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Crude Business in Colombia

Issue: 58 Section: Business Geography: Canada Colombia Topics: Canada-Colombia Free Trade Agreement

February 25, 2009

Crude Business in Colombia

Alberta's oil and gas sector gets behind the Free Trade push

by Dawn Paley

Collage based on stickers seen in Bogota. Photo: Moira Peters

BOGOTÁ, COLOMBIA–When Minister of International Trade Stockwell Day signed the Canada-Colombia Free Trade Agreement (FTA) in Peru on November 21, it was a happy day for Canada’s oil and gas sector, but the deal was celebrated by its signatories as a landmark for human rights and democracy in Colombia.

“Deepening both economic and political engagement between our countries is the best way Canadians can support the citizens of Colombia in their efforts to create a safer and more prosperous democracy,” said Prime Minister Stephen Harper at the signing ceremony.

As Day’s pen slid across paper in Peru, a massive mobilization of popular movements had taken over the central plaza in Colombia’s capital. The protests in Bogotá – known as a Minga, and spearheaded by Indigenous peoples – were the culmination of over six weeks of demonstrations across the country.

Crystal clear among the demands of the tens of thousands mobilizing in Bogotá was the immediate end to all FTAs and an end to the economic system these deals represent.

“Free Trade Agreements are never for the benefit of the people,” says Rafael Coicué, a Nasa Indigenous leader from Cauca, in southwest Colombia, who participated in the Minga. “These agreements are shaped by economic interests at the cost of life and sovereignty.”

The Canada-Colombia FTA was negotiated in secret, and the texts of the talks were only made public at the time of the signing ceremony. And, having signed the FTA with Colombia, the Harper government evened the score with the Bush Administration in the US: both governments have now signed the agreement, but neither one has yet ratified the deal.

According to Foreign Affairs Canada, bilateral trade with Colombia in 2007 totaled $1.14 billion, making it the fourth most important destination for Canadian trade in Latin America.

Along with select exporters, Canada’s extractive industries are among the sectors that will cash in on the FTA with Colombia. In fact, a briefing put together by Alberta’s Department of International, Intergovernmental and Aboriginal Relations calculates that exports from Alberta to Colombia averaged $48 million per year from 2002–2006. Almost half of Alberta’s exports to Colombia in 2006 consisted of wheat and other crops, oil and gas equipment, and transportation equipment.

More than 20 oil and gas companies from Alberta are currently active in Colombia, including Nexen, Enbridge and Petrominerales.

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Enbridge owns 24.7 per cent of Oleoducto Central SA (OCENSA), the company that controls the largest pipeline system in Colombia. The outstanding portion of OCENSA is owned by Ecopetrol (Colombia’s national oil company), TOTAL, BP and Triton Pipeline Colombia. Enbridge has been involved in the project since 1994, and today is responsible for operations along Colombia’s largest pipeline.

The company runs a Corporate Social Responsibility campaign, but according to its own power-point presentation, they are “prepared for some NGO questioning” relating to their operations in Colombia.

Seventeen military bases and more than 1,400 soldiers, airmen and marines are stationed near the 820-kilometre-long pipeline. Enbridge claims that the constitution of Colombia requires them to have military personnel guarding their operations. Colombia’s military has recently come under international scrutiny because of the “false positives” scandal, in which civilians killed by the army were dressed up to resemble guerrillas.

In 1998, the OCENSA pipeline was bombed by the National Liberation Army (ELN), a guerrilla group active in Colombia’s northeast. Seventy-one people were killed and many hundreds were wounded in the blast.

Amnesty International condemned the blasts as a “flagrant violation of international humanitarian law,” and later revealed OCENSA was transferring arms to the XIV Brigade of the Colombian army, as well as employing a private security company whose operations aggravated the human-rights situation for civilians living in the area near the pipeline.

“The relation with Israeli private security companies is potentially of concern given that in the past such companies have provided mercenaries, of Israeli and British and German nationality, to train paramilitary organizations operating under the control of the XIV Brigade,” said Amnesty International.

Paramilitary activity along the OCENSA pipeline led to an eventual payout of victims by BP, which was then operating the pipeline. BP now carries out oil production and exploration in Colombia, and maintains a smaller stake in the OCENSA pipeline.

Nexen, for its part, has a non-operational stake in oil production in Colombia. “It is not a focus area for us and we have about eight to 10 people in the country,” wrote Carla Yuill, Nexen’s Manager of Corporate Communications, in an email to Edmonton's Vue Weekly. Nexen currently produces about 5,000 net barrels a day in Colombia.

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John Wright is the president and CEO of Petrobank, which has operations spanning BC, Alberta and Saskatchewan, and Petrominerales, which produces oil in the Llanos area of Colombia, a region encompassing the departments of Arauca, Casanare, Vichada and Meta. The company is also exploring in Putumayo and Neiva, where operations net about 20,000 barrels daily and employ upwards of 130 people, plus a large number of contractors.

Wright has been working in Colombia since 1992, and he has yet to encounter the problems others have experienced in Colombia. “You find you’ll have exactly the same security issues you’d have in parts of Miami, or certainly in places like Caracas, or probably in a place like Lagos,” he says.

The day before Wright talked to Vue, 10 people were kidnapped by the Revolutionary Armed Forces of Colombia (FARC) in Meta, one of the departments where Petrominerales is active.

Nonetheless, according to Wright, “It’s very calm where we are... Colombia is one of the most transparent places on earth to do business; it’s as clean as Alberta when it comes to the oil industry,” he says.

He has strongly advocated for the passage of the FTA, and he testified before the Standing Committee on International Trade’s hearings about the deal.

“We’re huge supporters of [the Canada-Colombia FTA]. I think Canada has an enormous role to play; we can show the world how you can do things with rational regulations, rational oversight and transparent business practices, and Colombia fits into that mould,” Wright told Vue.

Not everyone agrees with Wright’s perspective. Gustavo Triana, the second vice-president of the Colombian United Workers Federation (CUT) and a former Secretary of the Energy & Mining Sector, says that, with relation to the oil and gas sector in Colombia, “What the Free Trade Agreements do is ... stipulate that the services and engineering that is today done by [Colombian] nationals will be instead done by foreigners, by bringing in firms and technicians that displace ours, and removing national control mechanisms.”

Resistance to the passage of an FTA between Canada and Colombia goes beyond popular movements and trade unionists in Colombia. After months of hearings on the agreement, the Standing Committee on International Trade issued its report to the government, in which it recommended an FTA with Colombia not be signed.

“The Committee recommends that the Government of Canada maintain close ties with Colombia without signing a free trade agreement until there is confirmation that the improvements noted are maintained, including continued improvement as regards displacement, labour law and accountability for crime, and until the Colombian government shows a more constructive attitude to human rights groups in the country,” reads the report.

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Among the strongest voices of opposition to FTAs in North America are those of labour, especially the AFL-CIO in the US and the Canadian Labour Congress.

Colombia is the world’s most dangerous place to be a trade unionist. Since 1996, Colombia’s National Trade Union School (ENS) has recorded the assassinations of 2,690 trade unionists. According to Triana, these numbers include 135 workers in the oil and gas sector.

ENS numbers show that in 2008, 46 trade union members were assassinated, 157 were threatened, 15 were arbitrarily detained, 13 taken hostage and four were disappeared.

“The union movement is pretty strong in Colombia and I don’t see [unionists] being persecuted in any way. The US side of it, of course, it’s all just a big political sham, it’s the AFL-CIO who are against the Colombia Free Trade Agreement,” counters Wright.

“None of the Canadian companies linked to the oil sector ... have unions, and the reason is simple — they rely on third parties for labour, subcontracting; they don’t hire [employees] directly and in that way get around union organizing,” says Triana.

In addition to being a dangerous place for trade unionists, Colombia is home to a growing population of over four million internally displaced people, and plays host to irregular armed groups ranging from the FARC and ELN to paramilitary groups. Colombia is the hemisphere’s largest recipient of “aid” money from United States though Plan Colombia, most of which goes towards military spending.

The Permanent Peoples’ Tribunal, modelled on the Russell Tribunals that took place after the Vietnam war, spent three years studying the role of multinational corporations in Colombia over the last three years. A Nobel Laureate and a number of European supreme court justices issued the verdict of the Permanent Peoples’ Tribunal last summer. Though no Canadian oil companies were named in the verdict, other extractive companies were denounced for their participation in human-rights violations.

“Colombia seems to be, in one sense, like a true institutional political laboratory where the interests of national and international economic actors are fully defended through the state’s abandonment of its functions and its constitutional duty to protect the dignity and life of the population, to which instead the state applies the Colombian version of the doctrine of national security,” reads the verdict.

“It is not true that terror is an enemy of development of capital in Colombia, in fact, the opposite is true: there is terror so that transnational corporate and Canadian capital can develop their interests, because terror creates cheap access to the means of exploitation and production,” says Manuel Rozental, a Colombian surgeon who has lived in Canada.

It is expected that the Canada-Colombia Free Trade Agreement will be tabled in Parliament before the spring. Whether or not Liberal leader Michael Ignatieff will direct the Liberals to vote against the deal — previous leader Stephane Dion promised during the election campaign that he would not support the FTA – is not known.

A version of this article was previously published in Edmonton's Vue Weekly.

Dawn Paley is a contributing editor with The Dominion.

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