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business & economyAlso in this section: Ports negotiation error costs a job, causes political strains by Eric Jackson, from other media In any American law school, they will note the maxim that Blackacre is never equal to Whiteacre: certain properties, real estate being one of them, are unique and not really interchangeable. Really, the same reasoning would apply to most businesses, and especially so to seaports. However, the contracts that Panama has with its private ports, each with its own idiosyncrasies, all provide that if a competitor gets a tax break or subsidy of some sort, the concessionaire will get equal treatment. For the past several years Panama has been caught in a spiral wherein the port companies are all claiming that certain provisions in their competitors’ contracts constitute special advantages for which compensation must be paid. The most infamous of these disputes was the claim by Panama Ports Company (PPC), the local subsidiary of Hong Kong-based Hutchison Whampoa, that aspects of the Manzanillo International Terminal (MIT --- a subsidiary of Seattle-based Stevedoring Services of America) and Colon Container Terminal (CCT --- a subsidiary of Taiwan-based Evergreen) gave those companies a special advantage, which led Mireya Moscoso to grant PPC a series of breaks on its contractual payments that would add up to more than $1 billion over the life of the contract. That “equalization” decree was widely criticized and challenged in court. But meanwhile, MIT and CCT pressed their claims that equalization was nothing of the sort, but actually a series of special breaks that the government owed it to them to match. As the Moscoso administration’s days wound down, it was agreed that certain lands would be given to these ports to make up for the break that PPC received. And of course PPC claimed that these land transfers were a special subsidy. Such was the spiral that the Torrijos administration inherited. And not only that. It was found to be very difficult to negotiate with PPC with the file missing. The Panama Maritime Authority (AMP), now under Second Vice President Rubén Arosemena, set out to clear up the mess. A settlement was reached with MIT and CCT, and quickly thereafter it was realized that the deal amounted to a $130 million subsidy to those two companies and grounds for PPC to add to its demands. The finger ended up being pointed at the AMP’s legal counsel, Raúl Ossa, who like Arosemena is a member of the Torrijos administration’s junior coalition partner, the Partido Popular. Ossa admitted a mistake and was fired --- even though that alleged error went past higher up officials at the AMP who didn’t catch it. The person who blew the whistle, it was reported, was Minister of Commerce and Industry Alejandro Ferrer. Now if one looks at the companies that various members of the Torrijos administration have represented as lawyers or otherwise, a number of people could be set up to look as if they could have been responsible for the $130 million giveaway, and not by mistake. The quick allegation of error and sacking of Ossa tended to cut such inquiries short. With Ossa’s departure, though not necessarily as a result of it, a war of words between Arosemena and PPC cooled down. It now seems that a new deal will be negotiated, one substantially less generous than the one that Mireya Moscoso made. Or at least, that’s the government’s stated intention and the company says it’s willing to talk about it. Meanwhile in partisan politics, the founder and spiritual leader of the Christian Democratic Party that later became the Partido Popular, Ricardo Arias Calderón, created a stir by denouncing Ossa’s forced departure as unfair. Some pundits took Arias Calderón’s criticicsm as a sign that the PRD-Partido Popular alliance is unravelling, but both Torrijos and Arosemena deny that this is so.
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