6 March 2017, ELN violence hinders/halts operations of three major companies in Colombia

As of 6 March 2017, three major corporations in Colombia – Gran Colombia Gold, Occidental Petroleum, and Ecopetrol – have either canceled or put on hold their operations due to attacks by the insurgent group, Ejército de Liberación Nacional (ELN, or the National Liberation Army).

The ELN is a Marxist insurgent group that formed in 1964. It seeks to overthrow the government of Colombia and replace it with a communist regime. It has approximately 1,500 fighters. A decade ago, it had over 5,000. The ELN makes liberal use of terrorist tactics.

The ELN and the government entered into peace negotiations on 7 February 2017. This comes on the heels of similar and more promising peace negotiations between the government and Colombia’s biggest insurgent group, Fuerzas Armadas Revolucionarias de Colombia (FARC, or Revolutionary Armed Forces of Colombia) that have actually seen some FARC units disarm and reject violence.

Regarding the ELN’s violence against corporations, Gran Colombia Gold, on 27 February, announced it was suing the government of Colombia for $700 million over “difficulties” maintaining its mining operations. It blamed illegal miners and attacks by the ELN. The company specifically said the insurgent group had “obstructed projects in the Antioquia region” throughout 2016.

Canada-based Gran Colombia Gold mines gold and silver. Its main geographic focus is Colombia where it runs the largest underground gold and silver mines in country via its Segovia (Antioquia department) and Marmato (Caldas department) operations.

As for Occidental Petroleum, it operates a 50,000-barrel a day oil production project – the Caño Limón Field – in the Llanos Norte Basin (Arauca department), and an enhanced oil production project – the La Cira-Infantas area – in the Middle-Magdalena Basin (Santander department). For the latter, Occidental partners with Colombia’s state-owned oil company, Ecopetrol.

As of 15 February, Occidental shut down 44 of 370 wells in the Caño Limón Field over ELN attacks on the 210,000-barrel a day Caño Limón-Coveñas pipeline. Ecopetrol owns the pipeline. If the pipeline cannot move oil from the field and its onsite storage tanks, then the whole operation has to halt. There have been 17 attacks on the pipeline in 2017, and there were 43 attacks in 2016, reports Reuters.

As a result of these pipeline attacks, says Bloomberg Quint, Ecopetrol, on 15 February, had to declare a “force majeure” and halt oil exports. In layman’s terms, a force majeure absolves a company from fulfilling its business obligations due to “an act of God,” or unforeseen circumstances beyond the control of the company in question.

The ELN has increased operations as of late. On 19 February, it claimed responsibility for a major bombing in Bogota in La Macarena neighborhood just down the street from the city’s main bullfighting ring. The blast killed one, a police officer, and wounded 26. The City Paper Bogota reports that the ELN said it specifically targeted the Mobile Anti-Disturbance Squadron (ESMAD) because it had put down “social protests.”

On 16 February, the ELN bombed the Caño Limón-Coveñas pipeline in El Carmen (Norte de Santander department), which is near the Venezuelan border, reports Business Insider. The attack temporarily shut down the pipeline, and an insurgent minefield hindered repair operations. On the same day, the ELN kidnapped the father of a local town mayor.

On 14 February, the ELN ambushed a military patrol on the Bogotá-Villavicencio highway in eastern Colombia, wounding two.

There are four takeaways here. First, despite pursuing peace talks and its reduced manpower, the ELN maintains its destructive capabilities and ideological motivation for attacking security, infrastructure, and civilian targets. It is not a significantly weakened organization.

Second, the ELN appears to have adopted a “talk-fight” strategy where it engages in peace talks and simultaneously continues its attacks in order to pressure the government to deliver favorable negotiating terms. Both insurgent and conventional forces have made liberal use of the talk-fight strategy throughout history. Communist forces in particular have used it to good effect; the North Vietnamese during the Vietnam War, for example.

Third, the corporate shutdowns mentioned here are not surprising given that these companies are operating in a decades-old low intensity conflict zone where thousands have been killed. If anything, it brings into question the business and legal logic of Gran Colombia Gold’s lawsuit and Ecopetrol’s force majeure. It is difficult to comprehend why any company would assume their operations would function normally in such hostile conditions. No government can protect all businesses from highly experienced insurgent armies. In this environment, no action by the ELN should be considered an “act of God.” It is a war zone, and this group has been carrying out these types of attacks for decades.

Fourth, if any legal term applies here, it is “totality of circumstances,” which essentially means, when referring to violent areas, that attacks happen so often that a corporation should take the responsibility to protect itself, and also that it should absorb at least some of the legal and financial downside should attacks happen.

Looking ahead, the ELN is most likely to continue its talk-fight strategy unless the government ceases peace talks and concentrates massively increased and sustained operations against the insurgents. If the ELN receives favorable negotiating terms up front, it might curb or halt its violence until it becomes useful to pressure the government again. Having said this, the ELN has been fervently dedicated to Marxism since the 1960s, and it is an organization steeped in generations of warfare. For these reasons, the ELN could break off peace negotiations at any time.

Companies seeking to do business in Colombia should take note of the situation of these three companies and weigh the costs of doing business in country, which should include a robust security program, relevant legal expertise, and added insurance.

Sources and further reading:

Colombia rebel group wages oil pipeline war as another disarms,” Bloomberg-Quint, 3 March 2017.

Occidental starts to suspend Colombia production after rebel attacks,” Reuters, 1 March 2017.

“Canadian gold company to sue Colombia for 700m US dollars,” BBC Monitoring Americas, 27 February 2017.

ELN claims responsibility for Colombia bomb attack,” Anadolu Agency, 27 February 2017.

ELN guerrillas claim responsibility for La Macarena bombing, The City Paper Bogota, 27 February 2017.

Explosion rattles Colombia’s capital, injuring dozens,” Miami Herlad, 19 February 2017.

UPDATE 1-Bombing halts pumping on Colombia’s Cano-Limon oil pipeline,” Business Insider/Reuters, 17 February 2017.

Profiles: Colombia’s armed groups,” BBC, 29 August 2013.

Gran Colombia Gold website, Operations & Projects.

Occidental Petroleum website, Colombia.

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