Americas Brief newsletter: 9-15 January 2019

This week's newsletter looks at fuel shortages in Mexico, anti-austerity protests in Argentina, and protests calling for the attorney general's resignation in Colombia. United States & Canada • United States – Closure of major Seattle highway to disrupt travel, logistics • United States – Shutdown causes security delays at Atlanta airport • United States & China – Firm drops supplier over forced labour fears Mexico, Central America & Caribbean • Costa Rica – Twelve people arrested over kidnap of U.S. businessman • Mexico – Fuel unloading backlog grows at ports South America • Argentina – Unions call for weekly anti-austerity protest in capital • Brazil – Flight cancellations anticipated after air carrier reduces fleet • Brazil – Heightened flooding risk as more rain forecast to hit São Paulo • Colombia – Protesters call for attorney general’s resignation
United States & Canada Alaskan Way Viaduct United States – Closure of major Seattle highway to disrupt travel, logistics UNITED STATES – Travel risk: Medium 11 January: In the north-western city of Seattle, Washington State, the 3.5km Alaskan Way Viaduct – a key city centre elevated highway – closed permanently on 11 January. The closure will lead to severe inner-city travel disruption until its replacement, the Highway 99 replacement tunnel, opens on the weekend of 2-3 February. Why it matters: Business travellers to Seattle between 11 January and 3 February should anticipate road congestion as well as busier-than-usual public transport services. Individuals in the city should ride-share in company cars or use public transport options such as buses or trains. Extra time should be allowed to travel to and from meetings. Individuals should monitor local updates on the Seattle Department of Transportation’s website. Logistics managers should factor the closure into short-term operational planning and devise alternative routes for hauliers. United States – Shutdown causes security delays at Atlanta airport UNITED STATES – Travel risk: Medium 15 January: A partial U.S. government shutdown has caused severe delays at Hartsfield-Jackson Atlanta International Airport (ATL), the world’s busiest, with the airport forced to close several security lanes today. Passengers have faced hour-long lines to get through security, while the Transportation Security Administration’s (TSA) standard wait time is 30 minutes or less. Atlanta airport is encouraging travellers to arrive at the airport three hours before domestic flights. Why it matters: The partial government shutdown has resulted in long waiting times across the country’s airports, with Houston Bush Intercontinental (IAH) closing security checkpoints at one of its terminals since 12 January. A2 Global advises business travellers in the U.S. to arrive early for flights in anticipation of irregular wait times. United States & China – Firm drops supplier over forced labour fears UNITED STATES – Political risk: Low CHINA – Political risk: Medium 11 January: U.S. sportswear company Badger has dropped a Chinese supplier over concerns that its products are made using forced labour in detention camps in China’s western Xinjiang Uyghur Autonomous Region, it was reported on 11 January. The North Carolina-based retailer said it would no longer source products from supplier Hetian Taida, basing this decision on an ‘abundance of caution’. Hetian Taida had featured in reports on Chinese state TV about the Xinjiang ‘vocational training centres’, where up to one million mostly ethnic Uyghurs and other Muslims are detained. The Chinese government says detainees are receiving vocational training and are not compelled to provide free or low-cost labour. Why it matters: Many of the factories and workshops that have recently appeared around the camps produce garments. Retailers should be aware that buying items made by inmates in Xinjiang camps could violate laws banning imports of goods made by forced labour. Companies importing goods – particularly garments – from China should review their strategic partnerships and conduct thorough due diligence, including stakeholder analysis, on local partners and third parties which could impact their supply chains. In addition, foreign businesses operating in China should be aware of the potential reputational damage of working with the government.
Mexico, Central America & Caribbean Costa Rica Costa Rica – Twelve people arrested over kidnap of U.S. businessman COSTA RICA – K&R risk: Low 13 January: The Spanish Civil Guard reported yesterday (13 January) that 12 individuals have been arrested in Costa Rica and Spain in connection with the kidnapping of a U.S. businessman in September 2018. William Sean Creighton Kopko, who owns an online gaming platform, was kidnapped in the canton of Curridabat in the San José province in Costa Rica and his family paid a ransom in bitcoin, thought to be worth USD 950,800, in an attempt to secure his release. However, Kopko was not released, and remains missing. Why it matters: The details of the case had not been previously made available to the media, most likely due to the sensitive nature of the ransom negotiations. A2 Global advises that while there has not traditionally been a major kidnapping threat to foreigners in Costa Rica, the declining security situation in the country means that the risk of kidnap-for-ransom has increased. High-net-worth visitors should exercise heightened vigilance, maintain a low profile and travel with a vetted driver. Mexico – Fuel unloading backlog grows at ports MEXICO – Travel risk: High 14 January: International vessel tracking data has indicated that the number of tankers waiting to unload imported fuel at Mexican ports has increased. As of 11 January, 39 tankers were delayed at the Pajaritos, Tuxpan and Madero ports on the Gulf of Mexico, and the Manzanillo port on the Pacific coast, an increase from 24 in the previous week. After taking office in December, Mexican president Andrés Manuel López Obrador sought to prevent fuel theft by forcing suppliers to deliver fuel via road, rather than through pipelines. This has resulted in major backlogs at ports as fuel companies await vehicles to distribute their imported fuel. Why it matters: A2 Global advises any companies using these ports in the one-week outlook to expect major delays and to research alternative routes should the backlog continue.
South America Argentina Metro Argentina – Unions call for weekly anti-austerity protest in capital ARGENTINA – Travel risk: Medium 10 January: Tens of thousands of people marched through the capital Buenos Aires in protest against President Mauricio Macri’s government expenditure cuts and the rising cost of living. The cuts are part of conditions imposed by an IMF stand-by arrangement (SBA) of a total of approximately USD56.3 billion of cuts over 36 months to support the government’s budget. The IMF approved the SBA last June, but agreed to increase it in December due to the continued deterioration of Argentina’s economic outlook. In response to the worsening economic situation, several trade unions – including the CTA and the Truckers’ Federation – have called for weekly protests every Thursday in front of the congress building on Rivadavia avenue. Why it matters: The protest calls are likely to be heeded by a wide array of protesters, and are likely to be supported by numerous civil society organisations. This will cause significant traffic disruption in the area surrounding the congress building. There is also an elevated risk of violence, with security forces deploying tear gas, rubber bullets and water cannon to disperse disorderly protesters. They are likely to respond by vandalising and ransacking buildings which they perceive symbolise capitalist institutions, such as banks. Security managers of sites near the likely protest locations should ensure the security measures are adequate and consider closing offices to protect staff and physical assets ahead of the protests. Brazil – Flight cancellations anticipated after air carrier reduces fleet BRAZIL – Travel risk: Medium 15 January: Brazil’s fourth-largest airline, Avianca Brazil, will see its fleet of aircraft reduced significantly as the owners of the aircraft, the U.S.-based Aircastle Ltd and Irish-based GE Capital Aviation Services (GECAS), seek to repossess at least 12 of Avianca Brazil’s A320 aircrafts, approximately a fifth of its total. This is according to a source quoted today (15 January) in the Reuters news agency. Why it matters: Avianca Brazil reportedly owes USD129 million to its creditors and on 10 December filed for bankruptcy protection at the business restructuring and insolvency court of the São Paulo state court of justice. A2 Global warns business travellers of the heightened risk of flight delays and cancellations due to the legal proceedings. Business travellers and tourism operators should monitor announcements from the airline and consider using alternative operators, particularly for domestic flights. Brazil – Heightened flooding risk as more rain forecast to hit São Paulo BRAZIL – Natural hazard risk: Medium 14 January: Heavy rain that hit the eastern and south-eastern parts of the south-eastern city of São Paulo yesterday afternoon (14 January) have led to partial flooding. A section of the Rio Verde river in the Itaquera district of the city overflowed at around 1745 local time, while the adverse weather conditions led to a tree falling on a vehicle on Sena Madureira street, in the south of the city, injuring two people. According to CGE, the agency responsible for monitoring weather in São Paulo, hail fell in the eastern residential neighborhoods of Tatuapé, Sapopemba, Vila Formosa and Vila Carrão. Why it matters: More rain is forecast to hit the city today (15 January) and later this week, which heightens the risk of road travel disruption. Places facing a higher risk of flooding include low-lying areas of the city, including tunnels, which are more prone to flooding as well as neighborhoods located near rivers. A2 Global advises staff with plans to visit São Paulo in the one-week outlook to allow additional time when travelling and anticipate potential delays during journeys. Logistics managers should instruct drivers to factor delays into delivery schedules and consider alternative routes. Colombia – Protesters call for attorney general’s resignation COLOMBIA – Travel risk: High 11 January: Protesters calling for the resignation of Attorney General Néstor Humberto Martínez over his alleged involvement in the cover-up of the Odebrecht corruption scheme demonstrated in major cities across the country. In the capital Bogotá, protesters gathered outside the attorney general’s office. Similar protests were held in main squares and outside public prosecutors’ offices in other major cities, such as Medellín and Cartagena, as well as outside Colombian embassies and consulates abroad. The case relates to Martínez’s alleged knowledge and cover-up of a bribery scheme when he was a legal advisor at Corficolombia – a Colombia-based financial services firm. Why it matters: The protests follow a similar case in neighbouring Peru, in which spontaneous protests eventually led to the resignation of Attorney General Pedro Chávarry. A2 Global advises business travellers in Colombia that related protests are anticipated in main squares and outside public prosecutors’ offices on 17 January. Business travellers should exercise heightened situational awareness and minimise travel to main squares and locations near public prosecutors’ offices. Individuals should avoid all protest gatherings due to the risk of violent confrontations between protesters and the security forces.