Trending

Newsletter

Colombia: The Drummond Case and Demonizing Corporations

By: Javier Garay - @Crittiko - Jan 23, 2014, 10:11 am

EspañolFor the past few weeks, Drummond — a mining company — has been the subject of condemnation and a shutdown in Colombia. While situational events account for this, to some degree, the underlying cause is worth our attention.

In 2013, the company admitted to contaminating the Santa Marta swamp. The Colombian government not only fined Drummond, it forced them to change their carbon shipment system. The current debate then started when company directors announced that they would not be able to meet the deadline, set by environmental authorities, to comply with the mandate.

Some analysts believe this announcement was an act of rebellion. Politicians and intellectuals have accused the company of causing environmental damage, compromising workers’ health, and allegedly defying the state with the refusal. As per usual, the Colombian government has decided to please the majority by announcing more fines and regulations.

Keep in mind, the company accepted the facts, agreed to pay, stopped any more damages, and will comply with the government’s decision. The scandal only arose when Drummond said they would not start using the new port right away, but in a few months.

Why did the people not take pity on this company’s situation and be accommodating? Unfortunately, this reflects the negative vision Colombians have towards companies and businessmen.

In a World Values Survey, when asked if they trust companies, 10.4 percent of Colombian citizens said they trust them “a great deal,” while 36.3 percent trust them “quite a lot.” Meanwhile, 32.2 percent do not trust companies “very much,” and 21.1 percent simply do not trust them “at all.”

These trust percentages as worse than those for the national police force (15.8, 34, 29.7, and 20.6 percent, respectively), the military forces (26.6, 33.3, 23.2, and 15 percent), and even the government (14.5, 35.8, 28.5, and 19.8 percent). Colombians seem to have a more positive perspective on public institutions than the private sector.

One could argue that polls reflect a history of corporate abuses around the country. Maybe, but there have been situations where, even before starting their operations, companies have had to go through public scrutiny and scandal. That is what happened to Starbucks, for example. Last year, they introduced their business plan to open branches in Colombia, and the immediate reaction was concern and national outrage.

This concern stemmed from the apparent threat to local coffee shops. It did not occur to the population that perhaps some competition could help improve quality and allow for more options — ultimately benefiting consumers and small scale producers. The outrage arose from the same old fears: this company’s arrival will change coffee habits for local consumers and threaten producers.

To make the knee-jerk outrage even more foolish, previous experiences testify the futility of these arguments. When McDonald’s came to Colombia, for example, it did not threaten for one minute the success of its main local competitor, El Corral. Today, this company still leads the hamburger industry, and the benefits? Consumers have more options, and many Colombians — especially young people — have more job prospects.

My contention is not that Drummond executives can and should be able to do whatever they want. Whether they have allied with paramilitary groups, endanger the environment, or refused to account for worker health risks, they must pay for their crimes. So far, though, the company has accepted responsibility and punishment for its excesses.

Meanwhile, Colombia needs to stop seeing companies as the devil. Not only do Colombians turn their backs on the benefits that these companies produce, they are exaggerating the consequences of partial noncompliance.

Corporate entities alone are not morally good or bad, but they are vehicles for commerce — and this makes them key players in the life of a country. If they are multinational, it does not mean they pose a threat. On the contrary, they merit admiration: their size proves the directors have made good choices, and they possess the quality and innovation that this country needs.

The assumption of entrepreneurship as something negative, whether at a national or international level, is an obstacle to development. Companies — the investors and businessmen behind them — are, in fact, wealth creators, so to persecute them is both irrational and a legitimate cause for outrage.

Does our close neighbor Venezuela not constitute enough proof of that?

Javier Garay Javier Garay

Javier Garay is a professor at the Externado University of Colombia. He has written two books on international issues, such as development, after his doctoral dissertation focused on the same topic. Follow him on Twitter @crittiko and through his personal blog, Crittiko.