The Economic Interests at stake in the South of BolivarPublished by MAC on 2003-08-24
The Economic Interests at stake in the South of Bolivar
Posted on Mines and Communities: 24 August 2003
The following is an extract taken from a long paper by Irish journalist Gearoid O Loingsigh called THE INTEGRAL STRATEGY OF THE PARAMILITARIES IN COLOMBIA'S MAGDALENA MEDIO published in Bogotá in September, 2002. It concerns the involvement of brutal paramilitary forces in north central Colombia and the reason for their involvement: preparing the way for gold mining by foreign multinationals.
Extract from The integral strategy of the paramilitaries in Colombia's Magdalena Medio
by Gearoid O Loingsigh
If we look at a map of Colombia, we immediately notice that the mountain ranges of the South of Bolívar rise up in the middle of relatively flat plains. The mountains constitute a geographical obstacle for the paramilitaries trying to get total control over the cordonor corridor which runs from Urabá as far as the border with Venezuela. Nevertheless, the military advantage in controlling the San Lucas and Perijá ranges is relative. The paramilitaries already have a way of getting between their Córdoba bases and the Venezualan border, going along the rivers and through the municipal capitals which they control. The military advantage would really just be a bonus, for their real interest in the area is economic.
There are two economic factors of interest to the AUC. One is conjectural and tactical and the other is strategic and structural. The first is coca. It is conjunctural and tactical in the sense that their interest in the growing of illicit crops is temporary. It only interests them insofar as it is a means to finance the war, and the control of this trade gives them the possibility of greater control over the peasant population in the area. The other question of interest is the enormous deposits of gold which, according to some experts, could be the largest deposit of gold in the world. As we will see below, the issue of the gold has a lot to do with the political and economic model proposed by the paramilitaries , or rather, by their sponsors. It is strategic because their interest in it goes beyond the war and forms part of the peace which they want to impose.
4.1 The coca trade
Unlike the Eastern Plains and zones like Putumayo, in the South of Bolívar there are hardly any large coca plantations. Most of the plantations are no larger than three hectares, and many are no bigger than one hectare.. The big eighty hectare spreads of coca are absent, or rather they are to be found in other departments. The largest coca plantation known to exist in the region is some forty hectares in size, and is a notable exception in the area. Here, when they talk of big plantations, they mean a peasant with five hectares. This is an important consideration, as it changes the behavior of the armed actors towards the coca growers and defines the relationship between the coca paste producers and the paramilitaries.
The paramilitaries, through their principal spokesperson, Carlos Castaño, have explained that they receive much of the money that pays for the war from the coca trade and directly from drug trafficking.. The AUC have indicated their interest in taking over the entire coca trade in the South of Bolívar. As we have already seen, the paramilitaries have been able to recruit several guerrillas, including some leaders from different fronts. This has afforded them total control of the cultivation, production and export of derivatives, to consolidate the economy of their project, to reinforce it by buying the most modern weaponry. Today one can see to what extent they have achieved their objectives..
In order to control the coca trade, the paramilitaries already have a commercial advantage over the guerrillas and also over common criminal groups. First of all they are controlled or tolerated by the security forces in the municipal towns where the coca paste is bought and sold. Anyone who wants to sell paste has to pass through the urban centres which are in their hands. The other advantage is that, by means of the blockade, they control the entry of the chemicals necessary to convert the leaf into paste. They not only control the passage of the chemicals, but are also the main suppliers of those chemicals, in contrast to the situation in Putumayo, where the force that controls the territory controls the entry of the chemicals, and not their adversary.
The paramilitaries, as we have already said, are the bosses of the Petrol Cartelin Barrancabermeja and surrounding areas. This implies a cheap source of one of the principal secondary materials in the process. However, as the plantations are very small, there are few peasants who deal directly with them. There is a market in selling chemicals through middlemen who are obliged to buy their products from the paramilitaries, since otherwise they prohibit the entry of material and anyone trying to do so is putting themselves in great danger.
The same happens with the coca paste which is produced in the area. Sales are handled by middlemen who bring the product from the rural areas to the municipal towns, where they are obliged to sell it to the paramilitaries. Some peasants have tried to bring their paste to Aguachica, where the price is better. In the municipalities of Morales, Arenal and Santa Rosa del Sur, the paramilitaries offer two million pesos a kilo, which compares unfavorably with the three million one can get in Aguachica, where they still do not control buying and selling. Apart from the lower prices offered, sometimes they do not pay or are months late in paying the peasants, which has encouraged attempts to take the paste to Aguachica or to a private buyer nearer to hand. However, in April 2002, at a checkpoint at the entrance to Moralists, the paramilitaries decommissioned ten kilos of paste on its way to a buyer other than the AUC and threatened to kill the next person who tried this.
It must be said that as well as the security forces tolerance of the illegal checkpoints set up by the AUC, the paramilitaries also rely on their tolerance of the trafficking of the paste in the towns. According to the inhabitants of the region, the places where paste is sold in Morales and Santa Rosa del Sur are but a few meters from the police station. In Arenales, the army does not decommission paste destined for the paramilitaries. In Santa Rosa del Sur, according to the residents and the coca growers themselves, the place the paste is sold is less than a hundred meters from the police station. This seems to be confirmed by some events which happened during the month of April 2002, when the paramilitaries stopped a group of priests coming from the rural part of the municipality. The priests were taken to a place which was openly operating as an AUC office and was less than 100 meters from the police station.
The AUC feel that they are so strong in the area and have such control over the paste trade that they are in a position to demand payment of a levy per hectare from the growers, although they themselves have no presence in the growing zones. Normally the levy on illicit crops is collected by whoever militarily dominates the growing zone. But given the conditions in the South of Bolívar and the blockade the population is suffering, all the actors are collecting a levy per hectare..
So, as can be appreciated, coca provides the paramilitaries with a stable and profitable source of income to finance their dirty war. On top of that, controlling the greater part of the trade and being able to tax activities carried out in guerrilla-controlled zones weakens the guerrillas and creates social pressures, as it is easier to deal with just one military force and not two, and there must be a temptation to ally oneself with the one that seems to be stronger and the one with which you have most dealings for your economic survival.
However as we have already said, control of the coca is conjectural and tactical, as once the war is over there are no guarantees that the trade will continue, as the agroindustrial plans for the area require not peasants but employees on projects supplying tropical products to the markets of the north (neither are there guarantees that it will totally disappear). Gold, however, is the principal declared objective of the paramilitaries and, unlike what has happened in relation to coca, they have made no statements distancing themselves from their declarations about the mines in the South of Bolívar.
4.2 Gold as a source of conflict and a factor in paramilitarism
To understand the role of gold in the conflict in the South of Bolívar, one must look closely at state policy, as the paramilitaries are not in a position to exploit the gold industrially, and, in the event of displacing the small miners, they would have to bring in new people to continue working in the same conditions. There are other factors which make the paramilitary project viable.
The municipalities of the south of Bolívar, as the table shows, are major gold producers, representing 42% of national production.
Gold production - Department of Bolívar 1996Municipality Troy Ounces Achí 63.67 Montecristo 75.48 Pinillos 3.880.24 Puerto Rico 29.35 Ríoviejo 195.783.10 San Martín de Loba 7.665.93 Santa Rosa 34.729.29 San Pablo 5.676.12 Tiquisio Puerto Rico 1.111.17 Total 249.014.35 National Total 592.773.71 Relative Share 42.01%
Source: Ministry of Mining and Energy
As can be seen, 42.01% of Colombia's gold is concentrated in a part of the country barely 16 500 km2 in size. With such a concentration, it was to be expected that the multinationals would have, or would develop an interest in the zone. As we will see below, multinational companies have played an important role in formulating mining policies in Colombia. Nevertheless, the zone is not just of interest to the multinationals, but to the US government itself.
In July 1998, the United States embassy sent a letter to the Managing Director of Mineralco in which they indicated that: Given the potential of the country as regards mineral deposits, and the interest of the Colombian government in attracting foreign investment in the sector, we would ask you to furnish us with information which would allow us to prepare monographs on the different minerals and also a list of the companies which are actually carrying out mining operations in Colombia in order to help North American companies.
In 1999 Bill Richardson, Energy secretary in the Clinton administration, told an audience which included mining companies that the United States was going to invest massively in mining and energy and to this end would triple military aid in order to safeguard the investment. The military aid Richardson was talking about is today known as Plan Colombia. It was Richardson, i.e. the US government itself, which made the link between Plan Colombia and their own economic interests. This seems to be confirmed by the announcement of the Bush administration that they will be giving 98 million dollars to protect the oil infrastructure in Arauca, and the shift in Plan Colombia which allows the use of military equipment in operations which have no anti-narcotic objective but represent a clear counterinsurgency use. Nevertheless, the US government was a late arrival to the struggle for the country's mineral resources. Long before Richardsons intervention in Cartegena, various multinationals were already fighting over the mines of the south of Bolívar.
3.3 Mines in dispute
The San Pedro Frío and Paraíso mines are claimed by the Illera Palacio family, although they have never worked them, alleging reasons of public order, even though the guerrilla presence is subsequent to the date on which the family claim to have bought the land and the mining rights. The Illera Palacio family is represented by the lawyer Luisa Fernanda Aramburo, who also represents Corona Goldfields S.A., a subsidiary of Conquistador Mines Ltd... As the representative of the two, Aramburo was in charge of a Corona Goldfields S.A. minning project to exploit the mines which Illera Palacio claimed. But they had a problem: the mines were being worked by craftsmen miners recognized by the law as the title holders of the mines.
In 1996, Aramburo proposed talks between the miners and her clients. The said talks were to include the participation of the PDPMM, at the invitation of Aramburo. The talks did not produce positive results for Aramburo and her clients. The matter would have rested there had it not been for the intervention of the Minister for Mines, Rodrigo Villamizar, who contracted Aramburo to write a draft proposal for a Mining Code. It is not surprising that this Code contained various articles which openly favoured the multinational which the lawyer represents [such as permission to exploit in] zones declared by the competent authority to be part of the system of: national parks, nature reserves, unique natural areas, flora and fauna sanctuaries and nature trails and the archaeological zones or historical and cultural patrimony , effectively giving them the right to exploit in any corner of the country. However, there was another clause, which directly affected the claim which Illera Palacio filed for the San Pedro Frío and Paraíso mines. Article 27 of the reform includes the principle: first in time, first in law, which is deliberately calculated to favour the Illera Palacio family, guaranteeing to take the licensees off the miners, as none of the miners had lodged a claim before 1995, as they had not needed to do so, whereas the Illera Palacio family had done so in the 1970s.
Luckily for the miners, the 1996 Mining Code was declared unconstitutional and the 1988 legislation remained in force. However, the Pastrana government drafted a new Mining Code which incorporated some of the controversial articles of the frustrated 1996 code. Between the two codes, the paramilitaries began their onslaught against the population of the South of Bolívar, and, as we have already indicated, the miners were not only not spared from this onslaught but were the preferred targets of the paramilitaries.
In a strange act, Efraín Illera Palacio sent a fax from Corona Goldfields proposing more talks with the miners and their collaboration with that company, with the intention of reaching agreement. The letter textually states: With this letter and our desire for conciliation, we hope that there will be peace in the region; we are not interested in sponsoring or collaborating with paramilitary groups or outside forces; we are conscious of how important you are for the region and we want to construct a new country with you, where we can resolve our differences through dialogue and conciliation, not through confrontation.
The reference to the paramilitaries is strange because nobody had accused them of sponsoring anything. In fact, the paramilitary onslaught had not even started when this letter was sent and it is significant that it was shortly after the miners said no that the onslaught began. It is also strange that the Illera Palacio family, who had always cited public order problems as the reason for not working their mines, propose to exploit them at a moment when the armed conflict in the country was escalating. There is no explanation for their change of position. One would have to suppose that it was and is an excuse to justify their failure to fulfil the legal obligation to work the mine.
On the 28th of March 1997, the paramilitaries killed 11 miners in Puerto Coca, in the municipality of Tiquisio. There was no reaction from the security forces. On the 25th of April 1997 a paramilitary group entered the town of Río Viejo and killed Juan Camacho Herrera, president of the Comité de Mineros de Río Viejo, which is affiliated to the Asociación Agrominera del Sur de Bolívar (Asoagromisbol): they decapitated him and played football with his head; then they put it on a pole, looking towards the mining zone, and told the inhabitants that they were coming for the mines and they were going to hand them over to people who would work them better and make a more rational use of the resource. Twenty nine other people were murdered in the course of this incursion. The paramilitaries then retreated to La Victoria estate, a few minutes from the town. There they met municipal officials. On the 28th of April, the army arrived in Río Viejo and set up a checkpoint near the said estate. These events were denounced at the time by the Vice-president of Asoagromisbol, The Agromining Association of the South of Bolívar, Orlando Camaño, during a speech in the city of Cartagena. Camaño was murdered in July of the same year, in the city of Aguachica (César), as he was lodging applications for the legalisation of some mines. Camaño had been labeled a guerrilla collaborator on the basis of his participation in the negotiations with the national government during the peasant marches of September 1996. On the 2nd of September 1996, Colonel Eduardo Murillo Salazar, Commandant of the Nariño Battalion, which belongs to the Second Brigade of the army, assured the radio station Caracol that it is the FARC and the ELN which are behind these protest marches, through the Asociación Agrominera in the South of Bolívar. It was after these claims that Luis Orlandos name appeared on the paramilitarieslists and the threats against the mining sector became more evident.
The massacres in the mining zones get mixed up with the other massacres in the South of Bolívar and at times it is difficult to know exactly which massacre or murder is due to the attempt to take over the mines. In reality, the paramilitaries do not have just one single goal in the zone and their behavior must be analyzed in an integral manner. It is possible to affirm that any incursion in the South of Bolívar serves to wrest the mines from the small miners, among other objectives. Nevertheless, there are some events, such as the murder of Camacho, which point clearly to one of the paramilitaries objectives A similar event is the paramilitary takeover of San Pedro Frío.
The paramilitaries took San Pedro Frío, in June 2000, and stayed there for 56 days. During the occupation of the hamlet, a helicopter visited them almost every day, without any intervention from the Colombian Airforce (FAC). According to the miners in the area, it fell to the guerrillas to expel the paramilitaries from the area, not the security forces, as the Constitution would have it. One of the paramilitaries first actions was to destroy the mining machinery they found there. As we mentioned above, the miners are scarcely able to make use of 30% to 50% of the seam due to a lack of technology and training. The machines destroyed were supplied by state bodies and the UNDP to improve the extraction of gold. The paramilitaries destroyed the machinery and told the people they were coming for good development and we came to protect the investment of the State and the multinationals.
As had happened at other times in the River Cimitarra Valley and in Micoahumado, the paramilitaries attacked and tried to destroy any productive project not linked to their model, i.e. any project which gave the communities a certain autonomy. They obliged the communities to remain in the conditions of neglect they had found themselves in, or go back to beg from the State or international bodies in worse conditions.
The paramilitary attacks significantly damaged the organisational capacity of the miners who were in the Federación Agrominera del Sur de Bolívar (Fedeagromisbol). Faced with the impossibility of improving their extraction techniques, the arguments of the paramilitaries, Asocipaz and the multinationals began to gain weight, according to which the exploitation is being done with primitive, low yield methods; their economic impact is typified by generating low incomes, negative social externalities and a [...] grave deterioration in the environment. It is true that the mining generates environmental problems, but the response of the State in its new Mining Code was to tolerate the environmental damage that was convenient to the multinationals. It is also true that the methods used by the small miners are low yield, but one cannot expect anything else when their organisations and spokespersons are persecuted and murdered and their productive activities become a military target of the paramilitaries. Added to this is the fact that the projects they began such as the projects presented after the Peasant Exodus in 1998 were never finished due to a lack of money and the public order situation,. One 41 million peso project for improvements in mining activities was granted only 17 million, and some of the equipment never arrived. In such circumstances it is not strange that mining techniques have not advanced much in the South of Bolívar.
If the paramilitaries dedicated themselves to impeding the development of the mining communities by force, the Colombian State ignored them whenever it could and once more contracted the representatives of the multinationals to write a new Mining Code, rejecting the proposals for the development of the region which had the support of the mining communities.
The government contracted Martínez-Córdoba & Asociados to write the text of the said code. Martínez Córdoba & Asociados legally represent half the mining companies on the national mining register, among them CEMEX, Cementos Diamante de Bucaramanga S.A., Ingeniesa S.A, Ladrillera Santafé, Concretos Diamante Samper S.A.
It must be noted that companies have a lot of weight and influence. Ladrillera Santafé belongs to the family of President Pastrana Arango and his cousins Andrés Uribe Crane, Carlos Andrés Uribe Arango and Ricardo Uribe Arango are on the board of directors; it was also the company which made the second largest contributions to Andrés Pastrana Arangos election campaign. Concretos Diamante Samper S.A. is the tenth most profitable Colombian company in 2001, declaring profits of 116 thousand million Colombian pesos.
With good reason, many have said that the new code was made by and for the mining companies. Alvaro Pardo, director of Mines and Hidrocarbons in the Ministry of Mines and Energy, defends the new code against this allegation, claiming that it was put to a wide ranging process of debate and agreement and is not the product of the multinationals but of everyone, above all of Congress, where the multinationals are not represented. He affirms that the Mining Code passed contains only 40% of the draft which Córdoba Martínez & Asociados drew up. However, in relation to the consultations they made, Martínez Córdoba & Asociados explained to the sub-director of Mining Planning that on certain themes the statements made were not accepted, because in our opinion they impaired the Mining Code Bill or were not convenient (bold type ours) or viable As for the indigenous peoples, they said that the meetings with spokespersons of the indigenous peoples have not had positive outcomes and left the issue to Congress to decide. It must be pointed out that it was the Constitutional Court which placed conditions on mining in the indigenous zones, for up until the judgment the law granted the faculty of awarding and delimiting within the indigenous zones, based on technical and social studies, exclusively to the mining authority
Before going on to look at how the new Mining Code affected the miners of the South of Bolívar, we would first like to look at its contents, as the surrender of the country's natural resources to the multinationals. It is important to be clear that the code is not a strategy just to further the interests of a few in one region, but an integral strategy for the whole country.
The Mining Code has various articles which favour the multinationals. First we will look at what it says about the environment, bearing in mind what is said about the small miners as being polluters and destroying the ecosystem. According to article 208, the environmental license will be for the duration of the mining license. The possibility of it being modified by the environmental authority is only contemplated in article 210, where provision is made for it to be modified at the request of the interested party. What is most serious of all is that according to article 211, which deals with the revoking of the license, the environmental authority may revoke the Environmental License for all or some of the aspects of the mining operation due to serious and repeated breach of environmental obligations by the exploiter. There is no obligation here on the authority to revoke the license: it may, if it wants to, but it is not obliged to, although Alvaro Pardo once again defends himself, saying that in Colombia the environmental authorities always act very rapidly in the case of an infraction of the rules and are even as radical as the environmentalists in their defence of the environment. Only a naïve fool would believe such a claim. Colombia stands out precisely for its non-application of its laws and rules. Less still can they be expected to apply them where they are expressly given powers not to do so. According to article 35 of the new code, the mining companies can also exploit in the zones defined as being of special archaeological, historical or cultural interest provided they have permission from the competent authority. All exploitation requires authorisation from the competent authority, the inclusion of this phrase here is superfluous and serves only to give an image of control over mineral depredation in special areas.
The Mining Code also introduces changes which permit the State to reduce the royalty to 0.4% for private proprietors of the subsoil, and introduces external environmental impact audits (this was previously the remit of the environmental authority alone). The most advantageous of all is that according to article 289 the only persons which can object to a mining concession contract are the administration, the concessionaire, the third parties that vouch direct interest and the District Attorney, , leaving the residents of the exploited zone without the possibility of recourse to an NGO to object to it (though the possibilities of asking for the annulling of the environmental license are broader). In the context of a society in conflict and where the paramilitaries say they are coming to protect the interests of the multinationals, such an article leaves the communities in mining zones unprotected.
There is a norm which obliges miners to legalise their mines. They have three years, from the first of January 2002. It is natural and normal that a State should want to legalise the mining in its country. However, Colombia is a country in a state of war and there are no guarantees for those who travel to the municipal town to legalise their mine. As we have mentioned, the miners leader Orlando Camaño was murdered just as he was making applications for the legalisation of some mines. The paramilitaries have said they would prefer the multinationals to be there. In the face of this, it is probable that some miners will decide to simply ignore the law. Such a situation is contemplated in the Mining Code and, unlike the treatment the multinationals may receive, the law is implacable even with the officials in the zone.
Illicit exploitation is a very typical infraction among small miners and not among big companies and in the new code it is an offense punishable by a custodial sentence. In accordance with article 244 of the Penal Code, this offense will be punished and anyone convicted for illicit mining will be prohibited from obtaining mining concessions for five years. The language dealing with the small miners gives the officials no room for manoeuvre, in marked contrast to the multinationals, where they may (there is no obligation) revoke the license What is more, the Mining Code will also punish officials who do not apply the law. Article 306 is clear in this respect. The Mayors will proceed to suspend, at any time, by official announcement or by notice or complaint of any person, the exploitation of mines without a title registered at the National Mining Register. This suspension will be indefinite and will only be revoked if and when the exploiters submit such titles. The omission on part of the Mayor of this measure, after having received such notification or complaint, makes him subject to a disciplinary sanction for a major offense (bold type ours). It seems that the miners will be forced to comply with the Mining Code. What remains to be seen is how the paramilitaries will act once they begin to apply for the legalisation of their mines. Unlike the last time there was a round of legalisations, the zone now has a heavy paramilitary presence, above all in the municipal capitals where they would have to make such applications.
The Ministry of Mining sees no problem there, as they do not have to go to Santa Rosa del Sur, they can go to Morales or even to the Northeast of Antioquia if they want, without acknowledging that all these zones are under paramilitary control, or even showing a knowledge of the terrain and the difficulties that a person from one municipality can have to get to another due to the lack of transport and roads.
As part of the process of legalisation of mines and the development of different articles of the Mining Code, the decree which delimits the mining reserve in the South of Bolívar has been derogated. This mining reserve was an excuse for not allowing the realisation of a contract of association between the small miners and a foreign multinational. Now they are trying to form different reserves in the South of Bolívar where the miners will have to legalise themselves and make contracts of association with the multinationals. The zones declared special reserves are in the municipalities of Arenal, Morales, Montecristo, Río Viejo, Alto de Rosario, and Barranco de Loba. What will happen if the miners do not reach an agreement with the multinationals is not in the plans nor in any decree at the time of writing. Nor has anything been said about what the conditions of the contract of association should be, since that is a matter solely for the miners. This lack of clarity leaves the miners unprotected in the face of pressure from the paramilitaries to quickly sign agreements which favour the multinationals. At the same time it shows that the government has given up on the idea of increasing the productive capacity of the small miners and is opting to surrender the mineral resources to the multinationals, one way or another.
The presence of the paramilitaries in the zone is a reality and is already having economic consequences that show one part of the paramilitaries interest in the mines.
The Department of Córdoba, seat of the so-called AUC, has never been a producer which exceeded 1.7 tonnes/year of gold on average and it is precisely in 1997, when the paramilitary operation really gets under way in the South of Bolívar, that Córdoba appears producing three times as much gold as it traditionally has, and in the year 1998 this figure increases sevenfold, without there being any evidence of new deposits or a large scale mining operation to produce such results. There is an explanation for this phenomenon. Under our legislation one must pay a 4% royalty to the municipality where the gold is extracted and this levy goes to the National Royalty Fund which transfers it to the municipalities and departments so that they can build basic infrastructure like roads, aqueducts, hospitals etc. but what has always happened is that these resources have ended up in the pockets of corrupt officials who share them out with drug traffickers and, more recently, paramilitaries who use them to arm themselves and politically consolidate their areas of operation; so what has occurred is that these royalties are going to one of the armed actors in the conflict, with the full knowledge and consent of the State. There have even been small uprisings against mayors over the diverting of this money, like the recent case in the municipality of Puerto Liberador.
In fact according to the Mining Energy Planning Unit, between 1996 and 2000 Córdoba produced a little more than 17 thousand kilos, compared to 1,539 kilos of gold in the department of Bolívar, occupying first place in terms of production at a national level . There is no doubt that for the paramilitaries the gold is an incentive in their attempts to take over the South of Bolívar. Their interest coincides with the interest of the mining companies in carrying out large scale mining projects in the area, which at the same time coincides with the economic model they want to impose. It is not that the multinationals have contracted the AUC to cleanse the area, but rather that the AUC, as in other sectors and regions, is capable of realising who is advocating the same economic and social model as them, and therefore who is to benefit from their actions. A glance at the map of violence in Colombia shows us that it coincides exactly with the mining map. There is not a gold mining area where there are no paramilitaries. This is not mere coincidence. The paramilitaries are the spearhead of the structural changes Colombia is experiencing in the area of mineral resources.