MAC: Mines and Communities

Power companies urged to stop buying Colombian 'blood coal'

Published by MAC on 2014-07-13
Source: Colombia Reports, Statement (2014-07-02)

Why Drummond and Glencore are accused of exporting Colombian blood coal

Nicolas Bedoya

Colombia Reports

2 July 2014

The push to boycott "blood coal" exported from Colombia by Drummond and Glencore is gaining momentum in Europe after the publication of a report in which dozens of victims and victimizers testified that the multinational mining companies financed and promoted death squads.

What is blood coal?

"Blood coal," a reference to the infamous "blood diamonds" mined amid conflict conditions in Africa, is the term used by the PAX peace organization to refer to coal extracted from areas in Colombia where paramilitary violence has been particularly severe.

"According to all the testimonies, the mining companies invited the paramilitaries to come over and start operations."

According to the Dutch NGO, coal coming from the Colombian mines of the Glencore and Drummond multinationals has been stained by blood, as several members of the death squads guilty of an estimated 2,600 homicides in the areas surrounding their mining operations have testified their formation was supported and financed by the mining firms.

The report has already spurred a debate in the Dutch Parliament around the importation of Colombian coal. The NGO wants parliament to ban the trade of Colombian coal until the multinationals in question have implemented appropriate measures to guarantee the end of human rights violations related to mining and compensated victims of the violence they are accused of having financed.

A quarter of the small European country's total coal imports is deemed "blood coal" by the NGO. In total, the Netherlands imported 15.4 million tons of coal from Colombia last year.

According to PAX, efforts are underway to urge other European countries - e.g., Germany and Switzerland - and the United States to force the multinationals to compensate victims for the crimes committed against them.

The multinationals' alleged sins

Drummond and Glencore's Colombian subsidiaries - Drummond Ltd. and Prodeco, respectively - are both accused in the report of providing financial and logistical support to paramilitary groups operating in the vicinity of the companies' mines.

Victims of massacres in Cesar mining municipalities
• Agustin Codazzi - 185 victims
• Becerril - 36 victims
• La Jagua de Ibirico - 33 victims
• Chiriguana - 33 victims

In a report titled "The Dark Side of Coal," Pax studied the roles corporate money and activity played in escalating a wave of paramilitary violence that swept through the northern state of Cesar between 1996 and 2006.

Throughout the three-year investigation of the report, Pax reached out to around 80 victims, gathered victimizer testimonies, visited the Cesar mining region, and met with employees of both companies.

Deadly violence

According to estimates based on national police figures, paramilitaries that operated in the region were responsible for 2,600 selective assassinations, 500 massacre killings, 240 disappearances, and 59,000 forced displacements, figures the report says are conservative due to the low rate of reported incidents.

PAX singled out the Juan Andres Alvarez Paramilitary Front (JAA) as the primary victimizer in the region in question. The JAA Front was formed in 1999 from paramilitaries already in northern Colombia and operated in and around municipalities where the Drummond and Glencore concessions were located, as well as along the railroad route the companies used to bring coal to port.

PAX Latin America chief Marianne Moore told Colombia Reports, "According to all the testimonies, the mining companies invited the paramilitaries to come over and start operations."

The mining companies' search for security

The Cesar state has long been a battleground for Colombia's civil war. In the 1990s, Colombia's two largest rebel group held a dominating presence in northern Cesar, where Drummond and Glencore would soon receive their concessions.

As the companies began exploration activities, the FARC's 41st front and ELN carried out repeated attacks on company infrastructure and kidnapped company personnel.

PAX gathered the testimony of former Army Officer and, later, Glencore contractor, Jose del Carmen, alias "El Canoso," in which he claims to have set up a meeting between company security officials and localAUC paramilitary commanders to discuss an arrangement in which Glencore would provide material and financial support to the AUC in exchange for the protection of company infrastructure and personnel. Gelvez is currently in a maximum security prison in Bogotaand has survived several assassination attempts allegedly brought on because of his testimony.

The action of the guerrilla groups made for a dire security environment for mining companies. According to the PAX report, Drummond and Prodeco set up a "triangular exchange of information." Drummond and Prodeco set up a joint intelligence office ran by a Sergeant in which information regarding subversives and the security situation in the region would be gathered and shared with local army units.

Security officials from Prodeco such as Manuel Gutierrez and Luis Ochoa received paramilitaries such as "El Lucho" and even Vicente Castaño, alias "El Profe," one of the founders and supreme commanders of the AUC paramilitary organization, responsible for the majority of human rights violations that have occurred in Colombia's armed conflict.

The first payment to paramilitary groups, according to "El Canoso," was made by Prodeco security manager Manuel Gutierrez to paramilitary commander Vicente Castaño in 1996 to encourage the expansion of paramilitary groups into the Cesar state.

The paramilitaries in these meetings reportedly wrote lists to inform the mining companies how much money it would take to arm, feed, and sustain 200 fighters.

Inviting paramilitaries to Cesar

According to former Drummond security manager James Adkins, the Colombian army had contacted Drummond to support the paramilitarism in the region. Several CONVIVIR groups, widely considered the germinators for paramilitary groups, were established in Cesar only to later be absorbed into the AUC paramilitary structure.

James Adkin's testimony stated that he informed Drummond's president about the military's plan to set up paramilitary groups and Garry Drummond consented to $1.1 million payment to the Colombian army. "When the money when into the military fund, the military could do with it what it wanted," testified Adkin.

Testimonies from Jaime Blanco Maya, Drummond's food service contractor, declare that Drummond used Blanco's "Industrial de Servicios y Alimentos" company to channel money to paramilitaries from 1997 to 2001. The 42% spike in the negotiated fee between the first and third contracts was allegedly inserted as funding for the JAA, at the alleged request of Drummond, as were the 10% markups Blanco claims to have worked into his invoices. Blanco said he paid out a total of $900,000 to the JAA paramilitary groups between 1997 and 2001.

According to the PAX report, Blanco Maya testified that after AUC was registered as a terrorist organization, James Adkins supposedly said that the dealings with the AUC had become risky and did not extend the contract with Blanco Maya's catering company.

However, despite this development according to testimonies of paramilitaries ‘El Samario,' ‘El Peinado,' and ‘El Mecanico,' meetings with company representatives and payments continued through more clandestine means. Payments were facilitated by a former employee of Blanco's catering company, Javier Lopez, who turned into a paramilitary. Javier Lopez was used by paramilitary commanders "Jorge 40″ and Tolemaida as the financial middleman. If the allegations are true, Drummond continued to finance a known terrorist organization after 2001.

According to Mattos Tabares, alias ‘El Samario,' the former paramilitary commander convicted of murdering two Drummond trade unionists, "The [JAA] Front was not created with funds from drug trafficking. We could not take funds from the businesses in the area because these were poor municipalities. That is why those payments from multinationals and specifically from Drummond to the Front were so important for us."

By 2006, the FARC had been completely forced out of northern Cesar and pushed to the eastern border with Venezuela. Paramilitaries along with Colombia's armed forced essentially declared a total war to eliminate FARC sympathizers and supporters in the local populations and depopulate the region surrounding the mining concessions.

Mining: Colombia's "engine of growth" in trouble

Large-scale mining has been declared by President Santos and ministers in his administration as Colombia's engine of economic growth. Colombia is the forth largest coal producer in the world.

Mining is the second largest recipient of foreign direct investment after oil, constitutes nearly 7% of exports, and is 2.3% of Colombia's GDP. Mining royalties is one of the Colombian government biggest sources of revenue.

Drummond operates "La Loma" and "El Descanso" mining concessions in Colombia's Cesar state. Prodeco operates the "La Jagua."

Roughly 50% of Colombian coal is destined for Europe of which 20% goes to the Netherlands and 12% to the British Falkland Islands. Most Colombian coal enters Dutch ports to be distributed to Germany, France and other European nations, according to the PAX report.

The investigative report by Pax could potentially cause serious damage the already-tainted image of Drummond Ltd. and Glencore for their export of "blood coal" as the companies themselves have acknowledged in press releases.

Even if the accusations against Drummond and Glencore are unsubstantiated and untrue as the companies assert, Marianne Moor told Colombia Reports that "Nowadays [Drummond and Glencore] don't do anything to protect victims of violence, human rights lawyers, and trade unionists from current violence."

The Dark Side of Coal can be downloaded here: http://www.paxforpeace.nl/media/files/pax-dark-side-of-coal-final-version-web.pdf


Power companies must stop buying 'blood coal'

Pax for Peace Press Release

30 June 2014

PAX is calling on five Dutch European power companies to stop buying Colombian ‘blood coal' from the mining companies Drummond and Prodeco. These mining companies must first contribute to the acknowledgment and compensation of the thousands of victims of paramilitary violence around their mines in the 1996-2006 period, and actively oppose the current human rights abuses.

Drummond and Prodeco paid the paramilitaries and exchanged strategic information with them, according to statements from perpetrators and witnesses in the investigation report ‘The Dark Side of Coal', which peace organization PAX today, June 30, presented to the Dutch Minister of Development Cooperation, Lilianne Ploumen.

Between 1996 and 2006 paramilitaries murdered a total of 3100 people and drove 55,000 farmers from their land. The victims have never received compensation or acknowledgment. To this day the mining companies benefit from these gross human rights abuses. Some of the land that was seized is within the companies' territory. The trade union has been systematically weakened by lethal violence; any critics have been silenced by threats.

Perpetrators and witnesses say the collaboration between the coal mining companies and the paramilitaries in the Colombian department of Cesar consisted of financial and material support and the exchange of strategic information. The main focus of the investigation ‘The Dark Side of Coal' is Drummond. There are fewer sources for Prodeco's involvement, but the information available warrants further investigation.‘The Dark Side of Coal' presents previously unreported testimonies of perpetrators and victims, and is the first systematic investigation into the abuses surrounding the coal mines in Cesar.

Stop Blood Coal

The Dutch power companies Nuon, Essent, Delta, Electrabel and E.ON buy coal from Drummond and Prodeco for generating electricity for sale to Dutch consumers. The Dutch power companies were and are aware of the large-scale human rights abuses. To date, however, the companies have not stopped buying coal that comes from Cesar. PAX hopes they will stop buying this blood coal until the mining companies contribute to effective redress for the victims. We are appealing to the Dutch public through the ‘Stop Blood Coal' campaign to find out whether their energy company uses blood coal and, if so, to urge the company's management to stop importing this coal.

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