Nation: WikiLeaks Haiti: The PetroCaribe Files

http://www.thenation.com/article/161056/petrocaribe-files

WikiLeaks Haiti: The PetroCaribe Files

Dan Coughlin and Kim Ives

June 1, 2011

When Rene Preval took the oath of Haiti's presidential office in a ceremony at Haiti's National Palace on May 14, 2006, he was anxious to allay fears in Washington that he would not be a reliable partner. "He wants to bury once and for all the suspicion in Haiti that the United States is wary of him," said US Ambassador Janet Sanderson in a March 26, 2006, cable. "He is seeking to enhance his status domestically and internationally with a successful visit to the United States."

This was so important that Preval "declined invitations to visit France, Cuba, and Venezuela in order to visit Washington first," Sanderson noted. "Preval has close personal ties to Cuba, having received prostate cancer treatment there, but has stressed to the Embassy that he will manage relations with Cuba and Venezuela solely for the benefit of the Haitian people, and not based on any ideological affinity toward those governments."

Soon, however, it became clear that managing relations with those US adversaries "solely for the benefit to the Haitian people" would be enough to put Preval in Washington's bad graces--especially when it came to the sensitive matter of oil.

Immediately after his inauguration ceremony, Preval summoned the press to a room in the National Palace, where he inked a deal with Venezuelan Vice President Jose Vicente Rangel to join Caracas's Caribbean oil alliance, PetroCaribe. Under the terms of the deal, Haiti would buy oil from Venezuela, paying only 60 percent up front with the remainder payable over twenty-five years at 1 percent interest.

As the press conference rolled on, just a mile away from the National Palace, in the bay of Port-au-Prince, sat a tanker from Venezuela carrying 100,000 barrels of PetroCaribe diesel and unleaded fuel.

Preval's dramatic inauguration day oil deal won high marks from many Haitians, who had demonstrated against high oil prices and the lack of electricity. But it ushered in a multiyear geopolitical battle among Caracas, Havana and Washington over how oil would be delivered to Haiti and who would benefit.

The revelations come in a trove of 1,918 cables made available to the Haitian weekly newspaper Haiti Liberte by the transparency group WikiLeaks. As part of a collaboration with Haiti Liberte, The Nation is publishing English-language articles based on those cables [1].

The State Department did not respond to a request for comment on the disclosures in this article.

According to the leaked US Embassy cables, Washington and its allies, including Big Oil majors like ExxonMobil and Chevron, maneuvered aggressively behind the scenes to scuttle the PetroCaribe deal.

For the Haitian government the oil support from Venezuela was key in providing basic needs and services to 10 million Haitians, securing a guaranteed supply of oil at stable prices, and laying the basis for Haitian energy independence from the United States.

Further, Haiti "would save USD 100 million per year from the delayed payments," noted the Embassy in a July 7, 2006, cable. Preval earmarked these funds for hospitals, schools and emergency needs, such as disaster relief. But the US Embassy opposed the deal.

"Post [the Embassy] will continue to pressure Preval against joining PetroCaribe," Ambassador Sanderson wrote in one April 19, 2006, cable. "Ambassador will see Preval's senior advisor Bob Manuel today. In previous meetings, he has acknowledged our concerns and is aware that a deal with Chavez would cause problems with us."

In a cable nine days later, on April 28, Sanderson recognized that Preval was under "increasing pressure to produce immediate and tangible changes in Haiti's desperate situation." She also noted that "Preval has privately expressed some disdain toward Chavez with Emboffs [Embassy officials].... Nevertheless, the chance to score political points [with the Haitian people] and generate revenue he can control himself proved too good an opportunity to miss."

Sanderson, who had been appointed ambassador to Haiti by President Bush, is now deputy assistant secretary of state in the Obama administration.

To implement the PetroCaribe deal, Haiti had to meet certain terms and reorganize its internal oil market. As a result, it would be almost two years before PetroCaribe oil would begin consistently flowing into Haiti. The key obstacles, though, remained the US Embassy and Big Oil, which controlled oil shipping and distribution networks in Haiti, according to the WikiLeaks cables.

"International oil companies are increasingly concerned--both Texaco and Esso will meet with the Ambassador in the near future--that they will have to buy their oil from the GOH [Government of Haiti]," wrote Ambassador Sanderson in a May 17, 2006, cable, concluding that "we will continue to raise our concerns about the PetroCaribe deal with the highest levels of government."

Christian Porter, ExxonMobil's country manager, "speaking for both ExxonMobil and Chevron, stressed that they would not be willing" to buy oil from the Haitian government "because they would lose their off-shore margins and because of PetroCaribe's unreliable reputation" for timely deliveries, Sanderson wrote. She concluded that it was a "dubious proposal that neither the U.S. oil companies in Haiti--responsible for about 45 percent of Haiti's petroleum imports--nor Venezuela, for that matter, is likely to agree to."

She was wrong about Venezuela but right about the oil companies. An October 13, 2006, cable explains that ExxonMobil and Texaco/Chevron were "shocked" but hadn't "informed the government of their concerns," which Sanderson encouraged the two companies to do.

Sanderson reiterated that despite her "numerous attempts to discuss (and discourage) GOH intentions to move forward with the PetroCaribe agreement, the GOH insists the agreement, implemented in full, will result in a net gain for Haiti."

The US ambassador also detailed how the oil companies were attempting to sabotage the agreement: "Following Preval's September 27 meeting with all four oil companies... the oil industry association (Association des Professionals du Petrole--APP) received an invitation to meet with representatives of the Venezuelan oil company who were in Haiti. All four companies refused to attend. Also, the companies received letters separately requesting information on importation and distribution from the GOH on October 9. So far, no one has responded."

Sanderson concluded one long October 13 cable by explaining how she had stressed "the larger negative message that [the PetroCaribe deal] would send to the international community [i.e., Washington and its allies] at a time when the GOH is trying to increase foreign investment," and lamenting that "President Preval and his inner circle are seduced by [PetroCaribe's] payment plan."

The Oil Companies and US Embassy Dig In

With parliamentary ratification and technical details resolved, by early 2007 Preval thought he finally had everything in place to get PetroCaribe implemented. But the oil companies were not done trying to undermine the deal.

Michael Lecorps, appointed by Preval to head the government's Monetization Office for Aid and Development Programs (formally known as the PL-480 office), which would handle PetroCaribe matters, told the oil companies that they would have to purchase PetroCaribe oil from the Haitian government, but the US companies said no. Quickly, there was a standoff.

Lecorps, "apparently infuriated by Chevron's lack of cooperation with the GoH, stressed that Petrocaribe is no longer negotiable," the charge d'affaires, Thomas C. Tighe, reported in a January 18, 2007, cable. He also said that "ExxonMobil has made it clear that it will not cooperate with the current GoH proposal either."

"Chevron country manager Patryck Peru Dumesnil confirmed his company's anti-Petrocaribe position and said that ExxonMobil, the only other U.S. oil company operating in Haiti, has told the GoH that it will not import Petrocaribe products," Tighe wrote in the same cable.

The embassy's political officer reported that Chevron "refused to move forward with the discussions because 'their representatives would rather import their own petroleum products.'"

Tighe continued that the Haitian government was "enraged that 'an oil company which controls only 30% of Haiti's petroleum products' would have the audacity to try and elude an agreement that would benefit the Haitian population."

The Haitian government stressed that they "would not be held hostage to 'capitalist attitudes' toward Petrocaribe and that if the GoH could not find a compromise with certain oil companies, the companies may have to leave Haiti," reported Tighe.

Enter Hugo Chavez

Venezuelan President Hugo Chavez arrived in Haiti on March 12, 2007, to a spontaneous hero's welcome by tens of thousands of Haitians, who jogged alongside his motorcade from the airport to the National Palace. The Venezuelan president came bearing many gifts.

"Venezuela pledged funds for improvement to provincial Haitian airports and airport runways (also previously announced) and experts on economic planning to help identify development priorities. Other pledges include Cuban commitment to bring medical coverage to all Haitian communes, Cuban and Venezuelan electrical experts to improve energy generation, and a trilateral cooperation bureau in Port-au-Prince," Sanderson wrote.

In subsequent cables, Sanderson sounds increasingly cynical about Preval's arm's-length posture toward Chavez, which she clearly regards as disingenuous.

"To hear President Rene Preval tell it, Venezuelan President Hugo Chavez' visit to Haiti on March 12 was a logistical nightmare and an annoyance to the GoH," Sanderson says in the "Summary" of that cable.

"Preval told Ambassador the evening of March 13 that Chavez was a difficult guest" and "did not have a GOH invitation but insisted on coming to mark Venezuelan flag day."

Preval apparently tried to put Sanderson's mind at ease.

"Responding to Ambassador's observation that giving Chavez a platform to spout anti-American slogans here was hard to explain given our close relationship and support of Haiti and of Preval's government in particular, Preval stressed that he had worked hard to stop much of Chavez' proposed grandstanding," Sanderson wrote. The ambassador reported that Preval said he is "'just an independent petit bourgeoisie' and doesn't go for the grand gestures that Chavez favors. Haiti needs aid from all its friends, Preval added, and he is sure that the US understands his difficult position."

Sanderson concluded, in frustration, "At no time has Preval given any indication that he is interested in associating Haiti with Chavez's broader 'revolutionary agenda'" but "it is neither in his character--nor in his calculation--to repudiate Chavez, even as the Venezuelan abuses his hospitality at home."

Preval's "Obliviousness"

Despite Sanderson's scoldings and Preval's reassurances, the Haitian president kept angering Washington. On April 26, 2007, senior presidential adviser Fritz Longchamp told the embassy's political counselor that "Preval will attend the ALBA [Bolivarian Alternative for the Americas] summit in Venzuela [sic] as a 'special observer' for the express purpose of finalizing a tri-lateral assistance agreement between Haiti, Venezuela, and Cuba, whereby Venezuela will finance the presence of Cuban doctors and other technicians in rural Haiti," according to a cable Sanderson wrote the same day.

Sanderson said the meeting with the embassy was "specifically to raise our displeasure with Preval's Venezuela trip" and that "Longchamp's reaction probably reflects Preval's own obliviousness to the impact and consequences his accommodation of Chavez has on relations with us." Longchamp "betrayed a common trait among Haitian officials in misjudging the relative importance that U.S. policy makers attach to Haiti versus Venezuela and Chavez' regional impact."

The Haitians, in other words, were too convinced of their own relevance to grasp that the real concern for the United States was stemming the Chavez tide. Sanderson suggested that the United States "convey our discontent with Preval's actions at the highest possible level when he next visits Washington."

Preval returned from Caracas with "Chavez' promises to provide a combined total of 160 megawatts of electricity" to Haiti, after "parading with Chavez' rogues gallery [sic] of ALBA leaders," Sanderson fumed in a May 4, 2007, cable.

She outlined the essence of the Venezuelan/Cuban aid package: "The Cubans will replace two million light bulbs throughout Port-au-Prince with low-energy bulbs. The initiative will cost USD four million, but save the country 60 megawatts of electricity, which costs the country USD 70 million annually. Venezuela promised to repair the power plant in Carrefour, generating an additional 40 megawatts of electricity. Additionally, Venezuela will by December of this year build new power plants across the country to add 30 megawatts to Port-au-Prince's electrical grid and 15 additional megawatts each for Gonaives and Cap-Haitian, all of which will use heavy Venezuelan fuel oil, a more efficient and less-expensive alternative to diesel."

Meanwhile, as this broader energy package took shape, the tensions over PetroCaribe were still simmering.

On May 4, Sanderson sent a second cable explaining that "the head of Haiti's Petrocaribe office, Michael Lecorps, gave the four oil companies operating in Haiti until July 1 to sign the GoH contract on Petrocaribe," hoping that "the four companies will sign the agreement voluntarily, instead of passing legislation obliging oil companies operating in Haiti to participate in the Petrocaribe agreement."

After talking to ExxonMobil Caribbean sales manager Bill Eisner, the embassy reported that Eisner "was shocked when he realized that Lecorps expected the oil industry to coordinate the Petrocaribe deal on behalf of the GoH" which would "make the oil industry prisoner to two incompetent governments," Haiti and Venezuela, in Sanderson's words.

President Bush took up the issue of Preval's relationship with Chavez during the Haitian president's spring 2007 visit to Washington, after which Sanderson expressed "hope that President Bush's clear message on Venezuela sank in, but only time will tell."

Two weeks after Preval's return, on June 12–13, 2007, a transport strike "gripped Haiti's major cities and underscored a mounting crisis over fuel prices, which rose nearly 20 percent in just two weeks," Inter Press Service reported at the time. Many believed that Haiti's joining PetroCaribe "would alleviate high gasoline costs," and word was leaking out that "the two large US oil companies that export to Haiti are said to have stonewalled negotiations" for PetroCaribe's implementation. The July 1 deadline for PetroCaribe compliance was fast approaching.

The standoff over PetroCaribe would continue through the rest of 2007, with Chevron the most resistant to working within the PetroCaribe framework. Haiti needed Chevron to ship the oil from Venezuela.

"It was ridiculous because they had been buying and shipping petroleum products from Venezuela for 25 years," Lecorps, the Haitian official who oversaw PetroCaribe, told the weekly Haitian newspaper Haiti Liberte. "And you know, Chevron is an American company, so maybe there were some politics behind that too, maybe because of Venezuela and Chavez. But they never said anything about that."

Lecorps's suspicions that Chevron had political concerns were warranted.

After returning to Haiti on December 22, 2007, from a PetroCaribe summit, Preval announced that the negotiations with Chevron were nearing a close. "We're going to sign with Chevron and then we're going to start ordering oil," he said at the airport, according to the Associated Press, adding that Venezuelan technicians would visit Haiti to consult on the project.

But, as Sanderson noted in a February 15, 2008, cable, "Chevron management in the U.S. does not want to make a lot of 'noise' about the agreement because they do not want to appear to support PetroCaribe."

Sanderson explained that the deal was sealed when "Chevron finally obtained its desired terms from the GOH," whereby the state oil company Petroleos de Venezuela, S.A., or PDVSA, "will sell to the GoH, which will then sell to private oil traders, who finally will sell to the oil companies in Haiti for distribution.... Chevron also agreed to ship the refined petrol on one of its tankers. The GoH expects to receive a PetroCaribe shipment in late February or early March."

And PetroCaribe shipments, covering all of Haiti's fuel needs, did begin on March 8, 2008, marking a victory for Venezuela and Haiti in surmounting the roadblocks thrown up by the US Embassy and Big Oil.

The extraordinary story that the Haiti WikiLeaks cables tell of the US Embassy's campaign against PetroCaribe--which provides such obvious benefits for Haiti--lays bare the real priorities of "Haiti's most important and reliable bi-lateral partner," as Sanderson calls the United States.

As for Preval and his officials, the cables indicate that, faced with Washington's might, they employed a preferred form of Haitian resistance, dating back to slavery, known as "marronage," where you pretend to go along with something but do the opposite. This dynamic of US pressure and subtle Haitian pushback has persisted under the Obama administration, which has moved to marginalize Preval's INITE political party in favor of new president Michel Martelly and his group of pro-American Haitian business supporters.

Under President Martelly, the fate of PetroCaribe remains unclear. But those who appreciate what the program has done for Haiti see reason to worry. While Preval tried to walk the battle-line between Washington and the ALBA alliance, Martelly had a pre-inauguration meeting not with the foreign minister of Venezuela, but that of Colombia, whose US-oriented neoliberal development plan he has said he will emulate.

[1] http://www.thenation.com/article/161009/wikihaiti-nation-partners-haiti-liberte-release-secret-haiti-cables