EDUARDO CÁMEL ANDERSON
SAILÚ URIBARRÍ NÚÑEZ

EL UNIVERSAL

Following three hours of negotiations among the authorities of the Ministry of Basic Industry and Mining (Mibam), steelmaker Sidor's major trade union Sutiss, and Sidor's authorities, a special taskforce that is to manage the transfer of the steel and iron company to the state's hands was appointed.

Rodolfo Sanz, the head of CVG and Minister of Basic Industry and Mining; CVG Ferrominera head Radwan Sabbagh; Mibam's legal counselor Esther Goitier; Mibam's Vice-Minister Iván Hernández; CVG Territorial Development  Vice-President Elizabeth Alves and Eduardo Escobar, together with Type B stakeholder Pedro Acuña, and trade union members José "Acarigua" Rodríguez, José Meléndez, Bulmaro Ramos, and Elio Sayazo comprise the committee.

Sidor CEO Ricardo Prosperi and Ternium CEO Daniel Novegil initialed the minutes to transfer the steelmaker to the Venezuelan state.

Sanz claimed the move "kicked off the transfer process based on the state's nationalization drive. Further, a committee dealing with economic negotiations was organized simultaneously to assess, outline and enable the terms and conditions for the transfer of shares."

Sanz would not rule out the idea that Argentinean firm Ternium keeps only 10 percent of Sidor's shares. "The committee is watching over the state's and workers' interests."

It was agreed that the state will work jointly with Sidor's board of directors while the transfer is completed. In eight days, the state will take control of the steelmaker's docks.

Sanz and trade union representatives formally resumed negotiations of the collective bargaining agreement that is to be in force until 2010.
 
Conditioned Integration
President of Argentina's Industrial Union Juan Lascurain told EFE that the nationalization of Sidor, owned by Argentinean group Techint, "discourages any kind of investment" in Venezuela.

The businessman stated that Venezuelan President Hugo Chávez has an "ambiguous attitude" towards the companies and reiterated that what happened in Sidor "contradicts" the integration process with the Common Market of the South (Mercosur).

In joining Mercosur, Venezuela undertakes to meet the body's regulations under which member states have to provide a fair treatment to other member countries' companies, particularly in the event of expropriation.

This is provided for under the Protocol of Colonia on the Reciprocal Promotion and Protection of Investments in Mercosur, in force since 1994.

Under such instrument, none of the contracting parties will take steps for nationalization or expropriation nor any other measure that has the same effect, against investments that take place in their territory that belong to investors from another contracting party, unless such steps "are taken for reasons of public utility, on a non-discriminatory basis and in accordance with the proper legal proceedings." The protocol adds that such steps "will be followed by the payment of a previous, appropriate and effective compensation."

According to Article 4 of the protocol, "The sum of this compensation will correspond to the real value that the expropriated investment had immediately before the moment that the decision to nationalize or expropriate has been officially announced or made public by the competent authority and generate gains or will have its value updated to the date of its payment."

Venezuela is in the process to join Mercosur -founded by Argentina, Brazil, Paraguay, and Uruguay in 199- as a full member.

Lascurain underlined that Venezuela's membership in Mercosur "undoubtedly requires trade relations that are friendly and based on mutual trust, as well as respect for mutual investments and productive projects."

Translated by Karina Gómez P.