Colombia stands up to Big Coal

Colombia mounted pressure on U.S.-based coal miner Drummond as the company, the Latin American country's No. 2 coal producer, continues the outlawed practice of loading ships by crane.

Posted February 7, 2014 by

Colombia’s government is making a big show of prosecuting US coal producer Drummond for a series of environmental blunders, says our correspondent in Medellín. The case is reverberating all the way to Europe, where coal prices spiked on Jan. 9 when the government suspended Drummond’s shipping activities.

Some see the developments as a sign the government is taking a tougher environmental stance with dirty coal. Last month the environment minister also promised to bring forward legislation requiring environmental permits for mining exploration.

“This is one of the few times the Colombian government has put its foot down,” says our correspondent. “It’s a very significant.”

But the case is unlikely to presage any significant legal or environmental troubles ahead for Big Coal in the South American country, which is eager for the industry’s foreign direct investment, our correspondent adds. The spotlight may have more to do with Drummond’s shady history and President Juan Manuel Santos’s plans to stand for reelection in the May election.

“I’m skeptical if this represents real change,” says our correspondent. “Given the Colombian government’s relationship to the sector, I would be surprised if it continued to take a hard line.”

The government’s chief prosecutor announced last week that six Drummond employees will be charged with environmental damages for spilling some 200 metric tons of coal into the bay of Santa Marta in January 2013, for which the company was already fined $3.6 million. The incident was exposed by a Colombian photojournalist, which only increased the story’s media appeal.

On top of that, last month the government hit Drummond with $100 million in allegedly unpaid back taxes and also ordered the Alabama-based company to suspend all coal-loading operations until it upgraded its facilities to meet new environmental standards that kicked in Jan. 1. The new law requires coal producers to build direct ship-loading facilities that pour coal directly into vessels and reduce the pollution caused by the use of cranes and barges.

In Colombia, the incidents have resonated with the public – and gained traction in the press – in part because of Drummond’s shady history in allegedly hiring right-wing paramilitary militias to silence opponents. A year ago a Colombian trial judge convicted a former Drummond contractor for masterminding the 2001 killing of two union leaders, and in May a federal civil lawsuit was filed in the US alleging the company paid millions of dollars to a paramilitary terrorist group responsible for the deaths of 67 people.[Full story-MGO]