Tag Archives: extortion

Surge of violence in the Pacific state of Colima likely to be fuelled by a battle between the Sinaloa Cartel and the CJNG over access to the strategic port of Manzanillo, underlining security threats at ports in Mexico

According to this month’s government statistics, the small Pacific state of Colima in the west of Mexico is experiencing rocketing homicide rates, with a staggering 942% increase in April 2016 comparative to April 2015, displacing Guerrero as the homicide hotspot this month. As Mexican security expert Alejandro Hope noted in El Daily Post, this is particularly worrisome given Colima’s regional position. If the situation continues to deteriorate it could result in significant spill over violence, triggering a conflict in Michoacán akin to that which gained global attention in 2013/2014.

The statistics outline that April wasn’t a one-off violent month in Colima, the homicide rate has been inclining steadily since 2015. So far, there has been little official comment or significant press coverage on the deteriorating situation and analysts are trying to piece together what might be driving the violence in the once relatively calm state.

Firstly, it’s important to think about Colima’s geographical location. Nestled in between the embattled state of Michoacán and Jalisco (home to the Jalisco New Generation Cartel) hugging the Pacific coast, it is home to one of Mexico’s largest ports, Manzanillo, a key gateway and exit point for legal and illicit trade. This is likely the hotspot that is fuelling the violence, as groups battle to gain control over strategic corridors of the Pacific.

Sinaloa Cartel vs Jalisco New Generation Cartel

While the head of the Sinaloa Cartel, notorious two-time fugitive “El Chapo”, fights his extradition to the US from his prison in the border city of Ciudad Juárez, the Sinaloa Cartel continues to operate throughout the country.

In 2015 they declared on social media their arrival in Colima and ambition to “cleanse” the region from criminals carrying out kidnaps and extortion. Since then, MS Risk believes that the Sinaloa Cartel has been involved in a battle with the more local CJNG, which most likely is over the port where shipments of ingredients to manufacture synthetic drugs are brought in, as well as numerous other illegal goods.

Port security

While the situation in Colima points to an increasingly worryingly situation at the Manzanillo port, it also outlines the issue of port security at large. In 2014 the Navy had to fight to take control of the busy port of Lazaro Cardenas, which was being defacto run by the Michoacán-based Knight’s Templar Cartel. After the group gained control of numerous mines in the vicinity they began to trade iron ore with China through the port, threatening any businesses or workers that refused to cooperate. The case underlined how organised crime groups fuse illegal and legal trades, severely hampering the economy and ensuring that such groups have access to supplies and weaponry that far supersede those of state authorities.

Kidnap and extortion

While the government security statistics around homicide rates do not show the full picture of what is happening on the ground, its monthly kidnap and extortion statistics are virtually meaningless. Few report cases of extortion or kidnap for fear of reprisal as well as a lack of faith in the state’s ability to react, noting that Mexico has a rate of near 90% impunity for violent crimes and homicides. However, trends and MS Risk’s sources suggest that where homicide rates increase significantly, extortion and kidnaps are likely to follow suit. In particular, when two organised crime groups are involved in a battle to gain territory, they use violent threats to gain key “plazas” and extort local businesses to fund their operations.

Missing Spanish journalist in Norte de Santander department is likely to have been kidnapped by the ELN guerrilla group

On May 23 Spanish newspaper El Mundo confirmed the disappearance of their correspondent Salud Hernández-Mora from the El Tarra region in Catatumbo Norte de Santander. El Tarro, which hugs the border with Venezuela, is at the heart of illegal cross border activities and is particularly difficult to access. It is known to be under the control of the national liberation army (ELN) guerrilla group, who finance their operations by extorting businesses in the region, carrying out kidnaps and illegally smuggling oil.

The journalist travelled to the area last week to report on coca cultivation and was last seen on Saturday May 21 in El Tarra. Spanish media sources claim that is suspected that she was taken by the ELN, though the group has yet to make a public announcement. A Spanish national, Hernández-Mora has been based in Colombia for nearly two decades and is well-known for her strong views against guerrilla groups and the ongoing peace process between the government and the FARC.

While negotiations in Havana between the government and the FARC are in the final stages, the ELN guerrilla group continues to pose a threat to peace in Colombia and is yet to enter into official peace talks with the government. This latest incident underlines how the smaller guerrilla group use kidnap as a political and strategic tool, which particularly threatens the safety of business operations in rural areas of the country primed for post-conflict economic development.

Herein MS Risk analyses the current relations between the ELN and the government, the guerrilla group’s strategy around using kidnap as a political and financing tool, and future dynamics as Colombia muddles forward in its attempt to end an armed conflict that has plagued the country for more than 60 years.

The background

At the end of April President Juan Manuel Santos announced that the government would not enter into the previously publicised talks with the ELN if the group did not agree to cease all kidnap activities and release any victims currently being held. The ELN argued that this was not part of the initial negotiation and that the government was doing a u-turn on its previous commitment to enter into preliminary dialogue with the group.

The ELN’s response highlights the group’s political strategy, and in a comminque it refers to key points it wants to discuss with the Colombian state:

• societal participation in peace building efforts
• peace-based democracy
• social, political, economic transformations for peace
• victims and the end of the armed conflict

According to the group’s communique, edition 528 in their paper Insurrección, discussing kidnap and hostages is the fifth point on the agenda. The communique underlines the group’s refusal to give up kidnap as a political tool, and outlines that the Colombian state must enter into negotiations with the group in the current context. This is a different strategy to that of the FARC, who were prepared to call an official ceasefire when entering into first stage discussions with the government a number of years ago in Havana, Cuba.

Discussions between the state and the ELN are currently frozen, though the government recently sent mediatory to Caracas, Venezuela to engage with ELN representatives to push forward future negotiation plans. However, this latest event is likely to see the government back away from the negotiating table and take a more hard-line stance against the group.

Why kidnap?

Kidnap has always been at the heart of the ELN’s tactical strategy to negotiate with the government, as well as a key financing method. Unlike the FARC, the ELN has always maintained that the group is not involved in drug cultivation or trafficking. As such, extortion and kidnap, are key methods of financing its operations. The ELN’s strongholds tend to be in remote areas that are cut off from many of the state’s formal institutions, which make searching for victims particularly problematic.

According to the office of the Attorney General (Fiscalía General de la Nación), the ELN have carried out 4,900 kidnaps in Colombia since the group’s inception in 1969. This is an “official” number and the informal numbers are likely to be significantly higher, noting the lack of reporting around many cases, and the numerous copy-cat kidnaps that take place within the ELN’s wider social network that is not under central command.

The group has always taken a particularly aggressive stance towards business personnel and major corporations, claiming a Robin Hood style rationale of redistributing wealth among communities that have been historically suppressed and excluded from society. They use their revenues from extortion, kidnap and other illegal contributions to support their fighters and maintain their operational capacity.

Recent kidnap cases and dynamics

• At the end of march 2016, Ramón José Cabrales, a government advisor in Norte de Santander, was released by the ELN after his family paid a significant ransom. The group initially asked for 4000 million pesos (1.3 million USDs) and while the family likely paid significantly below this, the total ransom would still have been a significant injection of revenue for the small guerrilla group.
• The group use the threat of kidnap in their areas of influence to force companies and personnel to comply with local extortion payments. In April, two bus drivers from Flota Occidetal in Chocó were kidnapped when they refused to pay the extortion fees that the group imposed on all transport companies in the local region.
• There have been numerous cases when the group has denied direct involvement, such as the kidnap and subsequent release of Melissa Trillo in Santander department this year. While the ELN denied any involvement or knowledge of the incident, it is highly unlikely that another group could carry out a kidnap in areas with a significant ELN influence, without the group being made aware. However, this does example underlines that there are significant copy cat groups, carrying out criminal activities and claiming to be operating on behalf of the ELN network. It is likely that these groups are not operating under the centralised command structure, and would not comply to any official ceasefire arranged between the group and the Colombian state.
• There is limited official information tracking the identities of all those kidnapped by the ELN, but MS Risk’s analysis underlines that business personnel are particularly vulnerable, specifically those working in the extractives sector, agro-industries and construction in key areas under ELN control. Additionally, there have been numerous kidnaps of  local union leaders, local politicians, business leaders and landowners. The likely kidnap of the Spanish journalist highlights the political drive behind these incidents, as well as financial.
  
  Future kidnap trends

Kidnapping anywhere in the world – and particularly in this context in Colombia – is not just a criminal activity, but a highly political and complex one. Understanding how it is used as a strategy is essential for assessing future trends in Colombia, particularly in the context of the post-conflict environment. As MS Risk has been discussing in its series on post-conflict economic analysis in Colombia, the likely official end to the armed conflict between the government and the FARC will open up areas of the country to investors that have traditionally been no-go areas since the 1960s. However, the armed conflict will not end by negotiating with the FARC alone and Colombia is likely to face difficult challenges in the coming years as the country implements the peace process and attempts to develop a post-conflict economy.

Opening up key regions to investors is likely to increase the risk of violent illegal activities as groups vie for control, as well as further increasing economic inequality – a key driver of armed conflict in many regions. The Catatumbo region – where Hernandez-Mora disappeared – is one of the government’s key areas to develop its agro industrial projects to offer alternative livelihoods outside of coca cultivation. This is exactly what Hernández-Mora was reporting on before she was taken by guerrillas, underlining the high risk environment in these volatile areas. While the government is visibly trying to paint an optimistic picture surrounding the peace negotiations in Havana, if it is unable to actively engage in such negotiations with the ELN, swathes of the country are likely to remain extremely challenging for both local communities and the international investors the government is aiming to attract.

In general terms, the lack of a bilateral agreement and ceasefire between the Colombian state and the ELN outlines that in the near future the guerrilla group will not give up its key political and financial strategy of carrying out kidnaps. Moreover, current events suggest they might increase their visibility in this field to put pressure on the government to negotiate on their terms. Alongside this, many of the kidnaps and extortions carried out by the ELN are done by their wider network and are not controlled by a central command structure. Even if those names involved in official negotiations called for a ceasefire, it is unlikely that the group’s wider network engaged in criminal activity would follow.

What to watch out for 

The near-end of the armed conflict between the FARC and the government has seen significant discussion around future economic development plans, particularly in post-conflict regions. President Manuel Santos has outlined that two key industries will be the extractives sector and the agro-industries – both of which are controversial areas of business in many parts of the country, and in particular the ELN and the FARC have maintained strong opposition to extractives projects in Colombia, often victimising their workers.

The ELN have carried out numerous kidnaps against those working in the oil and gas sector, particularly personnel involved in extracting and transporting processes. MS Risk maintains that the ELN is unlikely to give up its practice of kidnap and extortion in the near term, which means companies – particularly those entering the market – in the extractives sector, are likely to face continued security threats to local and international workers. Investors looking to develop their operations in Colombia, or enter new markets through government initiatives must carry out effective due diligence at a local level to understand trends between the varying armed groups operating in the region.

For more information please contact MS Risk’s Latin America team: Philippa.williams@msrisk.com.