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Protests halt palm oil production in northern Colombia

29 Sep 2011 22:28 (+01:00 GMT)

Bogota, 29 September (Argus) — Spreading labor unrest is disrupting palm oil output in the Puerto Wilches area of northern Colombia, a region that accounts for about one-quarter of Colombia's biodiesel output.

Four of the seven palm oil production companies in the region have been shut down by protesting workers, a situation that could cause supply problems for Ecodiesel, which produces about 100,000 t of biodiesel annually in the town of Puerto Wilches in Santander department.

“So far we haven't had any shortages. But if the protests continue, in a few weeks we will have to look for palm oil from outside the region, or else import,” said Gueyler Blanco, financial administrator of Ecodiesel, which is jointly owned by state-run oil company Ecopetrol and seven palm oil producers in the northern departments of Santander and Cesar.

Striking workers have paralyzed production at Palmas Oleaginosas Bucarelia since 23 August. Three other palm oil producers were occupied by their employees on 21 September and were forced to shut down. About 3,000 palm oil workers are involved in the protests.

The Bucarelia strike began after the company rejected calls for increased salaries and benefits, according to Carlos Daniel Ardila, a regional leader of the Sintrainagro labor syndicate which represents some of the striking workers.

Protesters occupied three other palm oil companies to press for the hiring of more direct workers. The majority of workers at these companies are employed indirectly through cooperatives and temporary work agencies that pay lower salaries and fewer benefits.

The protests “could last for a long time due to the attitude of the companies,” Ardila said.

Seeking US congressional approval of a free trade agreement, Colombian President Juan Manuel Santos in April pledged to enact sweeping labor reforms. They include the hiring of more labor inspectors to investigate worker rights abuses in several sectors, including the palm oil industry.

Colombia is on track to produce about 420,000 t of biodiesel this year, up from 357,000 t in 2010, according to the National Federation of Oil Palm Growers. This growth comes as Colombia pursues a policy to boost its nationwide mix of biofuels in gasoline and diesel to 10pc, up from 8pc, by the end of 2012. By 2020, the government would like to double those blend rates to 20pc.

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