The CUT‘s general strike over the past two days was, most importantly, peaceful, and also extremely modest in scale. If the goal was to create a groundswell of support for the Labor Reform Referendum, a failure. Ordinarily, I am suspicious of the mainstream media’s reporting of pro-Petro events, but on this occasion, either the workers didn’t stay away or used the two days of good weather for some R&R.

Back in the senate, labor reform 2.0 has edged forward at the commission level with the adjustments in the articles being criticized by workers and employers alike – it remains what it will look like, or even how far it will advance.

The Banco de la República – Colombia, which has taken the month off in terms of overnight rate decisions, reported another 18% increase in remittances, this time for April, to $1 billion USD – YTD; they are now up 15%, $4.2 billion USD. It remains to see the impact of Trumponomics, but these transfers, which used to be negligible next to other countries in the region, have certainly grown in importance.

Fedesarrollo for April reported an increase in retail confidence to 24.9% (15-month high), a reflection of Colombians’ propensity to shop, whilst industrial confidence dropped slightly, both in line with recent real sector data from Departamento Administrativo Nacional de Estadística – DANE Colombia.

According to the TMF of 79 countries surveyed (accounting for 94% of global GDP), Colombia is the 5th hardest country to do business in – but before the conservative elite start pointing at Gustavo Petro, it is where the country was in 2022 & 2023, and there are various European countries even lower down.

Final oil data for 2024 revealed an average daily production of 772k boepd (modestly down) whilst oil reserves rose to 7.2 years whilst gas reserves dropped by 13% – no surprises. Ecopetrol has announced that despite Shell‘s departure, they will push ahead with their ambitious offshore gas development.

Separately, CEO Ricardo Roa is again under pressure to quit after another scandal hit both him and the company. Despite its privatization almost 20 years ago, it seems that the oil giant has been embroiled in such headlines since the day I arrived.

Enough for a Friday.

My regards.

Roops.

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The CUT’s general strike was peaceful. Photo credit: CUT Colombia/Facebook.

]]> https://www.financecolombia.com/rejection-of-petros-labor-reform-sparks-a-political-showdown/ Tue, 18 Mar 2025 21:10:48 +0000 https://www.financecolombia.com/?p=32888 The rejection of President Gustavo Petro’s proposed labor reform by eight senators from the Seventh Commission of the Upper House of the Congress has sparked intense controversy. In response, Petro announced that he may call for a public referendum to allow voters to decide on the proposed changes.

While there is general consensus that labor reform in Colombia is necessary, disagreements persist over how to balance the interests of businesses, workers, and lawmakers responsible for enacting these changes. The government argues that the proposed reform aims to restore labor rights and enhance job stability, with a particular emphasis on promoting indefinite-term contracts.

Bruce MacMaster, President of the National Business Association of Colombia, ANDI, claims that President Petro’s government of failing to comply with the international agreements to which Colombia has signed, since two years have passed without holding a labor consultation. “We went to the International Labour Organization (ILO) to formally denounce the Colombian government for not advancing the consultation that should have been done by constitutional obligation and by the international agreements it has signed,” MacMaster told broadcasting network Caracol Radio.

One of the most debated aspects of the proposal includes changes to work hours and compensation. The bill proposed shifting the start of night shifts from 9:00 PM to 7:00 PM, which would require employers to pay a 25% surcharge for work beyond that hour. Additionally, compensation for work on mandatory rest days and holidays would rise from 75% to 100%.

Business leaders have voiced strong opposition to these provisions, arguing that they would lead to significantly higher labor costs and reduced productivity. Jaime Alberto Cabal, President of Fenalco, the national federation of merchants, stated that many small and medium-sized enterprises narrowly avoided a 30% increase in labor costs due to the bill’s rejection. “For the sake of Colombian workers, the unemployed, the informal sector, and small and medium-sized businesses, it is necessary to think carefully before approving a labor reform that is harmful to Colombia’s interests,” he said on a video shared on social media.

Alfonso Cuitiva, president of the board of directors of the Colombian Association of Retail Drugstore Owners (Asocoldro), noted that while the union agrees with improving workers’ conditions, it is also important to boost the entire productive sector, including microentrepreneurs, who are numerous in this country. “In fact, microentrepreneurs in this country generate more than 60% of employment. Small and medium-sized enterprises, together, generates almost 90% of employment in this country, and this is the sector most impacted by the labor reform,” Cuitiva said to Medellín newspaper El Colombiano.

Labor unions and social organizations, however, have fiercely condemned the Senate’s decision. The Comando Nacional Unitario, that gather Colombia’s major labor unions and pensioners’ confederations, called for a national mobilization on March 18th to demand that Congress “prioritize workers’ rights over business interests”.

Union leaders argue that the labor reform was an essential step toward social justice, aimed at reversing labor policies implemented through Law 50 of 1990 and Law 789 of 2002 under former President Álvaro Uribe. These laws, they contend, eroded job stability and social security protections. For labor activists, the rejection of the reform represents a victory for neoliberal policies that have perpetuated inequality and precarious employment conditions.

While officials aligned with President Petro are promoting mobilization in favor of the reform, other officials have shown their disengagement with these actions.

“On Tuesday, March 18th, Medellín’s public servants will work normally. We will not shut down educational institutions, health services or any other public institution. (…) May the economy continue to grow. May thousands of good-quality, well-paying jobs continue to be generated. There is no better social policy than job creation,” stated Medellin’s Mayor Federico Gutiérrez on X.

As the debate over labor reform continues, the divide between the government, business sector, and labor movements highlights the complexity of enacting meaningful changes in Colombia’s labor laws. Whether through legislative efforts or a public referendum, the issue remains a critical test for Petro’s administration and agenda.

Headline photo: Newly appointed Minister of Culture, Yannai Kadamani Fonrodona (third from the left in the front row), shared a video on her personal social media, calling for participation in the March 18 protests in support of the government and the labor reform. (Photo: X / @KadamaniYannai)

According to a statement by CNP affiliate Central Unitaria de Trabajadores, or “Unified Workers;’Center,” the reasons for the call to strike are:

• The government’s failure to address 67 massacres this year, or the assassinations of 283 ex-combatants in the past five years.
• Repression by the attorney general’s office of strikers, charging protesters with terrorism
• The murder this month specifically of Esteban Mosquera, who had already lost an eye to police violence in 2018.
• The failure of 10 CNP bills to advance in congress
• The freezing of wages of government workers as part of the tax reform package.
• Government privatization – it mentions the sale of ISA to Ecopetrol, however the sale was from one government controlled entity to another.
• What it calls the “neoliberal and regressive character” of the new proposed tax reform.

In an interview with TV broadcaster Red+ Noticias, the president of the Central Unitaria de Trabajadores, Francisco Maltes justified the group’s opposition because:

• It would impose the same 35% income tax on both large and small enterprises. They want a preferred rate for small and medium sized businesses.
• The proposed tax reform would freeze the salaries of 1.3 million government workers for 10 years.
• Elements in the tax reform would, according to him, weaken the collective bargaining ability of labor organizations to negotiate with the government as enshrined in Article 54 of the Colombian Constitution.

#EnVivo | ¿Cuáles son los reparos del Comité de Paro a la nueva reforma tributaria?

Francisco Maltés, presidente de la @cutcolombia, habla en #RedMásNoticias.?#NuevasMarchasSon pic.twitter.com/0RnfQVQAR9

— red+ noticias (@RedMasNoticias) August 26, 2021

Strikes began last April against a tax reform package that the Colombian government failed to “sell” to the public, or even to members of congress beyond the President’s own Centro Democrático party. Though strikes began largely peacefully, the violent response of Colombian ESMAD riot police units escalated the level of confrontation and discord, leading to looting, blockades and rioting on one hand, and a flood of documented accounts of police violence and misconduct on the other.

August 26 Actions

Cali

In Cali, the city hit hardest by last spring’s civil unrest, today more than 2.000 police officers are being deployed, with an announced demonstration beginning at the railway station and ending in San Francisco Plaza.

Medellín

In Medellín, protesters have called a mobilization from 10am, and a Parque de los Deseos sit-in beginning at 4pm. School has been called off in Bucaramanga, and unions have called for a 9am gathering beginning at Puerta del Sol, and occupying parts of 27^th Avenue, 36^th street, and the García Rovira park.

Santa Marta, Barranquilla, Pereira, Ibagué

In Santa Marta, marches start at 9am from the Grand Coliseum (Coliseo Mayor). In Barranquilla, the strike begins at the University of the Atlantic (Uniatlántico). Teachers who participate will be given paid leave, according to the Atlantic Educators Association. Those who do not participate must work at least three hours. Pereira expects sit-ins at the mayor’s office and Risaralda government facilities, while in Ibague, there will be a cit-in at Plazoleta Dario Echandía.

Bogotá

The US Embassy has issued an alert to US Citizens saying that it expects planned demonstrations in the following Bogotá locations:

• Parque Nacional – Carrera 7 and Calle 35.
• Secretaría Distrital de Salud – Calle 13 and Carrera 32.
• Centro de Memoria Paz y Reconciliación – Carrera 19 and Calle 24.
• Avenida Boyacá and Calle 71 sur.
• Avenida Cali and Calle 45 sur.
• Avenida Suba and Avenida Cali.
• Avenida Caracas and Carrera 68.
• Autopista Sur and Carrera 75.
• Avenida Caracas and Calle 51B sur.
• Autopista Norte and Calle 171.
• Monumento a los Héroes – Autopista Norte and Calle 80.
• Also, possible demonstrations are expected at Universidad Nacional, Distrital, and Pedagógica, especially during the afternoon.

Advice for foreigners

The US embassy went on to share the following information

While most protests remain peaceful, large crowds confronted by police or anti-riot forces may turn violent rapidly. If you require assistance, please contact us at the phone number and/or email provided below.

Actions to Take:

• • Avoid protest areas.
  • Avoid crowds and demonstrations.
  • Keep a low profile.
  • Be aware of your surroundings.
  • Monitor local media for updates.
  • Plan for alternative travel routes or remain in place if travel becomes difficult.

Assistance:

• • U.S. Embassy Bogota, Colombia
    Tel. +57-1-275-2000
    acsbogota@state.gov
    https://co.usembassy.gov/
  • U.S. Consular Agency, Barranquilla
    conagencybarranquilla@state.gov
  • U.S. Department of State – Consular Affairs
    1-888-407-4747 or 1-202-501-4444
  • Colombia Country Information
  • Enroll in Smart Traveler Enrollment Program (STEP) to receive security updates
  • Follow us on Facebook and Twitter

Image: Twitter feed of @adebogota

In joining the club, Colombia will become the 37th member nation and just the third from Latin America, along with Mexico and Chile.

“We are now part of the big league!” – Colombian President Juan Manuel Santos

The news was celebrated on Twitter this morning by Colombian President Juan Manuel Santos, who had set joining the OECD and, more generally, making fiscal reforms as key goals of his presidency.

“Seven years of intense work to receive this excellent news: the council of the OECD approved Colombia’s entry,” said Santos. “We are now part of the big league!”

Santos, who is reportedly set to sign the official membership agreement in Paris next week, added that this is “a very important step” that will help in efforts to modernize the country. “We compare ourselves with the best to be the best,” said Santos. “We have great opportunities to advance in health, education, the fight against corruption, and the protection of the environment.”

The review process to become a member is rigorous. Colombia’s path to “accession,” the term favored by the OECD, began in 2013 and lasted longer than is typical.

The years of OECD committee meetings and recommendations have led to various policy changes in Colombia that address both larger, structural issues, such as the integrity of the nation’s justice system, and business-level concerns, including the respect for intellectual property rights as well as market access for foreign pharmaceutical and manufacturing companies.

“As part of its accession process,” said the OECD in a statement, “Colombia has been subject to in-depth reviews by 23 OECD Committees and has introduced major reforms to align its legislation, policies, and practices to OECD standards, including on labor issues, the reform of its justice system, corporate governance of state-owned enterprises, anti-bribery, trade as well as new national policies on industrial chemicals policy and waste management.”

Benefits of Joining the OECD

According to many international experts, the key benefit of OECD membership for countries is the formal recognition. Being in the club offers a level of confidence among investors and the global community at large that the nation has established a modern, stable economy that generally adheres to international standards in terms of free market policies, tax schemes, legal protections, and dispute resolution.

“States seek status by associating with a group of like-minded and powerful states,” wrote Christina L. Davis, professor of politics and international affairs at Princeton University’s Woodrow Wilson School of Public and International Affairs, in a 2016 paper on the topic. “Joining the OECD represents a choice of social category within the international system that brings with it both norms of behavior and benefits for reputation.”

In addition to reputation benefits and having a seat at the table in international events, membership provides other soft benefits. Being in the club ensures that the nation’s economic trajectory — as well as many social, environmental, and other metrics — are more routinely and rigorously tracked by a wide ranges of reports and studies conducted by both the OECD itself and other global institutions.

Such data can be valuable for not just investors and those creating government policy but non-governmental, educational, and social organizations that can use this information to better quantify challenges, progress, and other trends within a nation’s economy.

Despite it often being called a club for the world’s wealthy nations, simply having a large economy is no guarantee of being invited to join the OECD. Many non-democratic countries, such as China, have never been invited, while Russia, which had begun negotiations to join earlier this decade, became persona non grata after its 2014 invasion of Crimea.

Argentina is another nation that has expressed interest in joining. But it has so far been rebuked, despite having the third-largest economy in Latin America, reportedly due to its economic volatility and unpredictable policy decisions over the past two decades.

Opposition to Colombia Joining the OECD

Various U.S. stakeholders had sought to prevent Colombia’s membership in recent months until it instituted further reforms on matters including the respect for intellectual property rights as well as policies that ensure competitive fairness for foreign drug and truck manufacturers.

U.S. Trade Representative Robert Lighthizer stressed that Colombia must make amendments to its copyright law and that it still did “not meet the high standards of the OECD.”

U.S. Trade Representative Robert Lighthizer, in a February letter to Colombian Trade Minister Maria Lorena Gutiérrez, stressed that Colombia must make amendments to its copyright law and that it still did “not meet the high standards of the OECD” in this area.

He noted other ongoing concerns as well, including that “U.S. heavy truck manufacturers continue to have serious concerns with the openness of Colombia’s market, as well as the predictability and transparency of Colombia’s regulatory system.”

The OECD has previously addressed these and other issues. In a recent report, the organization noted that “pharmaceutical companies continue to face significant challenges in getting new products approved in Colombia, despite Colombian regulations that call for an expedited pharmacological review of products.”

On Colombia’s mandatory truck replacement program, the OECD said that this “is considered to be a serious barrier to trade and a source of corruption in Colombia.” While some changes have been made to eliminate this “one-for-one scrapping program,” the OECD still stated that “serious concerns remain and market access remains restricted.”

Domestically, various labor unions, including the Confederación de Trabajores de Colombia (CTC) and the Central Unitaria de Trabajadores (CUT), had also petitioned the OECD to not let the country into the club until more protections were enacted to safeguard union workers from violence, improve standards for collective bargaining, and address other labor issues.

The Paris-based Trade Union Advisory Committee (TUAC) to the OECD, which meets with unions across the world, outlined that these Colombian groups have called for action on the following issues: “continuing violence against trade unions and social activists; refusal and withdrawal of protection; persistently high rates of impunity for crimes against trade unionists; the lack of progress on tackling informality and abusive sub-contracting; the need to strengthen inspection; and violations of the right to collective bargaining and the right to strike.”

Global humanitarian group Human Rights Watch has also formally raised an issue that is among Colombia’s greatest shames — the malnutrition crisis among the indigenous Wayuu community on the Caribbean coast that has killed hundreds of children — as a factor the OECD should consider while assessing the country’s qualifications for membership.

“By securing a commitment by the Colombian government to take serious and concrete measures, the OECD could play an important role in helping address this critical crisis,” wrote José Miguel Vivanco, director of Human Rights Watch’s Americas division, in a letter to the OECD late last year.

Colombia Climbs the Ladder

Despite these concerns, the various committees of the OECD have now all approved Colombia to join the high-status economic club that dates back more than a half-century.

Angel Gurría, secretary general of the OECD, praised President Santos for working with the organization to help ensure Colombia could join before he left office in August.

“The accession of Colombia will contribute to our efforts to transform the OECD into a more diverse and inclusive institution.” – Angel Gurría, secretary general of the OECD

“Accession to our organization was set as a priority by President Santos when he assumed office, and we are glad that the process could be completed during his mandate,” said Gurria.

The OECD was founded in 1961 by Western elite nations, including only the United States, Canada, and 18 European nations (including Turkey). This soon expanded to bring in Japan, with Australia and New Zealand joining in the 1970s.

Mexico was admitted as the first Latin American nation in 1994 and Chile joined in 2010. Costa Rica, though a small economy, began negotiations to join in 2013. Others in the region, including Argentina, Brazil, and Peru, also have been pushing their credentials for membership in recent years.

Gurria also noted that welcoming Colombia to the group is beneficial as the OECD attempts to bring in more members of the global south to move beyond its legacy of being primarily a club for North American and European nations.

“The accession of Colombia will contribute to our efforts to transform the OECD into a more diverse and inclusive institution, which will ensure our relevance in the years and decades ahead,” said Gurria. “The global challenges we are facing today can only be addressed if we have emerging, developing and advanced economies working together.”

With the increase, the new minimum monthly salary in Colombia for 2018 will be 781,242 pesos, or around $265 USD at today’s exchange rate. The increase comes up short of last year’s 7.0% raise in the minimum wage, which put the 2017 figure at 737,717 pesos. The 2016 increase was also 7.0% while 2014 and 2015 both saw jumps of 4.8%.

The transportation subsidy for workers, which is also a legally mandated minimum and comes on top of the minimum wage, was also raised to 88,211 pesos ($30 USD). This is up by 6.1% from the previous level of 83,140 pesos.

Together, the increases put the overall minimum monthly income for a Colombian worker in 2018 at 869,453 pesos ($296 USD).

In his address, President Santos stressed the complexity and difficulty that the year-end salary negotiation typically presents. The negotiators missed a deadline earlier in the week to come up with a final figure as workers were seeking a 9.0% increase while business sector leaders were pushing for 5.1%, according to Colombian Minister of Labor Griselda Restrepo.

Santos said he hoped the 5.9% raise would help spur in increase in household consumption that can help counter the low-growth climate that the Colombian economy has been stagnating in for much of the past two years.

“The negotiations to set the minimum wage have always been complex,” said Santos, adding that the goal was “to maintain the income of workers but also to avoid a negative effect for the employment of almost 2.5 million workers and pensioners who earn the minimum.”

In addition to the minority of workers who earn the minimum wage, the figure is a key calculation in many other important figures used within the Colombian economy. Known as the “Salario Mínimo Mensual Legal Vigente” (SMMLV), multiples of this number are used for everything from salary payments to levying fines against companies to gauging adequate income levels when approving visa applications.

Among those involved in the negotiations were: Julio Roberto Gómez of General de Trabajadores; Miguel Morantes of Trabajadores de Colombia; Jhon Jairo Díaz, representing pensioners; and Luis Alejandro Pedraza, president of the Central Unitaria de Trabajadores (CUT).

Labor Minister Griselda Restrepo and Finance Minister Mauricio Cárdenas both also attended a key meeting earlier this week to help overcome an impasse that nearly caused the negotiations to fall apart, according to a report by Bogotá-based newspaper El Tiempo.

Photo: 50,000 Colombian peso notes. (Credit: Jared Wade)

Above photo, ETB President Saul Kattan Cohen (left), Bogotá Treasury Secretary Ricardo Bonilla

The President of ETB, Saul Kattan Cohen, highlighted the progress of the company, reconfirming for the second consecutive year, the increase in income of the company, a trend that began in 2013, after more than eight years of losses and despite the continued decline in fixed telephone line revenues, the company’s largest generator of income. This fiscal year, revenues were $371 billion pesos. Liquidity is $1.1 trillion. Share value of the company grew 16% during 2014 compared to a decrease of 5.81% in Colombia’s COLCAP index.

The only financial debt is an international bond issue of $ 530 billion.  The company’s decision to issue this debt in pesos has mitigated the negative effects of the current decline of the peso against the dollar in recent months. The bonds have a term of 10 years and a rate of 7%, one of the lowest rates obtained by a Colombian firm on international debt markets in recent years.

Kattan reported progress in service innovation this past year, with the launch of three new services: Fiber to the Home, Digital Interactive Television and 4G LTE Mobile Telephony Services. In ETB’s service area of 900,000 homes, 30,000 households have already been wired for fiber optics. The goal in 2015 is to connect 140,000 households.

In ETB’s Interactive television service, more than 10,000 homes are subscribed, and enjoy benefits such as greater speed in changing channels, the ability to record up to five channels at the same time, and rewind to play back up to an hour of live programming. The goal this year is to install 80,000 interactive vable television connections.

ETB’s moble service already has more than 50,000 users. ETB managed to sell its shares in Millicom’s Tigo (wireless carrier) worth over 240 million dollars, with a clause in the sale creating an infrastructure sharing agreement valued at $800 million dollars, enabling ETB, partnering with Tigo’s infrastructure, to launch a mobile service nationwide less than 1 year after obtaining the spectrum.

ETB won for the second year in a row, recognition by the organization Transparency for Colombia, for having good corporate governance practices, and for the first time achieved environmental sustainability certification under the ISO 14001 standard.

New Board of Directors

The assembly also elected a new board. The holders appointed are:

• The Mayor of Bogotá, Gustavo Petro
• District Secretary of Education Oscar Sanchez Jaramillo
• Civil engineer and economic analyst Eduardo Sarmiento
• Business and marketing manager Juan Pablo Morris Rincón
• Economist Fernando Arbelaez
• Attorney Mauricio Duarte Duarte
• Economist Francisco González Barnier

The following alternate board members were also approved:

• Martha Lucia Zamora Avila, current General Secretary of the Mayor of Bogota
• Helga Maria Rivas Ardila, District Secretary of Habitat
• Leader of the Confederation of Workers (CUT) union, Fabio Arias Giraldo
• Social Communication expert José Manuel Alarcon
• Civil engineer Carlos Fonseca Hildebrand
• Utilities attorney Carlos Rey Arturo Parra
• Héctor Bermúdez