On May 20 the contract between the Panamanian government and Refineria Panama, whose controlling owner was Texaco/Chevron, was officially rescinded. The contract's end means that petroleum won't be refined in Panama anymore, although much of the refinery will still be used for the storage and distribution of petroleum products. The government is putting an upbeat spin on the development, noting that with the contract a monopoly over the wholesale distribution of many petroleum products also ended and predicting that this will eventually mean lower prices for consumers. The 11 percent import tax on oil products was lifted during a brief refinery workers's strike in April, and Ministry of Commerce and Industry says it may propose legislation to permanently make petroleum and its derivatives duty-free items, both for re-export and for national consumption.

A Japanese-led attempt to resume commercial whaling, which has been banned by international law since 1986, recently fell short of the required votes at the International Whaling Commission annual meeting in Shimonoseki, Japan. The Japanese proposal garnered 16 votes, including Panama's, as against 25 opposing votes and three abstentions. All of Panama's environmentalist groups have denounced the Moscoso administration's position, and Greenpeace International has accused Panama of having been bribed into voting against its interests by the Japanese. Foreign Minister José Miguel Alemán defended Panama's vote by pointing to the subtantial aid that we receive from Japan.

The Legislative Assembly's Population, Environment and Development Committee has defeated a proposal to ban highly radioactive cargoes from the Panama Canal and this country's territorial waters by an unusual abstention by all five committee members on a vote to take the measure to the entire legislature. Some of the legislators said that more of a national dialogue is needed on the subject. Though the deputies will be technically be able to say that they didn't vote to kill the proposal, environmentalists are not convinced and can be expected to campaign against those committee members who seek re-election in 2004. The would-be law's proponent, Partido Popular legislator Teresia Yaniz de Arias, complained that the committee members would have been more honest with the public had they simply voted against the measure.

The United Nations-backed Program for the Promotion of Educational Reform in Latin America and the Caribbean (PREAL, by its Spanish initials), reports that Panama spends more money per student than most other governments in the region, and yet its public school students are among the worst in terms of academic accomplishments. The Education Ministry complains that the PREAL study didn't take alleged recent reforms into account. The ministry did not specify which changes it claims have improved which aspects of Panamanian education.

The Free Trade and Consumer Affairs Commission (CLICAC), has ruled that the Colombian Bavaria Group's buyout of both of Panama's main breweries, Cerveria Nacional and Cerveceria Baru, would create an illegal monopoly. They buyers have petitioned the commission for a reconsideration. CLICAC predicted that the mergers would lead to higher beer prices, but Grupo Bavaria argues that efficiencies of larger scale production would actually tend to drive prices down.

Four years after it was built with a legislator's circuit fund but never opened due to budget shortages, the Hospital General de Buguba, in Concepcion, is open for business. The facility, which is owned and run by the Social Security Fund, was made operational by transferring some of the funds from the nearby Policlinica Pablo Espinoza. The hospital's opening will relieve some of the overcrowding at public health facilities in David.

Two managers at the Refineria Panama and three bomberos have been sentenced to prison terms for negligence in connection with a 1997 series of Panagas cooking gas tank explosions that killed one woman and injured several other persons. The refinery mixed caustic soda in with the natural gas when filling the aluminium tanks for Panagas, and the soda at holes in the tanks, causing leaks and ultimately explosions. The refinery's manager Carlos del Valle Muñoz and chief chemist Carlos Guerra Morales received 30-month sentences, while former number three firefighter Gregorio Arosemena, the ex-chief of the bomberos' Safety Office Luis Baruco and the fire department's former main gas inspector Eduardo González received 36-month sentences.

The Panama Canal Authority has submitted its fiscal 2003 budget to the Legislative Assembly, projecting a small rise in spending and income to $807 million. The authority predicts that it will transfer $226 million in canal profits to the Panamanian government's general fund in the next fiscal year.

Despite its previous vows not to renegotiate and some public criticism, the Moscoso administration has agree with Panama Ports Company, a subsidiary of Hong Kong-based Hutchison Whampoa, to lower the company's payments for its concessions at the ports of Cristobal and Balboa. The reduction contemplated by the company and the government would be an annual discount of about $28 million from the current contract, which calls for the company to pay $22.2 million per year in fixed rent, plus 10 percent of gross revenues. The company says it can't make money on the original terms of its concession, and complains that Stevedoring Services of America's Manzanillo International Terminal and Evergreen's Colon Container Terminal (Coco Solo Norte) get tax benefits and subsidies that they don't. Critics point out that the latter two ports were built nearly from scratch by private investors, while Hutchison Whampoa took over two ongoing and money-making concerns when they got their concession, and thus argue that it's not fair to compare the various ports' benefit packages. Panama Ports holds as its ace the ability to delay or cancel work at the port of Balboa, which could then dash plans for a multimodal container handling system upon which the Panama Canal Railroad, the Manzanillo and Coco Solo Norte ports and the CEMIS project at and around France Field airport all at least in part depend. The changes to the ports concession contract will be the subject of legislative debate and probably of lawsuits as well.

Due to small harvests last year and strange weather so far this season, the government has approved rice imports to make up for shortages in the nation's granaries. These imports come principally from the United States, and a recent big shipment from American exporter The Rice Company turned out to be heavily contaminated with the Tilletia Barclayana fungus. Instead of rejecting the shipment and returning it to its point of origin, Panamanian health authorities allowed the company to fumigate the rice with methyl bromide, a chemical that doesn't seem to do much harm to most humans in small amounts, but which kills the fungus and also damages the Earth's ozone layer. Food treated with methyl bromide is generally banned by Panamanian health regulations. Now the National Consumers and Users Union of the Republic of Panama (UNCUREPA) is complaining that the fumigated rice has been sent to various companies for repackaging and eventual retail sale, without any notice to consumers that the product had been contaminated by fungus or fumigated with chemicals.

COPA, the Panamanian national airline whose major owners are members of the Motta family and US-based Continental Airlines, has been unable to reach an agreement with Mexican civil aviation authorities to increase the number of COPA flights between Panama and Mexico City. COPA offers daily service to Mexico and wanted permission for twice-a-day flights to and from that destination, and was willing to cede some of its routes to Venezuela and Ecuador to Mexican companies in exchange. However, Mexico rejected COPA's offer.

A US State Department anti-terrorism report has warned that there may be a cell of the Lebanese Hizbollah group operating out of the Colon Free Zone, and that has sparked a string of denials from the Free Zone and the Panamanian government. Digna Donado, the president of the Colon Free Zone Users' Association, noted that Jewish and Arab merchants have been getting along very well in the 54 years that the free zone has existed and questioned why the US government didn't inform its Panamanian counterpart of any specific knowledge of a Hizbollah presence in Colon. Vice-President Arturo Vallarino and Government and Justice Minister Aníbal Salas both said that the Panamanian government has no knowledge of any Hizbollah activity here. Hizbollah is a Lebanese Shiite militia, political party and religious organization that has for many years been at war with Israel and presently constitutes one of the more powerful factions in Lebanon's parliament. The governments of Israel and the United States have long maintained that Hizbollah is the principal suspect in the unsolved 1994 bombing of a Colon to Panama commuter flight that killed all 23 persons aboard. However, Hizbollah generally does not stray far from Lebanon with its violent attacks and has always denied involvement in the commuter plane bombing here.

Prosecutor Maribel Cornejo has asked a criminal court to throw out fraud charges against a number of individuals implicated in the collapse of the Providence Corporation and Estrella Mar investment funds. The funds promised high rates of return and, according to complaining investors, concealed their precarious financial state. The funds' assets were assigned to the Banco Disa, which itself later collapsed, and investors are looking for their money back. The prosecutor says that there isn't enought evidence to support a criminal case, but the dropping of charges does not affect civil lawsuits aimed at recovering investors' funds.

The EPASA corporation, a company owned by the heirs of the late Panamanian President Harmodio Arias and publisher of La Critica and El Panama America, is taking aim at its principal competition for ad sales, La Prensa, in a series of television ads. The commercial spots point out a decline in La Prensa's circulation over the past year and note that La Critica is the country's leading-circulation paper and that the combined sales of that tabloid and El Panama America more than double La Prensa's figures. What effect this will have in the market remains to be seen --- most advertising that comes through Panamas' ad agencies, even those that are branches of foreign-owned firms, is forwarded to specific media based on the family or business interests of the ad agency management, without regard for which media would work best for a particular client.

The Cabinet Council has approved a special credit of some $7.8 million to pay off a February 2001 Inter-American Human Rights Court judgment in favor of public employees who were fired for going on strike back in 1990. However, the proposal was sent to the Comptroller General to review whether the government actually has the money to pay, and if it passes that hurdle, the measure would go before the Legislative Assembly.

The Education Ministry, which is theoretically in charge of protecting copyrights in Panama, has been using pirate social studies books. A court has found Editora Escolar, SA, the publisher of "Estudios Sociales 4," a text used in the nation's primary schools, of pirating four photographs by internationally renowned Panamanian photographer José Angel Murillo. There will be further proceedings to determine how much Murillo is owed for the unauthorized use of his work.

The Embera community of Arimae, in the Darien on the Pan-American Highway a little before the turnoff to Santa Fe, has again been invaded by squatters from the Interior (colonos). The collective title to land there was granted to the community when Omar Torrijos ran the government, but later in the Noriega era the same land was given to a group of farmers who were originally from the Azuero Peninsula. There have been off-and-on confrontations and court cases ever since then, with the police and prosecutors generally siding against the Embera and the government ministries and agencies unwilling to talk about the situation. In the latest invasion the colonos fenced off part of Arimae with razor wire, and members of the community quickly tore down the fence and vowed to resist any further attempted land grabs.

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