Deputy Comptroller Carlos Mario Zuluaga warned that there could be legal uncertainty and disincentives to investment if the Petro government approves the decree.
Colombia's Deputy Comptroller, Carlos Mario Zuluaga, expressed concern about the recent ban on coal exports to Israel. In a letter addressed to the Minister of Mines, Andrés Camacho, he warns him about the legal uncertainty that could arise if the draft decree is approved.
Zuluaga points out in his letter: “Colombia has had free trade agreements with Israel since 2020; Likewise, it is likely that business autonomy is being restricted and violating what is contemplated in article 98 of Law 685 of 2001."
The Comptroller's Office maintains that the Gustavo Petro Government's proposal could discourage investment in Colombia, especially considering that the companies that currently export coal to Israel are mostly foreign.
In addition, he warns that the decision could only affect the Colombian economy, since other countries such as Australia, Indonesia and India could make up for the lack of coal.
According to the Mining and Energy Planning Unit (UPME), coal exports to Israel until October 2023 amounted to 2.45 million tons, which represents 5.3% of total coal exports that year and close to $650 million (US$ 156,701) in royalties, taxes and contributions to the Colombian Nation. This would affect the departments of La Guajira and Cesar, since they receive about $100 million (US$24,107) of this amount.
The letter also maintains that, if approved, the projects supported under the General Royalties System could be affected.
Likewise, he warned that "the decrease in the exploitation of thermal coal would directly affect the generation of employment, both direct and indirect, in the producing regions."
Finally, Zuluaga indicates that “the message that the Government is sending to the world is disturbing, taking into account that it is being implied that the Nation does not have the legal stability to guarantee compliance with the obligations acquired.”
THE PROBLEM OF PROHIBITION
The National Association of Foreign Trade of Colombia (Analdex) assures that commercial relations with Israel could face turbulence due to a draft decree that seeks to prohibit coal exports from Colombia to that country. “In fact, it is the product that Colombia has sold the most in recent years.”
In 2023, coal exports from Colombia to Israel reached US$447 million, which represents a decrease of 57% compared to 2022, the year in which exports exceeded the US$1 billion barrier, according to data from the Department. National Administrative Department of Statistics (DANE).
Likewise, between January and April 2024, coal exports to Israel totaled US$88 million, 62.3% less than in the same period in 2023.
Javier Díaz Molina, president of Analdex, mentioned that “the draft decree by which a ban on coal exports to Israel is established is in violation of the Political Constitution and the National Development Plan,” and added that it would cross the lines red, given that the decree “does not conform to the constitutional mandate nor is it based on a trade policy reason.”
According to Díaz, it would be a “moral measure that is not contemplated in Colombian legislation for customs and foreign trade matters.”
