On June 8, President Gustavo Petro announced that Colombia will stop exporting coal to Israel “until it stops the genocide” against Palestine. This, by showing, once again, in disagreement with that country for the response it gave to the terrorist attack it received on October 7, 2023 by the Palestinian group Hamas.
The measure, according to the Colombian Mining Agency (ACM), as well as other experts, would mean that Colombia would stop receiving USD450 million at a difficult time for the country’s economy, in which, precisely, a cut of $20 was reported. billions in the General Budget of the Nation (PGN).
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The situation, of course, generated all kinds of reactions and now it was the Comptroller General of the Republic (CGR) that referred to the fact. Did through a letter to the Minister of Mines and Energy, Andrés Camacho Morales, in which he detailed several observations.
In this, it is read that the Directorate of Sectoral Studies of the Delegate Comptroller of Mines and Energy made the evaluation of the draft decree on the matter and legal certainty is concerned, especially of the commitments assumed at the international level, such as, for example, free trade agreements, in this case the one that Colombia has had with Israel since 2020.
Likewise, he pointed out that it is likely that there is a restriction on business autonomy and what is contemplated in article 98 of Law 685 of 2001 is violated, which says: “Disposition to production. The concessionaire will freely determine the destination of the exploited minerals and will establish the conditions for their disposal and commercialization.
He stated that although the Government indicates within the motivational part of the draft decree that it makes this determination due to the military attacks that Israel has carried out on Palestine since October 2023, it also points out, among other arguments, that “due to the nature of urgent execution of the measures adopted to prevent and stop acts of genocide against the Palestinian people, and with the purpose of protecting public morality and the essential security interests of the Republic of Colombia…”, It is no less true that Colombia, through its exports, especially coal, generates resources for investment in social policies.
Then, the entity stressed that “although the decree mentions the causes in which the export ban to Israel would not apply, the CGR considers that the draft decree causes legal uncertainty and a disincentive to foreign investment, since The coal and briquettes (charcoal) that are exported to Israel are exploited by companies with foreign capital, mainly Drummond and El Cerrejón”.
Likewise, he noted that according to figures from the Mining and Energy Planning Unit (Upme), Coal exports to Israel until October 2023 amounted to 2.45 million tons, corresponding to 5.3% of total coal exports that same year, which corresponded to nearly $650 million in royalties, taxes and contributions to the nation; and nearly $100 million allocated specifically to the departments of La Guajira and Cesar.
Thus, if said decree is approved, the nation could stop receiving resources similar to those mentioned above, which would affect the projects that are supported under the General Royalties System. On the other hand, the decrease in the exploitation of thermal coal would directly affect the generation of employment, both direct and indirect, in the producing regions.
However, the entry into force of this decree would not affect Israel’s economy, since countries such as Australia, Indonesia, India, among others, could fill the void left by Colombia.
“Additionally, the message that the national government is sending to the world is disturbing, taking into account that in addition to discouraging foreign investment, it is being implied that The nation does not have the legal stability to guarantee compliance with the obligations acquired as sellers of raw materials.not only within the mining sector,” added the Comptroller General of the Republic.
