Venezuela Says Smurfit Kappa Won’t Be Compensated for Forestry Seizure

[naaman fletcher]

Venezuela won’t compensate Smurfit Kappa Group Plc (SKG) for the seizure of 12,000 hectares of forestry plantations the Irish cardboard maker controls in the South American country, Agriculture Minister Juan Carlos Loyo said.

The government has taken steps to remove Smurfit from three different farms and will not negotiate over the issue, Loyo said in comments carried by state television last night.

“The lands belong to the state,” Loyo said. “We’re going to have a dialogue with the Smurfit company, but we’re not going to negotiate. They should be on less fertile land.”

http://www.bloomberg.com/news/2011-09-08/venezuela-says-smurfit-won-t-be-compensated-for-forestry-seizure.html

So much for the "chavez always pays" argument.

[joshcryer]

1. Smurfit didn't own the land.

If not the state is well within its right to eject companies from their property. For example, if BLM wanted to, right now, in the United States, forfeit a contract, the companies that were exploiting the land for whatever reason would be shit out of luck.

Smurfit would want to be compensated for lost profits from a potential harvest, but it'd be futile to try. As it would be futile for, say, BP or Chevron to try that if we banned offshore oil drilling falling within United States land lease programs.

[Bacchus39]

2. yes, it will be futile because its the Chavez goverment however it is a managed plantation

producing a renewable resource for wood or paper or whatever they use. Oil on the other hand is a non-renewable resource. the Smurfettes have cultivated the trees making the land economically productive. the seizure is more akin to Chavez taking over an agricultural operation than an oil field. the Smurfettes lose their entire inventory they produced not to mention their operational facilities I assume.

[joshcryer]

3. As would BP lose any equipment non-recoverable from a deep sea oil well.

I do think that at the bare minimum that they and their employees should've at least been compensated for the final season of crop harvesting. But this is not a case of expropriation without recompense, the land belongs to the people. I would not weep if Chevron, for example, lost their oil shale leases even though they've sunk millions into in situ extraction and that by and large that stuff can't be recovered.

Someones pockets are being lined by this expropriation, though this is not an example that I was suggesting to naaman fletcher in a previous post.

[Bacchus39]

4. I agree its the government land. but the trees also belong to the Smurfs

it is not natural forest land from my reading, but a managed plantation. So I think the State is responsible for paying for the siezure of the product (the trees) as well. If it were natural forest land or oil then yes they would be out of luck.

but all in all the Chavez administration is seizing a business operation that has invested in creating the enterprise from scratch. now that the private business has established the infrastructure and business operations, the State takes it away.