Dominican Chevron torpedoes DR-CAFTA; insists on transporting fuel

http://www.dominicantoday.com 01/02/07

Santo Domingo.- Despite efforts made by Chevron-Texaco locally and in the United States, seeking for the Dominican government to allow them to transport their fuel, the Industry and Commerce Ministry has not approved the foreign firm’s petition.

Chevron-Texaco yesterday ratified through press notes that it had opted to dialogue with the Industry and Commerce Ministry, seeking to implement what the entity denominates “Global process to maximize transport,” which it considers “rigorous and fair.”

The problem lies in that this process implies unilaterally rescinding existing contracts that Chevron holds with truckers. Also, approving such a move would concede the transnational firm additional permits to operate transportation, which could go in detriment of local operators.

For this reason Industry and Commerce on December 8, 2006 issued resolution #148, which stipulates that rescission of any contracts must first be approved by that Ministry.

Following this decision by Dominican authorities, Chevron-Texaco would have contacted the U.S. Trade Representative’s (USTR) office, entity responsible for assessing implementation of the Free Trade Treaty (DR-CAFTA).

The USTR office became interested in the issue, but the Dominican Industry and Commerce Ministry responded that it stipulated in compliance with Law 112-00 on Hydrocarbons and ultimately ratified its position on the basis of the new resolution 023-07 approved on January 18 and which reconfirms its legal authority to regulate the fuel transportation sector.

Millions are involved

Each year the country imports some 740 million gallons of gasoline, diesel and fuel oil. Transporters get RD$3.00 for each gallon transported locally, a RD$2.2 billion yearly business.

Chevron-Texaco seeks to manage their part of the business directly.