Rodman concession caught in end-of session scramble

Say WHAT? It’s the end of legislative
year scramble — that much we know

by Eric Jackson

On April 30 a legislative year ends. As that date approaches, legislatures usually play games. There are names for some of the more popular ones. The camaron — literally, shrimp — is a usually tasty little morsel, for someone, snuck into a bit of legislation about some other subject. A madrugonazo is legislation, generally by way of an amendment to soemthing else, brought up and jammed through in the wee hours the morning. The whole point of either is a sneak attack, of public business done without public notice or explanation, usually because if a close examination is allowed it would not pass the smell test.

On Saturday, the 21st of April, Panamanians woke up to see their screens or in print news of a camaron, an amendment to a proposed zoning law brought up by PRD deputy Roberto Ayala. It was added without much debate or examination. The amendment repeals another camaron that was jammed through the legislature in 2014 at the end of Ricardo Martinelli’s administration and that legislature’s session, and signed into law nearly a year later by Juan Carlos Varela.

The 2014-2015 sleight of hand awarded a port concession to PSA, whch used to stand for Port of Singapore Authority before a 1997 Singaporean government reorganization, on a parcel just north of the old Rodman Naval Station piers. At the time what did get some notice and prompt some objections was that the real estate in question had already been conceded to somebody else, a company called PIMPSA, which over the years had various environmentally obnoxious land use ideas. PIMPSA’s 1997 concession forbade its transfer.

So, at the end of the Martinelli administration, goodbye to a company that wanted to put in a cement factory to send out clouds of grit to mess with the instruments and crews of passing ships? Maybe there was merit to that, but that particular question had already been decided against the company, which surely wanted to unload a concession that proved not so profitable to itself. PSA, which had already bought some rights to the old Rodman piers back in 2008, got the property.

There was that ban on transfers, but senior in authority to the provisions of a concession contract in Panamanian law is the constitution.

Article 3 of the Political Constitution of the Republic of Panama is the fruit of a generations-long anti-colonial struggle, a controversy over which Panamanians died:

The Republic of Singapore is a sovereign city-state. Starting in the late 1990s as privatization was all the neoliberal rage, it began to devolve its port authority. But actually, it just put two layers of government between itself and the company created out of the authority. PSA International Pte Ltd, which wholly own the PSA Panama International Terminal concession, is one of the world’s major seaports companies. It is a subsidiary of Temasek Holdings Private Limited (Temasek), which despite the name is a wholly state-owned Singaporean sovereign wealth fund. PSA is the Singaporean government, analogous to how the old Panama Canal Company was the US government. Yes, they can play organizational chart and semantic games, but PSA’s concession at Rodman is a cession of Panamanian territory to another state.

The picture back in 2015 was made just a bit stranger by the presence of one individual, Guillermo Liberman, as a director of both PIMPSA and PSA’s Panama subsidiary.

To several lawyers the whole thing looked just wrong, although stated suspicions of some sort of corruption in the deal have never been specified. In any case, there were lawsuits filed which cited the non-transferability of the PIMPSA concession and another section of the constitution, Article 290, which generally forbids the acquisition of “domain” over national territory by foreign governments and their official or semi-official entities. Those lawsuits have languished undecided for three years now.

In the intervening time, PSA has made a substantial investment in the port. Legal concession or not, the company has changed its position in reliance upon the contract and there are international agreements which say that such things matter.

The morning was not over before President Varela promised a veto, business groups complained that things like this tell foreign investors that there is no rule of law here and the PRD legislative caucus backtracked on what it had done a few hours earlier. PSA is unlikely to lose its concession by a political process anytime soon. They may yet lose it in the courts, but that would be a very outside chance.

Rule of law upheld? Not especially.

Would the expulsion of PSA cripple the nation’s maritime industry? Not especially. That port is not particularly busy. On the west bank of the canal it’s not served by the multimodal rail link among most of the seaports in Panama City and Colon. A new bridge, more or a road infrastructure and new train lines might alter the equation in the not so distant future.

So who wanted to take the concession away? Why? We really haven’t heard an explanation from Mr. Ayala. The general public mood is to suspect crude theft by dark forces. But we really don’t know.

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