NotiSur, 08/10/01: Argentina, Colombia, Venezuela Via NY Transfer News * All the News That Doesn't Fit ------------------------------------------------------------ L A T I N A M E R I C A D A T A B A S E NotiSur - South American Political & Economic Affairs ISSN 1060-4189 Volume 11, Number 30 August 10, 2001 ------------------------------------------------------------ Copyright 2001, Latin America Data Base (LADB), Latin American Institute, University of New Mexico Director: Rebecca Reynolds Bannister Editor: Patricia Hynds Staff writers: Carlos Navarro, Robert Sandels LADB ARCHIVES: Back issues are referenced to provide historical background relevant to the articles in this newsletter. These can be accessed with a subscription to the LADB searchable on-line archives at http://ladb.unm.edu/ by clicking on Search Archive. For subscription information, e-mail info@ladb.unm.edu or call 1-800-472-0888. In This Issue: ARGENTINA: ECONOMIC CRISIS CONTINUES * Congress finally approves cuts * IMF moves date of disbursement ahead * Another round of protests engulfs country COLOMBIA: COCA-COLA SUED FOR HUMAN RIGHTS ABUSES * Paramilitaries used for union busting * Coca-Cola, bottling companies respond * Lawsuit raises broader issues VENEZUELA: BOMB THREATS INCREASE SECURITY CONCERNS * Incidents add to insecurity * Catholic Church temporarily closes churches ____________________________________________________________ ********************* ARGENTINA ********************* ARGENTINA: ECONOMIC CRISIS CONTINUES The Argentine financial crisis shows no sign of abating, prompting the International Monetary Fund (IMF) to advance the next installment of its bailout package to stave off a possible default or devaluation. Meanwhile, workers and the unemployed are stepping up protests against the government's latest austerity measures. When Finance Minister Domingo Cavallo joined the administration of President Fernando de la Rua in March, he was heralded as the white knight who was going to quickly pull the country out of the economic doldrums (see NotiSur, 2001- 03-23). With each passing week, and each new "solution" that does not make the grade, it is increasingly evident that the crisis is beyond a quick fix. The latest rabbit pulled from the administration's hat-- "zero deficit"--commits the state to spend no more than it takes in each month. The package slashes pensions and public- employee salaries by at least 13%, and cuts could reach 20% if tax revenues continue to drop (see NotiSur, 2001-07-20). The austerity measures were backed by international lenders, including the IMF, which conditioned Argentina's continued access to the US$40 billion in bailout credit, approved in December 2000, on meeting IMF goals. Congress finally approves cuts On July 27, the government's austerity program suffered a serious reverse when Labor Judge Roberto Pompa barred implementation of the president's decree authorizing the salary cuts. That order became moot, however, when the Argentine Senate passed the cuts into law on July 30. The austerity package was approved by a vote of 26 to 18 following nine hours of heated debate. It had been passed earlier by the lower house. Passage had stalled on the government's proposal to cut government salaries and pensions of US$500 a month or more. Some lawmakers wanted the floor raised to US$1,000 a month. In the end, the senators agreed to disagree, and approved the cuts in general, leaving the specifics for a later debate. Seldom has the gap between lawmakers' talk and action been clearer. Even as they voted for the cuts, deputies and senators were making speeches saying the measures would not work. Some legislators were talking about passing another law to "minimize" the social impact of zero-deficit measures, although opponents of the cuts could not come up with an alternative they could all agree on. By Aug. 1, the situation again looked rocky. Continuing disagreements within the governing Alianza coalition regarding the size of the budget cuts and proposals by opposition Partido Justicialista-peronista (PJ) lawmakers to amend the law did not help convince investors that the government could meet its zero-deficit target. The report that tax revenues fell in June by twice what authorities had been predicting also failed to inspire confidence. Cabinet chief Chrystian Colombo admitted that, if tax income continues to drop, the government would have to deepen the spending cuts to meet the zero-deficit target. "The people have to be prepared to face up to this profound crisis," he said, adding that the zero-deficit law "does not place limits" on the salary and pension cuts, "but sets the target" of a balanced budget, which must be met. Analysts say further cuts would bring even greater strains between Alianza partners, de la Rua's Union Civica Radical (UCR) and the Frente Pais Solidario (FREPASO). The reaction to the passage of the law emphasizes the government's very difficult situation. Fearing a devaluation, people are rapidly withdrawing their deposits from banks, the country's risk keeps rising, and the amount of taxes collected keeps falling. "The market's not buying the spending cuts," Bruce Pan, Latin America currency strategist at BNP Paribas in New York told Dow Jones Newswires, adding that the market was trading at "distressful levels." What most concerned investors was the conviction in financial circles that Argentina would eventually be forced to default on its public debt of US$130 billion, about 50% of its GDP. IMF moves date of disbursement ahead An IMF mission arrived in Argentina July 23 for a scheduled visit to evaluate the government's economic program. On July 25, despite all the gloom about the three-year economic slump, the mission said indications show that Argentina is on track to meet its program targets. In a sign of US support, US President George W. Bush phoned President de la Rua Aug. 1 to say that an IMF review could be brought forward by a few weeks, meaning payments could be accelerated. US Treasury Undersecretary for International Affairs John Taylor arrived in Argentina Aug. 2 to meet with Argentine government officials and report back to the Bush administration. "We have not asked for [additional] financial aid from any government or group of countries," said Colombo after the talks. "The government is working with multilateral credit organizations and intends to continue to do so." On Aug. 3, Horst Kohler, managing director of the IMF, said the fund was ready to accelerate disbursement of US$1.2 billion in aid to Argentina, money included in the earlier aid package. But by changing the terms of the package, the IMF and the US acknowledged that the situation had deteriorated. While Argentina has not met all the conditions of the aid package and shows few signs of being able to meet its commitments this year, including the zero-deficit pledge, pressure to continue lending is intense, in part because of the effect that a default would have throughout the region. On Aug. 3, the de la Rua administration received additional bad news when the labor court ruled the salary and pension cuts unconstitutional. Another round of protests engulfs country The government cutbacks have angered many Argentines who blame widespread cronyism and inefficiency in government for the financial crisis. Polls show Argentines believe officials earn too much, and an Economy Ministry report in February said a worker earning the minimum wage would have to work 52 years to make what a senator earns in salary and perks in a month. Judges can earn up to US$195,000 a year, while small-town mayors can have receive a US$6,900 a month salary plus an equal amount for personal expenditures. With unemployment above 16% and more than a third of the nation living in poverty, social unrest is increasing. Following the announcement of the most recent cuts, Argentine workers staged the largest strike in years July 19- 20. Protesters set up roadblocks throughout the country, public transportation stopped, and government workers stayed home. Protests have continued sporadically since then. Public employees belonging to the Asociacion de Trabajadores Estatales (ATE) called for another strike Aug. 7 and said that they could paralyze government offices indefinitely if the government begins laying off workers. Teachers also walked off the job on Aug. 7 in the provinces of Buenos Aires and Misiones. Groups of unemployed workers, who erected dozens of barricades from the northern border with Bolivia to Tierra del Fuego in July, have resumed the roadblocks to pressure the administration to abandon the cuts. The emergence of the "piqueteros," a largely spontaneous movement that takes its name from its picketing method of struggle, has surprised observers and worried politicians with its demands for jobs and more social spending. The Central de Trabajadores Argentinos (CTA) called for a 24-hour general strike for Aug. 8, and about 50,000 people marched to historic Plaza de Mayo in front of the Casa Rosada, the government palace. CTA secretary general Victor de Gennaro accused de la Rua and Cavallo of "establishing an adjustment with no limits, without floor or ceiling, and that is extremely serious." [Sources: The Financial Times (London), 07/23/01; CNN, 07/27/01; Inter Press Service, The New York Times, 08/03/01; Associated Press, 07/19/02, 07/22/01, 07/30/01, 08/01/01, 08/04/01; Notimex, 08/01/01, 08/06/01; El Nuevo Herald (Miami), 08/06/01; Reuters, 07/23/01, 07/25/01, 07/30/01, 08/01-05/01, 08/07/01; Spanish news service EFE, 08/06/01, 08/07/01; La Opinion (Los Angeles), 07/25/01, 08/02/01, 08/07/01, 08/08/01] ********************* COLOMBIA ********************* COLOMBIA: COCA-COLA SUED FOR HUMAN RIGHTS ABUSES The United Steelworkers of America (USWA) and the Washington-based International Labor Rights Fund (ILRF) filed suit July 20 in the US District Court for the Southern District of Florida against Coca-Cola and Miami-based Panamerican Beverages, Inc., the primary bottler of Coke products in Latin America. The lawsuit charges that Coca- Cola's Colombian bottlers are working with death squads to kill, threaten, and intimidate plant workers. The case was brought under the Alien Tort Claims Act (ACTA) and US racketeering statutes. It was assigned to US District Judge Paul Huck in Miami. Also named in the suit are Colombian bottlers PANAMCO, owned by Panamerican Beverages, and Bebidas y Alimentos, owned by Richard Kirby and his son, Richard Kirby Keilland, both US citizens living in Key Biscayne, Florida. The lawsuit was filed on behalf of the Colombian trade union Sindicato Nacional de Trabajadores de Industrias de Alimentos (SINALTRAINAL), which represents 2,500 food workers, including 500 Coke bottling-plant employees, and the estate of Isidro Segundo Gil, a worker murdered in 1996. The other plaintiffs are SINALTRAINAL leaders Luis Eduardo Garcia, Alvaro Gonzalez, Jose Domingo Flores, Jorge Humberto Leal, and Juan Carlos Galvis. The suit claims they were subjected to torture, kidnapping, or unlawful detention to encourage them to cease their trade-union activities while employed by Coke. Paramilitaries used for union busting The 66-page complaint alleges that Atlanta-based Coca- Cola bears indirect responsibility for the killing of Gil, who was shot to death at the entrance to the Bebidas y Alimentos plant in the northern town of Carepa. The union claims Gil was killed by paramilitaries acting on orders from a plant manager and on behalf of the bottling company's owners. At the Carepa plant, the complaint says, paramilitary forces murdered two activists in April 1994 and then were invited by Bebidas y Alimentos management to come onto the premises to warn other union leaders to either resign from the union or leave town altogether. In 1995, every member of the union's executive board left. When the union elected a new board, management hired paramilitary members to work in the sales and production departments. They carried out a campaign of intimidation that included death threats against board members, culminating in the murder of Gil in December 1996. The suit also contends that plant manager Ariosto Milan Mosquera had told workers that he had given an order to paramilitary forces to destroy the union. Two days after Gil's death, plant managers passed out union resignation forms prepared by Bebidas y Alimentos staff. Dozens of workers resigned soon after that. Although Bebidas y Alimentos is a defendant in the suit, Mosquera is not. At PANAMCO's Cucata and Barrancabermeja plants, the complaint says, since 1999, several local union officials have been forced into hiding after receiving death threats from paramilitaries in connection with their union work. In Barrancabermeja, plant management has openly collaborated with and supported the paramilitaries. "With respect to their business operations in Colombia, the Defendants hired, contracted with, or otherwise directed paramilitary security forces that utilized extreme violence and murdered, tortured, unlawfully detained or otherwise silenced trade-union leaders of the union representing workers at Defendants' facilities," the lawsuit said. In each case, the union repeatedly asked Coca-Cola Colombia and the bottling company's management for protection. "Coke did nothing," said USWA lawyer Dan Kovalik. "We are confident that if any of these plants make a mistake in applying Coca-Cola's formula or in delivering Coke, they would be there to correct it. But in cases where they kill union leaders, they do nothing." In all these cases, said Terry Collingsworth, ILRF's chief attorney, the bottlers effectively acted as Coca-Cola's agent given the degree of control the company exercised over their operations under the standard bottling contract. "There is no question that Coke knew about and benefitted from the systematic repression of trade union rights at its bottling plants in Colombia, and this case will make the company accountable," said Collingsworth. He said that, in a similar case in Guatemala 20 years ago, Coke arranged for the bottling-plant owner, John Trotter, to sell his franchise. Trotter was accused of using death squads to kill several union officials between 1978 and 1979. After the sale, the repression at the plant ceased. But in Carepa, Coke turned down an offer by the Kirbys to sell the plant in 1997, despite reports that the elder Kirby had threatened to kill union leaders before Gil's death. Coca-Cola, bottling companies respond "The Coca-Cola Company does not own or operate any bottling plants in Colombia," said spokesman Rafael Fernandez in Atlanta. "It is not true that the agreement [with the bottlers] gives us control." He also denied that the company received "any notice from Colombian police or anybody of any wrongdoing" in any of the plants. "We adhere to the highest standards of ethical conduct and business practices and we require all of our companies, operating units, and suppliers to abide by the laws and regulations in the countries that they do business," said Natalie Rule, another Coca-Cola spokesperson. PANAMCO also denied that it used paramilitary groups to terrorize trade unionists, and it said that its lawyers were considering whether the charges were defamatory. "We have rejected and continue to emphatically and totally reject any suggestions, which we can only describe as the product of ill-will, that link this company to outlawed groups or to practices that are forbidden and punished by Colombian law," said Juan Carlos Dominguez, PANAMCO's legal and public-affairs manager. Bill McCaughan, a lawyer in Miami who represents Kirby, said the allegations in the suit were "totally baseless." "Mr. Kirby is a well-respected businessman," McCaughan said. "He has no association with either the paramilitary group or the guerrilla group, and obviously had no association with any group that would take any people out and shoot them." Lawsuit raises broader issues The suit was filed on Colombia's Independence Day to emphasize that Colombia leads the world in the number of trade-union leaders murdered each year. The lawsuit said persecution of trade unionists in Colombia had been "at epidemic proportions" for years, with more than 3,800 unionists murdered since 1986 when the Central Unitaria de Trabajadores (CUT) was formed. The CUT, the major labor organization in Colombia with more than 750,000 affiliated workers, backs the suit because those responsible for killing union members must be held accountable, said CUT president Miguel Antonio Caro. "Of every five trade unionists murdered in the world, three are Colombian," said Kovalik. He said more than 50 union leaders have been killed so far this year, including Oscar Dario Soto Polo, an employee and union official at a Coca-Cola plant in Monertia who was gunned down June 21. Six union leaders who worked for Coca-Cola bottlers have been assassinated since 1989, three of them during union negotiations with the company. "In 1995, in May, while we were preparing for negotiations with Coca-Cola on the northern coast of Colombia, I was detained just for being at the entrance of the bottling plant waiting for the workers to give them a report on the progress of the negotiations," said SINALTRAINAL president Luis Javier Correa, who has worked for Coca-Cola since 1983. "There has been a very concerted campaign against trade unionists for many years and it seems to have even stepped up in recent months," said Robin Kirk, a Colombia expert at Human Rights Watch (HRW). "This case is extremely important for trade union and human rights. If we cannot get Coke, one of the most well- known companies in the world, to protect the lives and human rights of the workers at its worldwide bottling facilities, then we certainly have a long way to go in making the global economy safe for trade unionists," said Kovalik. [Sources: International Labor Rights Fund (press release), Inter Press Service, Notimex, 07/19/01; Associated Press, 07/21/01; Reuters, 07/20/01, 07/23/01; The New York Times, 07/26/01; La Opinion (Los Angeles), 07/30/01] ********************* VENEZUELA ********************* VENEZUELA: BOMB THREATS INCREASE SECURITY CONCERNS The recent rash of bombs found in Caracas churches and other public buildings has increased concerns about public safety. It has also highlighted the strained relations between the government of Venezuelan President Hugo Chavez and the Catholic Church. Defense Minister Jose Vicente Rangel said the government is very concerned about the number of explosive devices found in various buildings in Caracas since late July. He said the terrorist acts are "a threat and a provocation designed to cause fear." The discovery of the low-intensity explosives began July 25, when one of three devices placed in the church of San Francisco exploded. The church is across the street from the Asamblea Nacional (AN) building. The device exploded in a confessional in the church, injuring a 25-year-old woman and causing considerable damage to the building. Since then, other explosive devices have been found in several churches in the capital, as well as in other institutions and public buildings, including the headquarters of the Policia Tecnica Judicial (PTJ), the Caracas metro offices, and the home of former President Carlos Andres Perez (1974-1979 and 1989-1993). Presidential assistant Nancy Matos said that members of the security police (Direccion de Servicios de Inteligencia Policial, DISIP) had removed a device found at the entrance to the residence of the former president on Aug. 3. Employees of Perez, who was in the Dominican Republic at the time, found the device and called authorities. The string of threats continued. On Aug. 5, a device was found at the Caracas church of Nuestra Senora del Carmen. It was also removed by members of DISIP. Incidents add to insecurity The incidents are adding to the public's already high sense of insecurity. Caracas has a very high crime rate, with an average of 100 violent deaths each weekend. Venezuela has had its share of civil and military unrest but terrorism is a problem most citizens associate with other countries, such as neighboring Colombia. Interior Minister Luis Miquilena dismissed the anxiety as "exaggerated." Nevertheless, the government deployed the National Guard to protect several churches and other buildings. Police have not yet made any arrests in connection with the bombs. Officials vow to capture those responsible, but Venezuelans are getting impatient with the lack of progress. "I can't believe that we are so incompetent that we have not captured even one person behind the incidents," said Caracas Mayor Alfredo Pena. "The government is using all of its security and intelligence resources to put a stop to this and detain those responsible," said Rangel. Police insisted they were making progress in their investigations. "Politicians have their own agenda, they don't always have the best intentions," said Miguel Dao, chief of the Cuerpo Tecnico de Policia Judicial (CTPJ), Venezuela's FBI. He suggested that someone is trying to aggravate the problems between the government and the Catholic Church. Administration officials claim the bomb threats are part of a growing conspiracy to destabilize President Hugo Chavez's government. "There has to be a political interest. It can't be explained in any other manner," Rangel said. The bombs are part of "another campaign by the "escualidos" [political opposition] to try to weaken the strength of the government, the country, and the Bolivarian revolution," said Chavez on his radio program Alo Presidente on Aug. 4. Catholic Church temporarily closes churches The incidents with the bombs have again publicized the strained relations between the Chavez government and the Catholic Church. Chavez has frequently clashed with members of the hierarchy who have criticized his efforts to reform what he says was an elitist and corrupt political system. The president has questioned the church's political belligerence and apparent closeness with the opposition. The Catholic Church temporarily closed eight churches for three days after the explosion then held a public mass of atonement. The church is not "a political institution, nor do we participate in any ideological current, but it has the duty to alert the citizens about acts of vandalism and terrorism," said Ignacio Velasco, cardinal archbishop of Caracas, at the mass of atonement on Aug. 5. The latest skirmish between clergy and politicians comes as the Asamblea Nacional is debating legislation to respond to the problems of crime and public insecurity, among the principal problems facing the Chavez administration. [Sources: El Nuevo Herald (Miami), 08/04/01; Associated Press, 08/04/01, 08/07/01] ================================================================= NY Transfer News Collective * A Service of Blythe Systems Since 1985 - Information for the Rest of Us 339 Lafayette St., New York, NY 10012 http://www.blythe.org e-mail: nyt@blythe.org ================================================================= pvtsa-08.13.01-03:30:14-29681