Venezuela and U.S. to Sign New Drug Control Agreement

Luis Correa, the director of Venezuela's National Anti-Drug Office.
Credit: VTV

Caracas, Venezuela, June 26, 2006 —Venezuela’s director of the National Anti-Drug Office (ONA), Luis Correa, said today that an agreement has been reached between Venezuela and the U.S. to re-start cooperation on fighting drug trafficking. The agreement will be signed between the ONA and the U.S. Drug Enforcement Agency (DEA) on July 8.

“The points in which we had differences between the DEA, or the North American government and the Venezuelan, have been solved. Both countries are in agreement about the new work paper,” said Correa.

Venezuela had suspended its cooperation with the U.S. last year, when President Chavez accused the DEA of engaging in unauthorized activity in Venezuela, of spying, and of over-stepping its bounds in its work. He had said the DEA would be expelled from Venezuela. U.S. officials denied the charges at the time.

However, during a press conference in Washington today, DEA administrator Karen Tandy clarified that the threat to expel the DEA was never implemented and that the DEA continued to operate in Venezuela without interruption. “While President Chavez announced through the papers his intent to expel DEA, he withdrew that shortly afterward and has been, through his counternarcotics officials, working with DEA on a memorandum of understanding that we could execute together as to how we will work together in that country,” said Tandy.

The new drug control agreement will be signed by Venezuela’s Minister of the Interior and of justice, Jesse Chacon, and the U.S. Ambassador to Venezuela, William Brownfield.

In September of last year, the U.S. officially “decertified” Venezuela as a country that lives up to its international obligations in the fight against drug trafficking. Venezuela, though, pointed out at the time that its drug interdictions have increased substantially since Chavez came into office. Drug interdictions increased from 43 tons in 2004 to 72 tons in 2005. Police estimate that 300 tons of cocaine pass through Venezuela per year.

The decertification normally means a cut-off of all U.S. aid to a country. However, the Bush administration decided to waive this consequence because, “support for programs to aid Venezuela's democratic institutions, establish selected community development projects, and strengthen Venezuela's political party system is vital to the national interests of the United States.”

According to documents released through the Freedom of Information Act, the U.S. government provides over $5 million per year to mostly opposition groups in Venezuela.

Venezuela and Panama Sign Energy Agreements

Venezuela's President Hugo Chavez and Panama's President Martin Torrijos

Caracas, Venezuela, June 23, 2006—During a visit to Panama yesterday, Venezuelan President Hugo Chavez agreed to support a variety of energy related projects, such as the amplification and modernization of a Panamanian oil pipeline, the possible construction of a gas pipeline, the supply of Venezuelan oil to Panama, and the construction of a refinery in Panama, among other things.

Chavez visited Panama in order to participate in the 180th anniversary celebration of the “Anfictionic Congress,” that Latin American independence hero Simon Bolivar had organized in Panama and that was supposed to push for Latin American integration.

With regard to the modernization of Panama’s pipeline, Chavez said that it, “is today being underutilized and in addition we can give it bi-directionality, amplify its capacity in order to bring Venezuelan oil and pump it from the Caribbean to the Pacific.”

Venezuela has repeatedly indicated a strong interest in modernizing the Panamanian pipeline, which can carry oil from the Caribbean to the Pacific Ocean. The purpose of such a pipeline for Venezuela would be to reduce transportation costs in bringing oil from Venezuela to China and India, which it intends to supply in greater volumes.

Other energy-related memoranda of understanding that the two countries signed included a joint project for the supply of Venezuelan natural gas to Panama and the construction of a refinery with the capacity to process 150,000 barrels of crude oil per day.

Also, Chavez offered Panama to join the Petrocaribe agreement, which provides Venezuelan oil at favorable financing rates and allows countries to pay for oil shipments with products instead of cash. Almost all nations of the Caribbean are already part of this agreement. It is, “a system of oil supply guarantees that keeps growing every day and that more governments, peoples, and communities are joining,” said Chavez about the offer.

Reflecting on Simon Bolivar’s efforts to unify Latin America, Chavez said, “We are prepared to advance in an integration project that transcends the energy sector. It is about retaking Bolivar’s dream, the Protocols of the Isthmus. It is about giving form to a new integration, an integration that begins with the conscience, with the soul of these peoples…”

Chavez urged the Panamanian President, Martin Torrijos, to consider his government’s ALBA proposal, the Bolivarian Alternative for Latin America and the Caribbean, which is “based on what we advocate as a new model of Latin American integration, founded on solidarity, cooperation and economic complementation,” instead of just free trade, which the U.S. is pushing, said Chavez.

Responding to accusations that Venezuela is supporting Daniel Ortega in the upcoming presidential elections in Nicaragua, Chavez denied the charge that he had sent helicopters to Nicaragua and added, “There is a great hegemonic interest, from which we distance ourselves, that this good will and the Venezuela proposals to governments and parliaments end up being rejected or seen in a bad light, as a result of this campaign that is constantly being repeated.”

Venezuelan National Assembly to Pass Law to Partly Nationalize Mines

Credit: El Universal Caracas, Venezuela, June 23, 2006—On Tuesday, the Venezuelan National Assembly (AN) unanimously took the first steps towards passing reforms on the Venezuelan Mining Law, which could force companies with abandoned and idle mines to form joint ventures with the Venezuelan state.  The move is similar to this past year’s shift in Venezuelan hydrocarbon policy, which forced oil companies to form joint ventures with Venezuela’s state oil company PDVSA.

With the unanimous passage out of the opening discussions of the AN on Tuesday, the reform now enters in to a national consultation process focused on the mining regions of Zulia, Táchira, and Bolívar.  José Ramón Rivero, President of the AN subcommision on Mines stated this week that the results of the discussions will be incorporated in to the other two current mining proposals, and the corresponding reform will hopefully officially pass the AN in one month.

According to the daily Carabobeño, Rivero said that they are attempting to eradicate the mining latifundio (large idle estates), because “they are worse than the land latifundios.”  He stated that there are more than a million hectares (2.5 million acres) that are frozen from exploitation because they are in the hands of concessionaries that do not take advantage of the resources.  “We propose that we give urgent priority in approving [the reform] before this period of Congressional sessions is over.”  The Venezuelan National Assembly recess is scheduled to begin August 15.

The reform approved during Tuesday’s opening discussions, proclaims to recover national sovereignty over mining resources by eliminating concessions for inactive mines, and by creating a new legal and regulatory framework to benefit Venezuela’s small miners who have found it hard to compete with transnational mining corporations.

It proposed, “the eradication of the latifundio, through the elimination of the system of concessions and the creation of the figures of operative contracts and joint ventures, as new modalities for the practice of mining activity…  The consolidation of the small mining interests under the principles of sustainable development, which will be carried out through the National Mining Enterprises of Social Production; the possibility of creating mechanisms of cooperation geared towards international equilibrium and which guarantee the transfer of advanced technology in agreement with the principles of State planning and functioning for the good of the people.”

One of the more important features of the reform is the creation of the joint mining ventures, whereby private companies with idle concessions would be forced to form enterprises with the Venezuelan state (who is by law given majority share), if they want to continue to have a mining stake in Venezuela.  According to the reform, this is to take back control over the nation’s mineral resources and to eliminate the profit driven bottom-line only search for wealth without the input from the state and the good of the people.

However, El Universal reported over the weekend that according to the President of the Mineral Chamber of Venezuela (CAMIVEN) Gilberto Sánchez Albornoz, the creation of the joint ventures was entirely permitted under the 1999 Mining Law. “Either they haven’t read it, or they didn’t know how to interpret it”, he said. The CAMIVEN board will meet this week to analyze the official proposal and its implications,

Crystallex International

Crystallex International is a Canadian mining company, which became one of the largest mining concession holders in Venezuela, when it bought 40,000 hectares of exploration rights from Bolivar Goldfields in 2000.  As of 2002, it held 77,410 hectares, including the rights to develop Las Cristinas, in southeastern Bolivar state, which could hold more than to 10 million ounces of gold reserves.  According to Forbes, however, after two years and $94 million dollars, the company is still awaiting the environmental permits from the Venezuelan government, to begin exploration.  According to Bloomberg, Crystallex believes that their contract is valid and that “the draft mining law is completely consistent with the validity of [their] contract.”  But, Bloomberg reported last week that according to Rivero, if this bill is passed, it would force Crystallex to convert its operations to joint ventures (although they would have a transition period to adapt to the changes).

"The reform is to rescue areas which aren't in operation, where they haven't finished exploration, where they haven't initiated mining," said Victor Alvarez, Minister of Basic Industries and Mining (MIBAM) last week during a press conference.  According to Bloomberg, Alvarez added that non-producing areas include those awaiting state permits, “Too often the permit process is used as an excuse and a pretext for inactivity."

Venezuelan Mines

According to MIBAM statistics, there are currently 760 active mining rights, of which 413 represent concessions, 327 are contract miners and 20 are contracts granted under the old Ministry of Energy and Mines, totaling a surface of 1,363,005 hectares, of which 600,000 hectares where handed over to small miners organized in cooperatives and Social Production Businesses in May. 

According to El Universal, in Venezuela there are 7 large gold mines, 14 metallic mines, and 7 non-metallic mines.  Venezuelan minerals include, Aluminum, bauxite, carbon, diamonds, iron, nickel and gold as well as various no-metallic resources.

According to a report by the World Resources Institute, as of 1999, Venezuela’s production in Aluminum, bauxite and iron was in the top 15 countries of the world, although diamond and gold production places far behind.  Nevertheless, in the last 6 years, Venezuelan gold production has almost quadrupled, to 22 million tons a year in 2005.  This increase has gone hand in hand with a large increase in the price of gold after years of stagnation. Gold now stands around $643 per troy ounce (31.1 grams), which is up 24% from the beginning of this year.

Venezuelan Officials Denounce U.S. Campaign against Venezuela UN Post

Venezuela's Foreign Minister Ali Rodriguez.
Credit: RNV Archive

Caracas, Venezuela, June 22, 2006—Venezuela’s foreign minister reacted sharply yesterday to reports that the U.S. was lobbying against a Venezuelan seat on the UN Security Council, predicting that the U.S. would suffer another bitter defeat.

According to Rodriguez, the situation is very similar to when the U.S. wanted to push for a different Secretary General of the Organization of American states than was being supported by Venezuela, Brazil, Argentina, and Chile. “The United States could not impose its candidate and something similar will occur, with all certainty, in the Security Council of the United Nations.

Venezuela is currently lobbying for one of the 10 rotating Security Council seats, five of which will become available at the end of the year. Countries are generally nominated by their regions and then approved of by the full General Assembly. The Los Angeles Times reported on Monday that the U.S. is lobbying other Latin American nations to support its candidate, Guatemala. Unidentified diplomats told the LA Times, though, that many countries would probably support Venezuela in the upcoming vote in October.

AP reports, though, that the U.S. ambassador to the UN, John Bolton, when asked if the U.S. was opposing Venezuela for the Security Council, said, “I think we're making our position very clear, very persuasively, too.”

statements the U.S. Under Secretary of State Thomas Shannon made about how the U.S. is “working multilaterally” to defend democracy in Venezuela. Shannon had made the comments during a hearing of the House Foreign Relations Committee, where he also stated that the U.S. would be willing to help Venezuela to improve its electoral institutions.

Rodriguez, in an interview with the South American satellite TV channel TeleSur, also reacted to Shannon’s allegation that Venezuela was trying to purchase influence in Latin America, via its various oil trade agreements. Rodriguez said that Bush administration officials, “who have a salesperson mentality, think that it is very easy to buy consciences and that it is very easy to sell consciences. This is not an insult to President Chavez, it is an insult for those countries that in their use of their sovereign right to make agreements with Venezuela in order to benefit their countries.”

Rodriguez went on to say Shannon is, “offending the dignity of other leaders of the continent, which shows a total and profound ignorance of distinct realities.”

Maripili Hernandez, Venezuela's vice-minister for North America, said that the United States, “is worried that a small country like Venezuela can stand up to the empire with dignity and strength,” if it were represented on the Security Council.

Venezuela’s Vice-President José Vicente Rangel also weighed-in on the issue today, saying that Venezuela was not trying to intervene in any country’s decision on who to support for the UN post. “Venezuela is not trying to intervene, in any way, in the decision that any government takes about the representation in the Security Council of the United Nations,” said Rangel.

Referring to the specific case of Chile, which according to several reports has been put under much pressure by the U.S. to support its candidate, Guatemala, Rangel said he believed that in the end Chile would support Venezuela. “The historical ties between Chile and Venezuela are superseded by circumstantial factors,” said Rangel.