Bolivia expels Brazilian steel group
by Hal Weitzman in Lima and Jonathan Wheatley in São Paulo
Bolivia has ordered a Brazilian steelmaker to leave the country, the first expulsion of a foreign investor since Evo Morales, the leftwing president, took office in January.
The government's action is intended to settle a power struggle between the Morales administration in La Paz and local interests in the south-eastern Amazon region that resulted in the kidnapping of three cabinet ministers and the closure of the international border.
The government said EBX had failed to secure environmental permission to build a $148m (€120m, £83m) pig-iron plant at Puerto Suarez, about 1,120km south-east of La Paz on the border with Brazil. It also said the plant violated a ban on foreign companies operating within 50km of Bolivia's borders.
"The decision is firm. A company that does not respect the law has to leave," said Vice-President Álvaro García.
"EBX has not, and they are also encouraging conflict between Bolivians," he added. EBX denied breaking any laws, claiming its Bolivian subsidiary had complied with all regulations, including those covering investments in a tax-free zone near the border designed for exporting companies.
It said the Bolivian government had distorted the facts, refused to discuss the project constructively and "denied us access to the procedures necessary to obtaining an environmental licence".
It also condemned the brief kidnapping of three ministers by local people protesting at the threat to jobs posed by government opposition to the plant.
Had the pig-iron project gone ahead successfully, EBX said it would have been followed by a further $120m investment to build a steel plant, providing 620 direct and 5,000 indirect jobs.
The dispute comes as the government continues to negotiate with international investors in the gas sector, the second largest in the region.
Relations have deteriorated with energy groups such as Petrobras, which called off last month a planned $5bn investment in Bolivia, and Repsol, which is being investigated for oil smuggling.
By attempting to have the last word on the EBX affair, the government hopes to send a message to foreign investors that it is not afraid to take a hard line, and to local opponents that it will not cave in to protest.
The EBX dispute has brought to the boil a long-simmering dispute between local leaders and La Paz. The plant is located in the department of Santa Cruz, a stronghold of Bolivia's right wing and a region in which Mr Morales does not have strong support.
Local civic committees have called an indefinite strike and set up roadblocks until EBX is granted permission to operate.
They called on Mr Morales "to govern for all Bolivians" and said the government had "left hundreds of Bolivians without jobs, without employment and livelihood for their families, and has generated an economic depression in this region".
Bolivia has ordered a Brazilian steelmaker to leave the country, the first expulsion of a foreign investor since Evo Morales, the leftwing president, took office in January.
The government's action is intended to settle a power struggle between the Morales administration in La Paz and local interests in the south-eastern Amazon region that resulted in the kidnapping of three cabinet ministers and the closure of the international border.
The government said EBX had failed to secure environmental permission to build a $148m (€120m, £83m) pig-iron plant at Puerto Suarez, about 1,120km south-east of La Paz on the border with Brazil. It also said the plant violated a ban on foreign companies operating within 50km of Bolivia's borders.
"The decision is firm. A company that does not respect the law has to leave," said Vice-President Álvaro García.
"EBX has not, and they are also encouraging conflict between Bolivians," he added. EBX denied breaking any laws, claiming its Bolivian subsidiary had complied with all regulations, including those covering investments in a tax-free zone near the border designed for exporting companies.
It said the Bolivian government had distorted the facts, refused to discuss the project constructively and "denied us access to the procedures necessary to obtaining an environmental licence".
It also condemned the brief kidnapping of three ministers by local people protesting at the threat to jobs posed by government opposition to the plant.
Had the pig-iron project gone ahead successfully, EBX said it would have been followed by a further $120m investment to build a steel plant, providing 620 direct and 5,000 indirect jobs.
The dispute comes as the government continues to negotiate with international investors in the gas sector, the second largest in the region.
Relations have deteriorated with energy groups such as Petrobras, which called off last month a planned $5bn investment in Bolivia, and Repsol, which is being investigated for oil smuggling.
By attempting to have the last word on the EBX affair, the government hopes to send a message to foreign investors that it is not afraid to take a hard line, and to local opponents that it will not cave in to protest.
The EBX dispute has brought to the boil a long-simmering dispute between local leaders and La Paz. The plant is located in the department of Santa Cruz, a stronghold of Bolivia's right wing and a region in which Mr Morales does not have strong support.
Local civic committees have called an indefinite strike and set up roadblocks until EBX is granted permission to operate.
They called on Mr Morales "to govern for all Bolivians" and said the government had "left hundreds of Bolivians without jobs, without employment and livelihood for their families, and has generated an economic depression in this region".
posted by Alice at
Saturday, April 22, 2006
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