the enhanced security provided by the Colombian military has been achieved through an increase in human rights abuses perpetrated against the rural population.

Foreign oil and mining companies operating in Colombia’s rural regions have become enmeshed in the country’s conflict and its related human rights abuses. Many of these companies house Colombian military units on their installations and provide combat troops with logistical support, including the use of company vehicles, helicopters and fuel. This relationship between foreign companies and the Colombian military is particularly troubling given the dramatic increase in human rights violations perpetrated by state security forces in recent years.

According to the Bogotá-based Center for Research and Popular Education (CINEP), during President Alvaro Uribe’s first term in office (2002-2006), the percentage of the country’s human rights violations directly perpetrated by state agents increased from 17 percent when he assumed office to 56 percent in 2006. The increased role of the state in human rights abuses has paralleled the implementation of neoliberal reforms that have created favorable investment conditions for multinational companies.

In 1999, US Secretary of Energy Bill Richardson visited the Colombian city of Cartagena to address US economic interests in the South American nation. During his visit, Richardson announced, “The United States and its allies will invest millions of dollars in two areas of the Colombian economy, in the areas of mining and energy, and to secure these investments we are tripling military aid to Colombia.” The ensuing tripling of military aid occurred the following year under Plan Colombia, which was presented as a counter-narcotics initiative to the US Congress and the public.

Also in 1999, Colombia experienced its worst economic recession in more than half a century and, for the first time, the country turned to the International Monetary Fund (IMF) for a bailout loan. In December of that year—one month before President Bill Clinton announced Plan Colombia—the IMF agreed to lend Colombia $2.7 billion on the condition that the government implement structural reforms that included privatizing state-owned companies, deregulating the economy and opening up the country’s natural resources for exploitation by multinational companies. In essence, the IMF-demanded structural reforms became the economic component of Plan Colombia.

Between 2001 and 2004, as part of the structural reforms, the oil and mining regulations were restructured to provide a favorable investment climate for foreign companies. In 2001, the Canadian International Development Agency (CIDA) assisted the Colombian government in re-writing the country’s mining code. The new CIDA-backed code relaxed environmental regulations on mining operations, extended the length of concessions issued to foreign corporations and, perhaps most importantly, reduced the royalty rates that companies were required to pay to the Colombian government on the resources they extracted.

Under Article 227 of the new code, the royalty rates on coal were reduced from the previous level of 10-15 percent to a mere 0.4 percent. In reference to the new royalty rate, Francisco Ramírez, president of the Colombian State Mineworkers’ Union (Sintraminercol), declared, “With the stroke of a pen, once again the Nation lost enormous sums of money which could have been used to address social problems, like the fact that 80 children in Colombia perish every day from hunger, malnutrition, and curable diseases.”

In the petroleum sector, prior to 2001, foreign companies were required to sign association contracts with Colombia’s state oil company Ecopetrol under which each party would own 50 per cent of the oil produced. However, three years later neoliberal reforms had ensured that multinational companies were no longer required to enter into partnership with Ecopetrol as they were given the rights to 100 per cent of the oil they produced. The Colombian government also reduced the royalty rate that multinational companies were required to pay on each barrel of oil from 20 percent to 8 percent.

The revised contract terms in the oil and mining sectors led to a dramatic increase in the number of new contracts signed by multinational energy companies, causing foreign direct investment to soar. Despite the favorable terms for foreign oil and mining companies and the diminished financial benefits to Colombia under the new contracts, José Armando Zamora, director of the government’s National Hydrocarbon Agency, insisted that the contract concessions “do not represent a loss of sovereignty or the sale of the nation’s resources.”

While the economic reforms in the oil and mining sectors provided favorable investment conditions for foreign companies, the lack of security in rural regions made it difficult to take advantage of the new contract terms. In 2001, for example, leftist guerrillas demanding that the government nationalize the oil industry bombed Los Angeles-based Occidental Petroleum’s pipeline in Arauca in eastern Colombia a record 170 times, shutting it down for 240 days during the year and costing the company $100 million in lost earnings.

One way for companies to avoid having their operations attacked by guerrillas is to pay the “war taxes” demanded by the rebels. Though no foreign oil companies have admitted to directly paying off the guerrillas, Occidental Vice-President Lawrence Merriage has acknowledged that in the past his company’s contractors have met extortion demands in Arauca. When asked about FARC threats and demands in the southern department of Putumayo, Edgar Dyes of Houston-based Argosy Energy claimed he had no knowledge about whether or not the company’s contractors had made extortion payments to the rebels. Interestingly, the FARC has for the most part left Argosy’s operations untouched in its offensives against oil infrastructure in that region.

Foreign companies that refuse to pay the guerrillas are dependent on the Colombian military to safeguard their operations. And as Energy Secretary Richardson made clear in 1999, US military aid would help provide the necessary security for foreign oil and mining companies operating in Colombia’s rural conflict zones. Plan Colombia, which represented the initial US military aid package, was soon supplemented with counter-terrorism funding following the 9/11 terrorist attacks against the United States. By 2003, the newly-strengthened Colombian military was aggressively implementing the security policies of President Uribe.

In the southern Colombian department of Putumayo, which has been the principal target of Plan Colombia, the so-called counter-narcotics initiative has provided increased security for US and Canadian oil companies operating in the region. The Colombian army’s principal objective has not been the defense of a civilian population caught in the midst of the conflict, but rather the protection of foreign companies taking advantage of IMF-imposed neoliberal reforms.

As the Colombian Army’s Lieutenant Colonel Francisco Javier Cruz, commander of 1,200 troops in Putumayo, made clear in 2004, “Security is the most important thing to me. Oil companies need to work without worrying and international investors need to feel calm.” The fact that US counter-narcotics aid has helped secure the oil operations of multinational companies was made evident by Cruz when he stated, “We are conducting better operations now because we have tools like helicopters, troops and training provided in large part by Plan Colombia.” Cruz has not only benefited from the use of helicopters supplied by the United States under Plan Colombia, he also acknowledged that he and his troops have access to two helicopters owned by Ecopetrol and the Canadian company Petrobank for use in combat operations.

Petrobank is not the only foreign company providing logistical support to Colombian army units engaged in counter-insurgency operations. According to Captain Wilfredo González, commander of two hundred Colombian soldiers stationed inside the Alabama-based Drummond Company’s Pribbenow coalmine in northern Colombia, the company provides fuel for the helicopters that his troops use to combat guerrillas who pose a threat to mining operations in the region. Similarly, a spokesperson for Occidental Petroleum acknowledged that the oil company provides logistical support to the Colombian Army’s 18th Brigade, which is responsible for protecting oil operations in Arauca.

The oil-rich region of Arauca provides perhaps the clearest example of the relationship between the operations of foreign companies and human rights abuses perpetrated by Colombian soldiers responsible for protecting their investments. Following 9/11, the Bush administration aided Occidental’s efforts to protect its operations by deploying 70 US Army Special Forces soldiers to Arauca to provide counter-insurgency training to the Colombian Army’s 18th Brigade. Over the next 18 months, while the US soldiers were based in Arauca, there was a significant drop in the number of rebel attacks against Occidental’s oil facilities. At the same time, however, the 18th Brigade was not only using its newly acquired counter-insurgency skills against the guerrillas, it was also targeting civilians critical of the Uribe government’s security and economic policies.

In May 2003, soldiers from the 18th Brigade and right-wing paramilitaries entered the Betoyes indigenous reserve in Arauca where they raped and killed a pregnant sixteen-year-old indigenous girl and then cut the fetus out of her stomach before disposing of her body in a river. Two other indigenous people were also killed and more than eight hundred forcibly displaced.

On August 21, soldiers from the army base in Saravena, Arauca, raided homes and arrested 42 trade unionists, social activists and human rights defenders who were accused of being terrorists. Several months later, soldiers from various units of the 18th Brigade rounded up more than 25 opposition politicians in Arauca less than a week before local elections. Among those arrested for suspected ties to guerrillas were the mayor of Arauca City, the president of the regional assembly, a candidate for governor, and five mayoral candidates. Amnesty International accused the Uribe administration of politicizing human rights, claiming, “A lot of it has to do with silencing those who campaign for human and socio-economic rights.” The timing of the arrests, only days before local elections, also led an Amnesty spokesperson to declare, “It is part of a strategy to undermine the opposition’s credibility.”

In August 2004, Colombian soldiers from the same base housing the US military advisors again ventured out into Saravena’s barrios. This time, the soldiers dragged three union leaders out of their beds in the middle of the night and executed them in cold blood. The Colombian army initially claimed that the three unionists were armed guerrillas killed in battle, but an investigation conducted by local and international human rights groups ultimately pressured Colombia’s attorney general’s office into launching its own probe. Deputy Attorney General Luis Alberto Santana later announced, “The evidence shows that a homicide was committed. We have ruled out that there was combat.”

Multinational companies operating in Colombia’s rural conflict zones have also been linked to the country’s right-wing paramilitary death squads, which are closely allied with the Colombian military. In March 2001, a paramilitary death squad stopped a company bus carrying workers from Drummond’s Pribbenow Mine. The armed gunmen pulled two people off the bus and executed them. The victims, Valmore Locarno and Victor Hugo Orcasita, were the president and vice-president of the local chapter of the Colombian union Sintramienergetica, which represents the mine’s workers. Seven months later, the union local’s new president, Gustavo Soler Mora, was also taken from a company bus by paramilitaries and killed.

In 2002, a suit was filed in US Federal Court on behalf of Sintramienergetica claiming that the company had “aided and abetted” the paramilitary perpetrators of the murders. While Drummond denied the allegations, a sworn statement by former Colombian intelligence officer Rafael García supported the union’s claims. In his affidavit, García said he witnessed Augusto Jiménez, president of Drummond’s Colombia operations, hand over a “suitcase full of cash” to a paramilitary commander named Julian as payment for killing Locarno and Orcasita. Former paramilitary fighter Alberto Visbal verified García’s statement, claiming that he was also present when Jiménez handed his commander $200,000 in cash. However, the judge refused to allow the statements to be submitted as evidence, declaring that the case was beyond the discovery stage. Consequently, the jury had little choice but to find Drummond not guilty.

Drummond is not the only multinational company that has been accused of maintaining ties to paramilitaries. The union representing Coca-Cola’s workers in Colombia has claimed the soft drink manufacturer recruited paramilitaries to murder a labor leader at one of its Colombian bottling plants in 1996 in an attempt to bust the union. Further links between multinational corporations and the paramilitaries were made evident in 2007 when Cincinnati-based Chiquita pleaded guilty in a US court to funding paramilitaries in the banana-growing region in northern Colombia. Between 1997 and 2004, Chiquita paid $1.7 million to the paramilitaries even though the company knew that they were on the US State Department’s list of foreign terrorist organizations.

The Uribe administration claims that the paramilitaries have been demobilized, but according to many analysts the disbandment of the United Self-Defense Forces of Colombia (AUC) represents little more than a restructuring of the militia group. The Colombian NGO Indepaz, for instance, reports 43 new paramilitary groups totaling almost 4,000 fighters have formed in 23 of the country’s 32 departments. Meanwhile, the OAS estimates there are 20 new paramilitary groups with 3,000 fighters operating in Colombia.

While the Uribe administration dismisses these new militias as criminal organizations and not actors in the armed conflict, one of Colombia’s leading human rights lawyers, Alirio Uribe of the José Alvear Restrepo Lawyers’ Collective disagrees: “There are 43 new paramilitary groups but, according to the Ministry of Defense, these new paramilitary groups have nothing to do with the old ones. But the truth is, they are the same. Before they were the AUC, now they are called the New Generation AUC. They have the same collusion with the army and the police. It’s a farce.”

While the Uribe administration’s demobilization process has failed to completely disband the right-wing death squads, it has led to a decrease in human rights abuses perpetrated by the paramilitaries. However, a significant portion of that decrease—particularly in Colombia’s rural conflict zones—has been offset by the military’s increased role in human rights violations. These violations include extra-judicial executions, forced displacements, disappearances and arbitrary arrests, with many of the abuses occurring in regions where multinational oil and mining companies operate.

As previously stated, when President Uribe assumed office in 2002, the state was responsible for 17 percent of all human rights violations. Four year’s later, at the end of Uribe’s first term, the state was responsible for 56 percent of human rights abuses—almost double the total number of violations perpetrated by the military and other government agents in 2002.

Perhaps most troubling is the escalation in the number of extra-judicial executions perpetrated by state agents. According to a coalition of eleven Colombian human rights groups, extra-judicial executions carried out by state agents during President Uribe’s initial five years in office (2002-2007) increased by an alarming 66 percent when compared to the previous five years. Of the 955 documented instances that occurred between July 2002 and July 2007, convictions have been obtained in only two cases—an impunity rate of over 99 percent.

Colombia’s much lauded economic growth has paralleled a troubling increase in human rights violations perpetrated by the Colombian military and other state actors. These two phenomena are directly related as security policies intended to establish a favorable environment for foreign investors in the extractive sector have led to widespread abuses. US-backed counter-insurgency strategies routinely target the civilian population as part of a dirty war in which it is assumed that peasants, unionists and community leaders in resource-rich regions are either guerrillas or, at the very least, rebel sympathizers.

Foreign companies exploiting Colombia’s natural resources often provide logistical support to a military that is becoming increasingly engaged in human rights violations. Consequently, they have become complicit in human rights abuses perpetrated by military units responsible for protecting their operations. Meanwhile, despite Colombia’s robust economic growth, more than 80 percent of the rural population continues to live in poverty while also being forced to endure the ongoing violence. As one peasant in the oil-rich region of Putumayo noted, “Everyone knows the conflict in the Middle East is because of oil, and Colombia’s problems are no different. Maybe the coca is going, but there’s still oil. And if there’s oil, then the armed groups won’t leave because they are interested in places where there is money and power.”

Back to Top . Comments