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Lumps of Coal

On March 12, 2001, the night two labor leaders representing miners at the Drummond Coal Company's huge La Loma mine in Colombia were executed by paramilitaries, Daniel M. Kovalik, a senior lawyer for the United Steel Workers, was in Bogotá meeting with other unionists. After the facts trickled into the capital--pointing to possible complicity on the part of the Alabama-based firm--Kovalik visited the U.S. Embassy, where he was informed by the State Department official charged with human rights, that investigating the activities of U.S. companies was not part of her brief. Maybe it should be.

Our foreign policy is already highly commercially-minded. Multinationals are an integral part of our interests abroad, more so if they are in the vital energy sector, or play a role in stabilizing allies such as Colombia. The State Department's top legal adviser at the time, William H. Taft IV, said as much in 2004, when asked to comment in on an Alien Tort Claims Act (passed in 1789) lawsuit against Occidental Petroleum Corp, the same statute that provided a basis for a more recent case against Drummond. He wrote that the lawsuit could result in "reduced U.S. investment, particularly in the oil and other extractive industries, [which] could harm Colombia's economy in several ways... downturns in Colombia's economic could have harmful consequences for the United States and our interests in Colombia and the Andean region."

Drummond $1 billion-plus investment has helped make coal Colombia's second most valuable (legal) export. Its production of some 23.8 million metric tons accounts for almost a third of Colombia's total coal exports and the company is looking to double this output by 2010. Last year the company netted $110 million on exports worth more than $1.1 billion; royalty and tax payments to Bogotá's coffers should be significant.

Another part of the U.S.'s interest in Colombia is asphyxiating armed groups of both the left and the right. But companies, especially natural resource-based firms, are inherently problematic, providing invaluable oxygen to the domestic struggle through the enrichment opportunities these capital-intensive investments afford. In Colombia, as has been widely reported, the 184-mile-long oil pipeline Germany's Mannesmann AG built in the mid-1980s almost single-handedly revive a moribund ELN (National Liberation Army) through payments the company made while building it.

The recent case of Chiquita, which agreed to a $25 million Justice Department fine for making payments over several years to right-wing paramilitaries, is the most glaring recent example of a U.S. firm essentially 'taking sides' in a civil conflict. The company says it was the victim of extortion but Colombia's Prosecutor-General, Mario Iguaran, denounced it as a "criminal relationship... money and arms and, in exchange, the bloody pacification of [banana-growing area of] Uraba." There are accounts of Chiquita's workers unloading arms destined for the AUC at its private dock in Turbo.

In Drummond's case the facts are more ambiguous, and the company has admitted no wrongdoing. Drummond chose to go to trial to fight the charges of complicity in the killing of the union leaders, and was cleared by a Birmingham jury. Although there was strong testimony that Drummond cooperated with local paramilitaries--and there is no dispute that they carried out the killing--jurors were not convinced that Drummond directed the murders. Drummond has since taken out prominent ads in Alabama and Colombian papers declaring the verdict completely exonerative. But the trial's reprieve may be short-lived.

There appear to be strong grounds for appeal, including the judge's effective exclusion (by agreeing to take overseas testimony--issuing "letters rogatory"--without sufficient time for them to be fulfilled) of several key eyewitnesses. Strongest among them is Rafael Garcia, a former information technology chief of the country's security service (DAS, roughly equivalent to the FBI), who has sworn that he saw Drummond's chief local representative, Augusto Jimenez, pass money to the paramilitaries. Family-owned Drummond refused to speak about the case, but a Bogotá-based communication adviser to the company ridicules the idea that Jimenez, a Harvard-educated lawyer would be so stupid as to give money to a paramilitary and discuss the payment's purpose in front of a group of people. Then again, Jimenez didn't seem to be demonstrating Crimson pedigree when, according to testimony from a union member and a former Drummond supervisor, he twice warned unionists, "The fish that opens its mouth dies"--a phrase Jimenez concedes he uses but couldn't recall uttering at these labor meetings.

This was after the killings of the two labor leaders, who had warned the company many times of just such an attack. They were stopped by paramilitaries as they were driven from the mine to the dusty nearby town of La Loma. Drummond had rebuffed their pleas to be allowed to stay on the 25,000-acre mine property, made more urgently after flyers appeared calling their local a "guerrilla union"--in the local context, a virtual death sentence. The paramilitaries boarded the buses and called for them by name, as the ones who "had a problem with Drummond." Union president Valmore Lacarno was executed with bullets to the brain in front of the workers; Victor Orcasita, his vice-president, was bundled off, only to reappear hours later, tortured and dead. A successor, Gustavo Soler, was similarly murdered soon afterwards; bringing total union members killed at Drummond to six since they started in the early 1990s.

Without any smoking-gun testimony, plaintiffs tried to establish that Drummond aided and abetted the crime. Witnesses testified to Drummond's assistance to the paramilitaries, and with the company "all the while knowing that the paramilitaries have a propensity to attack trade unionists. You can't give help to a group who you know is going to do that and not be responsible when they do it," explains Kovalik. "It's like having a pit bull that you know may bite a kid. When he does, and you've done nothing to prevent it, well, gee, you're going to get sued for what that pitbull did."

Edwin Guzman, a former Colombian military officer, testified to the close cooperation between Drummond and the local paramilitaries, explaining that Drummond essentially enjoyed the protection jointly provided by La Popa Battalion of the Colombia army and the AUC paramilitaries, who were more effective because they did not have the same restraints the army had. A single paramilitary group, known as Adan Rojas, managed to keep three different leftist forces--FARC, EPL, ELN--from attacking the railroad on which the company hauls coal to the coast. According to Salvatore Mancuso, a senior paramilitary member now in jail, coal companies were paying $70,000 a month for rail protection, with the biggest contribution from Drummond. The company denies any cooperation with the paramilitaries or that it threatened union members.

Fortunately, the U.S. is expected next year to start ramping up funds earmarked for Colombia's prosecutors and judiciary, a long-overdue restructuring of aid that is still lopsidedly devoted (75 percent) to drug interdiction and to the military, which, according to Human Rights Watch, is itself is often deemed to be collaborating with the paramilitaries. The International Crisis Group advocates a more balanced 50-50 ratio of money going to social programs. But as Maria McFarland of Human Rights Watch notes, there have been similar human-rights promises before, such as special prosecutions units devoted to solving the murders of journalists--and yet Colombia remains one of the most dangerous countries in the world for reporters.

The public trial, and the possibility of a retrial, does not appear to have changed Drummond's m.o. at the La Loma mine. United Steelworkers President Leo Gerard wrote to Drummond on August 23 to complain about the suspension for 30 days of five union officials--including Raul Sosa, who attended the trial in Alabama--for entirely lawful activities which "may have been in retaliation" for the lawsuit. Estivenson Avila, the current president of the local mining union (Sintramienergetica), says the company continues to be reckless about workers' health, safety, and general well-being. Driver truckers, for instance, suffer spinal cord injuries when huge boulders, some as large as 15 tons, are dumped into the vehicles. The company refuses to break the boulders up because it would sacrifice efficiency. Workers are not able to see the company doctor until their seven-day shift is finished and then he tends to discount work-related injuries. When workers finish their 12-hour shift and return to boarding houses there is often no water or electricity to power fans. (The company declined numerous requests to comment.) This is hardly model corporate citizenship for a leading foreign investor--especially for a company like Drummond whose very future is dependent on its coal reserves in Colombia; the company has only one small mine still in operation in Alabama--and company executives are beginning to learn the hard way why making nice is better business. Despite the verdict, the trial severely dented the company's reputation inside, local journalists say. The negative publicity has also drawn more official attention to the company, especially from the Colombia Comptroller-General's office, which recently won two cases against the company--one resulting in Drummond agreeing to pay retroactive royalties of $39.8 million. Meanwhile, in Alabama, an appeal in the Drummond case was filed by the plaintiffs on August 27, the beginning of a process that is expected to take at least another year.

Ultimately, the U.S. government needs to ensure that American firms resist 'taking sides'--and to punish them if they don't. Not to, undermines wider U.S. policy interests. U.S. companies' collusions with paramilitaries help keep Colombia the most dangerous country in the world for trade unionists; it's responsible for roughly 70 percent of the world's annual toll of killed unionists. Perversely, a high percentage of these are teachers, who double as local leaders. Of the 2,200 labor murders in Colombia since 1991, there have been only 34 convictions, according to Colombian government statistics. It's a record that has stiffened U.S. labor's--and so far Congress's--opposition to the proposed Free Trade Agreement with Colombia. As a letter written to Congress in June and co-signed by 13 U.S. union leaders said, "Approval of a free trade agreement where more trade unionists continue to be killed than in the rest of the world combined and where murders of trade unionists continue to enjoy a 98% rate of impunity would make a mockery of any U.S. trade policy commitment on worker rights." The Bush Administration will try once again to pass the agreement this fall.

By Ken Stier