Despite the supposed commitment of former President Alvaro Uribe‘s administration to creating a climate for foreign investment, U.S. officials were still concerned about corruption and apparent favoritism shown to Colombian companies a WikiLeaks cable has shown.
Of the numerous problems highlighted by the then-U.S. Ambassador William Brownfield in the cable, dated October 8, 2009 and released through El Espectador, two in particular stand out.
First is the case of a group of investors from Montana who were seemingly shut out of the bidding process to obtain a railroad project in central Magdalena. According to the group they were provided with an unrealistically short bid timetable and unfair qualification criteria established by the National Concessions Institute (INCO).
In relation to this same project, five senior officials from both the INCO and the Ministry for Transportation were forced to resign after recorded phone conversations emerged of the five soliciting bribes for the granting of the railroad contract.
The then-President of the Chamber of Infrastructure Juan Martin Caicedo noted how cases such as these represented a “huge brake on the [Colombian] economy.”
In a second example, even foreign companies who successfully obtained contracts in Colombia were shown to be at risk.
Brownfield relays how an American company, Scientific Games International (SGI), that won a contract in 1992 for a national instant ticket lottery had to enter into a dispute with ETSEA, a company owned by the Ministry of Social Protection, after it was unable to meet the sales level stipulated in the contract.
Despite contractual obligations for the dispute process to go through arbitration, ETSEA refused to take this route, instead choosing to file a lawsuit.
This, Brownfield states, shows the Colombian government’s lack of respect for clauses in commercial contracts and thus “adds another level of risk and uncertainty for U.S. businesses considering investments in Colombia.”
While senior members of the Uribe administration acknowledged the problems faced by U.S. businesses in Colombia, they maintained that the way for the U.S. to foster a more receptive climate would be to hasten their efforts to pass the FTA.
The FTA between the U.S and Colombia was signed in 2006 but has never been ratified by the U.S. Congress. President Santos said last month he is confident the agreement will be passed this year.
Although levels of foreign investment grew under Uribe and continue under President Juan Manuel Santos, a report released in February stated how corruption remains a significant stumbling block for infrastructure projects in the country.