Southern Cone

Argentina: new energy law seeks foreign capital

Argentina's Chamber of Deputies voted 130-116, with one abstention, on Oct. 30 to pass a new version of a 1967 federal law governing the exploitation of oil and gas resources. The controversial new version had already been approved by the Senate; it will become law once it is signed and published in the Official Gazette by President Cristina Fernández de Kirchner. Under the revised law—which was pushed through the National Congress by the Front for Victory (FPV), President Fernández's center-left faction of the Peronist Justicialist Party (PJ)—concessions will be granted to private companies for 25 years for conventional oil drilling, for 30 years for offshore drilling and for 35 years for unconventional techniques like hydrofracking. The royalties the companies pay on oil and gas sales will be limited to 12% for the federal government and to just 3% for the oil-producing provinces, which technically control the resources. Private companies can also benefit from a provision letting them sell 20% of their production in international markets without paying export taxes if they invest $250 million over a three-year period.

Argentina: UN group condemns vulture funds

The Geneva-based United Nations Human Rights Council passed a resolution on Sept. 26 condemning "the activities of vulture funds" and regretting the effect payments to the funds could have "on the capacity of governments to fulfill their human rights obligations." The resolution was presented by Argentina, which was forced into technical default on July 30 after US district judge Thomas Griesa in New York blocked the country from paying interest to its bondholders unless it settled with US two hedge funds, NML Capital and Aurelius Capital Management; the two companies are known as "vulture funds," investment groups that try to profit by buying weak debt the debtors are likely to default on. Argentina's effort in Geneva was backed by Algeria, Brazil, Russia and Venezuela. The Human Rights Council approved the resolution in a 33-5 vote, with nine countries abstaining; the opposing votes came from the US, UK, Czech Republic, Germany and Japan. "Vulture funds aren't just an economic problem," said Argentine foreign minister Héctor Timerman, who was in Geneva for the vote. "They represent a political, social problem that affects the lives of all the citizens" in many countries since they deprive governments of resources they could use for social services.

Chile: alleged anarchists arrested in bombing

On Sept. 18 Chilean authorities arrested three supposed anarchists, Juan Alexis Flores Riquelme, Nataly Casanova Muñoz and Guillermo Durán Méndez, on charges of participation in the Sept. 8 bombing at a shopping center in Santiago's Escuela Militar subway station; 14 people were injured in the lunchtime blast. Public defender Eduardo Camus, who is representing the defendants, said they denied involvement. The arrests took place during an operation by more than 200 agents of the carabineros militarized police which included searches in six homes in the working-class Santiago-area communes of La Granja, San Bernardo and La Pintana. So far there have been some 200 bombings and attempted bombings in Chile in the past 10 years; most caused no injuries.

Chile: who's behind the bombing spree?

Fourteen people were injured, four of them seriously, when a homemade bomb exploded at 2 PM on Sept. 8 in a shopping center restaurant at the busy Escuela Miltar subway station in Santiago, the Chilean capital. In response, President Michelle Bachelet, a Socialist Party of Chile (PS) leader who began her second term on March 11, held a special security meeting in the La Moneda palace on Sept. 9; she called for increased vigilance and for modifications to the Antiterrorist Law, a measure passed during the 1973-1990 dictatorship of Gen. Augusto Pinochet. The bombing came shortly before the 41st anniversary of the Sept. 11, 1973 coup in which Pinochet's military overthrew Socialist president Salvador Allende Gossens.

Brazil: deadly prison uprising ends in deal

Brazilian authorities reached a deal with inmates Aug. 25 after a deadly prison uprising at Cascavel in Paraná state. The riot erupted the day before as breakfast was being served, when inmates overpowered guards. In apparent score-settling between rival drug gangs, two prisoners were beheaded, and two others thrown to their deaths off the roof of a cellblock. At least 25 were injured in the fighting. Under the deal, two guards who had been taken hostage are to be freed in exchange for a commitment to improve conditions at the facility and the transfer of some inmates to other prisons. The prison had already exceeded its intended 925 capacity. Negotiations on the specifics are ongoing between prisoners and the Paraná attorney general's office. Some 574,000 are incarcerated in Brazil; only the US, China, and Russia have more people behind bars. It is an open secret in Brazil that with prison overcrowding at unmanageable levels, guards routinely keep the peace by handing control of cellblocks to the inmates. The overcrowding has been exacerbated by a legal reform eight years ago that dramatically increased sentences for drug trafficking. (AFP, BBC News, Al Jazeera, Aug. 25; AP, Aug. 24)

Brazil: Haiti mission shaped Rio police unit

Two Brazilian experts in police work have confirmed longstanding claims that the Brazilian military and police used their leading role in the United Nations Stabilization Mission in Haiti (MINUSTAH) as a way to train their forces for operations in Brazil's own cities. According to Lt. Col. Carlos Cavalcanti, of the Brazilian Peace Operations Joint Training Center (CCOPAB), the Brazilians were especially interested in the concept of permanent "strong points" in urban areas, which MINUSTAH forces used to "pacify" Port-au-Prince's huge Cité Soleil section in 2005 and the Cité Militaire neighborhood in 2007. "Rio de Janeiro's Militarized Police even sent a group to Haiti while these operations were still being carried out, with the object of taking in the Brazilian army's experiences," Cavalcanti said.

Argentina: US sued at Hague over default

The International Court of Justice (ICJ) in The Hague said on Aug. 7 that Argentina had asked it to take action against the US for what the South American country called "violations of Argentine sovereignty and immunities and other related violations as a result of judicial decisions adopted by US tribunals" that interfered with the payment of its debts. Financial services agencies declared Argentina in default on July 30 when it failed to arrive at a settlement with a small group of investors led by US hedge funds NML Capital and Aurelius Capital Management. A federal judge in New York, Thomas Griesa, had ruled that unless it had an arrangement with the hedge funds, Argentina couldn't make payments to the majority of its creditors, who had agreed to accept discounted exchange bonds.

Argentina: US hedge funds force bond default

The US financial services company Standard & Poor's Ratings (S&P) declared Argentina in default the afternoon of July 30 after last-minute negotiations failed to produce an agreement between the country and a group of creditors who insisted that they be paid in full for the $1.5 billion in Argentine bonds they own. This was Argentina's second default since an economic collapse in December 2001 brought on by a decade of extreme neoliberal austerity and privatization measures. Opinions were divided on how the new default would affect the country, which was already entering a recession. "The ordinary Argentine citizen will be the real and ultimate victim," Daniel Pollack, the mediator appointed by a US federal court in New York, said in a statement. But Argentine Economy Minister Axel Kicillof was defiant. "We aren't going to sign any agreement that would jeopardize the future of Argentines," he said at a news conference after the negotiations ended on July 30.

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