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Latin America News Round-up
August 2, 2012
Ecuador Wants to Avoid Assange's Extradition to Sweden
For the latest news and developments on Haiti, please see CEPR's blog, "Haiti: Relief and Reconstruction Watch."
For archives of past Round-ups, please click here.
Brazil and Southern Cone
Brazil corruption trial from Lula era set to start. BBC
Chevron, Transocean must stop drilling after spill in Brazil. AP
Argentina automakers, economy hurt by drop in exports to Brazil. Reuters
Argentina court case highlights use of herbicides. BBC
Argentina's YPF to seek Chinese partners for shale E&P. Platts
Chile bans marketing of toys in children's food. AP
Paraguay urges OAS to take a position on the country’s situation. Mercopress
Northern Andean Region
Venezuela's opposition wants to scrap preferential oil deals. Reuters
GM wants to double car output in Venezuela – Chavez. Reuters
Colombia, Venezuela will 'continue to cooperate' to fight crime. Colombia Reports
Colombia president moves to restore approval rating. Los Angeles Times
Colombian General Motors employees on hunger strike over 'labor rights violations'. Colombia Reports
Western Andean Region
Ecuador wants to avoid Assange's extradition to Sweden. Reuters
Julian Assange is right to fear US prosecution. The Guardian
Catholic Church and University in Peru Fight Over Name. New York Times
The next December solstice celebration in Bolivia will have Coca Cola after all. Mercopress
Mexico, Central America and Caribbean
Drug War Lures Mexico Firms to Jails as Foreign Rivals Stay Away. Bloomberg
Mexico Drug War Memorial to be Placed Next to Military Base, Drawing Criticism. Fox News Latino
Honduras looks to Hong Kong as a model for economic revitalization. PRI’s The World
Media Repression in Honduras Speaks to U.S. Congress, but is anyone Listening? Real News Network
Honduras institutes public gun ban for violence-hit region. Reuters
Guatemala sued over activist’s death. AFP
Brazil and Southern Cone [contents]
Brazil corruption trial from Lula era set to start
BBC. August 2, 2012
Brazil's Supreme Court is set to begin the trial of 38 people in a corruption case that rocked the government of the then president Lula, in 2005.
The defendants are accused of involvement in a scheme that used public funds to pay coalition partners to support the government's agenda.
Among those accused are former leading members of Lula's Workers' Party (PT). All reject the charges.
At the time, Lula denied knowledge of the scheme and said he felt betrayed.
The case, already dubbed the "trial of the century" by the Brazilian media, involves 38 former members of the PT and other political parties, government officials, business people and bankers.
They face a range of charges including money-laundering, corruption, and accepting bribes.
It will be heard by the 11 Supreme Court justices sitting in Brasilia.
Ahead of the proceedings, the Attorney General Roberto Gurgel sent the judges a note describing the case as "the most daring and outrageous corruption scheme and embezzlement of public funds ever seen in Brazil".
Reputation
The scandal was known as the "mensalao" or "big monthly allowance".
Luiz Inacio Lula da Silva in a file photo from 2006 President Lula was re-elected a year after the scandal surfaced
Members of the PT are alleged to have paid political allies some $10,000 (£6,400) each every month to ensure they voted through the government's agenda in Congress.
Prosecutors allege that the money was diverted from the advertising budgets of state-owned companies.
The scandal broke in 2005 during the first term of President Luiz Inacio Lula da Silva, leading to the downfall of several senior members of the government.
These included Jose Dirceu, who was Lula's chief of staff. He was replaced by Dilma Rousseff, who went on to be elected as president in 2010. She is not implicated in the case.
Mr Dirceu's lawyer has said there was no "so-called vote-buying".
"There is no proof of any use of public money. Dozens of witnesses categorically say that Dirceu had no knowledge of the loans and (money) transfers)," Jose Luiz Oliveira Lima told the newspaper O Globo.
The trial, which is expected to last a month, takes place just a few weeks before important municipal elections.
Analysts say it could tarnish the reputation of Lula, who served as president from 2003 to 2010, and who remains hugely popular in Brazil.
But while the PT and its allies are in the dock, the alleged corrupt practices cast a negative light on the whole political establishment, correspondents say.
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Chevron, Transocean must stop drilling after spill in Brazil
Stan Lehman. AP. August 1, 2012
SAO PAULO – A federal court has given Chevron and driller Transocean 30 days to suspend all petroleum drilling and transportation operations in Brazil until investigations are completed into two oil spills off the coast of Rio de Janeiro.
The court says in a statement posted Wednesday on its website that each company will be fined 500 million reals, or about $244 million, for each day they fail to comply with the suspension.
About 155,000 gallons of oil crude began seeping from cracks in the ocean floor at the site of a Chevron appraisal well in November. Chevron has placed the amount of oil that leaked at 110,000 gallons.
Two weeks later, the National Petroleum Agency said the seepage was under control. But in March, oil again started leaking and Chevron voluntarily suspended production in the field.
"Two environmental accidents in the space of just four months and the lack of equipment needed to identify the origin of the leaks and contain them, shows that the two companies do not have the conditions necessary to operate the wells in an environmentally safe manner," Judge Ricardo Perlingeiro said in his ruling.
Chevron said in an e-mailed statement it planned to appeal the court's decision.
"Chevron Brasil is confident that at all times it acted diligently and appropriately," the statement said, adding that the company's "response to the incident was implemented according to the law, industry standards and in a timely manner. The source of the leak was contained in four days."
Petroleum agency head Magda Chambriard said last month that the November spill involved about 25 safety infractions for which Chevron will be fined up to 50 million reals, or about $25 million, the maximum under Brazilian law.
Chevron has said it underestimated the pressure in an underwater reservoir, causing crude to rush up a bore hole and escape into the surrounding seabed about 230 miles off Rio de Janeiro. The oil seeped from at least seven narrow fissures on the ocean floor, all within 160 feet of the wellhead. No oil reached shore.
According to the petroleum agency, Chevron "was not able to correctly interpret the geology and local fluid dynamics" of the reservoir when the leak occurred. It blamed Chevron's water-injection practices for the reservoir pressure.
Earlier this year, Brazilian authorities banned Chevron from any new drilling or water-injection activities at working wells in the country.
In April, a Brazilian prosecutor filed an $11 billion lawsuit against Chevron and Switzerland-based Transocean for both the leak in November and the one in March, alleging they caused environmental damage. Prosecutors also asked that Chevron be temporarily prohibited from sending any profits made in Brazil outside the country.
A month before that lawsuit, federal prosecutors filed criminal charges against 17 Chevron and Transocean executives accusing them of environmental crimes, of misleading the petroleum agency about safety plans and of not providing accurate information after the spill. The charges carry a maximum penalty of 31 years in prison.
Judges must still decide if the cases will go to trial, which would be a lengthy process given the number of defendants, the case's complexity and the Brazilian legal system's room for numerous appeals.
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Argentina automakers, economy hurt by drop in exports to Brazil
Magdalena Morales. Reuters. August 1, 2012
BUENOS AIRES, Aug 1 (Reuters) - Argentina's automobile exports this year will drop the most in a decade on a percentage basis, deepening the country's economic slowdown despite an expected rebound in Brazilian demand in the coming months.
Exports to Brazil account for about half of Argentina's automobile output -- which has been a key driver of industrial production growth during most of the last nine years.
Brazilian demand has shrunk due to sluggish economic conditions, however, and improved prospects later this year will not be enough to stem losses in output and sales in 2012 as a whole, analysts and industry sources say.
"We're forecasting a 17 percent year-on-year decline in the automobile industry, which fell 15 percent in the first half of the year," said Inaki Alvarez, an economic analyst at Estudio Bein & Asociados consulting firm.
This decline will shave 0.6 percentage points off Argentine economic growth this year, which Bein & Asociados is estimating at 2 percent, do wn from 8.9 percent in 2011.
Some other private analysts say Argentina's economy will grow even less or shrink this year, hit by falling external demand, high inflation, a smaller grains crop and state currency and import curbs. They also say widely questioned official growth data will not fully reflect the slowdown.
In the first half of this year, auto exports plunged 28 percent from the same period of 2011, according to data released by private carmaker group ADEFA.
But as Brazil's stock of vehicles declines, demand there is expected to pick up. Sources at the Argentine unit of Renault , which had to lay off workers this year due to reduced demand, and at PSA Peugeot Citroen in Argentina confirmed this.
About 80 percent of Argentina's auto sales abroad go to Brazil. Mexico was another big regional buyer but it accounted for just 2.5 percent of Argentine exports in the first half of this year, and the Argentine government pulled out of an auto trade pact with the country in June, sparking reprisals.
Brazilian Finance Minister Guido Mantega said auto sales in his country were on course for a July record, which he interpreted as a sign the economy would shake off stagnation and accelerate during the second half of 2012.
Argentine consulting firm Abeceb forecast that auto exports will sink 23 percent in 2012, marking the biggest decline since 2002, when sales abroad plunged 30 percent amid a crippling economic crisis.
"Brazilian demand is starting to recover but (sales) will still end up negative," said Maximiliano Scarlan, an analyst at Abeceb.
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Argentina court case highlights use of herbicides
Vladimir Hernandez. BBC. August 2, 2012
Susana Marquez has had 17 miscarriages. Her only daughter, Lourdes, who is seven, has a serious heart condition that could affect her growth.
Ms Marquez, who lives in Argentina's central farming belt, is adamant their health problems are the result of living close to a soybean field that since 2001 has been regularly sprayed with chemicals.
"There was one year, before Lourdes was born, that I lost my baby. Later I found out that five other women on my street, who were also pregnant, had also suffered a miscarriage," she says.
Ms Marquez and other local residents have long campaigned for their arguments to be heard.
Now, a trial currently taking place could result in a key ruling about the use of herbicides and pesticides in Argentina, whose economy is heavily dependent on agricultural commodities.
Two farmers and a pilot are on trial in Ms Marquez's home town Ituzaingo Anexo, on the outskirts of Cordoba, accused of violating local regulations that prohibited the use of chemicals near residential areas.
The court's verdict is expected on Friday. If found guilty, the defendants, who deny the charges, could face up to 10 years in prison.
"This is the first trial in Latin America that has reviewed the use of farm chemicals. We're trying to prove that there has been illegal pollution in this community," says public prosecutor Carlos Matheu.
Defence lawyers say the evidence against their clients is weak.
If a guilty verdict is returned, Mr Matheu says he will ask the government agency responsible for regulating the use of chemicals to review how it classifies their toxicity.
Such a move could reshape the agriculture sector in Argentina, the world's third biggest exporter of soy.
The outcome of the case is also likely to attract interest in neighbouring Brazil and Paraguay, also important commodity producers.
Agriculture has been behind Argentina's economic growth in the past decade - and the sector is heavily dependent on herbicides and pesticides to boost productivity.
map
"It is true that this trial could set a precedent that will change the use of farm chemicals here. But this is only a stepping stone. The real aim of this legal process is to prove that farm chemicals constitute a hazard for people," says Mr Matheu.
The question of the health effects is being considered in a separate judicial inquiry.
The inquiry is analysing whether there is enough evidence to try the same defendants for using farm chemicals that could have contributed to health problems and deaths in Ituzaingo Anexo.
The prosecution has included several scientific documents that support the argument that there is a link.
These include a study by Andres Carrasco, director of the molecular embryology department at Buenos Aires University, which was published in 2010 in the US journal Chemical Research in Toxicology.
If the inquiry, which is set to take several months, deems there is sufficient evidence, a trial will go ahead.
The Chamber of Agricultural Public Health and Fertilisers (Casafe), which represents companies that sell farm chemicals in Argentina, says herbicides and pesticides used in the country meet international safety standards.
"We are convinced of the safety of our products, when something goes wrong it's because they have not been used properly and therefore we invest a lot of time training farmers," says Juan Cruz Jaime, director of Casafe.
"The World Health Organization classifies the toxicity in farm chemicals in colours - red being the most dangerous and green the most environmentally friendly."
Some 83% of the herbicides and pesticides used in Argentina are classified as green, including the most common, glyphosate, Mr Cruz Jaime says.
Campaigning
Among the evidence being presented to the inquiry is a study of 140 randomly chosen children in Ituzaingo Anexo.
The results showed that 80% of the children studied, including Ms Marquez's daughter Lourdes, carried traces of two farm chemicals in her blood.
The judicial inquiry is looking at whether these findings are statistically significant.
Ms Marquez is in no doubt.
"If she's got chemicals in her blood with only five years in this place, how much do I have after 39 years here?" she says.
Soybean field in Argentina Argentina is a major exporter of agricultural products
The inquiry follows campaigning by a community organisation called Mothers of Ituzaingo Anexo, to which Ms Marquez belongs.
Their work began in 2001 when a woman called Sofia Gatica started her own investigation after her newly born daughter died from a rare disease.
"Sofia soon found out that other people in the community had also suffered unusual diseases," says Maria Godoy, a member of Madres de Ituzaingo Anexo.
Ms Gatica took her findings to the authorities. In 2008, the local government took legal action against the farmers who owned the nearby fields.
Ms Gatica, whose work was recognised with the 2012 Goldman Environmental Prize, one of the highest awards for grassroots activism, was one of those called to give evidence at the trial in Ituzaingo Anexo.
But lawyer Sebastian Becerra Ferrer, who is defending one of the farmers in the case, stresses that the trial is about the presumed violation of local regulations by his client, not the health issues being investigated separately.
He refers to the possible impact of toxic waste from a power station in this community, a factor which is being examined by the court.
"This is a place where there have been other environment hazards that make it difficult to establish if the farm chemicals are solely responsible," says Mr Becerra.
"In any case I don't think a small provincial court is the ideal place to hold a debate on the future of farm chemicals in Argentina.
"This should be done in a wider debate, in Congress, where we could hear the views of numerous scientists on this matter."
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Argentina's YPF to seek Chinese partners for shale E&P
Platts. August 1, 2012
Argentina's state-run oil company YPF plans to seek Chinese partners for developing large shale resources in the southwest of the country, a government official said Wednesday.
YPF general manager Miguel Galuccio will join a government-led mission to China in September, Argentine Planning Minister Julio De Vido said.
He spoke after meeting in Buenos Aires with Zhang Xiaoqiang, the vice director of the Chinese National Development and Reform Commission.
Galuccio participated in the meeting along with De Vido, who is the government's chief energy strategist, and Deputy Economy Minister and YPF director Axel Kicillof.
The visit will allow the Argentine government to move forward "with a series of projects," De Vido said after the meeting in a recorded interview posted on a government website.
These include plans to secure "the participation of Chinese oil companies in the exploration and exploitation of the Vaca Muerta formation in Neuquen, where there are important reserves of gas and oil, in association, of course, with our flagship company YPF," De Vido said.
Argentine President Cristina Fernandez de Kirchner in June met in Buenos Aires with Chinese Premier Wen Jiabao, when both agreed that their countries would work together on potential projects in nuclear energy, hydropower and the production of fertilizers and hydrocarbons, among other things.
YPF, which came under state control in May after the expropriation of 51% of the shares from Spain's Repsol, is seeking financing for a plan to invest $35 billion through 2017.
The company wants to arrest a 6% annual decline in oil and gas production so that output grows by the same pace.
Galuccio has said the focus of the investment will be on squeezing out more from mature fields and developing shale resources, thought to be the third-largest for gas in the world after the US and China. Most of the shale potential is thought to be in Vaca Muerta in the southwestern Neuquen Basin, the country's biggest source of conventional gas and second for crude.
YPF also is sounding out Chevron, ConocoPhillips, ExxonMobil and others as potential partners, and this week inked a deal to work closer with Venezuela's state-owned PDVSA.
China's CNOOC and Sinopec have acquired assets in the Argentine oil industry over the past few years at a time when investment is picking up on expectations for large shale potential. Sinopec is the fifth-biggest oil producer in Argentina, with a 5.9% share.
YPF is the biggest player, producing a third of the oil and 23% of the gas.
--Charles Newbery, newsdesk@platts.com --Edited by Jason Lindquist, jason_lindquist@platts.com
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Chile bans marketing of toys in children's food
LUIS ANDRES HENAO. AP. August 1, 2012
SANTIAGO, Chile -- A new law in Chile aims to take some of the fun out of fast-food by forcing McDonald's, Burger King, KFC and other restaurants to stop including toys and other goodies with children's meals.
The companies are still using toys to draw in Chile's increasingly chubby children more than a month after the ban took effect on June 7, Sen. Giudo Girardi said as he filed a formal complaint Wednesday with the health ministry.
"These businesses know that this food damages the health of children and they know that the law is in effect. They're using fraudulent and abusive means," Girardi said.
The complaint also targets makers of cereal, popsicles and other products that attract children with toys, crayons or stickers, as well as markets that sell the food.
If Chile's health ministry upholds his allegations, the companies could be forced to remove the goodies or face nominal fines.
The Associated Press left messages seeking reaction with spokesmen for McDonald's Corp., Burger King Worldwide Inc. and KFC's owner, Yum Brands Inc.
Girardi said he wrote the law because nearly a quarter of Chile's 6-year-olds now suffer from childhood obesity - and that its passage came despite seven years of industry lobbying.
"These corporations threatened that if the law was approved there would be no more money for children's foundations, the sick, or athletes, but we were finally able to create a great alliance between the civil society and scientists to defeat these lobbyists," the senator said.
McDonald's Happy Meals - marketed as "Cajitas Felices" in Spanish - have been a major draw for 4-year-old Florencia Moraga, who was playing with her Ice Age movie toys Wednesday night with her father Ricardo at a restaurant in downtown Santiago.
"I loooove McDonald's because of the toys in the Happy Meal!" Florencia said.
Moraga said he takes his daughter every two weeks to the fast-food chain, but would not come back if she becomes overweight.
"She's healthy, skinny, but a kid with obesity was just sitting next to us. If I were his father I wouldn't bring him here," he said.
The Washington-based Center for Science in the Public Interest sued McDonalds over using toys to market its food to children in 2010, but the claim was dismissed in April. San Francisco banned restaurants last year from providing toys along with meals high in fat, salt, and sugar, but McDonalds has continued providing toys there by charging consumers a small fee for the goodies. A similar measure was defeated in New York.
The experience of both U.S. cities helped Girardi craft his "junk food law," his spokeswoman, Carol Bortnick, said.
Sara Deon, an activist with Corporate Accountability International, campaigned for the measures in San Francisco and New York, and praised Chile for passing its law. But she said "Chilean public servants should have no illusions" about implementing it.
"Judging from McDonald's response to similar health laws in the U.S. we'd expect the corporation to respond as it long has: it will fight tooth and nail to continue marketing to children," she said. "It will take every opportunity to blame parents for today's health epidemic. Marketing to kids is core to McDonald's brand and to its bottom line."
Michael Warren in Buenos Aires, Argentina contributed to this report.
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Paraguay urges OAS to take a position on the country’s situation
Mercopress. August 2, 2012
Paraguay urged the Organization of American States, OAS, on Wednesday to say whether it will be taking measures or not against the country following the removal of Fernando Lugo from the presidency, a political incident that has reverberated in the whole continent.
“Paraguay can’t go on waiting eternally for a decision. We have been very flexible on the matter” said Paraguayan ambassador before OAS Bernardino Saguier during a meeting of the continental organization at its headquarters in Washington.
Although the ambassador admitted that there was no consensus yet among member countries, he regretted the OAS had yet to make a statement on the political impeachment of Lugo by the Paraguayan congress that had him removed and replaced by his Vice president Federico Franco.
A group of countries under the leadership of Venezuela including Nicaragua, Ecuador and Bolivia has proposed to suspend Paraguay from OAS, but another group with the US, Canada and Mexico want to carefully check and balance any decision.
“For us there is urgency in making a decision on the issue and convening a meeting that is conclusive” so as to give Paraguay certainty, said the Mexican ambassador, Jose Hernandez, who as most of the 34 delegates supports the idea of holding a special meeting next August 22.
The president from the Permanent Council, the OAS political body, Jamaica’s Stephen Vasciannie pledged that the date would be confirmed ‘very soon’, once all countries give their OK.
OAS has already held three extraordinary meetings on the Paraguayan situation.
Ambassador Seguier underlined on Wednesday that Paraguay lives “in peace and calm, in an absolutely normal situation with full implementation of institutions and absolute respect for all political and human rights”.
OAS Secretary General Jose Miguel Insulza who headed a fact finding mission to Paraguay three weeks ago stated personally, that he was against the OAS suspending the country because of the economic implications which it would entail.
However Unasur and Mercosur effectively suspended Paraguay until the next general election scheduled for April 2013, in reprisal for what they described as a “democratic rupture” of the country’s institutional process.
Northern Andean Region [contents]
Venezuela's opposition wants to scrap preferential oil deals
Marianna Parraga. Reuters. August 2, 2012
(Reuters) - Venezuelan opposition leader Henrique Capriles said on Wednesday he would scrap preferential oil deals with foreign allies if he defeats socialist President Hugo Chavez in an October election to lead the South American OPEC member.
Chavez has sought to boost his influence abroad by offering crude deals to nations in Asia, Latin America and the Caribbean -- Venezuela's state oil company PDVSA was not paid directly for almost half the crude it pumped last year.
In Capriles' first major speech on his future oil policy, the 40-year-old said stopping Chavez's deals for crude on credit or in exchange for other goods would save $6.7 billion annually, which would be invested in new social programs.
"To have a friend, you don't need to buy him," Capriles said during a campaign stop a few kilometers from the Puerto La Cruz refinery. "From ... 2013, not a single free barrel of oil will leave to other countries."
The youthful former state governor named Belarus, Cuba, Jamaica, Dominican Republic, Uruguay and Argentina as countries that would stop receiving oil on preferential terms.
In 2011, PDVSA -- the fiscal motor of Chavez's socialist policies -- was not paid directly for 43 percent of its barrels of crude and oil products, rising from 36.5 percent in 2010 and 32 percent in 2009.
Many of the agreements are criticized by his opponents, especially those signed over the last decade with China, Cuba, Argentina, Uruguay, and the more than a dozen countries that are members of Venezuela's Petrocaribe supply program.
Chavez -- who underwent three operations for cancer over the last year -- is seeking re-election for a third term on October 7 to extend his self-styled socialist "revolution" and is spending heavily to beat Capriles.
Most opinion polls give him a double-digit lead.
'NO LEGAL CHANGES PLANNED'
Capriles is seeking to tap into pent-up frustration among many voters weary of high crime, inefficient public services and high prices. He has been on a months-long "house-by-house tour" through Venezuela meant to win over Chavez supporters and draw a comparison with the recovering president.
Capriles -- who frequently cites Norway as an example of a nation that has used its oil wealth properly to diversify the economy -- said he planned no legal changes to the oil industry, although there would be more supervision of the activities of public and private companies that are partners of PDVSA.
Chavez ordered the nationalization of dozens of crude projects in 2006 and 2007, but Venezuela has still managed to attract partners from Russia, Vietnam, Belarus and Malaysia to join PDVSA-led projects.
Companies including U.S. major Chevron, Spain's Repsol and Italy's ENI have also been drawn by the world's biggest crude reserves, which are mostly located in the Andean country's Orinoco Belt.
Oil accounts for more than 90 percent of Venezuela's exports.
Capriles promised to use the extra resources from stopping preferential deals, plus money from a planned doubling of production between 2013 and 2020, to fund programs such as raising benefits for pensioners, scholarships for mothers of handicapped children, and education.
"Where will all these resources go? Not to tanks, not to a hospital in Nicaragua, not as donations," Capriles said.
(Writing by Jack Kimball; Editing by Daniel Wallis and M.D. Golan)
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GM wants to double car output in Venezuela - Chavez
Reuters. August 1, 2012
Aug 1 (Reuters) - U.S. automaker General Motors Co wants to more than double its production of cars and auto parts in Venezuela, President Hugo Chavez said on Wednesday.
Hailing it as one of the first examples of benefits from Venezuela joining the Mercosur regional trade bloc on Tuesday, Chavez said he was presented with a plan by senior GM executives while he was in Brazil for the ceremony.
Asked to provide journalists with the details, Venezuela's Industry Minister Ricardo Menendez said GM planned to increase its production of cars in the country to 120,000 units per year, up from almost 50,000 now.
Menendez said the company also planned to increase its production of auto parts, for Venezuela's domestic market and for export to neighboring Brazil and the Caribbean.
Chavez added that French automaker Renault had also expressed an interest in building cars in the South American nation. The socialist president gave no other details.
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Colombia, Venezuela will 'continue to cooperate' to fight crime
Olle Ohlsen Pettersson. Colombia Reports. August 1, 2012
Colombia’s Minister of Foreign Affairs, Maria Angela Holguin, claimed Tuesday the country has made great advances in the fight against illegal armed groups in the past ten years, underscoring the importance of cooperation with neighboring countries.
According to the State Department’s annual terrorism report released Tuesday, attacks against government forces also increased in 2011, while the number of left-wing guerrillas killed, captured or demobilized had decreased. The document also said Venezuela supported guerrilla groups, the FARC and ELN, while additionally reporting that Cuba also provided rebels with medical and political assistance.
In response to the report, Minister Holguin highlighted increased cooperation with neighboring countries, especially Venezuela, despite the State Department claims that Hugo Chavez' government has links to the FARC.
"We insisted on working in cooperation with neighboring countries to fight against organized crime and against illegal armed groups and we will continue to do so," she said during the Colombian- United States High-Level Diaglogue, a series of meetings in Bogota between the two governments that touch on a range of topics, but primarily focus on drug trafficking and security policies.
In the meetings, U.S. Deputy Secretary of State William Burns said it was important for the Colombian government to give attention to certain parts of the document, while noting the complexity of Colombia’s armed conflict and the fight against domestic and transnational crime.
Colombia-Venezuela relations have improved substantially since Colombian president Juan Manuel Santos took office in September 2010. The two countries have collaborated against organized crime on several occasions, including the arrest of alleged Venezuelan drug trafficker Walid Makled in Colombia in 2011 and the capture of Colombian drug lord “Diego Rastrojo” in Venezuela in 2012.
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Colombia president moves to restore approval rating
Chris Kraul and Jenny Carolina Gonzalez. Los Angeles Times. August 1, 2012
BOGOTA, Colombia — Like their U.S. counterparts, Colombian presidents customarily give accountings of their performances in addresses that resemble the State of the Union speech.
But the speeches President Juan Manuel Santos has been giving in several cities to mark his two years in office are also an exercise in damage control, analysts say, to restore his plummeting popularity and counter sniping by his still-popular predecessor, ex-President Alvaro Uribe.
A poll commissioned by Semana magazine showed Santos' approval rating has fallen to 47%, with 48% of those polled disapproving his performance. A year ago, 71% thought he was doing a good job.
The slippage is a harsh comedown for someone elected to office in a June 2010 landslide and whose ambitious reform package seemed to have the wind at its back by virtue of a solid pro-Santos majority in Congress.
Analysts say Santos can partly blame his image problems on Uribe, who in recent months has loosed a barrage of critical comments in public and on Twitter. Uribe, who was president from 2002 to 2010, has denounced Santos for trying to smooth relations with Venezuela'sHugo Chavez, as well as for allegedly alienating the armed forces, among other purported sins.
"It's undeniable that Uribe's meddling has made governing more difficult for Santos," said Arlene Tickner, political science professor at Universidad de los Andes. "Uribe has gone out of his way to make Santos' job harder, and that has affected the president's image for the worse in some sectors."
Immediately after taking office, Santos unveiled a package of social and economic reform proposals aimed at getting to the causes of Colombia's decades of civil conflict and the scourge of drug trafficking. Critics say the lofty goals only raised expectations unrealistically.
"The main problem Santos faces now is one of implementation," Tickner said. "He has a number of wonderful policies, but execution has been slow to emerge."
Perhaps the most damaging among Santos' miscues was his administration's handling last month of a constitutional amendment to reform the justice system. The president first championed the law and then was forced to repudiate it after the final version contained elements that surprised even his staff.
"Santos delegated too much, trusted too much, and he wasn't paying close enough attention to the process," said Marcela Prieto, executive director of the Political Science Institute think tank in Bogota, the capital.
Although Santos claims security overall has improved since he was sworn in, civil society groups and his Defense Ministry say kidnappings, extortion and terrorism incidents are up. Leftist guerrillas have increased attacks on oil industry pipelines and other infrastructure, cutting output.
"There have been advances in some indicators, such as homicides in big cities like Bogota and Medellin, but often these improvements are the result of changes in local policy by municipal government, not the national government," said Jaime Zuluaga, a sociology professor at Universidad Externado de Colombia.
Prieto said catastrophic floods were big setbacks, diverting resources Santos had hoped to use to improve Colombia's infrastructure and fortify the economy.
So was the emergence of criminal bands that took the place of demobilized paramilitary groups in running drug trafficking, illegal mining and extortion rackets. In a show of strength this year, one such gang forced hundreds of businesses along Colombia's Caribbean coast to shut down for a week after the armed forces killed its leader.
Meanwhile, ripple effects from the global slowdown are finally lapping at Colombia's shores, at the worst possible time for Santos.
"Uribe benefited from the global economic cycle, which is now in a more regressive phase, and whose consequences Colombia is starting to experience," Zuluaga said.
Kraul and Gonzalez are special correspondents.
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Colombian General Motors employees on hunger strike over 'labor rights violations'
Adriaan Alsema. Colombia Reports. August 2, 2012
A group of employees and ex-employees of the Colombian branch of General Motors began a hunger strike in front of the U.S. embassy in Bogota Wednesday to protest the firing of colleagues on sick leave.
The factory workers set up a provisional shelter in front of the embassy Wednesday evening, demanding the company respect labor laws, and talks with the American ambassador and Colombian government.
General Motors "is firing us without just cause, harming us and our families. We are taking this decision because our health has worsened day by day, we have lost our homes, we're basically on the street and we have been forgotten by the government," one of the protesters told Caracol Radio.
"The association of workers and former workers of Geneal Motors Colomotores takes the decision to begin a hunger strike, sewing our lips, until our rightful requests are heard by the company, the ambassador of the United States and the government," a second protester added.
The (ex-) workers told the radio station that while the U.S. government is demanding Colombia to respect labor rights, the U.S.' largest car producer itself is violating the rights of its Colombian workers.
According to newspaper El Tiempo, the United States business attache met with the protesters and promised to inform General Motors headquarters in Detroit about the situation.
Western Andean Region [contents]
Ecuador wants to avoid Assange's extradition to Sweden
Eduardo Garcia. Reuters. August 1, 2012
(Reuters) - Ecuador wants to prevent Julian Assange's extradition to Sweden because it is disappointed that the Scandinavian country has turned down an offer to question the WikiLeaks founder in the Ecuadorean Embassy in London, a minister said on Wednesday.
Assange has been holed up in Ecuador's Embassy in London for six weeks as he awaits a decision on his asylum request by the leftist government of Rafael Correa.
The Australian anti-secrecy campaigner, who angered Washington in 2010 when his WikiLeaks website published secret U.S. diplomatic cables, is wanted for questioning in Sweden over sex crime allegations. He fears that if he is sent to Sweden he could be bundled off to the United States.
Ecuador has long said that it will take as long as needed to make a thorough analysis of Assange's asylum request before making a decision. Foreign Minister Ricardo Patino on Monday vowed to wait until the end of the London Olympic Games on August 12 to announce a decision.
He said Ecuador had invited Swedish authorities to question Assange in the Ecuadorean Embassy in London, which could give the former computer hacker a chance to avoid extradition to Sweden.
But following a meeting with Correa on Wednesday Patino said he had "unofficially" learned that Sweden had turned down the offer. He said he was disappointed about Sweden's decision because it "makes the situation more complicated."
"This makes it more difficult for us to make a decision that would mean that Mr. Assange would have to travel to Sweden," Patino told reporters outside the presidential palace.
Patino did not say if Ecuador is now more inclined to grant political asylum to Assange, but said his country's decision will seek to protect Assange's life and his right to freedom.
"This will be a factor to consider in the decision we have to make. Had we had a positive answer from the Swedish government then we would be considering taking a different kind of decision," Patino said.
Sweden's foreign ministry declined to comment, but a Swedish prosecution authority spokesman said prosecutor Marianne Nyh had turned down an offer to interrogate Assange in Ecuador's Embassy in London.
The spokesman said the offer was made by Assange's Swedish lawyer Per Samuelsson, but that the prosecution authority had not been in contact with Ecuadorean officials. He said he was unaware if there had been any contacts at government level.
NO CHARGES
According to Julian Assange's mother, Christina Assange, who is in Ecuador to plead for her son's asylum request, the United States is bent on having the 41-year-old extradited, and that would only be possible if he is sent to Sweden first.
She fears that her son will face torture and even execution if deported to the United States.
"I'm here humbly as a mother to present some facts. Of course I'll be most grateful if asylum is granted to my son to save him from being hooked by the US government," she told reporters after a meeting with Correa on Wednesday.
Neither U.S. nor Swedish authorities have charged Assange with anything. Swedish prosecutors want to question him about allegations of rape and sexual assault made by two WikiLeaks supporters in 2010.
Assange, whose distinctive platinum hair and high-flying friends have made him a global celebrity, says he had consensual sex with the women.
"Even though there isn't a trial, there aren't judicial proceedings against him, Sweden wants to imprison him ... That's why we asked the Swedish government to question him where he's now," Patino said as he expressed disbelief that Sweden had turned down the offer.
(Reporting by Jose Llangari; Additional reporting by Anna Ringstrom in Stockholm; Editing by Cynthia Osterman and Stacey Joyce)
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Julian Assange is right to fear US prosecution
Michael Ratner. The Guardian. August 2, 2012
As the drama unfolds over Julian Assange's bid for political asylum in Ecuador, a troubling irony has emerged: the besieged founder of WikiLeaks is seeking refuge in this small Andean nation because he fears persecution from the United States, a nation whose laws famously grant asylum to people in precisely Assange's situation. Indeed, the US has demonstrated its commitment to be a safe haven for those being persecuted for their political beliefs by recognising that journalists punished for expressing political opinions in places like China meet the criteria for asylum under the US's own laws.
The journalistic function and legacy of WikiLeaks cannot be disputed. The site has published 251,287 leaked US diplomatic cables and military documents that revealed the inner workings – warts and all – of US foreign policy. These publications illuminated state-sponsored human rights abuses in Iraq and Afghanistan, exposed a secret war in Yemen, and revealed the Obama administration's interference with independent efforts to prosecute Bush officials for torture and other war crimes.
So why is Assange so concerned? Are his fears of persecution due to his political beliefs and expression reasonable?
US officials scoff at the idea that the Obama administration even seeks Assange's extradition – "It's not something the US cares about, it's not interested in … there's nothing to it," said Jeffrey Bleich, the US ambassador to Australia. This is a remarkable claim given several unambiguous signs that the US is on track to prosecute Assange for his work as a journalist. A grand jury in Alexandria, Virginia, empanelled to investigate violations of the Espionage Act – a statute that by its very nature targets speech – has subpoenaed Twitter feeds regarding Assange and WikiLeaks. An FBI agent, testifying at whistleblower Bradley Manning's trial, said that "founders, owners and managers" of WikiLeaks are being investigated. And then there is Assange's 42,135-page FBI file – a compilation of curious heft if the government is "not interested" in investigating its subject.
In this context, Assange's fears of extradition to and persecution in the US, and therefore his plea for asylum, are eminently reasonable.
What's more, Assange is rightly concerned about how he will be treated if he is extradited to the US. One need only consider how the US treated Bradley Manning, the army private who allegedly leaked the cables to WikiLeaks to see why. Manning spent close to a year in pre-trial solitary confinement for 23 hours a day, and then eight months under conditions designed to pressure him into providing evidence to incriminate Assange. During this time, Manning was stripped of his clothing and made to stand nude for inspection. Thousands of people, including scores of legal scholars and the United Nations special rapporteur on torture, have condemned Manning's treatment as inhumane, and state that it may constitute torture. There is no reason for Assange to expect he will be treated any better.
Most disturbingly, the US government is more concerned with investigating a journalist and publisher than the high-level government officials whose alleged war crimes and misdeeds Assange and his cohorts brought to light. Why? To send a message to others who might dare to expose government misconduct, who believe that transparency, exposing abuses, and dissembling hypocrisy strengthen democracy – and who act on those beliefs. In short, the US is intent on persecuting a crusading journalist and publisher for his political expression.
These are the circumstances under which Ecuador is considering whether it will grant Assange the asylum he is entitled to under law. If it does, and should the UK or the US retaliate against Ecuador, that would be a violation of the law. Granting asylum is a peaceful and humanitarian act and cannot be regarded with hostility.
The US claims to lead the world in freedom of the press, freedom of speech, and the role these play as the foundations of democratic government. These freedoms do not die when governments feel threatened or are embarrassed by the publication of information. As Justices Stewart and White famously said, "the only effective restraint upon executive policy and power in the areas of national defence and international affairs may lie in an enlightened citizenry – in an informed and critical public opinion which alone can here protect the values of democratic government".
Indeed, it is precisely those who challenge the powerful, including government, who most require the protection afforded by fundamental free speech rights. If our current administration chooses to abandon them, it may fall to Ecuador to uphold the best of American principles.
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Catholic Church and University in Peru Fight Over Name
WILLIAM NEUMAN and ANDREA ZARATE. New York Times. August 1, 2012
LIMA, Peru — To its critics in the church, the Pontifical Catholic University of Peru is not deserving of its name. It has spurned the pontiff, they say. It is far from Roman Catholic orthodoxy, they argue. In their minds, the school ought to be called something else entirely.
“It’s false advertising,” said Fernán Altuve, a conservative legal expert who supports a recent order by the Vatican that the school change its name by eliminating references to the pope and the church. “It’s as if I sell you a bottle that says Coca-Cola but what’s inside is Pepsi.”
The fight over the name of what is considered one of the top universities in South America is part of a fierce battle over academic freedom and the authority of the Vatican that is unfolding here. La Católica, as the school is known, is the alma mater of many of Peru’s elite, including President Ollanta Humala.
The clash has divided the community here.
“I entered this school because it was the PUCP and I’m one semester away from graduating, and now my degree is going to say something other than PUCP,” said Vesna Gálvez, 25, a law student, using the school’s Spanish acronym (pronounced pook). “I know the prestige won’t change, but it’s tradition and I’d like to get what I signed up for.”
The school, closely associated with the teaching of liberation theology, a movement that emphasizes Christianity’s connection to the poor, has refused to change its name or to enact other changes that would give the church more control over its operations. Officials say they are being targeted for a hostile takeover by far-right elements in the church, led by the conservative archbishop of Lima, Cardinal Juan Luis Cipriani.
“They’ve told us, ‘Hand over your money and obey,’ ” the university president, Marcial Rubio, told a gathering of students and faculty members in the school gym on Wednesday, casting the fight as a battle over the school’s valuable real estate and financial holdings.
Mr. Rubio singled out a church spokesman and legal expert, the Rev. Luis Gaspar, accusing him of trying to scare students by suggesting that degrees from the school would not be valid.
“Father Gaspar is a terrorist against the university,” Mr. Rubio said, to applause.
Father Gaspar called the comments hurtful. He said that if Mr. Rubio continued to resist the church’s demands, church officials would be forced to consider a range of sanctions, the most serious of which would be excommunication.
“They are not currently adhering to Catholic values at that university,” Father Gaspar said. “They have shown rebelliousness to the ecclesiastical authorities, disobedience. This has caused a scandal among faithful Catholics.”
In keeping with the order to change the name, Father Gaspar now refers to the school as the “ex-PUCP.”
The church says the school is under the jurisdiction of canon law, which gives church leaders the right to approve the appointment of the university president and oversee its finances. The church also says that the will of a major benefactor who died in 1944 gives it additional claim to the school’s holdings, which include a profitable shopping mall and other real estate.
University officials say the school is independent. The university president is chosen by an assembly of school administrators, faculty members and students, as well as a small number of church leaders. University officials disagree with the church’s interpretation of the will, saying they alone control the school’s finances.
The two sides tried to negotiate their differences, but the talks broke down.
In its latest move, the Vatican signaled that it had lost patience. In a decree signed July 11, Cardinal Tarcisio Bertone, the Vatican’s secretary of state, said the university was not being run in a way that was “compatible with the discipline and morals of the church.”
As a result, the decree said, the school had lost the right to call itself pontifical or Catholic.
But even if the school were to change its name, that would not be the end of the fight. Father Gaspar said the school’s land, buildings and financial resources were the property of the church and should be used for educational purposes in line with church doctrine.
“If this university is going to stop being Catholic and not fulfill its purpose, the Catholic Church has the obligation to designate that property to another Catholic university or to create a new Catholic university in Lima,” he said.
The battle is a particularly vivid example of the long-running fight between the left and right within the church.
The university is closely associated with liberation theology, a movement that mixes leftist politics with religion and views the Christian faith from the perspective of poor people. It encourages followers to tackle social problems in terms that opponents equate with Marxism. One of the movement’s founders, the Rev. Gustavo Gutiérrez, has taught theology at the school for many years. He also teaches at the University of Notre Dame in Indiana.
School officials say that if the church gets control, it will scrub liberation theology from the curriculum, eliminate a gender studies program that includes courses on feminism and homosexuality, and take other steps to align teaching with religious doctrine. They also predict a purge of faculty members whose views on issues like abortion, birth control or gay rights are considered incompatible with church positions.
On the other side of the spectrum is Cardinal Cipriani, a member of Opus Dei, an ultraconservative church order.
Liberal Catholics here said that because liberation theology was associated early on with Peru, the country has been singled out by the Vatican, which opposes the movement.
The split within the church mirrors a similar ideological divide within elite Lima society.
The university is often associated with what conservatives mockingly call “caviars,” a term roughly equivalent to “limousine liberals,” meant to evoke the image of well-off leftists who maintain a comfortable lifestyle while espousing politically correct notions of equality and class consciousness.
In turn, the caviars describe the cardinal and his allies as being part of what they call the “D.B.A.,” the initials in Spanish for what amounts to stupid and thuggish right wing.
The increasingly shrill standoff has many students unnerved.
Sandra Ires, 19, who studies industrial engineering, said school officials were being hardheaded.
“We’re a Catholic school that’s governed by Catholic laws,” she said. “If people want pluralism, they should look for it at another school.”
But Gabriel Rodríguez, 19, an anthropology student, said he would transfer if the church won control.
“I don’t intend to be in a closed-minded environment,” he said. “I don’t think it would be good for my development as a person and professional.”
Pepi Patrón, a university vice president, said officials at the school, which opened in 1917, would keep fighting.
“They would have to use violence to get us out of here,” she said.
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The next December solstice celebration in Bolivia will have Coca Cola after all
Mercopress. August 2, 2012
Bolivia said on Wednesday that statements from Foreign minister David Choquehuanca about “the end of Coca Cola” were taken out of context adding there are no plans to expulse the US Company from the country, as published in the local media.
“The statements from the Minister were taken out of context and there is nothing official” regarding the media publications said Consuelo Ponce, head of the PPRR department from the Foreign Affairs ministry.
Last July 13 Choquehuanca said that the Bolivian government would be inviting indigenous leaders and groups from all over the world to celebrate in Bolivia the summer solstice on 21 December, since on that day would come “the end of capitalism and the end of Coca Cola and the beginning of a time love and peace and of cultivation of life”.
“Next December 21 will mark the end of selfishness, and of division. December 21 must be the end of Coca Cola and the beginning of the mocochinche (a soft drink made out of nectarines and peaches)” said at the time Minister Choquehuenca during a rally at the town of Copacabana next to the Titicaca Lake and close to the Peruvian border.
Since then the statement was interpreted, according to several La Paz media, as meaning that the company would be sent out from Bolivia and rumours went as far as saying that on that precise date, 21 December, President Evo Morales would be making the grand announcement.
As rumours extended the US fast food company McDonald’s was added to the list, when the truth is that the burger company closed its outlets in Bolivia in 2002, after five years of operations and because of very low profits.
Embol a subsidiary from Chile’s Embonor and the official bottler of Coca Cola in Bolivia said that it will make an official statement in reply to the current confusing information.
The president of Bolivia Chamber of Industries, Mario Yaffar interviewed by a radio in La Paz said that there was a “clear distortion” (intended or not) of the statements from Choquehuanca, which to his understanding spoke about “an alleged loss of global supremacy” in reference to Coca Cola and certainly not that the company would be sent out of Bolivia.
Mexico, Central America and Caribbean [contents]
Drug War Lures Mexico Firms to Jails as Foreign Rivals Stay Away
Nacha Cattan and Eric Sabo. Bloomberg. August 2, 2012
Two Mexican homebuilding companies are embracing the government’s turn to private enterprises to help run violence-plagued prisons that has been shunned by international jail-management firms.
The country will open its first private prisons this year as the U.S.-backed war against drug gangs fills cells past capacity. In Central America, where a fire at an overcrowded Honduras jail killed 366 inmates in February, business groups are also pushing governments to build and run facilities.
Enlarge image Mexico Drug War Has Home Builders Cashing In on Private Prisons
A relative of an inmate observes policemen behind the security fence after a riot inside Apodaca prison, near Monterrey, state of Nuevo Leon, Mexico. Photographer: Julio Cesar Aguilar/AFP via Getty Images
Enlarge image Mexico Drug War Has Home Builders Cashing In on Private Prisons
Mexico’s prisons are legendary for their lawlessness. Photographer: Alfredo Estrella/AFP via Getty Images
It’s an opportunity that global prison operators such as G4S Plc (GFS) and Corrections Corp. of America are passing up in the face of the disorder and corruption that plagues Latin American jails. That’s left untested firms like Mexican builders Desarrolladora Homex SAB (HOMEX*) and Empresas ICA SAB (ICA*) with the task of bringing order to facilities the United Nations says lack basic sanitation and are plagued by “alarming” levels of violence.
“It’s hard to say that things could get worse because the jails are so bad,” said Mark Ungar, a professor at the City University of New York in Brooklyn who studies Latin American prisons. “But I can’t imagine many international companies wanting to jump into this.”
Outgoing Mexican President Felipe Calderon’s administration has said farming out prison construction to private companies would cut costs for such projects by 29 percent and the new jails would increase capacity for inmates by as much as 30 percent. Enrique Pena Nieto, who will succeed him in December, says he also supports private investment to expand facilities that hold 22 percent more inmates than the 180,000 they were designed to accommodate, according to a May 2011 government report.
Honduras Blaze
Improving security at penitentiaries took on renewed urgency following the Feb. 14 blaze in Honduras, the world’s deadliest prison fire in a century. Less than a week later, 37 inmates conspired with guards to sneak out of a Mexican jail by provoking one of the nation’s bloodiest prison riots, in which 44 died.
Calderon has said that a dozen new prisons under construction, some of them private, will be completed before his term ends, helping to relieve overcrowding in 429 federal and state facilities.
While Calderon’s drug crackdown has led to a surge in killings -- more than 47,500 since he took office in 2006 -- Latin America’s second biggest economy has proven resilient in the face of the worsening violence. Gross domestic product grew 4.6 percent in the first three months of 2012 from a year earlier, the fastest pace in six quarters and compared with Brazil’s 0.8 percent expansion.
Criminal Hotbed
Crowded jails that serve as a hotbed for criminal activity have hampered the drug fight in Mexico and Central America. Only $24 million of a $1.6 billion U.S. anti-narcotics aid package for the region is devoted to equipment and training for the prison system. With resources already stretched, private investors are being asked to fill the void.
Culiacan-based Homex, Mexico’s biggest homebuilder by sales, said July 25 it will buy out a partner in its prison projects for 1.1 billion pesos ($80 million) after second- quarter home sales tumbled. The company plans to build two correctional facilities this year and manage services such as food, laundry and building maintenance, the company said on conference calls with investors.
“I’m confident there will be more” to build, said Homex’s Chief Executive Officer Gerardo de Nicolas Gutierrez in an interview in New York on March 8. “The prison population will grow as the judicial system is improved.”
Revenue Contribution
Mexico City-based ICA, Mexico’s largest construction company, said in a July 27 earnings report that two prison projects due for completion before October were its single- largest contributor to second quarter revenue.
The penitentiary projects have the potential to produce a 35 percent profit margin for companies thanks to the government’s annual payment for services of 1 billion pesos per prison, Carlos Hermosillo, a Mexico City-based analyst with Grupo Financiero Banorte SAB, said in a phone interview. In return, the government gains immediate access to capital to build prisons faster than if it had to seek budget approval from congress, he said.
This year, shares of Homex have fallen 31 percent to 27 pesos, while ICA has risen 34 percent to 23 pesos per share.
Natural Fit
While companies that build and operate resorts and toll roads may consider it a natural fit to turn to prison construction, their lack of experience running such facilities could prove detrimental to their bottom line, said Ramon Ortiz, an analyst with Mexico City-based brokerage Corp. Actinver SAB.
“They face a very steep learning curve,” Ortiz said.
Press officials at both ICA and Homex didn’t return e-mails requesting comment.
While Mexico’s government will remain in charge of guarding the prisons, that’s not enough to inspire confidence for London- based G4S, which runs nine jails in the U.K., Australia and South Africa.
“The level of influence of some of the criminal gangs is extreme,” Fiona Walters, a G4S Americas spokeswoman, said in a phone interview from Jupiter, Florida. “To be able to run a safe and secure prison also speaks to broader issues and some of the challenges you’ve got with the cartels in some of those countries.”
G4S’s shares have dropped 7.7 percent to 250 pounds this year.
Drug Lord
Mexico’s prisons are legendary for their lawlessness. Joaquin “El Chapo” Guzman, the nation’s most-wanted drug lord, bribed guards so he could continue his extravagant lifestyle behind bars, including parties with prostitutes. He escaped in 2001 from his maximum security jail in a laundry bin.
Nashville-based Corrections Corp. (CXW) of America, the largest U.S. prison contractor, as well as its competitors Boca Raton- based Geo Group Inc. (GEO) and closely held Management & Training Corp., based in Centerville, Utah, have no plans to pursue business in Mexico or Central America, spokesmen for each company told Bloomberg.
This year, Corrections Corp. has risen 49 percent to $30 per share and Geo Group has climbed 39 percent to $23.
Investing outside of safer, developed markets would “pose a lot of risks for the G4S’s of this world,” said Alex Magni, an equity analyst at HSBC Holdings Plc. (HSBA)
Investors ‘Nervous’
“Investors would probably get quite nervous since there’s a world of opportunity where they don’t have to take that sort of risk,” Magni said in an interview from London.
In the U.S., which has the world’s highest incarceration rate, about 16 percent of federal prisoners and 7 percent of state prisoners are held in private jails, the Department of Justice said in a December report.
More recently, sentiment has turned against private prisons as cash-strapped state governments in the U.S. question whether handing inmates over to private facilities generates the cost- savings touted by the industry.
In April, California said it would reclaim almost 10,000 inmates held at private facilities. Shares in Corrections Corp tumbled 8.9 percent, their biggest drop in 11 months, the day after the plan was announced by Governor Jerry Brown. In February, Florida’s Senate blocked a plan to create the largest private-prison system in the U.S.
Rights Groups
In Mexico, some human rights groups have complained that the government is shirking its responsibility to clean up jails by turning to private companies.
“It’s a way to wash their hands and blame someone else for human rights violations that can take place at these jails,” Jose Luis Gutierrez, director of Mexico City-based Legal Assistance for Human Rights, said in a phone interview.
The Public Security Ministry, which oversees Mexico’s prisons, did not return calls seeking comment.
Central America may also follow Mexico’s lead in turning its prisons over to private hands. Business groups in Honduras and El Salvador, whose prisons are the most overcrowded in the region, have each lobbied their governments to open the prison system to investment.
Both countries are major transit zones for U.S.-bound cocaine from South America, and have seen incarceration rates surge over the past decade.
While Chile and Brazil have succeeded in turning over some basic prison services such as building maintenance to private companies, Central American prisons racked by violent gangs are easily corrupted and nearly impossible to manage, said Ungar, who has advised the Inter-American Development Bank.
“Governments have abdicated their responsibility in managing prisons,” Jose Miguel Vivanco, the Americas director for Washington-based Human Rights Watch, said in a phone interview from Washington. “Internally, these prisons are run by the prisoners themselves.”
To contact the reporters on this story: Nacha Cattan in Mexico City at ncattan@bloomberg.net; Eric Sabo in Washington at esabo1@bloomberg.net
To contact the editor responsible for this story: Joshua Goodman at jgoodman19@bloomberg.net
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Mexico Drug War Memorial to be Placed Next to Military Base, Drawing Criticism
Fox News Latino. August 1, 2012
Peace activists in Mexico wanted a government monument to the victims of the drug violence that has spun out of control over the course of a six-year assault on the country's cartels.
But the government's choice to put the monument next to a military base has drawn criticism and sparked debate among victim's rights activists.
Some activists say the federally funded project, 15 steel walls arranged in rows with a pool between them, will be a space to reflect on the violence in the hopes it never repeats itself.
But poet Javier Sicilia, who leads a crime victim's movement, says building the monument next to Mexico City's Campo Marte military base is "a mistake in every way."
"It appears to be more of a monument to violence," Sicilia said Tuesday.
Drug cartel gunbattles, kidnappings and extortion killings have claimed at least 47,500 victims since late 2006 when thousands of soldiers were deployed to fight drug traffickers. The government stopped providing figures late last year, and non-governmental organizations estimate the dead now number between 50,000 and 60,000.
Sicilia says the victims should be honored with thorough investigations that clear up who they were and why they died. Many of the dead are found in clandestine graves, or mutilated and dumped on roadways, which often makes identification difficult.
Victims' advocates, who built a powerful national movement following the killing of Sicilia's son and six other victims in 2011, were already angered by President Felipe Calderon's decision to return a victims' rights law to Congress, asking changes be made. Calderon argued the law wasn't clear enough about state versus federal responsibilities in helping victims and their relatives with payments and social services.
Interior Secretary Alejandro Poire has defended the monument, noting, "I think it is important to give crime victims this recognition."
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Honduras looks to Hong Kong as a model for economic revitalization
PRI’s The World. August 1, 2012
Honduras' political leaders are hoping to jumpstart the country's flagging economy by separating one of the country's cities. A new law would allow the government to designate a city as a "charter city" subject to different laws and regulations and perhaps under some foreign supervision.
Honduras has been going through an especially rough patch.
A military coup in 2009 ousted its president. Drug violence has helped give Honduras the world’s highest murder rate. On top of that, the country is impoverished.
Things are so bad that Honduran officials are considering something drastic. They want to build an experimental city to give the country a fresh start.
Last year, the Honduran Congress passed a constitutional amendment allowing the creation of a semi-autonomous city that would have separate governing rules and a degree of foreign supervision.
The plan was inspired by Paul Romer, a U.S. economist who has been promoting what he calls "charter cities."
"I was asked by the president of Honduras who said 'we need to do this project, this is important. This could be the way forward for our country,' " Romer said.
Romer proposed the new city have a governing charter made up of the best political and economic rules from around the world. Partner nations would provide oversight, guidance and more.
For example, the Honduran judicial system is widely viewed as slow and corrupt. So the island nation of Mauritius has agreed to allow its highly respected Supreme Court to serve as the court of appeals for a Honduran charter city.
Supporters say charter cities could serve as catalysts for reform in the rest of Honduras, similar to the way British-administered Hong Kong provided a blueprint for mainland China’s move to a market economy. Romer says they could also persuade some of the 75,000 Hondurans each year who immigrate illegally to the U.S. to stay home.
“A new city could offer new choices for people,” he said. “There would be the choice of a city they could go to, in Honduras, rather than hundreds of miles away in the north.”
Trujillo, on the Caribbean coast, is one of the oldest towns in Honduras, and there’s not much there. It’s a sparsely populated area of farmers and fishermen. In fact, its backwardness inspired the visiting American writer O. Henry to coin the term “banana republic.” But now, Honduran politicians are considering the area around Trujillo for an ultra-modern charter city.
“We need a system where we can have ships, rail, trucks and planes,” said Dino Rietti, a Honduran architect who is advising the government on the charter city plan.
Rietti envisions an international airport and trans-oceanic railroad near Trujillo.
“Is it Utopic? Yes, but also it’s a hope. It’s a new way of thinking,” he said.
A few projects are already going up in anticipation of a charter city. Rietti is managing construction of a combined cruise ship marina and shopping mall in Trujillo.
The marina provides work for hundreds of local residents. Building a whole new city would create many more jobs: Jobs that are badly needed according to Joel Louis, a construction worker at the marina.
“In Trujillo, here in Honduras, a job is very hard to get,” Louis said. “People suffer, suffer a lot for jobs.”
A military helicopter buzzing over Trujillo helps explain why. Government troops are battling drug traffickers and the spike in violence has dragged down the economy. What’s more, the Caribbean coast never fully recovered from Hurricane Mitch in 1998, which wiped out the local banana trade.
William Lorenz, a U.S. developer who moved to Trujillo four years ago, says foreign investors are intrigued by the prospect of a charter city.
“We’ve had Americans come. There are Canadians here who are active. People have been here from Great Britain. We have some interest stirred up in South Korea,” he said.
Money to construct the charter city would come from leasing and selling land to foreign investors. Still, Hondurans are a long way from laying the first brick. The Constitutional amendment allowing for charter cities is being challenged in the Honduran Supreme Court. The country’s former attorney general recently called the plan “21st century colonialism.”
Even supporters, like Rietti, worry about outsized foreign influence and the possibility of environmental damage.
“You see this beautiful place? You see how beautiful it is? It’s natural. You see children playing. You see people working,” Rietti said.
But given the nation’s downward spiral, Rietti says it may be time for Honduras to try something radically different.
“We are giving to the investors the best that we can,” he said. “Now they have to do the best for the country.”
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Media Repression in Honduras Speaks to U.S. Congress, but is anyone Listening?
Real News Network. August 2, 2012
NOAH GIMBEL: I’m here at the Rayburn House Office Building on Capitol Hill, where the Tom Lantos Human Rights Commission is holding a congressional hearing on press freedom in some of the most dangerous countries in the world for journalists.
One of those places is Honduras, where 25 journalists have been killed by both the state and organized crime syndicates since the 2009 coup that overthrew president Manuel Zelaya. According to the United Nations Special Rapporteur for the Freedom of Expression and Opinion, “in proportion to its population, Honduras has the most alarming violation of the freedom of expression in the world, and is the country in which the most journalists have been killed in the least amount of time.” Up to now, the U.S. has remained largely silent on the state of violent repression in Honduras – a key ally in the so-called War on Drugs.
But two congressmen heard testimony on the situation in Honduras, as well as in Russia and Turkey, as the Congressional Human Rights Commission called the hearing to gather testimony for the Global Online Freedom Act currently in the works. Republican Congressman Chris Smith explained the goals of the act.
SMITH: This bill will prevent the export of hardware or software that could be used for surveillance, tracking, blocking and the like, to internet restricting countries.
GIMBEL: The opening statements of the Commission’s Chairman, Massachusetts Democrat James McGovern, reflected the Act’s objective to focus on abuses committed by the US’s geopolitical adversaries.
MCGOVERN: Unfortunately, the media is under attack in many places. Authoritarian regimes in countries like China, Russia and Iran, are developing increasingly sophisticated tools to keep media under their control, and to punish journalists who refuse to tow the official line.
GIMBEL: But despite the apparent use of the issue of free expression to target U.S. rivals, the commission also heard testimony from Honduran human rights advocate and radio broadcaster Reverend Ismael Moreno Coto. His testimony on the ill state of press freedom in Honduras, and on U.S. complicity in state repression was received politely by the commission, but without any concrete responses as to how the U.S. might pressure the Honduran government to curtail the violent repression of critical voices.
Known to Hondurans as Padre Melo, Moreno has been recognized by Reporters Without Borders and the Global Media Foundation for his continued perseverance in the face of continuous threats and attacks. Just two weeks ago, Honduran radio journalist Adonis Felipe Bueso Gutiérrez was shot dead with two of his cousins.
The Real News caught up with Padre Melo prior to his testimony for an in-depth look into the state of free speech in Honduras.
MORENO: Freedom of expression has always been precarious in Honduras, especially over the last 30 years, which coincides with representative electoral democracy. However, since the coup, that is, over the last 3 years, the deterioration of freedom of expression has been so great that in this small period, the assassinations we have mentioned have taken place, and moreover, many journalists have felt obliged to censor themselves.
And when you seek answers to the demands for freedom of expression, what you get is a hardening of the laws. Right now, Honduras has enacted legalized phone surveillance and control over private internet accounts.
Using the “war on drugs” as justification, what this type of law does is control the social and political opposition – all types of opposition to the Honduran state.
GIMBEL: And despite the well-documented record of police brutality and state-sponsored violence in Honduras, the U.S. has only strengthened its support for the regime since being among the first countries to recognize the coup government. In 2012, the Obama Administration increased military Aid to Honduras.
MORENO: The role of the U.S. government has always been ambivalent in Honduras. In public, officially, it has always opposed coups, and recriminated all infringements of free expression. Also, formally, it has expressed concern over the violence and impunity that dominates in Honduras.
However, in practice – and here’s the ambivalence – they keep strengthening the ones responsible, the leadership that facilitates impunity, and they continue to favor the leadership of the biggest human rights violators. They continue, for example, to support the police, whom they well know to be in the service of criminality.
And they continue to support in various ways the institutions bearing the highest responsibility for the coup: the Attorney General’s Office and the Supreme Court. What we would ask is that the U.S. condition clearly and with visible benchmarks all military and police aid to those institutions that have shown unequivocally to be compromised by human rights violations, impunity, and repression against Honduran social sectors.
GIMBEL: Whether Washington will listen to the concerns of the Honduran people has yet to be seen. For the Real News, I’m Noah Gimbel in Washington.
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Honduras institutes public gun ban for violence-hit region
Gustavo Palencia. Reuters. August 1, 2012
TEGUCIGALPA (Reuters) - The Honduran Congress approved a law on Wednesday that prohibits the public possession and transportation of guns in a region of the country where drug trafficking and other agrarian conflicts are blamed for the killings of more than 60 people in the past three years.
The gun law covers Colon, one of the Central American country's 18 departments, and was advocated by President Porfirio Lobo.
Located on Honduras' Atlantic coast, Colon has seen a dramatic increase in violence due to drug cartel activity as well as a deepening conflict pitting poor farm workers against agricultural businesses and the private guards they employ.
"The bloodshed that continues taking place in this region must stop and the disarmament of the local population is needed," said Honduran Security Minister Pompeyo Bonilla.
Over the past few months, the government has deployed about 1,000 soldiers and police to the region in an effort to stem the violence, but without much success to date.
The new law bans the possession of firearms in public places as well as their transportation in any vehicle, but police, military and private security guards are exempt from the prohibition.
The legislation also authorizes the president to extend the measure to other regions if he deems it necessary.
According to the United Nations, Honduras has one of the world's highest murder rates, at 86.5 homicides per 100,000 residents. By comparison, the U.S. rate is 4.7 per 100,000 residents.
(Reporting By Gustavo Palencia; Writing by David Alire Garcia; Editing by Peter Cooney)
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Guatemala sued over activist’s death
AFP. August 1, 2012
WASHINGTON – The Inter-American Commission on Human Rights announced Wednesday that it is suing Guatemala in the Inter-American Court of Human Rights over the 2004 murder of activist Florentín Gudiel. The case remains unsolved.
Gudiel was serving as mayor of the town of Cruce La Esperanza when he was killed, according to a statement by the commission.
"The investigation into the killing was plagued by irregularities, and the authorities did not ensure the protection of witnesses, including relatives of Gudiel, who were forced to leave the area," the statement said.
The commission had recommended that Guatemala conduct a thorough investigation and punish officials who denied justice and safety to human rights defenders. But apparently Guatemala did not comply. The commission filed its lawsuit in the Costa Rica-based human rights court on July 17.
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