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A US court dismissed a lawsuit against Drummond Co., Colombia's second-largest coal producer. (Photo: Drummond Ltd).
Wednesday, April 15, 2015
Trade Talk

Drummond Fights Colombia Lawsuits

Argentina loses Suez compensation claim, Ecuador tourism controversy, top Mexico City areas for expat executives.


Drummond Company Inc. is fighting back lawsuits that claim it aided paramilitary groups in Colombia to protect its coal business there.  Not only are the charges false, but they are being promoted by profit-seeking tort lawyers that have bribed witnesses, the company says.

In the most recent case, the United States Court of Appeals for the 11th Circuit in Atlanta, dismissed a 2009 case claiming that company and two of its executives had been accused of allegedly being involved in a conspiracy with paramilitary groups. The Atlanta court ruled the case lacked merits.

“With the company and its executives cleared of any wrong-doing, Drummond welcomes this ruling as a re-affirmation that we conduct business obeying the law,” the firm said in a statement last week. “At no time have we been involved in illegal activities or in relationships with illegal groups. “

Instead, Drummond points the finger at overzealous lawyers. “This case was brought about by ambitious lawyers seeking large windfall profits by creating false charges using paid witnesses,” Drummond said in its statement.  “Evidence has been uncovered that these witnesses and/or their families were given financial benefits by the lawyers. Justice has been served by the courts! Now, these falsely accused executives can work without these false accusations hanging over their heads so that they and the company can work to create a better and safer way of life for our workers and the communities in which we work.”

The Court of Appeals upheld the lower court’s factual findings that there is no evidence that Drummond Company Inc., Drummond Ltd or its executives were involved in the paying of the paramilitary group AUC.  Additionally the Court ruled that there is no evidence that Drummond executives “knew that noncombatants were being murdered along the rail lines,” or that the  “paramilitary group AUC was allegedly being paid by Drummond.”  Also, the district court found that the “Plaintiffs´ admissible evidence did not raise a genuine issue of material fact as to either of the individual defendants´ liability.” Accordingly, the Court affirmed the summary judgment in favor of the executives.

The Court ruled that the evidentiary record “demonstrated an absence of evidence in support of Plaintiffs´ case” against the executives.  Specifically, there was no evidence that either executive “had any knowledge of an alleged corporate scheme to fund or otherwise support the AUC, much less that they had any part in such a scheme or control over those who allegedly did.”

The ruling further stated that “Plaintiffs have failed to adduce any evidence creating a genuine issue of material fact” as to the executives´ “liability for any alleged corporate scheme resulting in the killings of noncombatants along Defendants´ mining operation and rail lines by the AUC….” and “there is no factual basis to sustain liability for Plaintiffs´ TVPA [Torture Victim Protection Act of 1991] claims against the individual defendants.”

Drummond also recently filed a lawsuit that alleges several lawyers, an advocacy group, and a Dutch competitor, are involved in a criminal campaign to extort money from Drummond over claims that claim it collaborated with a paramilitary organization in the murders of Colombian civilians to protect its coal interests in that South American country, AL.com reports.

Drummond's latest complaint, filed March 27 in U.S. District Court in Birmingham, claims the defendants have violated the Racketeer Influenced and Corrupt Organizations Act - or RICO.

"Over the span of more than six years, defendants have engaged in a multifaceted criminal campaign to exert pressure upon Drummond in an attempt to damage Drummond's reputation and business interests and obtain a fraudulent and extortionate financial windfall," according to the lawsuit.

Drummond's lawsuit names as one defendant Terrence P. Collingsworth, a partner in the Florida -based law firm of Conrad & Scherer, who has been a lawyer in the three lawsuits against Drummond. Collingsworth also serves as executive director of the group International Rights Advocates (IRAdvocates) and serves as an agent for Albert van Bilderbeek, one of the owners of the Dutch company Llanos Oil described as a competitor that lost oil and gas rights to Drummond in Colombia.


Avenida Reforma and the Polanco neighborhood are the undisputed favorite areas for expatriate executives when they choose where to live in Mexico City.

Around 50 percent of the executives choose to live on Reforma, while the other half live in Polanco, according to data from realtor Coldwell Banker quoted by El Financiero.

“Younger people without children choose Polanco and executives with families or higher ranking executives are more inclined at Reforma,” Coldwell Invest General Manager Manuel Diaz tells El Financiero.


Although Argentina was ordered by The World Bank’s International Centre for Settlement of Investment Disputes (ICSID) to pay French company Suez a compensation of $405 million for the 2006 cancellation of its contract, experts believe it will be the next government that will heed the order.

“The fact that a ruling has been made after nine years opens the space for negotiation,” Carla Selman, a Latin America analysts at IHS, said in a commentary. “However, the government of President Cristina Fernández de Kirchner is highly unlikely to meet the payment in full or engage in negotiations in the run-up to the October 2015 elections, as it would be politically damaging for her nationalist rhetoric if she is seen as negotiating with a foreign company. It is more likely that the next government will be in charge to reach a deal, as the three main contenders for the elections are more prone to honor international commitments, with the aim of bringing Argentina back to international markets, from where it has been marginalized since the 2002 default. As in the past, a negotiated amount, probably in bonds, is more likely to be paid.”

The three top contenders are
Buenos Aires mayor Mauricio Macri, who is the business favorite; Sergio Massa, a former chief of staff of Cristina Kirchner who now leads a dissident faction within the ruling Peronist party and Daniel Scioli, a former vice president and current governor of the Buenos Aires Province who has Kirchner’s backing.

Argentina still has 19 pending cases at ICSID, in the context of reversing the privatization processes of the 1990s, and the currency changes in 2001 when it abandoned its peg to the dollar and froze utility rates, according to IHS. In October 2013, Argentina paid $677 million to utilities and telecommunications companies mostly via bonds, including Azurix, CMS Gas, Continental Casualty, Vivendi, and National Grid, which accepted a reduction in their original claims.


Ecuador’s tourism officials are in hot water after they faked a trip to Costa Rica for a group of travelers, The Tico Times reports.

In a stunt carried out by the Ecuadorean airline Tame, Ecuador’s Tourism Ministry and Ministry of Transport and Public Works, 40 tourists were taken to an area they were led to believe was Costa Rica before being told that they were actually in Ecuador, the paper says.

Costa Rican newspaper La Nacion published the official Ecuadorian video
of the ruse.

“We’re unhappy about their use of our country to trick their people into getting to know their own country,” Tourism Minister Wilhelm von Breymann told The Tico Times.

Von Breymann said that lawyers for Costa Rica's Tourism Institute (ICT) and Costa Rica's export promotion agency (Procomer) were looking into possible legal action over the misuse of Costa Rica’s national brand.

The latest video comes after Ecuador made a splash at this year’s Super Bowl, the first time a foreign government had purchased air time during the annual event that is known as much for football as the TV ads during the broadcast of the match. It paid $3.8 million for a 30-second spot, All You Need Ecuador (see video here).

Meanwhile, Ecuador is embroiled in another controversy relating to a US PR firm that has received $9.7 million from Ecuador's government to campaign against Chevron. In the latest case, the firm sued Hollywood star Sharon Stone (See Ecuador Planned Sharon Stone Luxury Trip).

However, Stone is fighting back the allegations from the PR firm, MCSquared. Stone's lawyer says the actress never agreed to go to Ecuador to advocate against Chevron, according to The Hollywood Reporter.


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