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Colombia's bloody civil war and violent
drug trade have long served to limit foreign investment in a
country with some of world's richest untapped natural resources.
But Colombia's place in the global economy may be changing,
as its business-friendly government eases restrictions on corporate
newcomers and with the U.S. now dedicating military aid to protect
multinationals' interests in the country. As more global companies
are lured by lucrative returns in Colombia, labor and human
rights advocates fear a growing corporate presence will cause
increased violence in a country that already is home to the
murder capital of the world.
Read more about U.S.-based Occidental Petroleum Corporation,
other leading investors in Colombia, and corporations' role
in the country's 38-year conflict.
By
David Montero and Kelly Whalen
OCCIDENTAL
PETROLEUM CORPORATION
Occidental
Petroleum Corporation is one of the largest U.S.-based oil and
gas multinationals, with exploration projects in three states
and nine foreign countries, including Colombia. It has operated
in Colombia for more than three decades; in 1983, Occidental
discovered Caño Limón, Colombia's second-largest
oil field and one of only 50 billion-barrel-class fields in
the world. Occidental's investment in Caño Limón
paid off long ago, with its share of production yielding hundreds
of millions of dollars annually. Even through years of rebel
attacks and pipeline closings, Caño Limón Field
continues to be a profitable venture for Occidental.
In recent years, Occidental has simplified its oil and gas operations
by focusing its operations in the United States, the Middle
East and Latin America. Despite drastic oil price declines in
2001, Occidental Petroleum had its second-best annual earnings
ever.
Annual
sales: $14 billion
Annual net income: $1.2 billion
CEO and annual executive salary: Ray Irani, $24 million
(six-year average); Forbes Magazine ranked Irani the
second-worst among executives who gave shareholders the least
return on their investment compared with their own pay. In
2001, Irani's compensation package included free financial
planning, country club dues and a $2.6 million bonus.
Founded: 1920
Stock: Publicly traded (OXY) on the New York Stock
Exchange
Corporate headquarters: Los Angeles
Employees: 8,235
Colombia operations: Occidental owns Caño Limón Field
in the province of Aruaca, operates three exploration projects
elsewhere in Colombia, and, in 1998, swapped its holdings
in the Philippines and Malaysia for Shell Oil's interests
in several producing blocks of Colombia.
Worldwide holdings: Russia, Pakistan, Saudi Arabia,
Yemen, Qatar, Oman, Ecuador, the Gulf of Mexico, the United
States (Texas, California and Alaska)
Worldwide reserves: 2.17 billion barrels of oil
Worldwide annual production: 461,000 barrels of oil
per day
Colombia annual production: 34,000 barrels of oil per
day in 2002, up 79 percent from the year before
Labor
Conditions
In addition to sabotaging the physical structure of Occidental's
Caño Limón Pipeline, Colombia's rebel groups have attacked,
kidnapped and murdered company employees. Employees also have
often been caught in the crossfire between the rebels and the
military. Not unlike other multinationals in Colombia, Occidental
makes it clear with its employees that it will not pay ransom
in the event of their kidnapping. With few exceptions, the company
hires Colombians from distant cities to work in the danger areas
because they are less likely to be knowledgeable about military
troop locations or security measures should they fall into the
hands of guerrillas. Prospective contractors are rigorously
screened by Occidental's psychologists to ferret out spies;
workers must show identification cards at a half-dozen security
checkpoints; and palm-reading devices restrict access to executive
offices. Still, Colombia's rebels have succeeded in breaching
the multinational's security on a number of occasions.
In
1988, the rebel ELN (the National Liberation Army) exploded
a car bomb outside Occidental's nine-story Colombian headquarters
in Bogotá, badly damaging the building.
In April 2001, rebels seized a bus filled with 100
Occidental oil workers and security contractors on their way
to work. Most were released that night, but 30 were held for
as long as four days and pumped for security information.
A truck bomb in October 2000 narrowly missed a bus
filled with 40 Occidental secretaries and other company employees.
Human
Rights Record
Watchdog groups have ranked Occidental poorly on human rights
after the company pursued a protested oil exploration project
in Colombia's cloud forest, home to 5,000 members of the U'wa
tribe. In 2000, three children were killed after Occidental
called on the military to break up a nonviolent U'wa blockade
of the road to the drill site. After years of public pressure
protesting Occidental's exploration on ancestral lands, the
company announced in May 2002 that it was canceling the project.
The company blamed its withdrawal on technical and economic
factors, but many believe Occidental caved to negative publicity.
Occidental's stand on human rights in Colombia was also tainted
after a 1998 air raid of the village of Santo Domingo near the
Caño Limón Pipeline. That year, three American pilots of AirScan
(a Florida-based security firm that Occidental uses to protect
its oil interests from rebel attacks) marked hostile targets
for the Colombian military in an antiguerilla operation. The
pilots' assistance mistakenly led to the killing of 18 civilians,
including nine children. Survivors from the village said the
aircraft (U.S.-donated) attacked them as they ran out of their
homes to a nearby road with their hands in the air. The Colombian
government is still investigating.
Occidental
on Capitol Hill
Between 1996 and 2000, Occidental spent more than $8.6 million
lobbying the U.S. government, including for U.S. military aid
to Colombia. In the 2000 election cycle, the company gave hard
and soft money totaling about $551,000, with about 60 percent
going to Republican candidates and political action committees.
The CEO of Occidental's chemical subsidiary, J. Roger Hirl,
raised more than $100,000 in support of George W. Bush's bid
for the presidency.
Occidental also has maintained links to the Democratic Party
for many years, primarily through former Vice President Al Gore's
father, the late Al Gore Sr., who after leaving the Senate took
a $500,000-a-year job with an Occidental subsidiary, then served
on the company board for 28 years.
When the younger Gore joined Clinton's ticket in 1992, Occidental
loaned the Presidential Inauguration Committee $100,000 to help
pay for the ceremony. And after Gore took office, the company
gave nearly $500,000 in soft money to Democratic committees
and causes. In late 1997, the former vice president championed
a $3.65 billion sale to Occidental of the government's stake
in Elk Hills Oil Field (California), representing the largest
privatization of federal property in U.S. history. In 1998,
when his father died, Gore inherited about $500,000 worth of
Occidental stock.
Related
Links
House
Testimony
Read Congressional testimony by Lawrence P. Meriage, Occidental's
vice president of Executive Services and Public Affairs, urging
counternarcotic and other U.S. military aid to Colombia.
An
Open Letter to Occidental's CEO
Human Rights Watch (HRW) wrote Occidental CEO Ray Irani urging
the company to reconsider its security reliance on the Colombian
military, an institution rated by HRW as one of the worst human
rights violators in the hemisphere.
The
Terror Campaign Against Occidental
Rebel groups have extorted local oil workers and engineers have
been murdered, write Wall Street Journal reporters Alexei
Barrionuevo and Thaddeus Herrick, in this report on threats
against Occidental Petroleum, its workforce and the company's
vulnerable fortress. (The Wall Street Journal, Feb. 6,
2002) (registration required)
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MORE
ENERGY COMPANIES
Colombia's top revenue exports are oil, coffee and coal. With
vast unexplored oil and coal reserves remaining in Colombia,
the government is campaigning to attract more foreign investment,
and multinational companies are indicating interest.
BP
While not U.S.-owned, one of Colombia's biggest foreign investors
is Britain's BP, which controls Colombia's largest oil field,
located in the northeastern province of Casanare.
Annual
sales: $174 billion
Annual net income: $8 billion
CEO and annual executive salary: John Browne, $8.7
million
Founded: British Petroleum and Amoco merged in 1998
to form BP-Amoco. The company since added Arco to its conglomerate,
and the oil giant is again branding itself as BP.
Corporate headquarters: London
Employees: 110,150
Colombia operations: BP operates Colombia's 1.5 billion-barrel
Cusiana-Cupiagua Field and the 444-mile-long Ocensa Pipeline,
which stretches to the Caribbean port of Coveñas. The company
also has a 50 percent holding in the Piedmonte Block. The
oil fields operated by BP account for half of Colombia's daily
output of oil.
Human rights: Because it runs further underground than
some of Colombia's other oil pipelines, the Ocensa Pipeline
is less frequently attacked by rebel groups. Still, the pipeline
was knocked out of operation for five days after a guerilla
bomb attack in August 2002. In 1997, BP, prior to its merger
with Amoco, came under strong criticism for indirectly funding
right-wing Colombian paramilitary forces to protect its oil
pipelines from rebel attack. The Guardian (U.K.) broke
the story that one of BP's private security providers imported
arms into the country and trained Colombian national police
who had ties to paramilitary groups. BP has since developed
a human rights policy for new contracts in Colombia.
Related link: BP
and Mercenary Armies? Reporters Michael Gillard, Ignacio
Gomez and Melissa Jones investigated BP's connections with
Colombian paramilitary groups. (The Guardian, Oct.
17, 1998)
Exxon
Mobil
Exxon Mobil helped develop and formerly operated El Cerrejón
Zona Norte, Colombia's 30-mile-long and more than two-mile-wide
coal mine near the Venezuelan border. When Exxon contracted
in 1980 with the Colombian government to extract coal from one
of the world's largest open pits, the deal became one of the
biggest joint ventures in the history of Latin America. In February
2002, Exxon Mobil sold its 50 percent stake in El Cerrejón to
a consortium of companies, including Anglo-American, BHP-Billiton
and Glencore.
Annual
sales: $187.5 billion
Annual income: $15.1 billion
CEO and annual executive salary: Lee R. Raymond, $14.7
million
Founded: In 1999, Exxon and Mobil merged to become
the world's largest company.
Corporate headquarters: Irving, Texas
Employees: 98,800
Colombia operations: Exxon Mobil's Colombian subsidiary,
International Colombia Resources Corporation, and its operation
of El Cerrejón Zona Norte once accounted for more than half
of the company's worldwide coal production. (The mine yields
more than 15 million tons of coal every year.)
Human rights: During Exxon Mobil's control over the
coal mine, operations expanded onto the indigenous lands of
the Wayuu, who have lived in the region for more than 500
years. Wayuu cemeteries were moved in the construction of
a 95-mile-long rail and road connection between the coal mine
and the port of Uribia. Survival International included Exxon
Mobil in its top ten list of corporate violators of Native
rights. Mine expansion continues to threaten numerous towns
and villages, and in 2001, the town of Tabaco was displaced
and destroyed. One of the latest rebel attacks against foreign
interests controlling the El Cerrejón occurred in May 2002,
when the Revolutionary Armed Forces of Colombia (FARC) bombed
and derailed a 20-car train transporting thousands of tons
of coal to the Caribbean export terminal.
Drummond
A family-run, private coal mining business, Drummond expanded
its U.S.-based operations to Colombia in 1994 after forecasts
that its coal reserves in Alabama would soon be depleted. The
company also has real estate development businesses in California
and Florida.
Annual
sales: $615 million
CEO: Garry Neil Drummond
Founded: 1935
Corporate headquarters: Birmingham, Ala.
Employees: 2,500
Colombia operations: Drummond operates Colombia's
second-largest coal mine, in La Loma. In 2001, it marketed
more than 12 million metric tons of Colombian coal to more
than a dozen countries.
Human rights: Since operating in Colombia, Drummond
has closed five mines in Alabama and fired more than 1,000
workers, triggering protests from U.S. labor unions, including
the United Mine Workers of America. In March 2002, the Mining
and Energy Industry Workers Union of Colombia and the families
of three killed union leaders sued Drummond, claiming that
after labor strikes the company's Colombian managers told
paramilitary gunmen that they wanted the officials killed.
The lawsuit is backed by the United Mine Workers of America,
the United Steel Workers of America and the International
Labor Rights Foundation. Drummond has
faced about a dozen rebel attacks on its Colombian facilities
in the last two years, and in 2000, the FARC kidnapped four
Drummond workers for ransom, but eventually released them.
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BEVERAGES
AND AGRICULTURAL PRODUCTS
Colombia generates $2 billion annually from its agricultural
exports. It is the world's second-largest flower-exporter, after
the Netherlands; the world's third-largest producer of coffee;
and the world's third-largest exporter of bananas.
Dole
Food Company, Inc.
Dole Food Company is the world's largest producer of fresh
fruit and vegetables. It controls one-fifth of Colombia's banana
and flower exports, dominating the banana trade and controlling
25 percent of all flower cultivation. Dole also is Colombia's
largest employer.
Annual
sales: $4.4 billion
Annual income: $150.4 million
CEO and annual executive salary: David H. Murdock,
$ 1,700,000
Founded: 1851
Corporate headquarters: Westlake Village, Calif.
Employees: 59,000
Colombia operations: Dole is in flower cultivation,
grape and banana growing and corrugated box plants. It owns
approximately 2,200 acres for banana production and 1,900
acres for flower production. In 2001, Dole owned $66.9 million
worth of assets in Colombia, including plants, property and
equipment.
Human rights: Local unionists, labor organizations,
and activist groups have harshly criticized Dole's labor practices
in Colombia, particularly its treatment of banana workers.
Dole has started to move banana production away from Colombia
to Ecuador, where wages are cheaper and benefits are scarce.
Coca-Cola
The world's most recognized brand, Coca-Cola is also the largest
soft-drink maker on the planet.
Annual
sales: $20 billion
Annual income: $2.4 billion
CEO and annual executive salary: Douglas N. Daft,
$5,000,000
Founded: 1891
Corporate headquarters: Atlanta, Ga.
Employees: 37,400
Colombia operations: Coca-Cola has been distributed
in Colombia since 1940, and the company's Colombian subsidiary
employs 15 workers and 25 contractors. It maintains bottler
agreements with 20 independent bottling companies in the country,
17 of which are owned by Panamco. As of 2002, Coca-Cola owned
a 25 percent equity interest in Panamco. Panamco has subsidiaries
operating in most of Colombia and claims a 94 percent market
share. The bottling companies employ approximately 10,000
people directly and an additional 50,000 indirectly.
Human rights: Coca-Cola's labor practices in Colombia
have become the focus of a recent lawsuit. Filed last July
in Florida, the suit alleges that the company was complicit
in paramilitary executions of several union leaders organizing
at Coca-Cola bottling plants. (Nearly 4,000 trade unionists
have been murdered in Colombia since 1986, more than in any
other place in the world.)
Philip
Morris, Inc.
The world's largest cigarette maker, Philip Morris markets the
most popular cigarette among Colombians: Marlboro. But according
to the Colombian police, most of the company's cigarettes are
smuggled into the country.
Annual
sales: $89 billion
Annual income: $8.5 billion
CEO and annual executive pay: Louis C. Camilleri, $
2,450,192
Founded: 1902
Corporate headquarters: New York City
Employees: 175,000
Colombia operations: Philip Morris exports cigarettes
made in Venezuela to Colombia through its Colombian subsidiary,
Philip Morris Colombia, SA, which opened in 1991. The
Colombian customs and tax agencies recently filed lawsuits
against Philip Morris alleging that the company has actively
supported the illegal smuggling of its cigarettes into Colombia
in order to evade import tariffs. Although Philip Morris now
cooperates with the Colombian government to prevent illegal
imports, the smuggling operation is estimated to have cost
the Colombia Department of Treasury hundreds of millions of
dollars that would otherwise have been used for social, health
and education programs. It also undercut local tobacco growers,
forcing many to turn to coca production in order sustain their
farms. Philip Morris also owns a Colombian subsidiary called
Landers y CIA, SA, which manufactures small household appliances. Annual sales of $20 million to $40 million.
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WEAPONS
MANUFACTURERS AND MILITARY CONTRACTORS
American weapons-system and defense contractors have thriving
businesses in Colombia. These companies play a central role
in Colombia's warfare, from supplying the helicopters that patrol
the skies above, to managing the defumigation of the coca fields
below. And they've spent a lot of money lobbying Congress to
allow them to do so. Between 1996 and 1998, two of the largest
American helicopter manufacturers -- Bell and Sikorsky -- spent
roughly $900,000 and $700,000 respectively to convince Congress
to buy their aircraft for counterdrug operations in Colombia.
In the end, they both won: Plan Colombia calls for purchasing
42 of Bell's helicopters and 30 of Sikorsky's.
Bell Helicopter
The Colombian national police are the world's largest user of
Bell's Huey II helicopter. A privately held subsidiary of Textron
Inc., Bell Helicopter is also the largest supplier of helicopters
to the U.S. military.
Annual revenues: $1.5 billion in 2001
CEO: John R. Murphey
Founded: 1956
Corporate headquarters: Fort Worth, Texas
Employees: 8,000
Colombia operations: Under Plan Colombia, the U.S.
military has provided the Colombian national police and the
Colombian air force with more than 40 Huey II helicopters,
at a cost of more than $130 million. Bell also does business
with the Colombian government. Between 1998 and 2001, Textron's
direct sales of helicopters and other military equipment to
the Colombian military more than doubled, from $7.9 million
to $18.7 million. Colombia has requested 12 additional helicopters
to patrol Occidental Petroleum's Pipeline.
Sikorsky Aircraft Corporation
One of the world's largest manufacturers of commercial and military
helicopters, Sikorsy is a privately held subsidiary of United
Technologies Inc. It manufactures the Black Hawk helicopter
used in counterdrug operations in Colombia.
Annual sales: $1.8 billion in 2001
President: Dean C. Borgman
Founded: 1923 (acquired by United Technologies in
1929)
Corporate headquarters: Stratford, Conn.
Employees: 9,000
Colombia operations: Under Plan Colombia, Sikorsky
was awarded two contracts, totaling $235 million, to provide
the Colombian air force, army and national police with 30
Black Hawk helicopters. In January 2002, the last 14 Black
Hawks were delivered.
DynCorp
The largest private military contractor operating in Colombia,
DynCorp is a private subcontractor of security and communications
services to federal agencies, including the U.S. Departments
of Defense, Energy, State and Justice. DynCorp is sometimes
described by critics as being in the "mercenary" business.
Annual sales: $1.96 billion (96 percent to the U.S. government)
CEO and annual executive pay: Paul V. Lombardi $1,799,342
Founded: 1946
Corporate headquarters: Reston, Va.
Employees: 23,300.
Colombia operations: DynCorp was awarded a five-year
$170 million contract in 1998 to conduct operations in Colombia.
The company recruits pilots for counterdrug operations and
for spraying toxic herbicides over coca fields. It maintains
335 employees in Colombia (about half are American), including
crop dusters, helicopter pilots, mechanics and paramedics,
in rotating shifts of 90 to 100. (Plan Colombia stipulates
that no more than 300 private American military contractors
can be in the country at the same time.)
David Montero is a freelance reporter living
in San Francisco, California.
Kelly Whalen is a freelance writer and documentary producer
based in Oakland, California.
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