The controversial decision of the Government, through the Ministry of Commerce, Industry and Tourism, under which decree 1047 was issued, banning coal exports to Israel from Septembernot only continues to generate a deep debate about the economic impact on national finances and in producing regions such as La Guajira and Cesar, but already has experts making legal calculations.
The document argues that “The Republic of Colombia considers that military operations against the Palestinian people represent a breach of international peace and security.” and points out that 90% of what is exported from Colombia to this nation is thermal coal (coal).
(We suggest: Ban on coal exports to Israel puts $650 billion at risk)
In this sense, “The Republic Colombia has decided to contribute to the measures adopted internationally in order to prevent the continuation of threats to peace. and international security generated by Israel establishing a measure prohibiting coal exports to that country”.
But it is a measure with a series of effects on the country’s economy, as well as with far-reaching legal implications that, In fact, it could lead to lawsuits before arbitration courts.
“The decree issued by the government of Gustavo Petro that prohibits coal exports to Israel It is subject to annulment before the Council of State for violating constitutional and legal norms protection of free economic competition“, was the forceful message from Pablo Felipe Robledo, former Superintendent of Industry and Commerce and former Vice Minister of Justice.
(We recommend: Hamas thanked Petro for banning Colombian coal exports to Israel)
Precisely, the The Colombian Mining Association (ACM) said that the decision is “iunconstitutional and illegal since it violates articles 150 and 189 of the Constitution, lLaw 7 of 1991, Article 259 of the National Development Plan and the international commitments acquired by Colombia in its Free Trade Agreements”.
The articles of the Constitution mentioned by the Association refer to the functions of Congress and the President, thus indicating that the measure could violate the functions assigned to each.
For its part, Fenalcarbón, which represents coal producing companies, also expressed its opposition and considered it to be arbitrary, illegal and unconstitutional. He argued that the decision jeopardizes agreements and contracts already signed between companies from both nations.
(Of interest: What the decree officially banning coal exports to Israel says)
Juan Camilo Nariño, ACM
ACM
However, the decree He points out that with respect to the Free Trade Agreement between Colombia and Israel, “authorizes the parties to the treaty to adopt the measures which they consider necessary for the fulfillment of their obligations under the Charter of the United Nations with respect to the maintenance or restoration of international peace or security or the protection of their essential interests”.
Similarly, the document states that the decision is “constitutionally necessary”, and further insists that it is valid.
(You may be interested in: The fall in mining’s contribution to the country’s GDP is due to ‘stigmatization’, warns the union)
However, Nicolás Arboleda, partner at Arboleda Abogados, said that The decree lacks legality and constitutionality, since any person has the freedom to trade with any country. He stressed that the Government cannot restrict foreign trade.
For this reason, The decree could be challenged before the Council of State or the Constitutional Court. The argument put forward by the Ministry of Commerce, as well as the Ministries of Foreign Affairs, Finance and Mines and Energy, is that There is an urgent need for “protect public morals and essential interests of security of the Republic of Colombia”.
In this regard, Juan Camilo Nariño, president of the ACM, said that “andThe argument of public morality cannot be used to justify disproportionate and inappropriate decisions which seriously affect the country’s economy and the well-being of the regions”.
(Recommended: Reserves of the main mineral and energy resources show a fall in 2023)
For its part, Fenalcarbón asserted that it is not about denying a historical conflict, but this type of measures are not part of the solution and, On the contrary, they do cause a detriment to the well-being of the Colombian nation in a reduction of the payment of rent and, of course, the payment of royalties.
Carlos Cante, president of Fenalcarbón, said that sales will fall in the second half of the year.
Archive
Economic and fiscal effects
He The government rules out that the decision could have economic effects, stating that royalties would not be affected.given that these are calculated based on production at the mine site and do not directly depend on exports.
The decree also states that “lThermal coal exports to Israel only accounted for 5.05% of the total coal exported by Colombia in 2023”. For this reason, In this measure, the Government indicates that the measure has fiscal viability in an indefinite period..
(Read also: Drummond exceeded 600 million tons of coal exported after 29 years)
However, the ACM stressed that this 5% of exports is equivalent to US$447 million, equivalent to all of Colombia’s exports to the United Kingdom1.2 times the exports of roses and 2.2 times those of Hass avocado.
In In terms of taxes and royalties, the effect would be $650 billion.whose effect would be particularly strong for regions such as La Guajira and Cesar, which together would stop receiving resources worth $100 billion.
“This tax contribution is equivalent to 31% of the income contributed by the entire ICT sector and 20% of the contribution of the construction sector,” said the ACM.
Daniela Morales Soler
Portfolio Journalist
