Table Of ContentThe Coal of El Cerrej6n
Dependent Bargaining and Colombian Policy-Making
Harvey F. Kline
The Pennsylvania State University Press
University Park and London
Up1v. Library, UC Santa Cruz 1~8 .•
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Contents
To Dottie
Preface vn
1 The Coal of El Cerrej6n and the World Energy
Crisis 1
2 The El Cerrej6n Decisions: Context and Actors 16
3 Coal in Colombia and El Cerrej6n Until1974 47
4 The Alfonso Lopez Years: Basic El Cerrej6n
Decisions Made and Unmade 75
5 The Turbay Administration: North El Cerrej6n
Ratified and Central El Cerrej6n Contracted 130
6 Conclusions: El Cerrej6n-Past and Future 178
Library of Congress Cataloging-in-Publication Data Appendix: Notes on Research Methods 198
Kline, Harvey F. References 202
The coal of El Cerrej6n.
Index 211
Bibliography: p.
Includes index.
1. Coal trade-Government policy-Colombia
Ej6n Hill Region. 2. Colombia-Politics and
governmentr-1974- . I. Title.
HD9554.C63E3748 1987 333.8'22215'09861 86-43038
ISBN 0-271-00491-6
Copyright© 1987 The Pennsylvania State University
All rights reserved
Printed in the United States of America
Preface
When I arrived in Bogota in August 1980, I greatly anticipated spend
ing yet another year in a country in which I had spent three of the
previous sixteen years. My plan was to do a general study of the energy
policy of an oil-importing developing country during the energy crisis. It
was my good friend Pacho Leal who first suggested that there was
enough in the El Cerrej6n case to fill my full year. He was right.
While my analysis of the coal decisions should stand on its own, I feel
that I would be remiss if I did not briefly discuss two preliminary
matters. The first is to anticipate likely Colombian reaction to this book,
while the second is to acknowledge those individuals who made this
book possible.
Most of the El Cerrej6n decisions were made in the confidentiality of
the executive branch of government. The public outcry in late 1980 and
early 1981 was intense, however. On the basis of that response, it seems
to me that this book might be similarly received, as I am certain that no
major Colombian actor or group will be entirely pleased with my de
scriptions, analyses, or conclusions. Allow me to reply, in anticipation of
some probable criticisms.
First, some will think that the data have been made to fit my precon
ceptions, especially in the case of the confidential interviews. While I
should admit that such a possibility exists in the social sciences, I can
only reply that I have made a scholarly attempt to consider all the
information from all sides. In the interviewing process, for example (see
the Appendix for more detail), I tried to interview all the potentially
relevant government policymakers-with greater or lesser success-as
well as all of the publicly known supporters and critics of the decisions. I
·also asked each interviewee for suggestions of other people I should talk
to and followed up on those suggestions to the extent possible. I have
attempted to present all sides of the El Cerrej6n debates and have
quoted the interviewees faithfully.
viii Preface
Second, my attempts to be impartial may be criticized by some
Colombians-by radicals for not criticizing the "oligarchy" as much as I
should have, and by government decisionmakers and other more conser
vative Colombians for including too much information from the same
radicals. I can state that I entered this study as a completely indepen
dent scholar, with no connections to any relevant actors on any side of
the El Cerrej6n issues. 1 The Coal of El Cerrej6n and the
This is not to suggest that I was completely "objective" in this study.
World Energy Crisis
My experience, especially in Colombia, has been that the sentence "He
is very objective" usually means "I agree with him." I did enter the
study with preconceptions-just as any scholar does. I have tried to
make them explicit in Chapter 1.
Some of the Colombians who helped most in this study-my good
friends and colleagues at the Universidad de los Andes-may very well
In 1982 the first coal was produced in the El Cerrej6n region of the
be among those who disagree with this study. Nonetheless I would be
departamento of La Guajira in northeastern Colombia (see Map 1.1),
remiss if I did not acknowledge their assistance and to suggest to them
through a service contract between the Colombian national coal com
that this study is much better because of them. I therefore thank Dora
pany, Carbones de Colombia (CARBOCOL), and a consortium of one
Rothlisberger and Francisco Leal (who have been helpful to me on three
Colombian and two Spanish firms. This contract applied to the central
separate research trips), and Gabriel Murillo (my student the first trip,
part of the deposit. Two years before, in September 1980, the Colom
my colleague on the second, and my chairperson on the third). This
bian government accepted the "commercial declaration" of the Interna
gratitude is extended sincerely for both professional assistance and
tional Colombia Resources Corporation (INTERCOR), a wholly owned
friendship. I also thank Francisco Gnecco Calvo, director of the
subsidiary of Exxon, for North El Cerrej6n. This agreement called for
Comisi6n para Intercambio Educativo in Bogota. Not only was he an
total investments, in current terms between 1980 and 2008, of U.S.$6.87
efficient Fulbright director, but his friendship made life easier for the
billion, to be split equally between CARBOCOL and INTERCOR, and a
visiting scholar and his family.
minimum production of 15 million tons annually.1 With these two con
I am, of course, very appreciative of the Fulbright-Hayes people in
tracts, there is a reasonable probability that coal will become the second
the United States as well as the local committee in Bogota. The grant
' . most valuable legal export of Colombia, if not the most valuable.
made a full year in Colombia possible. The El Cerrej6n story IS too This book is an analysis of the public-policy decisions made by the
complicated to research in less time.
Colombian government that led to the development of these two El
I would also like to thank all the Colombians who gave me some of
Cerrej6n contracts. More than that, it is an analysis of an oil-importing
their time-seven hours in one case. In all cases I was treated with the
developing country dealing with a previously unexploited energy
kindness and respect so typical of Colombians.
source. Furthermore, the study is one of the relationships between the
Finally I thank the family that joined me in this trip to Bogota. Words
government of Colombia and the large private businesses of the world
are inadequate to express my feelings for the three children-Kati,
(which I shall call "transnational enterprises," TNEs, following the
Ray, and David-who spent a year of their childhood in metropolitan
Latin American term). The decision that was made, contracting one
Colombia rather than in bucolic Massachusetts. But most of all I thank
part of El Cerrej6n with an Exxon subsidiary, was to enter into one of
my wife, Dottie, without whom this book would not have been possible.
the largest joint ventures in the history of Latin America with the
For all her help, both emotional and academic, I dedicate this book to
world's largest transnational enterprise.
her.
Tuscaloosa, Alabama 1. Throughout this study, I use "ton" to indicate the metric unit of weight equal to
January 1987 1,000 kilograms (2,204 pounds).
2 The Coal of El Cerrej6n The Coal of El Cerrej6n and the World Energy Crisis 3
tained new importance. While some saw this as a return to a "dirty
fuel," many more thought that the future of the world coal market was
bright, with this cheaper energy source to be used increasingly in
thermoelectric generation and, in the longer run, in liquefaction and
gasification projects.
In that context, representatives of coal companies-both strictly
speaking and, perhaps with greater frequency, coal affiliates of energy
companies-began conversations with various agencies of the Colom
• MedeiJ(n
bian government. Those representatives were no doubt inspired by the
COLOMBIA
reports of the good quality of El Cerrej6n coal, by the country's favor
*Bogota
able geographical location as compared with other major coal-exporting
.cllli
nations (the United States, Australia, South Africa), and by its low
labor costs. In short, the TNE representatives saw El Cerrej6n as a
good place to make money.
The Colombian government also showed interest in developing El
BRAZIL Cerrej6n coal. Until the early 1970s, Colombia's foreign-exchange earn
ings had been centered around one primary product, coffee, and, to a
lesser extent, crude petroleum. Export diversification was a constant
goal of Colombian presidents. No one seemed to object that another
200km primary product, coal, would be the basis of that diversification. But the
Map 1.1 Political map of Colombia
Colombian government became particularly interested in developing El
Cerrej6n coal during the 1973-82 period, as the country was becoming a
net petroleum importer for the first time since the 1920s, as it indeed
did in 1975.
The policy importance, then, came from Colombia's not being a mem
THE ENERGY CRISIS, OIL-IMPORTING COLOMBIA, AND EL
ber of that group of Third World nations-the members of OPEC and the
CERREJON COAL
other petroleum exporters-which was favored by the rise of oil prices.
Rather, Colombia was one of the developing countries that was preju
The first interest in El Cerrej6n coal came before the "energy crisis" of
diced by the rise of prices-or at least it seemed to be facing that pro
1973, with some intermittent TNE interest in the first seven decades of spect. In retrospect, the 1970s were not a period of foreign-exchange
the twentieth century. The Colombian government also, from time to crisis in Colombia, as had been feared. In part this was because of exports
time, demonstrated a desire to have the coal developed, and the first that were not anticipated (marijuana, cocaine). A 1975 frost in Brazil led
contract between a TNE (Peabody Coal) and the Colombian government to much higher coffee prices than anyone could have forecast. Further
was signed prior to the "oil shock" of October 1973. more, the new OPEC wealth in neighboring Venezuela and Ecuador
Nevertheless, all of the decisions that eventually led to coal produc "trickled down" to Colombia, through an increase of trade-some legal
tion in the north and central El Cerrej6n regions were made (since the but perhaps more contraband in form ("Segunda Crisis del Petr6leo,"
Peabody Coal agreement was rescinded, at least in part because of the 1980). Stating this situation comes after the fact, however, and, no doubt,
changed circumstances of the crisis) by the Colombian government and it was not the way policymakers viewed matters at the time.
the TNEs during that "energy crisis" between 1973 and 1982. The So Colombia was one of the oil-importing developing countries
latter date is chosen as the end of the "crisis"; by that year there was (OIDCs) that seemed likely to be harmed more by the petroleum price
an oil glut and prices began declining, in current as well as constant shock than even the industrial north. As Samuel L. Palmar said about
dollar terms. It was during that "energy crisis" period that coal ob- these OIDCs:
4 The Coal of El Cerrej6n The Coal of El Cerrej6n and the World Energy Crisis 5
The current oil crisis that has engulfed the world economy is in fact an even Most OIDCs decided on some combination of these three policies of new
greater problem for developing nations than for the developed. The former energy development, increased exports, and borrowing. The mixture of
have to curtail essential production and consumption; the latter can manage
policies, and their success or lack thereof, no doubt had to do with a
by cutting down on less essential items. Countries of the South lack pur
number of factors, including the natural resources of the individual coun
chasing power to secure their minimum requirements; countries of the
tries and the skill and ingenuity of their respective policymakers.
North do not. As oil prices rise, the rich nations are likely to corner world
supplies, leaving less for the poor-unless, of course, the oil producing
nations show special consideration for their "poor cousins" in the Third
World. Furthermore, the general increase in prices of essential inputs im Colombia as an "Energy Giant" of Latin America
ported from rich nations is bound to have an adverse effect on the develop
ment efforts of poor nations. (1975, 20) Colombia faced the energy crisis in a much better position than many of
the Latin American countries-and worse than others. At the time of
Therefore, the policymakers of those ninety-two OIDCs, with a com the crisis, it was the fourth most populous country in Latin America.
bined population of 1.67 billion in 1978 (World Bank, 1980, 3, 5) saw it yet that high ranking was equaled in few other statistics, either eco
necessary to pay more for the petroleum imports and for other needed nomic or energy-related. Its gross domestic product per capita was
imports, even for the same amount. But the goal in most cases was to fourteenth in Latin America in 1980, having raised its ranking by two
increase economic activity, hence necessitating increased energy con positions in the previous twenty years2 (Inter-American Development
sumption and more capital-goods imports. They faced, in effect, a prob Bank, 1982, 351).
lem stated clearly by Dunkerley, Ramsay, Gordon, and Cecelski: "High In energy terms, the country no doubt was one of the five "energy
oil prices, no matter how skillfully accommodated, add to the already giants" of Latin America, as Nazli Choucri has argued, the five that
heavy burden of achieving the necessary increases in economic output" together "accounted for 82 percent of total energy consumption during
(1981, 81). 1979 and 88 percent of total energy production" and "make up 87 per
The policy choices thus were limited. An OIDC could forswear eco cent of Latin American crude oil production and 73 percent of refined
nomic growth, through importing less energy and fewer capital goods, production consumption," as well as "93.8 percent of the region's coal
an option not voluntarily chosen by the policymakers of many develop production in 1979, 87.9 percent of total hydroelectric power, and 64
ing countries. Or it could use energy more efficiently and choose tech percent of energy produced from vegetable fuels (in 1975)" (1982, 52).
nologies and development strategies that economized on it. But such Yet the four other countries were "giants" more than Colombia was.
technologies would call for massive capital investments for a part of the When Colombian energy consumption was converted to per capita
world with a chronic capital scarcity (1981, 12, 17). terms, at 540 tons of petroleum equivalent (TPE), the country was not
Three other sets of policies were more realistic for most OIDCs. They nearly so much a giant as Venezuela (2,000 TPE), Argentina (1,250
could produce more of their own energy, a policy choice not open to all TPE), or Mexico (1,020 TPE) (Choucri, 1982, 83). Two of the giants are
OIDCs and which took time, even if possible. Or they could increase large exporters of petroleum (Mexico and Venezuela), while Colombia is
exports, in order to earn more foreign exchange for the increasing pe an importer. Furthermore, Colombia has the lowest consumption of
troleum bills. This option, of course, was open only to those OIDCs petroleum per capita of the five (2,300 barrels), the lowest proven re
which could produce something that the industrial countries, themselves serves (512 million), and the lowest number of years of potential produc
suffering from recession, wanted. It really mattered little, at least as far tion (ten), even at the current low rate (Inter-American Development
as paying the import bills was concerned, if the new or increased ex Bank, 1982, 403, 405-6).
ports were primary products, manufactured goods, or energy sources It is only when other energy sources are discussed that the Colombian
that could not be readily used within the OIDC. position among the giants becomes more justified. The country did have
Finally, an alternative-and in the short run, "easier"-policy would be large reserves of nonassociated natural gas, which were beginning to be
to go farther into debt to private banks, to multilateral lending agencies,
and to bilateral sources. As the years of the energy crisis passed, this
became a more realistic possibility as the private banks recycled petro
2. In this case I define "Latin America" in the traditional fashion-the eighteen inde
dollars to the more advanced of the developing countries.
pendent countrie~ of Spanish background, plus Brazil and Haiti.
6 The Coal of El Cerrej6n The Coal of El Cerrej6n and the World Energy Crisis 7
Table 1.1 Breakdown of Energy Consumption Within the Five "Energy Table 1.2 Potential Coal Reserves in the Five "Energy Giants" of Latin
Giants" of Latin America, 1979 (percentages of total consumption) America, 1979 (millions of tons)
Argentina Brazil COLOMBIA Mexico Venezuela Measured and
Indicated Inferred Potential Total
Coal 3.14 8.96 24.04 5.12 0.95
Crude petroleum Argentina 483 483
and natural-gas Brazil 3,312 8,423 11,735
liquids 68.83 75.12 46.75 66.67 50.39 COLOMBIA 7,000 10,000 23,000 40,000
Natural gas 2.76 1.43 21.25 25.37 44.87 Mexico 578 1,496 2,000 4,074
Hydro and nuclear 3.28 14.49 7.96 2.83 3.79 Venezuela 486 1,097 3,750 5,333
Total,
SOURCE: Choucri, 1982, 45. Latin America 12,268 22,045 34,035 68,358
Colombian
percentage of 57.1 45.4 67.6 58.5
used by the end of the 1970s. Colombia was fourth in hydroelectric
total
power in Latin America, following only Brazil, Chile, and Peru in terms
of the percentage of energy consumption (Choucri, 1982, 45). But, as
SouRCE: Instituto Latinamericano del Fierro y el Acero, 1979, xi.
seen in Table 1.1, the truly bright spot in the Colombian energy pano
rama was in coal, in which the country was first in Latin America in
policymakers did-contracting one part of El Cerrej6n with a consor
energy produced from that source, in both total production and percent
tium to produce coal for domestic use and contracting another part of
age of total energy consumption, with coal providing a full 24 percent of
the deposit with a TNE for export? The first policy would make it
the nation's energy. Chile was a distant second with 13 percent (Chou
possible to import less foreign petroleum, while the second would in
cri, 1982, 45).
crease hard currency earnings, by the export of Colombian coal to the
Indeed, studies of potential coal reserves in Latin America suggest
industrialized countries that were retrofitting thermoelectric plants to
that Colombia had over half of the measured reserves, about two-thirds
coal. Those earnings could be used for petroleum imports.
of the potential reserves, and nearly 60 percent of all the reserves. Two
Seen in this light, the situation would imply that the decisionmakers
things are of note, however. First, the Colombian figures in Table 1.2
participated in a very rational process, using reliable data, maximizing
are much more "even" than those of the other countries, suggesting
benefits, and minimizing costs. Yet anyone who has studied Colombian
"educated guesses" rather than precise figures, even in the case of
politics-or for that matter, politics anywhere-would probably suspect
"measured" reserves. Second, the Colombian figure for "potential" re
that, whatever the a posteriori appearances, such a "rational-actor mod
serves was not broken down by area of the country, unlike the other
el" cannot be assumed a priori.
countries of Latin America in the same report. Of the "measured and
indicated" coal, 400 million of the 7 billion tons came from La Guajira,
while 1 billion of the 10 billion tons of "inferred" reserves came from
that area (Instituto Latinamericano del Fierro y el Acero, 1979, ix). I FRAMEWORK OF THIS STUDY: DEPENDENT BARGAINING
assume that much, if not all, of the "potential" came from the same area.
In short, even as late as 1979-six years into the energy crisis The subject of this study is the decision-making process within the Co
Colombian policymakers did not know exactly how much coal the coun lombian government and the negotiations with transnational enterprises
try had. They did know that oil-import bills were increasing, owing to that led to coal production in Central and North El Cerrej6n. The time
higher consumption, lower production, and higher prices coming with frame considered in the two cases ends with the decisions to proceed with
the "oil shocks." Government sources projected that the day would come a development contract: in September 1980, for the case of the north,
when almost all of the foreign exchange earned from coffee would be when the Colombian government accepted the "commercial declaration"
needed for the purchase of foreign petroleum. of INTERCOR; and in May 1981, for the case of the central area, when
What then could have been more rational than what the Colombian the contract was awarded to the Spanish-Colombian consortium.
II
8 The Coal of El Cerrej6n The Coal of El Cerrej6n and the World Energy Crisis 9
As such, in addition to a study of the Colombian policy-making pro oil-importing developing countries, as their capacity to import is crucial to
cess, this study is intended to contribute to the analysis of bargaining their investment plans. Finally, there is the need to make assumptions
between the governments of Third World nations and transnational en about the future availability of capital. This involves judgments regarding
terprises. The literature on this bargaining has been less impressive, at credit-worthiness of developing countries and their access to international
capital markets, as well as the estimation of future flows of concessional
least in quantity, than that on other aspects ofTNEs, a fact pointed out
assistance from both traditional and new donor sources. (1975, 170-71)
by Lester E. Gordon:
Substantiating this hypothesis, however, would contribute little to
[T]he numerous books, articles, United Nations reports and Congressional
our understanding of Colombia or Latin America. As Joseph S. Tulchin
hearings on the subject display a curious gap. They are rich on all sides of
has argued, even liberal critics of the dependencia theory cannot deny
the question in assessing the costs and benefits of multinationals and for
the hierarchy of power of nations. Thus: "in this sense we are all depen
eign investment, and in analyzing the practices and characteristics of firms
dentistas. But if dependency includes everything, if it explains every
over a wide range of industries. What is missing, however, is a solid under
thing, in the long run it can explain nothing." He concludes, "We need
standing of how developing countries and foreign firms actually agree on
who gets what and how much. The relative void is in a comprehension of studies of people and institutions across time to learn how they adapted
the bargaining process as it takes place every day of the year; it is in an to the structural inhibitions of dependent development so that we can
appreciation of the complexity of the constraints and opportunities which determine with confidence which, if any, of the social science models
operate on both sides of the bargaining table and which produce a wide formulated from the study of center countries is relevant to the study of
variety of outcomes. (Smith and Wells, 1975, xi) reality on the periphery" (1983, 92).
My purpose is to provide one such study. It is not directed at "prov
While there is more literature on the bargaining now than there was ten
ing" that dependency exists-it surely does. Nor does it intend to con
years ago when Gordon wrote the above, still the "cost-benefit" litera,
demn such a system. Peter Evans suggests that the "dependency label"
ture is greater in quantity and the "solid understanding" of bargaining,
might be likely to disappear "because the term now carries too much
and of the internal governmental policy-making related to such negotia
theoretical baggage. 'Dependency' is too closely associated with simplis
tion, is still lacking.
tic hypotheses of external domination, the impossibility of either capital
The hypotheses of the study, as a combination of the dependencia ism or democracy on the periphery, and the hopelessly entreguista na
literature and that on bargaining between Third World countries and
ture of the dependent capitalist state" (1985, 159). In this book, my
TNEs, might be called "dependent-bargaining" hypotheses. The most
purpose, keeping the term but not the baggage, is to show how depen
important is that the decisions made by the Colombian policymakers are
dent bargaining took place in the El Cerrej6n cases, through an analysis
affected by the position that the country has traditionally played in the
of policymakers and the exogenous and endogenous factors that affect
international political economy: that of a poor country, stressing pri
them.
mary product exports in return for imports of manufactured and capital
I posit a continuum of policymakers from two ideal types: the national
goods. This dependentista hypothesis has been succinctly stated by
ist, who favors energy development with no TNE involvement, and the
Wouter Tims: reactionary, who is willing to agree to any energy development proposed
by the TNEs. Individuals at the two extremes are not "bargainers," as
There are a number of variables of crucial importance to the developing
contract modalities are accepted that either exclude the TNEs com
countries that they cannot influence themselves to any significant degree.
pletely (nationalists) or incorporate TNEs as they have suggested (reac
Notable among them is the future real growth of output and incomes in the
tionaries). Between those two extremes, however, are dependent bar
industrial countries that are their main trading partners and are also the
gainers, who accept the constraints of dependency and TNE participation
main source of the long-term capital inflows. Another is the rate of inflation
in the world economy, since it affects the relative prices of the commodities in energy contracts as givens but employ their political and technical
produced in the developing countries for international trade. A third exter abilities to obtain the best deal they perceive is available to the country.
nal factor-at present the most important-is the price of oil being set by Dependent bargainers, as this book shows, vary greatly along the contin
the major oil exporters; it is not only the price level of oil, but also uncer uum, my task being to isolate and explain those various positions.
tainty about its future course, which constitute a major problem for the A second part of the dependency hypothesis cautions care in the use
10 The Coal of El Cerrej6n
The Coal of El Cerrej6n and the World Energy Crisis 11
of global terms like "the country." This part posits that decisions are
This [bureaucratic-politics] approach ... treats United States policy not as
also conditioned by the class bias of the system. Cardoso and Faletto
the choice of a single, rational actor, but rather as the product of a series of
state, "Political institutions at a given moment can only be fully under overlapping and inter-locking bargaining processes within the North Ameri
stood in terms of the structures of domination because these express the can system, involving both intra-governmental and extra-governmental ac
class interests behind political organization" (as quoted in Hughes and tors. Although these processes take place within established parameters and
Mijeski, 1984, 18). Yet this argument, like the first half of the major are importantly affected by extrabureaucratic constraints, including shared
hypothesis, can be more ideological and deterministic than empirical. It values, their products are also very much influenced by events and proce
is therefore simply hypothesized that the El Cerrej6n decisions would dures internal to governmental organizations. (1973, 14).
be dominated by the "prestige sector" of Colombian society. As Richard
The emphasis, hence, is on conflict within the decision-making elite.
N. Adams argues, as compared to parts of the world in which a "middle
Such conflict might be along a variety of lines: politicians along party
class" has a collective identity, Latin American societies have more dual
lines, decentralized agencies, different TNEs, ministries, patronage
structures:
politicians, and technocrats, or some combination of the above.
In that bargaining process the TNEs have certain advantages over
The two sectors have both distinctive value systems and different bases for
the Colombian actors coming from (1) knowledge (or the presumption
social mobility. They do, however, manifest some parallel structural fea
thereof) of the foreign enterprises in such matters as technology, man
tures. The lower sector has wealth as its goal, and the recognized means to
agement, and marketing, and (2) the putative risk in natural-resource
obtain it are work. The upper sector has a variety of prestige symbols as its
goal, and the means of achieving them lie in the manipulation of power. development. As Michael Tanzer described this TNE advantage in the
(1967, 48) case of petroleum:
The case for private and against governmental oil exploration in oil-import
Hence it was expected that the middle-income participants in the
ing developing countries rests on three major premises: (1) Oil exploration is
decision-making process (primarily the bureaucrats) would have the
a very "risky" business. (2) Because of the "riskiness," considerable diversifi
same general values as the participants from the upper-income groups
cation of efforts is needed to have a chance of a successful oil exploration
(politicians in some cases, Colombian TNE executives in others). Con
program. This necessarily entails great expenses, both in men and money.
flict between the two economic strata was not anticipated along class (3) The international oil companies have the money and technical skills which
lines. are required and are sufficiently diversified so that they can afford risk;
To make the study empirical rather than an exercise in ideology, I conversely, the governments of the underdeveloped countries have neither
made a number of assumptions in order to search for conflict along other large amounts of capital nor trained manpower and hence cannot afford the
lines. The first was that the policy process would not be dominated by a "risk" of oil exploration. It logically follows from the above that governments
single "rational actor." The literature on Latin American politics is re of underdeveloped countries should not embark alone on an oil exploration
program, but rather should leave it to the resources of the international oil
plete with descriptions of the supreme power of the executive, on the
companies; at most a government might participate with the companies on
one hand, and of the U.S. government, transnational enterprises, inter
some joint-venture basis, where the companies would provide the scarce
national lending agencies, and upper classes, on the other. But the
manpower and foreign exchange. (1969, 117)
assumption of this study was that various actors-governmental, pri
vate Colombian, TNE, and possibly others-would be involved in the Another factor which favors the TNEs is manipulation of time. To the
decision-making process. Policies would be, as suggested by Graham
extent that transnationals can make an argument that rapidity is impor
Allison and Abraham Lowenthal (Allison, 1971; Lowenthal, 1973), tant, such works to their advantage and to the disadvantage of the host
among others, the result of a bargaining process among the actors, with country.
the most powerful prevailing.
The final assumption was that any major "decision" would be, rather
It was thus being assumed that the El Cerrej6n policy process would than a single cost-benefit calculation, a series of "nondecisions" and
be similar to that described by Lowenthal for the case of U.S. policy decisions made over time. Since this has two parts, each should be
toward Latin America: examined separately.
