Colombia prepared to sacrifice coal income for environmental protection

Colombia is prepared to put protection of its environment ahead of “profit at all costs”, as it heaps fine on one of the largest coal mining companies to operate there.

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The Colombian minister of Mining and Energy said recently that his country was prepared to forgo millions of dollars a day in national income, in the name of ensuring that environmental regulations in the coal and oil sectors are upheld. Amylkar Acosta, who has acted as minister in President Juan Manuel Santos’ government since September 2013, made the claims shortly after the government had ordered a halt to the operations of the US coalmining giant Drummond, due to the company’s apparent disregard for environmental norms concerning the shipping of coal in the port of Santa Marta on Colombia’s Caribbean coast.

Colombia’s environment ministry had landed a US$3.5m fine on Drummond for an accident in early 2013, when three ships carrying Drummond-extracted coal sank in the Magdalena River en route to Santa Marta, in what some observers have called Colombia’s worst environmental incident in years. The government consequently passed new laws that came into force on 1 January this year forbidding the shipping of coal between mines and ports, ruling that other modes of transport such as freight trains or trucks should be used instead. However, it emerged that Drummond was not complying with these new rules, and so the government went ahead and ordered the suspension of operations at the Drummond-controlled Caribbean port.

Colombia’s Río Magdalena and Caribbean coast, with Santa Marta in the top-right corner

Acosta reckons that the move will cost Colombia something in the range of 11.5bn Colombian Pesos (US$6m) per day, principally through a loss in royalties and taxes paid to the government. However, the minister backed the move saying “the law may be strict but it is still the law, and we cannot compromise on it. This law is not up for negotiation”.

The move could be seen as highly significant given how much the Colombian economy depends on its mining sector and the work of foreign companies there, while also playing host to spectacular landscapes and some of the highest level of biodiversity in the world. Colombia is the fourth largest exporter of thermal coal in the world, and the sector is its second most important source of foreign currency. The country has enjoyed impressive economic growth in recent years thanks largely to its exports of coal along with agricultural and other primary products.

While these activities have led to numerous and often under-reported cases of environmental and social destruction, moves such as this where the government is stamping down its authority and placing longer-term environmental concerns above shorter-term and immediate financial gains should be applauded and encouraged. Of course, there remains the issue of an economy that is closely tied to the extraction of natural mineral resources, often from fragile or highly biodiverse ecosystems, and even if Colombian authorities are able to enforce stricter regulations on foreign companies, extractive activities of any sort on the scale seen in Colombia are still likely to have an adverse effect on local environments, not to mention the contribution to global climate change made by the coal being extracted. Nevertheless, the government’s intervention in this case can only be a positive thing.

Workers in a coal mine in Colombia. Photo courtesy of Infolatam

Some commentators, such as BBC Mundo’s correspondent in Colombia, Arturo Wallace (link to Spanish-language article), suggest that the proximity of upcoming general elections and an ever-growing environmental and social consciousness among Colombian citizens has also played a part in the government taking measures such as this. “There are more and more voters demanding that authorities take a firmer stance against the big multinational companies who exploit the country’s natural resources, and this is something that is even harder to ignore in an election year”, says Wallace.

Drummond, the second largest producer of coal in Colombia, says it will have a system of direct mine-to-cargo transport in place by the end of the first quarter in 2014. It claims that this would have been completed earlier had it not been for a 50-day strike by Colombian workers between July and September last year. Some observers have criticised the government for being too hasty in punishing Drummond, arguing that it should have given the company more time to carry out the works needed to upgrade its facilities to meet the new stricter environmental norms. However, on the other hand some have also been critical of the government for allowing Drummond to continue its activities at all after the Magdalena incident.

Conveyor belt used by Drummond for loading coal onto ships, Santa Marta

Acosta sustains that “the government cannot be lenient on this, it has to be drastic. The rules apply to everyone and the law has to be enforced, and that is what the government is doing here at the moment”. Meanwhile, the minister for the Environment and Sustainable Development, Luz Helena Sarmiento, acknowledged that the temporary loss of Drummond coal production (the company extracts around 80,000 tonnes of coal each day, roughly a third of national production). “We know that this is a very costly decision for the country, but what is also at risk along with environmental and social concerns is the institutional credibility of Colombian authorities”, Sarmiento said. “The law is for everyone, and as the government we are obliged to enforce it”.

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