By Jeremy Morgan
Latin American Herald Tribune staff
CARACAS – Protesting steelworkers took over the main court building in Puerto Ordaz, Bolívar state, Friday morning in demand of payment of what they claimed was more than $500 million in debt due them. The occupation was said to have taken place without violence, although the response of the authorities was unclear.
The protest was the latest step in a simmering labor dispute at Sidor, the steelmaking company that was re-nationalized by President Hugo Chávez in a negotiated deal with Ternium, the Latin American steelmaking unit of Argentina's Techint Group.
A spokesman for the steel industry union, Sutiss, said that the debt had originated while Sidor was still majority-owned by Ternium, Latin America's second largest steelmaker, and that responsibility of the debt had been taken over by the government.
The union had initiated legal action in the name of workers at one steel plant in a bid to recover the debt but proceedings in the reopened case appear to be moving slowly, if at all.
Sutiss originally took legal action against Ternium in pursuit of the debts in 2008, but the case was turned down by a judge in Puerto Ordaz. However, that ruling was later over-turned on appeal, and the case was reopened in February this year.
By then, it had become a foregone conclusion that the bill for the debts would land up with the government as the new owner of Sidor. But in the meantime, according to a union official, the date for a first hearing in the reopened court case has yet to be set.
Ternium originally held a 60% controlling stake in Sidor, with the state and the workforce dividing the remaining 40% equally between them. Chávez abruptly announced in May last that the state was taking a majority 60% stake, and that Ternium could stay on as a minority partner if it wanted.
At the time, it was said that Chávez’s hope was that Ternium would remain on board with a stake of perhaps 10%. In the end, the Argentine-led group decided to call it quits and months of haggling went on over compensation.
In May this year, Chávez announced that a full deal had been reached at a total cost of $1.97 billion. Of this, $400 million had already been paid, and this would be followed by $945 million in six quarterly installments up to October 2010.
The outstanding balance was to be paid in amounts based on the increase in the price of U.S. benchmark crude above the level of May 6 this year, when WTI was $56.40 a barrel. Ternium originally acquired an 80% stake in Sidor from the state for $1.2 billion in 1998, although its share was later reduced to 60%.
In 2007, Ternium reported that it produced 4.3 million metric tons of crude steel and sales totalled $2.4 billion.