Emerald Czar’s Failing Health Could Spark Conflict in Colombia

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Colombian emerald magnate Victor Carranza is approaching his end after a long battle with cancer, and his demise could spark a bloody war for control of this lucrative industry, with a long list of criminal groups waiting in the wings.

It is impossible to talk about the emerald trade in Colombia without mentioning Victor Carranza. He is said to have complete control over the industry, and has been instrumental in shaping its trajectory over the last two decades. Colombia accounts for some 60 percent of the global emerald trade, with many of the most valuable stones coming from Carranza’s own mines in the western Boyaca province. However, Carranza’s health is failing, after being diagnosed with prostate cancer six years ago, and then with lung cancer in 2010, and there is no successor in line to take over his vast empire.

A documentary recently aired by Al Jazeera (see video, below) explored the prospects for what lies ahead when Carranza passes away. It found that many, including Carranza himself, feared that his death would create a power vacuum and spark a bloody war reminiscent of that which afflicted the industry for some 30 years until 1990. In Carranza’s own words, “The peace we signed [in 1990] … is cracking. It’s damaged.”

On June 30, just two days after the Al Jazeera report, Mercedes Chaparro, a key ally of Carranza’s who El Tiempo described as “a fundamental pillar of the peace process in western Boyaca,” was gunned down by assassins, a sign that the Emerald Czar’s prophesy may already be playing out.

“La Guerra Verde”

The Colombian emerald industry is divided between fewer than a dozen families in the emerald producing region that bridges Boyaca and Cundinamarca provinces. Carranza is thought to control more than half of the trade and is revered, as one miner puts it, as the “boss of bosses.” However, this was not always the case.

From the 1960s, the industry spent three decades in a perpetual state of violence known as “La Guerra Verde,” (The Green War), fueled at first by inter-clan conflicts. It exploded in 1984 when Pablo Escobar’s Medellin Cartel attempted to carve out a place in the trade. Not only did emeralds present an attractive prospect for laundering the cartel’s drug money, but the mining area would have provided another drug trafficking corridor up to Colombia’s northern coast. Carranza and other mine owners resisted the cartel’s attempts to buy a share of the trade, sparking a bloody conflict that resulted in over 3,000 deaths.

In February 1989, an associate of Carranza, emerald magnate Gilberto Molina, was executed by armed men on the orders of Jose Gonzalo Rodriguez Gacha, Escobar’s second-in-command who was charged with leading the cartel’s drive into Boyaca. Colombian police shot and killed Rodriguez Gacha in December that year. With the Medellin Cartel’s main man in the Green War now gone, the opportunity for peace arose, and Carranza took it.

Carranza deftly orchestrated peace talks between mine owners, with the church acting as mediator, and after a year of negotiations a peace agreement was signed in 1991. Carranza’s position as one of the main emerald magnates was fortified further with his role as the creator of a regulated market for the gem stones in Colombia that set out proper guidelines on pricing, quality and payment.

Despite numerous attempts to assassinate or prosecute Carranza over the years — he was jailed from 1998-2001 while under investigation for drug trafficking and maintaining his own paramilitary army, and survived attempts on his life in 2009 and 2010 — the Emerald Czar has endured. In February this year the Prosecutor General’s Office began preliminary investigations into his paramilitary ties following accusations from several former commanders of the United Self-Defense Forces of Colombia (AUC). However, it looks almost certain now that cancer will get him before the Colombian justice system does.

Colombia’s Emerald Mines After Carranza

Amid growing uncertainty over whether the peace will hold, the most prominent players in Colombia’s emerald business have convened four times in the last year. At the most recent summit in March, all publicly stated they would maintain the peace, with emerald businessman Luis Murcia declaring, “He who does not agree with the peace is better off leaving the region.”

It remains to be seen how this will play out, especially with the assassination of Mercedes Chaparro. The emerald industry is defined by its rivalries and Carranza has many enemies. Among them is Pedro Nel Rincon Castillo, or “Pedro Orejas,” a powerful emerald magnate in Boyaca who was jailed in late 2009 for homicide, but released shortly after. Rincon is alleged to have ties to paramilitaries and arms trafficking and may have ordered the 2010 attempt on Carranza’s life. There is even suspicion he could be behind Chaparro’s murder.

Complicating the issue further is the change in Colombia’s criminal landscape over the last two decades. Unlike the cartels of the 1980s, who tried to muscle in on the trade for money laundering and drug trafficking purposes, Colombia’s gangs and guerrilla groups now have experience in the mining industry.

Emerald_MinesIn January, Colombia’s National Police announced that, between them, the Revolutionary Armed Forces of Colombia (FARC), the Rastrojos and the Urabeños now control illegal mines in half the country, either through extortion or direct control of mining operations. Gold mines are the primary draw, though reports have emerged of criminal groups moving into coltan mining along the Venezuela border. Former Colombian piece chief Oscar Naranjo stated that the problem is so grave that it will be the biggest challenge to his successor, Jose Roberto Leon Riaño.

Though the emerald industry is not as profitable as gold, it is still worth millions and Colombia’s dominance of the global market, combined with the recent rise in emerald prices, is a major draw for criminal groups. The country registered exports of $35.8 million worth of emeralds in the first four months of this year, a 26.9 percent growth on the same period for 2011. In addition to this there is the domestic market, and undeclared exports. What’s more, the price of emeralds is projected to grow another 10-15 percent this year, following an almost 800 percent climb in price since the end of 2010.

As the map shows (see above), the FARC, Rastrojos and Urabeños all have a presence near Carranza’s main area of influence. However, they will not be able to simply replace Carranza. The dynamics of the industry, which is divided between a small number of clans, makes it incredibly hard to penetrate, even without Carranza’s grip over the greater part of it. The threat, therefore, is that war will break out between the clans. If there is instability, any one of these criminal groups who would be well poised to exploit it. Not only do they possess considerable firepower, but they all have a thirst for diversifying their enterprises, with mining in some cases being the second biggest earner after drug trafficking. It may be difficult to win direct control over Carranza’s mines, but a forming a strategic alliance with an emerald clan, or extorting them — without the threat of a Carranza retaliation — is viable.

What is certain is that the industry is on the precipice. Through clever politicking and ruling with an iron fist, Carranza has been integral to maintaining the peace for the last two decades. The void he will leave is enormous, as will be the financial gain to whoever takes control of his mines. Despite talk of maintaining peace, it will only take a moment of opportunism from one emerald clan to spark retaliation from the others. The death of Chaparro suggests this manouveruing may have already begun. What’s more, the clans could well have to contend with some of Colombia’s most feared criminal gangs, who will be waiting on the sidelines for any hint of an opening to expand their portfolios.

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