Cementing a relationship Part 3

After all the debate about nationalization in Venezuela, I decided to keep up with the cement industry because there was so much confusion surrounding it. Here’s the last installment from May.

Hugo Chávez wanted to decree that the cement companies negotiate a takeover (with the state holding a 60% stake) within 60 days or face expropriation. He requested that the Supreme Court rule on the question of whether the decree would constitute an organic law. Article 302 of the constitution stipulates that only organic law brings industries of national interest into the possession of the state. Here is the relevant part of the constitution:

El Estado se reserva, mediante la ley orgánica respectiva, y por razones de conveniencia nacional, la actividad petrolera y otras industrias, explotaciones, servicios y bienes de interés público y de carácter estratégico. El Estado promoverá la manufactura nacional de materias primas provenientes de la explotación de los recursos naturales no renovables, con el fin de asimilar, crear e innovar tecnologías, generar empleo y crecimiento económico, y crear riqueza y bienestar para el pueblo.

Not surprisingly, the Supreme Court ruled in his favor a few days ago. Soon thereafter, the decree was officially printed in the Gaceta Oficial and the 60 day clock started ticking.

There is no explanation for why this happened now, though the most logical conclusion is that the cement companies are fighting it tooth and nail and therefore are trying to find weaknesses in the government's legal foundation. Chávez is getting tired of waiting, so the decree polishes up his legal case and speeds up the process.