Americas Brief newsletter: 6-12 February 2019
This week's Americas Brief newsletter analyses new U.S. visa rules, protests in Haiti and Venezuela, and changes to Colombia's offshore energy tenders policy.
United States & Canada
- Canada � Snowstorm prompts severe flight disruption at Toronto airports
- United States � New visa rules give preference to U.S. university graduates
- United States � Shutdown risk lessened as parties agree deal �in principle�
- United States � Winter storm prompts New York airports to cancel flights
- Dominican Republic & Haiti � Border reinforced as Haiti protests continue
- Mexico � President threatens to renegotiate deals with private companies
- Brazil � Miner declares force majeure on contracts following dam collapse
- Chile & Peru � Flooding damages infrastructure, heightens travel risks
- Colombia � Changes to energy tenders signal desire to boost output
- Venezuela � Rallies in major urban areas heighten travel risk
United States & Canada
Canada � Snowstorm prompts severe flight disruption at Toronto airports
CANADA � Natural hazard risk: Elevated
12 February: Approximately 300 flights to and from Toronto Pearson International Airport (YYZ) and Billy Bishop Toronto City Airport (YTZ) have been cancelled today (12 February) amid heavy snowfall in the Greater Toronto Area. A winter storm warning issued by Environment Canada at approximately 0430 local time forecasts up to 25cm of snow and ice pellets, possible freezing rain and winds gusts of up to 70km/h in the city today. The storm is expected to pass by tomorrow (13 February).
Why it matters: Individuals with flights to or from YYZ or YTZ should re-confirm their flight status. Allow additional time to arrive at or depart either airport due to snow, ice and reduced road visibility. If driving to the airport, reduce speed, increase the distance between your vehicle and the one ahead by up to 10 times, and carry emergency supplies, including a small shovel, non-perishable food and bottled water. Consider postponing non-essential journeys.
United States � New visa rules give preference to U.S. university graduates
UNITED STATES � Political risk: Low
6 February: New rules for the selection process for the H-1B visa � a temporary visa for foreign workers in highly skilled speciality occupations � will favour candidates holding a graduate-level degree from a U.S. university over those with similar qualifications from foreign institutions. The amended selection process was announced by the Department for Homeland Security (DHS) on 30 January, but the changes, which include an electronic registration system, are to come into effect on 1 April.
Why it matters: The new rules follow President Donald Trump�s 2017 �Buy American and Hire American� executive order, and according to the DHS, are likely to lead to an increase of up to 5,300 holders of a graduate degree gaining the visa each year. A2 Global advises U.S.-based firms which recruit staff on H-1B visas to review the DHS�s announcement and modify human resources policies accordingly.
United States � Shutdown risk lessened as parties agree deal �in principle�
UNITED STATES � Travel risk: Medium
12 February: The likelihood of another government shutdown decreased on 11 February after lawmakers from the Democrat and Republican parties reached an �agreement in principle� over border security. The deal has yet to be approved by Congress, which encompasses both chambers of the legislature, and signed off by President Donald Trump. While details have not yet been released, parties familiar with the negotiations told media outlets the agreement includes USD1.375bn in funding for 88km of new fencing along the U.S.-Mexico border. Trump had sought USD5.7bn to build a 320km barrier. Lawmakers expressed optimism that a bill would be approved by 15 February, when funding for some federal departments runs out.
Why it matters: The previous partial shutdown, which began on 22 December 2018, lasted 35 days and by some estimates cost the country USD11bn. The deal proposed on 11 February would avert renewed significant disruption in areas including air travel and non-essential services from government departments. Trump will likely be inclined to sign the deal as it would alleviate pressure on him, while showing some progress in his promise to �build a wall�. Foreign businesses should monitor developments, while factoring in the slight possibility that the unpredictable Trump may reject the deal.
United States � Winter storm prompts New York airports to cancel flights
UNITED STATES � Natural hazard risk: Elevated
12 February: John F. Kennedy International Airport (JFK), LaGuardia Airport (LGA), and Newark Liberty International Airport (EWR), which serve the city of New York, have announced the cancellation of hundreds of flights as of 0700 local time today (12 February). This is due to the forecast passage of a winter storm which is bringing snow and freezing rain to north-eastern coastal states. The National Weather Service (NWS), a government agency, has issued a winter storm warning for most of the aforementioned region which remains in effect until 0600 tomorrow (13 February).
Why it matters: The poor weather is likely to continue disrupting travel operations over the next 24 hours. Business travellers with flights to or from the affected airports in the 24-hour outlook should consider postponing non-essential travel plans until the weather conditions have stabilised. Logistics operators transiting the region should be aware of hazardous driving conditions, and should delay transport where needed.
Mexico, Central America & Caribbean
Dominican Republic & Haiti � Border reinforced as Haiti protests continue
DOMINICAN REPUBLIC � Travel risk: Elevated
HAITI � Travel risk: High
11 February: The defence ministry of the Dominican Republic ordered the reinforcement of its border with Haiti, due to protests taking place in Haiti since 7 February. The border from Dajab�n province to Pedernales province has been reinforced, with increased patrols by the Dominican army and its Specialized Corps for Border Security (CESFRONT).
Why it matters: A2 Global advises business travellers to avoid all areas near the border with Haiti, and to monitor local and international news for updates on the situation.
Mexico � President threatens to renegotiate deals with private companies
MEXICO � Political risk: Medium
12 February: Mexico�s leftist president, Andr�s Manuel L�pez Obrador, wants his government to revise natural gas pipeline contracts with private companies, claiming that the state-owned electricity (SOE) utility, the Federal Electricity Commission (FCE), is forced to pay for fuel, even when it hasn�t been received. FCE director Manuel Bartlett said on 11 February that the company runs the risk of bankruptcy if it does not reach new terms with the companies. One of the private companies, IEnova, a unit of U.S.-company Sempra Energy, said that its pipeline in Mexico has been offline since August 2018, following �acts of sabotage� which were reported to local and federal officials.
Why it matters: The governments proposed renegotiation of natural gas pipeline contracts with private companies, including foreign-owned entities, signals a wider willingness by the administration to renegotiate existing contracts with foreign companies. This could impact on foreign firms in other sectors. A2 Global advises foreign businesses with investments in Mexico to review their contracts with the government and local companies, and ensure they have contingencies in place to address any changes to contracts.
Brazil � Miner declares force majeure on contracts following dam collapse
BRAZIL � Political risk: Medium
5 February: Brazilian mining giant Vale S.A. declared force majeure � unforeseeable circumstances which prevent a company fulfilling a contract � on several iron ore contracts, after a court in Belo Horizonte ordered the suspension of operations at its Brucutu mine in Minas Gerais state. The court ruled that Vale must stop using eight tailings dams at its mines, including one at the Brucutu mine, which produces approximately 9 per cent of its iron ore output. The court�s decision comes after the deadly collapse of a dam on 25 January at the company�s mine in Brumadinho, which has led to 142 deaths.
Why it matters: The decision to declare force majeure on several iron ore contracts reflects the legal implications of the dam collapse. Companies which source iron ore from Vale should factor the declaration into operational planning and consider alternative supplies to mitigate the risk of supply chain disruption in the one-month outlook.
Chile & Peru � Flooding damages infrastructure, heightens travel risks
CHILE � Travel risk: Medium
PERU � Travel risk: Elevated
11 February: Heavy rainfall and flooding in northern Chile and southern Peru caused significant damage to infrastructure, including roads and bridges, in the past week, forcing extractives firms to halt operations in both countries. In Chile, some northern areas, including the city of Calama in Antofagasta Region, received up to 12mm of rain in three hours, the heaviest rainfall in four decades. The conditions led state-owned copper mining company Codelco to suspend operations at its Chuquicamata and Ministro Hales mines for 24 hours. In Peru, Southern Copper, a Mexican-owned mining firm, suspended operations at its Cuajone mine in the southern Moquegua region following heavy rainfall.
Why it matters: Peru�s national meteorology service, Senamhi, has forecast rainfall throughout southern regions of the country in the 24-hour outlook, warning that these could prompt further mudslides. Business travellers should monitor local updates and avoid non-essential travel to impacted regions in the 24-hour outlook. Companies whose supply chains contain firms in the affected areas should contact stakeholders to gauge the extent of possible disruption and consider alternative suppliers in the one-week outlook.
Colombia � Changes to energy tenders signal desire to boost output
COLOMBIA � Political risk: Minor
4 February: The National Hydrocarbons Agency (ANH) � the public body responsible for managing hydrocarbon energy resources � announced changes to how offshore oil and gas exploration contracts are awarded, and restarted bidding for over 20 production areas. The new bidding rounds are the first since 2014. The ANH also announced that disagreements between companies and the government will be resolved through arbitration proceedings, and that conditions for communities around offshore projects would be improved.
Why it matters: The announcement comes as the government looks to boost oil and gas production. The move also reflects the desire of the conservative government, led by president Iv�n Duque, to attract foreign investment. Energy firms with interests in Colombia should review the ANH�s announcement and adjust strategic planning accordingly.
Venezuela � Rallies in major urban areas heighten travel risk
VENEZUELA � Travel risk: Extreme
12 February: Opponents and supporters of de facto president Nicol�s Maduro will hold multiple rallies across the country today (12 February).
In the capital Caracas, supporters of self-declared interim president Juan Guaid� gathered at several locations across the city at 1000 local time, before marching to the intersection of Francisco de Miranda avenue and Libertador avenue, where a rally was held. Supporters of Maduro held their own demonstration at Bol�var square in the historic centre neighbourhood from approximately 0930. Rallies, mostly supporting Guaid�, are taking place in other major urban areas, including Barquisimeto and Valencia. There is a high risk that hardline elements among the protesters will engage in violent confrontations with the security forces, who may retaliate using tear gas, rubber bullets, or even live ammunition.
Why it matters:�Individuals in major urban areas should monitor local updates, exercise heightened situational awareness, and allow additional time for travel. In light of the risk of violent confrontations, individuals should keep a safe distance from all large gatherings as a precaution. Staff should be allowed to work remotely to mitigate the high travel risk.