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Development: In an interview published on 23 August, Roberto Setubal, the president of Itaú Unibanco, the largest banking conglomerate in Brazil, warned against impeaching President Dilma Rousseff.

Significance: Setubal joins the list of notable Brazilian public figures who have positioned themselves against impeachment. The presidents of Bradesco, (another bank), Cosan, (an energy, logistics and infrastructure group) and the national confederation of industry have all spoken out against impeachment. While there remains considerable political pressure on President Rousseff, opposition leaders will be wary of alienating those sat atop the commanding heights of Brazil’s economy.

  • “In terms of corruption, there is no justification”, Setubal said. “By contrast, what we have seen is that Dilma has allowed a thorough investigation of this issue”. Addressing the separate issue of the “fiscal manoeuvres” which the government may have employed to justify higher spending in 2014, Setubal said, “they might merit punishment, but they are not a reason to remove a President. […] You can’t just remove a President from office because he or she is momentarily unpopular. You have to respect the rules of the game”.
  • An added element of uncertainty in the political arena comes from the attorney general’s decision to file corruption charges against Eduardo Cunha, the speaker of the federal chamber of deputies and the man with the sole responsibility for initiating impeachment proceedings against Rousseff. While the charges weaken Cunha, they may also anger him to the extent that he may wish to start impeachment proceedings before the supreme court decides whether he has a case to answer. Even if a motion to impeach Rousseff gets the two-thirds of votes it needs to pass the lower house, it is extremely unlikely that it would pass in the senate, but it would ensure that Brazil’s climate of political instability continues.

Looking Ahead: If corruption charges are filed against Renan Calheiros, the senate president, the prospects for the Rousseff administration could deteriorate fast. The tentative rapprochement between Rousseff and Calheiros is another bulwark against impeachment.

Published in Brazil

In the province of Buenos Aires, thousands have been forced to flee their homes due to floods. With around one third of the Argentine electorate based in the province, and just two months to go until the general elections, the natural disaster has unsurprisingly become an issue in the presidential race. Daniel Scioli, the frontrunner and candidate for the ruling Frente para la Victoria (FPV) faction of the Partido Justicialista (PJ, Peronists), is also the governor of the province. On 12 August, pressure from the opposition candidates forced him to cut short a trip abroad to attend to the situation.

Just two days earlier, Scioli had set off for Italy, not for a holiday, he claimed, but for work on his prosthetic arm (the former motorboat racer lost his arm in an accident.) Mauricio Macri, the presidential candidate of the centre-right opposition Propuesta Republicana (PRO) and the mayor of the city of Buenos Aires, noted that his administration was coordinating much of the emergency relief work and that provincial leaders were complaining of “a certain absence”. Sergio Massa, the third-placed candidate from the dissident Peronist Frente Renovador (FR), described Scioli’s trip as “inopportune”. Even some in Scioli’s own party were surprised by the timing. Aníbal Fernández, the cabinet chief, said that he had no idea the governor was planning a trip abroad. “It’s not my job to make a value judgment about this,” he said, pointedly.

Macri also sought to exploit questions over the province’s contingency planning raised by the flooding. “The only solution is infrastructure works; it’s not magic,” he said. “If the Buenos Aires provincial government had delivered on its promised water works, things would have been better.” While Macri enjoys robust support in the city of Buenos Aires, he desperately needs to expand his appeal in the province, traditionally a Peronist stronghold, to defeat Scioli in the elections.

On returning to Argentina, Scioli immediately declared a state of emergency, freeing up federal funds for assistance. He claimed that throughout his trip abroad he had been in constant contact with the emergency authorities. He also accused his rivals of politicising the issue. “The adversary is climate change,” he said. “I don’t look at this in political terms and I’m sorry about those who want to look at it in this way.

Dirty tricks

Over the weekend, Scioli’s mood soured. Periodismo Para Todos, an investigative television programme that has frequently targeted the administration of President Cristina Fernández, broadcast on Sunday night an image that had gone viral on social media. It purported to show Scioli relaxing and enjoying a cigar at a luxury European hotel, while floodwaters rose back in Buenos Aires. The Scioli campaign not only denounced the photo as being four years out of date but also stated its intention to seek legal redress for a dirty tricks campaign being carried out on social media, orchestrated by Macri.

Alberto de Fazio, an FPV senator, said the government would file charges against the opposition Cambiemos coalition. He added that around 35% of Macri’s followers on social media were fake accounts broadcasting false information. “It is not about censorship,” he said. “It is about accounts which are not real. This is a dirty campaign, not valid criticism.” In a radio interview on 17 August, Scioli said that the social media campaign was symptomatic of their weakness and his strength. “They feel helpless when they realise people backed us with 40% of the vote, with a difference of 15 percentage points, or more than 3m votes,” he said, exaggerating the numbers slightly.

  • Unity ticket

Daniel Scioli has lambasted rumours in the local media that Mauricio Macri and Sergio Massa are planning on uniting to defeat him. Combining the results of the two opposition candidates from the primaries would see them beat Scioli – just. But the electoral authorities have made it clear that a joint ticket would not now be permissible. “The law is clear. Candidates running in the general election should be from the same party lists that ran in the primaries,” Alejandro Tullio, the national electoral director, said.

Published in Brazil & Southern Cone
Wednesday, 19 August 2015 14:28

JUSTICE: Chevron case takes fresh twist

The US circuit court of appeals for the District of Columbia in Washington ruled on 4 August that Ecuador should compensate the US oil company Chevron to the tune of US$106m (including interest), based on the US-Ecuador bilateral investment treaty (BIT) that came into effect in 1997. This would be an impossibly bitter pill to swallow for Ecuador, which has pursued Chevron for 22 years in an effort to win multi-billion dollar legal compensation from the US oil giant for despoliation of large swathes of Ecuador’s Amazon, which damaged the health and livelihoods of the country’s indigenous communities and peasants.

The US appeals court rejected Ecuador’s challenge of a US$96m international arbitration award in 2011 by the permanent court of arbitration at the International Court of Justice at The Hague. Chevron began arbitration proceedings at The Hague in 2006. The oil major contended that Ecuadorean courts had failed to resolve lawsuits in a sufficiently timely manner, contravening the BIT between Ecuador and the US. Specifically, it maintained that between 1991 and 1993 Texaco, which was acquired by Chevron in 2001, had presented six lawsuits in Ecuadorean courts against the State for alleged violations of a joint accord to explore oil together in the Amazon, upon which the Ecuadorean justice system had failed to rule.

Chevron subsequently filed a suit in Washington in pursuit of a ruling confirming The Hague’s decision in order to collect the award of US$96m. This was duly affirmed by a US federal judge in 2013, which prompted Ecuador to lodge its appeal.

Ecuador argued that the court of arbitration did not have jurisdiction in the case because the BIT had taken effect in 1997, five years after Texaco had ended its operations in Ecuador in 1992. This did not cut any ice with the US appeals court. “In signing [the BIT], Ecuador agreed to arbitration of precisely this type of action,” US Judge Robert Wilkins wrote for a three-judge panel.

Chevron issued a statement expressing its content at the ruling, pegging the award of damages at US$106m, including interest. Ecuador’s attorney general’s office rejected the ruling. In a statement the attorney general’s office said that it was evaluating its position and was not ruling out the possibility of appealing the ruling before the Plenary District Court, or even the US Supreme Court of Justice.

Ecuador’s attorney general’s office accused the US court of appeals of having “failed to apply the US Sovereign Immunity Act which would have obliged it to examine the existence of a treaty of investment protection benefiting Chevron. If it had done so, it would surely have discovered the incongruity of protecting an investment that finished before the treaty entered into force”.

Pablo Fajardo, the lawyer representing the indigenous communities and peasants who have never been compensated for the massive oil spill and contamination of the Amazon by Texaco, wrote on Twitter that it would be “unjust for the government to pay Chevron after it committed the worst environmental crime against humanity”.

Fajardo said that Ecuador’s provincial court of Sucumbíos had prohibited any payment until Chevron pays US$8.6bn in compensation for environmental damage in accordance with a 2013 ruling. “The State doesn’t have to pay Chevron but the Amazon as part of the debt that Chevron has with us,” Fajardo said.

  • Chevron

In March 2014 a US district court in New York found against Steven Donziger, the US lawyer who fought the case against Chevron for the poor plaintiffs in Ecuador. During this trial, Chevron’s lawyers described the corrupt practices employed by Donziger’s legal team, assembling recorded clips, emails and other documents to make their case. Donziger was eventually found liable of violating the provisions of the US Racketeering Influence and Corrupt Organizations (RICO) Act for falsifying evidence and committing fraud in the original case.

Published in Ecuador
Wednesday, 19 August 2015 10:42

Deadly mining clash in Bolivia

Development: On 18 August Bolivia’s interior minister, Carlos Romero, announced that he will present a criminal complaint before the attorney general’s office against those responsible for the death of a police official in the municipality of Tacacoma, La Paz department, after clashes with local protesters that also left ten other security officials injured.

Significance: The clashes came after months of simmering tensions between local residents and miners from local cooperative Rosario de Ananea over accusations that the cooperative has breached a compensation agreement to exploit the mine. The conflict illustrates the continued problem of mine invasions despite recent (2013) legislation aimed at addressing this issue. It comes as the national government led by President Evo Morales is seeking to shore up confidence in the mining sector, which is struggling in the face of lower mineral commodity prices.

  • Police sergeant José Luis Quispe de la Cruz died on 17 August after falling 200 meters into a ravine during the clashes. Other officers were allegedly attacked with sticks and stones. The violence took place after the police arrived to enforce a court order to evict locals who took over the mine alleging that the cooperative had breached a compensation agreement struck weeks earlier to exploit it. The compensation agreement was aimed at quelling the unrest that erupted in May after locals accused the cooperative of operating in unauthorised areas – claims denied by the cooperative’s president, Marcelo Yupanqui.
  • Back in May 2013 the Morales government passed ‘law 367’, specifically aimed at stopping invasions of private and state-owned mines as part of efforts to restore investor confidence. The law followed the violent June 2012 clashes at the Colquiri mine, also in La Paz department, and other key mines like Mallku Khota in Potosí department.
  • The latest unrest comes as Bolivia’s key mining sector (along with the hydrocarbons sector) is already struggling with the fall in international commodity prices. Figures released on 10 August by the Instituto Boliviano de Comercio Exterior (IBCE), a private sector trade lobby, showed that mining exports totaled US$1.5bn in the first six months of 2015, a 23% fall compared to the same period last year. This result came despite a 7% increase in the volume of mineral exports, which failed to compensate for the fall in international prices.

Looking Ahead: The unrest once again ups the pressure on the government to tackle the problem of mine invasions. Carlos Soruco, the director of the administrative jurisdictional mining authority (Ajam), a dependency of the mining industry, yesterday told reporters that despite the introduction of ‘law 367’ there currently are currently at least 40 cases of mine invasions across the country.

Published in Andean

Development: On 17 August El Salvador’s attorney general’s office (FGR) reported that there had been 28 violent homicides across the country the previous day, with 11 people killed in shootouts between the security forces and the members of different local street gangs (maras).

Significance: The alarming level of homicides registered on Sunday serve as the latest evidence that El Salvador is entering into a worrying period of violence as the maras intensify their activities following last year’s breakdown of the ‘truce’ that they had observed since 2012 and the ensuing crackdown launched by the local security forces. This is a major problem for the government led by President Salvador Sánchez Cerén, which has been clear that it will not negotiate another truce with the maras and instead will pursue a hard-line public security policy against them.

  • According to the FGR report, mara members were involved in all of the violent deaths registered on Sunday. The FGR said that 17 people were killed across the country in attacks linked to gang activity. Meanwhile, five members of the Barrio 18 Revolucionarios gang were said to have been killed in the municipality of Panchimalco, San Salvador department, during a joint operation by the national police (PNC) and the armed forces (Faes) after a PNC-Faes patrol that entered the area was met with gunfire. In a similar incident, six suspected gang members were killed in Cojutepeque municipality, Cuscatlán department, in a shootout with another PNC-Faes unit.
  • According to the PNC, the operations were based on intelligence that maras were planning to attack police units in these areas. The FGR has reported that high-calibre weapons were seized from those gang members killed in the attack. According to the PNC – which emphasised that its officials only ever fired in in self-defence – while some officials were injured, there were no fatalities.
  • On the latest figures from the institute for legal medicine (IML), up to 12 August the number of homicides in El Salvador stood at 3,603 for this year. A total of 3,912 homicides were registered for the whole of 2014. With the current daily homicide average at 16.2 per day, it is likely that the 2015 homicide figure will be higher than last year.

Looking Ahead: The recent increase in planned attacks by the ‘maras’ on the security forces is fanning concerns that some gangs have now joined forces to fight the State in some areas which will further intensify the challenge for the Sánchez Cerén government.

Development: Following the 14 August flag raising ceremony at the newly restored US embassy in Cuba, a new steering committee of US and Cuban officials will begin work in September with a mandate to discuss human rights and other sensitive matters, as the two countries work towards the normalisation of bilateral relations.

Significance: The US Secretary of State, John Kerry, was clear in his speech in Havana that the US wants to see the evolution of Cuban policies on human rights, fundamental freedoms and political liberties. He called for “genuine democracy” on the island, in remarks reproduced on Cuban State media.

  • “My friends, it doesn’t take a GPS to realize that the road of mutual isolation and estrangement that the United States and Cuba were traveling was not the right one and that the time has come for us to move in a more promising direction. In the United States, that means recognizing that U.S. policy is not the anvil on which Cuba’s future will be forged. Decades of good intentions aside, the policies of the past have not led to a democratic transition in Cuba. It would be equally unrealistic to expect normalizing relations to have, in a short term, a transformational impact. After all, Cuba’s future is for Cubans to shape. Responsibility for the nature and quality of governance and accountability rests, as it should, not with any outside entity; but solely within the citizens of this country. But the leaders in Havana – and the Cuban people – should also know that the United States will always remain a champion of democratic principles and reforms… And indeed, we remain convinced the people of Cuba would be best served by genuine democracy, where people are free to choose their leaders, express their ideas, practice their faith; where the commitment to economic and social justice is realized more fully; where institutions are answerable to those they serve; and where civil society is independent and allowed to flourish”.
  • With the US government feeling that it has gone as far as it can go for now, it hopes that ‘people-to-people’ contacts, including commercial, will now rapidly accelerate, setting in motion a snowball dynamic that will promote internal political reform in Cuba and hasten the end of the US economic embargo on Cuba. That becomes more legally feasible after 2018, when President Raúl Castro has pledged to step down. The exit of the Castro family from political power is a key condition under the 1996 Helms Burton Act for the removal by the US Congress of the 1961 embargo.
  • Meanwhile, conservative US Republicans led by the Cuban-American senator and 2016 presidential hopeful Marco Rubio (FL) are ready to use the continued Cuban repression of political dissidents to blast the White House for its ‘wrong-headed’ policies and keep the anti-embargo lobby in the US Congress strong.

Looking Ahead: Kerry’s counterpart, Cuba’s foreign minister Bruno Rodríguez, replied to Kerry’s speech with pointed criticisms of the serious problems in the US with racism and police brutality. While the steering committee will meet in Havana on 10-11 September and then in Washington, expectations are being kept deliberately low. For now, the most visible progress in official bilateral relations will likely be limited to existing areas of mutual cooperation, including on anti-drug trafficking efforts, migration policy, civil aviation, disaster preparedness, marine environment protection, climate change and other ‘soft’ issues. Cuba’s demand for talks on the Guantánamo Naval Base are not on the table.

Thursday, 13 August 2015 09:48

OAS mediates Honduran dialogue amid protests

After 11 weeks of torchlit marches by protesters incensed by revelations of institutional corruption in Honduras, a dialogue process is tentatively underway. The protest movement, named after Spain’s indignados (outraged), is demanding the establishment of an anti-impunity commission along the lines of Guatemala’s Cicig, backed by the United Nations (UN), to root out this corruption, and is suspicious of a dialogue process proposed by President Juan Orlando Hernández on 23 June. Representatives of the indignados and civil society organisations did agree, however, to meet Luis Almagro, the secretary general of the Organization of American States (OAS), who visited Honduras on 7 August to broker talks.

Nationwide protests began after massive corruption came to light at the state social security institute (IHSS) and elsewhere last May. President Hernández opposes the creation of Cicih (as it would be called in Honduras). Instead, he appeared on national television to announce that he was creating an integral Honduran system against impunity and corruption (SIHCIC). He called for civil society, congress, and the attorney general’s office to help shape SIHCIC and “join our fight for dignity, transparency and the equal application of justice”. Hernández failed to provide any concrete details of the composition or remit of SIHCIC but it did not placate the indignados who insist that only an impartial, international body can combat corruption effectively in Honduras.

On 3 August congress rejected by 66 votes to 56 a proposal sponsored by the ousted former president Manuel Zelaya (2006-2009), the leader of the left-wing Libertad y Refundación (Libre), to call a plebiscite on whether Hernández should invite the UN to establish Cicih. The president of congress, Mauricio Oliva, urged Libre to join the dialogue process instead. Oliva said the Cicih proposal was “weak, unsubstantial and very superficial”, which sums up how the indignados view the SIHCIC proposal.

Given the growing polarisation in Honduras, the OAS is keen to get involved, having been caught off guard by the institutional brinkmanship that resulted in a coup in 2009. Hernández received Almagro who, promising to “knock on all doors and enter those that are opened,” later met Zelaya and the indignados. Almagro, who was accompanied by veteran Chilean diplomat John Biehl del Río, designated by the OAS to facilitate the dialogue process, said the OAS would later form an agenda for talks with specific goals and a timeframe.

Published in Postscript
Wednesday, 12 August 2015 14:29

Chile’s exasperation with Bolivia

Chile’s foreign minister, Heraldo Muñoz, on 4 August said that “everything has a limit”, and accused the Bolivian government led by President Evo Morales of making “unjustified accusations”.

Muñoz was responding to comments made by Morales in an interview with the Bolivian national daily El Deber. The radical left-wing Bolivian president said that he was considering expelling the Chilean consul to Bolivia, Milenko Skoknic, whom he accused of seeking to promote “instability” by travelling around the country to meet opposition political leaders.

President Morales levelled his accusation just a day after announcing that Bolivia’s foreign ministry would send the Chilean government a formal proposal to re-establish relations (severed in 1978 over Bolivia’s long standing claim to sovereign access to the Pacific Ocean, lost to Chile in the War of the Pacific [1879-1883]), with Pope Francis to act as guarantor. The latest spat over Skoknic would appear to put paid to any hopes of a rapprochement. In a press release, Chile’s foreign ministry described Morales’s accusations as a “media campaign”, and said it had no intention of removing Skoknic, in the post since 2014, noting that the diplomat has the total freedom to “meet whoever he wants.”

Morales’s call to re-establish relations follows the Pope’s visit to Bolivia in July, wheN he urged the two neighbours to work on their relations, “in order to avoid conflicts between brother countries and [to] advance frank and open dialogue about their problems”. The Pope’s remarks were hailed as a victory by the Morales government.

In 2013 Bolivia brought a case against Chile before the International Court of Justice (ICJ) at The Hague over its coastal claim. Bolivia insists that it is not asking the ICJ to review a 1904 peace treaty between the two countries but rather is demanding that the court order Chile to negotiate with Bolivia over the matter, citing the fact that on various occasions in the past Chile has shown a willingness to negotiate Bolivia’s demand for an outlet to the Pacific.

  • In 2015, the Chilean government led by President Michelle Bachelet issued a formal challenge to the ICJ’s jurisdiction, calling on the court to “adjudge and declare that the claim brought by Bolivia against Chile is not within the [its] jurisdiction”, arguing that the court does not have the authority to rule on bilateral treaties signed between two countries, such as the 1904 treaty.
Published in Postscript

Development: On 11 August Mexico’s foreign ministry (SRE) confirmed that the country’s new ambassador to the US will be Miguel Basáñez Ebergenyi, an academic with close political links to President Enrique Peña Nieto.

Significance: Surprisingly for such a key role, the position of Mexican ambassador to the US has been vacant for five months since March, when the incumbent, Eduardo Medina Mora, was appointed to sit on Mexico’s supreme court. Basáñez is an academic with close political links to the ‘Grupo Atlacomulco’ (a loose association within the ruling Partido Revolucionario Institucional [PRI ] named after the Peña Nieto’s home town in Estado de México). One of the new ambassador’s priorities will be to try and repair the damage caused to bilateral relations by last month’s prison escape by drug kingpin Joaquín ‘El Chapo’ Guzmán from a Mexican maximum security prison.

  • Foreign Minister José Antonio Meade said Basáñez has a “great political and academic record” and was “ideal to represent us in Washington”. An SRE press release added that his job would be to “consolidate bilateral relations and position Mexico as a country undergoing transformation”. In the 1980s Basáñez held various positions in the Estado de México (Edomex) working as state prosecutor and private secretary to former governor Alfredo del Mazo (1981-1986), a second cousin and mentor to President Peña Nieto during his early career (Peña Nieto went on to become governor of Edomex in 2005-2011 before successfully running for the presidency in 2012).
  • Basáñez is credited with introducing opinion polling in Mexico; as an academic he has been awarded degrees from a range of universities including the Universidad Autónoma de México (Unam), the University of Warwick and the London School of Economics (LSE). Prior to his appointment he was working as an adjunct professor at Tufts University Fletcher School of Law and Diplomacy in the US.
  • The job will be difficult. Mexico’s reputation has taken a serious blow in the US, following last month’s prison escape by El Chapo. According to a recent report in Mexican daily Reforma, US-Mexico collaboration over arms trafficking has deteriorated because of a lack of trust. US officials have not hidden their concern over the ability of El Chapo and other drug gang leaders to infiltrate and bribe Mexican security forces. With the US presidential elections looming in 2016 some candidates, like Republican hopeful Donald Trump, are taking what some would describe as an aggressive anti-Mexican line on immigration and security issues. The US remains of critical importance to Mexico: bilateral trade is worth US$534bn and an estimated 11.4m Mexicans live north of the border.

Looking Ahead: While many acknowledge the importance of the new ambassador’s political and academic credentials, some have questioned his lack of diplomatic experience. However, Andrew Selee of the US-based Wilson Centre says that the aim of his appointment is to give Mexico “a fresh and trustworthy face in bilateral relations with the US”.

Published in Mexico

Development: On 10 August Ecuador’s main indigenous organisation, Conaie, announced a nationwide “uprising” against the government led by President Rafael Correa.

Significance: Uprisings by Ecuador’s indigenous have toppled governments in the past. President Correa is more popular than his predecessors who suffered this fate and his strategy of divide and conquer has successfully emasculated the indigenous movement, but his approval rating has fallen in recent months as falling international oil prices begin to bite and an unpopular inheritance tax reform has spawned protests. Correa has been dismissive of the Conaie march which departed from the southernmost province of Zamora Chinchipe on 2 August and is due to arrive in Quito tomorrow (12 August) ahead of a general strike being staged the following day by the umbrella trade union Frente Unitario de Trabajadores (FUT). But Correa remains wary and has urged supporters of the ruling Alianza País (AP) to gather to express their backing for his ‘Citizens’ Revolution’.

  • The president of Conaie, Jorge Herrera, addressing marchers from Latacunga, the provincial capital of Cotopaxi province, drew up a list of 10 demands, including archiving a constitutional reform project that would allow indefinite re-election; annulling the ‘water law’ governing access to water and responsible management of water resources; providing free university education; ending negotiations with the European Union (EU) on a free trade agreement; and terminating large-scale mining activities.
  • Writing on Facebook, Correa said that this would be “a crucial week for the country”, pitting the country’s past of strikes and protests against the future of unity and progress offered by the ‘Citizens’ Revolution’. Correa accused Conaie of serving “the destabilising interests of right-wing groups”, something Conaie vehemently denies, denouncing Correa for stigmatising legitimate protests. So far AP supporters have provided the greatest disruption, filling a square in Latacunga where the indigenous marchers had intended to convene, and forcing them to find an alternative venue. Conaie denounced on Facebook “an enormous and disproportionate presence of anti-riot police”.

Looking Ahead: Conaie insists it will not leave Quito “empty-handed”. But Correa is in no mood to negotiate. He said the march would be “a massive failure” and ruled out dealing with “the indigenous elite”.

Published in Andean

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