6 March 2017, ELN violence hinders/halts operations of three major companies in Colombia

Read the full article here.

...There are four takeaways here. First, despite pursuing peace talks and its reduced manpower, the ELN maintains its destructive capabilities and ideological motivation for attacking security, infrastructure, and civilian targets. It is not a significantly weakened organization.

Second, the ELN appears to have adopted a “talk-fight” strategy where it engages in peace talks and simultaneously continues its attacks in order to pressure the government to deliver favorable negotiating terms. Both insurgent and conventional forces have made liberal use of the talk-fight strategy throughout history. Communist forces in particular have used it to good effect; the North Vietnamese during the Vietnam War, for example.

Third, the corporate shutdowns mentioned here are not surprising given that these companies are operating in a decades-old low intensity conflict zone where thousands have been killed. If anything, it brings into question the business and legal logic of Gran Colombia Gold’s lawsuit and Ecopetrol’s force majeure. It is difficult to comprehend why any company would assume their operations would function normally in such hostile conditions. No government can protect all businesses from highly experienced insurgent armies. In this environment, no action by the ELN should be considered an “act of God.” It is a war zone, and this group has been carrying out these types of attacks for decades.

Fourth, if any legal term applies here, it is “totality of circumstances,” which essentially means, when referring to violent areas, that attacks happen so often that a corporation should take the responsibility to protect itself, and also that it should absorb at least some of the legal and financial downside should attacks happen.

Looking ahead, the ELN is most likely to continue its talk-fight strategy unless the government ceases peace talks and concentrates massively increased and sustained operations against the insurgents. If the ELN receives favorable negotiating terms up front, it might curb or halt its violence until it becomes useful to pressure the government again. Having said this, the ELN has been fervently dedicated to Marxism since the 1960s, and it is an organization steeped in generations of warfare. For these reasons, the ELN could break off peace negotiations at any time.

Companies seeking to do business in Colombia should take note of the situation of these three companies and weigh the costs of doing business in country, which should include a robust security program, relevant legal expertise, and added insurance.

Copyright ? Muir Analytics 2017