Thursday, June 20, 2024

Blinken: Vulcan case could have ‘chilling effect’ on US investment

Mexican authorities’ takeover of a United States-owned marine terminal in Quintana Roo could have a “chilling effect” on future U.S. investment in Mexico, U.S. Secretary of State Antony Blinken said Thursday.

Vulcan Materials Company, an Alabama-based construction aggregates firm that has had a presence in Mexico since the 1980s, says that Mexican navy personnel, state police officers and employees of the building materials company Cemex illegally entered its port facility near Playa del Carmen on March 14.

Mexican military arrival at Sac Tun facilities in Punta Venado, Mexico
A group of soldiers, Cemex employees, police and “special investigation” officials arrived at Vulcan’s marine terminal, owned by its subsidiary, Sac Tun, in the middle of the night on March 14 and have yet to leave, according to Vulcan officials. (Internet)

During an appearance before the U.S. House of Representatives’ Subcommittee on State, Foreign Operations, and Related Programs, Blinken said he was “very concerned about the fair treatment of our companies in Mexico” and “also very concerned” about what happened to Vulcan.

“We’ve had our team on the ground, as well as from back here in D.C., very actively engaged on this. We’ve been requesting information from local authorities as well as from the federal government about the military and police presence,” he said.

The secretary of state also said that “the potential for a case like this to have a chilling effect on further investment or engagement by our companies as they see what’s happening should be a real concern to the federal government in Mexico.”

The takeover and occupation of the facility operated by Vulcan’s Mexican subsidiary Sac-Tun occurred as Mexico seeks to take advantage of the growing nearshoring phenomenon — the relocation of companies to Mexico due to its proximity to the United States and other favorable factors.

US Secretary of State Antony Blinken, while testifying Thursday before the House of Representatives, commented on the Vulcan case.


President López Obrador indicated Thursday that he believed that the security forces and  Cemex employees had done nothing wrong by entering Vulcan’s facility because judges had “authorized” its use by the building materials company.

However, in a March 16 letter sent to Mexico’s Ambassador to the United States, Esteban Moctezuma, Vulcan CEO J. Thomas Hill said his company had “not been presented a single legal document, court order, or warrant justifying” the takeover of the marine terminal.

Cemex used to have an agreement that allowed it to use Vulcan’s Quintana Roo terminal, but it expired at the end of last year and negotiations for a new contract reportedly broke down.

Vulcan said in a statement Tuesday that “prior to the expiration, Cemex was formally made aware that negotiation of a new contract would be necessary” to continue using its port facility.

“Vulcan has been and remains open to renegotiating the lease agreement. Rather than looking for a mutually agreeable solution, Cemex officers threatened to seek the aid of the Mexican government, including its armed forces, to use Vulcan’s port facilities,” the company said.

Vulcan reiterated that “on March 14 and to this day, Cemex, the military and the police have not presented any court order, warrant or other legal justification for their forceful entry and occupation of Vulcan’s property.”

Mexico's president Andres Manuel Lopez Obrador
President López Obrador largely dismissed Blinken’s remarks, saying that the U.S. Secretary of State’s job is to fight for his country’s interests and that Blinken was likely also misinformed. (Presidencia)

“Contrary to Cemex’s position, a Mexican federal court ordered Cemex to vacate the property, and another Mexican federal court order requires military and police forces to leave the property immediately,” it added.

López Obrador has maintained a dispute with Vulcan for years, and his government last year shut down a limestone gravel quarry the company operated in Quintana Roo for having allegedly “extracted or exported stone without approval,” according to an Associated Press report.

On Thursday, he again asserted claims made during the quarry dispute that the company has committed “ecocide” on the Quintana Roo coast. On Thursday, he said Sac Tun had destroyed mangroves across a “large area” and even damaged archaeological sites.

“… It took gravel from Playa del Carmen … and the coast of the Caribbean, from the most beautiful tourism area of Mexico and one of the most beautiful in the world,” López Obrador said.

“They used land … to extract gravel and took that material to the United States to use in the construction of highways. All this because of the complicity there was with [past] pseudo-environmentalist authorities …  who gave them the permits,” he said.

Quarry in Playa Del Carmen owned by Vulcan Materials
AMLO’s government and Vulcan Materials have a long history together. Last summer, federal authorities shut down this quarry Vulcan owns near Playa del Carmen, saying it was destroying the natural environment, claims the president repeated at a press conference this week. (Cuartoscuro)

On Friday, López Obrador said that Blinken’s comments about the Vulcan case were not surprising because representing the interests of United States companies “is his job.”

“Mine is to represent the interests of the Mexican people and look after our territory,” he added.

“… Maybe [Blinken] doesn’t have all the information and … it would be good for him to know about this company, Vulcan, which, in cahoots with former Mexican authorities, destroyed our territory.”

Federal Environment Minister María Luisa Albores last year presented a complaint to the United Nations about the “environmental disaster” caused by Vulcan. In 2018, Vulcan filed a case against the Mexican government with the World Bank’s International Centre for Settlement of Investment Disputes (ICSID), alleging unfair treatment.

López Obrador on Thursday called on members of the ICSID panel considering the case to visit Mexico to see the environmental damage Vulcan has caused.

“Of course we’ll comply with what they determine … but I would very much like them to get to know the territory, [to see] the destruction — the ecocide — this United States company caused,” he said.

Mexico News Daily 

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