Venezuelan steel maker to challenge state takeover

[Zorro]

Source: San Francisco Chronicle/SFGate

Venezuela's largest privately owned steel producer vowed Monday to challenge President Hugo Chavez's order to expropriate its assets even as soldiers arrived to oversee the takeover.

Sidetur's board of directors issued a statement promising legal action to protect its "employees, clients, suppliers and shareholders."

Chavez ordered the expropriation of Sidetur on Sunday, saying it is part of his strategy to transform Venezuela into a socialist state. He accused the company of selling products such as rebar at inflated prices on the domestic market, though Sidetur said its prices have been frozen since 2006 despite rampant inflation in the overall economy.

The company statement said that under Venezuelan law, only a judge can order the takeover of a company, and only after payment of an assessed price for the assets.

Read more: http://www.sfgate.com/cgi-bin/article.cgi?f=/n/a/2010/11/01/financial/f104709D32.DTL

---

Apparently someone thinks due process should be followed.

I wonder what Hugo's reaction will be.

[David__77]

1. The law is pretty clear that this is legal.

They will be compensated. In Venezuela, the state has every legal right to assert public control of strategic economic sectors. The construction of a socialist economic system is completely within the legal constraints of the constitution. This measure, in my opinion, will go far to ensuring the success of the current drive to radically improve housing for the majority.

[naaman fletcher]

17. we will see..

if production is higher or lower two years from now.

[me b zola]

2. So this guy is going to fight it in court

Wow, what a dictator Chavez is to allow people to use the legal system to address their grievances. /sarc

[EFerrari]

13. They just don't make dictators like they used to!

lol

[sabrina 1]

3. Wow, two 'let's make Chavez look like a dictator' threads in

less than 24 hours. He must have annoyed one of the Global Capitalists again. :eyes:

[Zorro]

4. So do you approve of expropriation without due process?

[sabrina 1]

6. I approve of countries having the right to pass laws they believe

are good for the country as a whole. Venezuela's laws allows this, the government is perfectly within its right to do this. The Corp. can use the legal process to appeal the decision. Just like here. It's perfectly democratic.

There will be due process.

Such laws exist in most countries. Iceland eg, has nationalized its banks in an attempt to set right all that went wrong over the past several years. Tough decisions sometimes have to be made.

Do you believe a country does not have the right to pass such laws? It is not a decree from one person. These laws were passed and accepted by the people of Venezuela. Except as might be expected, by the wealthy elite who were perfectly happy to enslave indigenous people who worked for slave wages for them, and had no chance of ever owning anything. That sure was not democracy.

Drastic steps sometimes have to be taken until wrongs are righted. Most people who care about their country will accept that. Venezuela badly need changes and apparently a majority of its people agree.

The company is planning an appeal and if they win, that will be accepted. So I don't understand why you are concerned about due process. Venezuela has laws and a Constitution. Just like here.

I don't see the problem

[Zorro]

8. I did not realize you were a Venezuelan legal scholar

I was unaware that Venezuelan law allows the president to declare with no warning that the government is taking over a company.

Apparently neither does the company that is being taken over, since they are under the misguided belief that it is only allowed through judicial means and that fair compensation must be negotiated prior to the action being taken.

[sabrina 1]

9. I didn't know it was such a big deal if a Sovereign Nation

decides to nationalize some of its privately held institutions. I also don't understand the intense interest in just one country is other than the fact that it is an oil producing country and everyone knows the obsession the U.S. and its greedy Global allies have in other people's oil.

Here are just a few examples of countries who have nationalized businesses. Britain MUST be a dictatorship if we are to go by this:

Nationalization

Sweden

1939-1948 Nationalisation of most of the private Railway companies.

1957 The mining company LKAB is nationalized. The state had owned 50% of the corporation's shares, with options to buy the remainder, since 1907.<12>

1992 A large part of Sweden's banking sector is nationalized.<13>

United Kingdom

The following companies/industries were the subject of nationalisation in the given year:
1868 Nationalisation of inland telegraphs under the GPO<14>

1875 Suez Canal Company - The Egyptian share in the company was bought out by the British Government.

1912 Nationalisation of inland telephone services under the GPO, apart from Portsmouth, Hull, Guernsey, and Jersey. The Portsmouth telephone service was nationalised the following year.

1916 Liquor Trade - The nationalisation of pubs and breweries in Carlisle, Gretna, Cromarty and Enfield under the State Management Scheme; mainly an attempt to restricting alcohol consumption by armaments factory workers. The scheme was privatised by asset transfer in 1973.<15>

1926 Central Electricity Board introduced under The Electricity (Supply) Act 1926 established the National Grid and set up a national standard for electricity supply in the UK.

1927 British Broadcasting Company (a privately owned company) became British Broadcasting Corporation (BBC), a public corporation operating under a Royal Charter.

1933 London Transport

1938 Nationalisation of UK Coal Royalties under the Coal Commission<16>

1939 British Overseas Airways Corporation (BOAC) later to become British Airways (BA) - combining the private British Airways Ltd. and the state owned Imperial Airways

1939 At the outset of World War II, much of British industry was subjected to State regulation or control, although not nationalised as such.

1943 North of Scotland Hydro-Electricity Board

1946 Coal industry under the National Coal Board (later British Coal); Bank of England - the latter had had private shareholders who were bought out by the state.

1947 Central Electricity Generating Board and area electricity boards, Cable & Wireless Ltd - the latter had had private shareholders who were bought out by the state.

1948 National rail, inland (not marine) water transport, some road haulage, some road passenger transport and Thomas Cook & Son under the British Transport Commission. Separate elements operated as British Railways, British Road Services, and British Waterways, also national health services created (as England and Wales, for Scotland and for Northern Ireland) taking over a mixture of previously local authority, private commercial and charitable organisations.

1949 Local authority gas supply undertakings in England, Scotland and Wales

1951 Iron and Steel Industry (denationalised by the following Conservative Government)<17>

1967 British Steel

1969 National Bus Company, combining former interests of the British Transport Commission with others acquired from the British Electric Traction group.

1969 Post Office Corporation created

1971 Rolls-Royce (1971) Ltd - The strategically-important aero-engine part of the recently-bankrupt Rolls Royce Limited.

1973 Local authority water supply undertakings in England and Wales

1973 British Gas plc Corporation created, replacing regional gas boards.

1974 British Petroleum - the combination of a 50% stake bought by Winston Churchill as First Lord of the Admiralty after World War I with around a 25% stake acquired by the Bank of England from Burmah Oil made the UK Government directly or indirectly BP's majority shareholder, though commercial independence was maintained. The shares were all sold during the 1980s.

1975 National Enterprise Board - a State holding company for full or partial ownership of industrial undertakings

1976 British Leyland Motor Corporation - became British Leyland upon nationalization. Privatized in 1986 to British Aerospace.

1977 British Aerospace - combining the major aircraft companies British Aircraft Corporation, Hawker Siddeley and others. British Shipbuilders - combining the major shipbuilding companies including Cammell Laird, Govan Shipbuilders, Swan Hunter, Yarrow Shipbuilders

1981 British Telecom created, taking control of telecommunications services from the Post Office

1984 Johnson Matthey - purchased for a nominal sum of £1 by the Thatcher government <18>

1997 Docklands Light Railway - John Prescott announced to the 1997 Labour Party Conference that he had nationalised this, although it was already in public hands anyway.<18>

2001 Railtrack - The owner and operator of the railway infrastructure, Railtrack, was not nationalised as such. However, its replacement Network Rail, whilst not a state-owned company, has no shareholders (company limited by guarantee) and is underwritten by the state. In addition prior to this the government began to make use of a residual shareholding of 0.2% (including voting rights) in Railtrack Group Plc leftover from the original sale.<19>

2008 Northern Rock - announced by Alistair Darling, Chancellor of the Exchequer on 17 February 2008 as 'a temporary measure'. The bank will be run at 'arms length' as a commercial business and sold to a private buyer in the future.<20>

2008 Bradford & Bingley (mortgage book only) - announced by Alistair Darling, Chancellor of the Exchequer on 29 September 2008. The loans part of the company was nationalised, while the commercial bank was sold off.<21>

2008 In October, the Royal Bank of Scotland, and the newly merged HBOS-Lloyds TSB was partly nationalised. The Government took over approximately 60% of RBS (later increased to 70%, then 80%) and 40% of HBOS-Lloyds TSB. This is part of the £500bn bank rescue package.

2009 On 13 November, Directly Operated Railways, a government company, took over the East Coast Main Line railway franchise that National Express had bought in 2007 for £1.4 billion, a sum originally to be paid over 7 years. The nationalised service operates as East Coast and includes services from London to York and Edinburgh. It has been stated by the government that their control is a temporary measure, initially to last 2 years.

British assets nationalised by other countries

1940s Argentine railways

1953 British Petroleum's Iranian assets by their government (actually a nationalisation of part of a part-nationalised company)

1956 The Egyptian Government nationalised the Suez Canal, owned by the Suez Canal Company which was part owned by the British State.

1962 The Sri Lanka Government nationalised the assets in the country of the partly British-owned Royal Dutch Shell company.

1975 The Sri Lanka Government nationalised the assets in the country of the British-owned plantation companies.

United States

1917: All U.S. railroads were nationalized as the Railroad Administration during World War I as a wartime measure. The United States Railroad Administration was returned to private ownership almost immediately after the war.

1939: Organization of the Tennessee Valley Authority entailed the nationalization of the facilities of the former Tennessee Electric Power Company.

1971: The National Railroad Passenger Corporation (Amtrak) is a government-owned corporation created in 1971 for the express purpose of relieving American railroads of their legal obligation to provide inter-city passenger rail service. The (primarily) freight railroads had petitioned to abandon passenger service repeatedly in the decades leading up to Amtrak's formation.

1976: The Consolidated Rail Corporation (Conrail), another government corporation, was created to take over the operations of six bankrupt rail lines operating primarily in the Northeast; Conrail was privatized in 1987. Initial plans for Conrail would have made it a truly nationalized system like that during World War I, but an alternate proposal by the Association of American Railroads won out.

1980s: Resolution Trust Corporation seized control of hundreds of failed S&L.
2001: In response to the September 11 attacks, the then-private airport security industry was nationalized and put under the authority of the Transportation Security Administration.

2008: Some economists consider the U.S. government's takeover of the Federal Home Loan Mortgage Corporation and Federal National Mortgage Association to have been nationalization.<22><23> The conservatorship model used with Fannie Mae and Freddie Mac is looser and more temporary than nationalization.<24>

2009: Some economists consider the U.S. government's actions with regards to Citigroup to have been a partial nationalization.<25> Proposal was made that banks like Citigroup be brought under a conservatorship model similar to Fannie Mae and Freddie Mac, that some of their "good assets" be dropped into newly created "good bank" subsidiaries (presumably under new management), and the remaining "bad assets" be left to be managed under the supervision of a conservatorship structure.<24> The U.S. government's actions with regard to General Motors in replacing the CEO with a government approved CEO is likewise being considered as nationalization.<26><27> On June 1, 2009, General Motors filed for bankruptcy, with the United States investing up to $50 billion and taking 60% ownership in the company. President Obama stated that the nationalization was temporary, saying, "We are acting as reluctant shareholders because that is the only way to help GM succeed"<28>

Venezuela

2007 On May 1, 2007, Venezuela stripped the world's biggest oil companies of operational control over massive Orinoco Belt crude projects, a controversial component in President Hugo Chavez's nationalization drive.

2008 On April 3, 2008, President Hugo Chavez ordered the nationalization of the cement industry.<29>

2008 On April 9, 2008, Hugo Chavez ordered the nationalization of Venezuelan steel mill Sidor, in which Luxembourg-based Ternium currently holds a 60% stake. Sidor employees and the Government hold a 20% stake respectively.<30>

2008 On August 19, 2008, Hugo Chavez ordered the take-over of a cement plant owned and operated by Cemex, an international cement producer. While shares of Cemex fell on the New York Stock Exchange, the cement plant comprises only about 5% of the company's business, and is not expected to adversely affect the company's ability to produce in other markets. Chavez has been looking to nationalize the concrete and steel industries of his country to meet home building and infrastructure goals.<31>

2009 On February 28, 2009, Hugo Chavez ordered the army to take over all rice processing and packaging plants.<32>

2010 On January 20, 2010, Hugo Chavez signed an ordinance to nationalize six supermarkets in Venezuela under the system of retail stores of a French company because of increasing price and speculation hoarding illicit.<33>

2010 On June 24, 2010, Venezuela announced the intention to nationalize oil drilling rigs belonging to the U.S. company Helmerich & Payne.<34>

2010 On October 25, 2010, Chavez announced that the government was nationalizing two U.S.-owned Owens-Illinois glass-manufacturing plants.<35>

2010 On October 31, 2010, Venezuelan President Hugo Chavez said his government will take over the Sidetur steel manufacturing plant. Sidetur is owned by Vivencia, which had two mineral plants appropriated by the government in 2008.<36>

How DARE Venezuela make decisions for itself without consulting with the Rulers of the World, Global Capitalists and their profits-before-people employees, allies, investors etc.

And how DARE they imagine that a sovereign country can act independently for the benefit of its own nation even if those actions interfere with profits for the World's Wealthy Elite. Because when you do that, you get lots of bad press from their propaganda machines. Fortunately though, most of the world is no longer affected by propaganda.


Are you a citizen of Venezuela, btw? Or a legal scholar?

[Renew Deal]

5. Maybe the threads aren't the problem.

[EFerrari]

12. Aren't the Koch brothers involved with this business?

That's what I remember reading but don't remember if it was this business or some other one.

ETA: Here's a link to an article about this round. Koch thugs have a fertilizer plant, it was a different enterprise.

[burning rain]

7. Once again, this makes me glad Obama was elected.

Wouldn't have surprised me if a President Walnuts! had launched a war for capitalism or abetted a coup over this sort of thing.

[sabrina 1]

10. Well, considering many countries, including this one

nationalize businesses under their laws, this would be a pretty bad reason to pick to invade a Sovereign Country. It is perfectly within the law, and if we are to invade Venezuela for making economic decisions under its own laws, we would be busy invading nearly every country in the world.


So long as the company is compensated there is nothing wrong with any country making such decisions in the overall national interests.

But whenever Venezuela does something other countries do without much fanfare, the Global New World Order crowd send out their propaganda through their versions of Judith Miller, to rile up anti Chavez sentement so they can justify the takeover of another oil producing country's resources that had the nerve to think their oil belonged to their own people.

There won't be an invasion if the American people stop falling for these tactics. Obama has been very disappointing on South American issues, keeping as a U.S. ally, one of the worst and most corrupt governments in the region, Colombia. Don't think that there would not be an invasion of Venezuela if the MIC wanted it, under Obama. There would be if it was feasible. And if they can get the support, as they did by lying about Iraq, of the American people.

[EFerrari]

11. There have been three attempts since Obama was elected.

Honduras, aided and abetted, lately Ecuador with its security forces infiltrated by CIA, and in 2009, a plot against Eve Morales was discovered. The Bolivian feds went in and found mercs and weapons bought by a separatist group that gets money from the State Department, iirc.

They don't actually need any provocation, or rather, the fact of vibrant democracy is enough provocation.

[sabrina 1]

15. Yes, and it's sickening. I really hope that region of the world

survives the interference of the U.S. and strengthens their democratic nations by forming strong alliances and maybe even a multi-national, S.A. military so that when you of their allies is attacked, all of them will come to their aid. Like a S.American NATO. If they don't, the U.S. and it's corrupt Global allies won't quit trying to destroy what they are building.

After leaving the Venezuelan Presidency, Chavez could become the head of the S.American Nato. That ought to blow the minds of the global monsters who apparently cannot ever have enough of other people's resources.

[Vidar]

14. I hope he hangs the fuckers, but Hugo's is more moderate & realistic than I am.

[sabrina 1]

16. Rotfl. But he'd have to be a dictator to do that.

If he was capable of such behavior, he'd be an ally of the U.S.

Saddam, eg was much admired by the U.S. for several decades for his no-nonsense attitude towards dissension of any kind,

UNTIL he made the mistake of deciding that Iraq's oil was Iraq's oil. Until then, Rummy and Reagan and everyone in DC were proud to shake his hand and bring him gifts.

Chavez otoh, who operates under the democratic laws of his country, extended his hand to President Obama but it was rejected.

We love our brutal dictators so long as they don't get any fancy ideas about making decisions about their precious resources without our consent.