WORLD TRADE
ORGANIZATIONWT/COMTD/N/8
30 April 1998
(98-1755)
Committee on Trade and Development Original:  Spanish
NOTIFICATION UNDER SECTION C OF ARTICLE XVIII
OF THE GENERAL AGREEMENT ON TARIFFS AND TRADE 1994
Communication from Colombia
The following notification, dated 8 April 1998, made under the provisions of Section C of
Article XVIII of the General Agreement on Tariffs and Trade, has been received from the Permanent
Mission of Colombia.
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Notification under Article XVIII:C
1. Purpose of the measure to be adopted
To establish suitable conditions for the reorganization of grain salt production in Colombia,
particularly the production of salt by the Wayúu indigenous community.
2. The Wayúu indigenous community
The Wayúu are an indigenous community belonging to the Arawak language group, who
more than 4,000 years ago embarked on a process of migration from northern Brazil to the
Department of Guajira in north-western Colombia .  Archaeological excavations in the department
provide evidence of Wayúu settlements dating from the year 1800 BC.
The community currently occupies a territory of 12,000 square kilometres.  It has a
population of approximately 130,000 persons, and accounts for 22.3 per cent of the indigenous
population of Colombia and 40 per cent of the popu lation of the Department of Guajira.  The
indigenous population component is more than 80 per cent in some municipalities within the
Department.
The Wayúu are one of the indigenous communities that survived Spanish colonization, and
they have maintained their autonomy and independence up to the present day.  Accordingly, theycontinue to preserve their language and ancestral traditions, which constitute an historical and cultural
heritage.
The survival of this community has been marked  by two factors:  geographical isolation and
an uncertain livelihood based on artisanal fishing and salt mining.
The Wayúu territory covers the largest maritime salt works in the country,  the 4,000 hectare
Manaure salt works.  Salt harvesting forms part of the Wayúu cultural heritage which has been
maintained for centuries and is handed down from generation to generation.  Wayúu mythology
reflects the community's ancestral link with salt production in the following sentence:WT/COMTD/N/8
Page 2
"Maleiwa (the Wayúu God of Creation) created the sea and the land and when the sea went
into the land salt was formed, and He gave us Wayúu the job of harvesting it".
Long before the arrival of the Spaniards1 , the Wayúu were operating the Manaure and Bahía
Honda salt works.  In colonial times, some of the salt works became Crown property, while others
were operated by private individuals, both indigenous and foreign, in ponds and plots of land.
Grain salt production is currently the only means of employment and source of income for the
Wayúu community.  Three thousand indigenous people are employed in collecting salt by hand,
which brought an income of US$2.1 million in 1997, with additional revenue derived from handling
and transport of grain salt to the refinery.
The backwardness of the Guajira people and of the Wayúu community, and their substantial
dependence on salt mining, demonstrate the need to protect an activity of ancestral origin, which is a
feature of their cultural diversity.  Recognition and support for this cultural diversity is one of thepillars of democracy and pluralism in Colombia.
2
3. Standard of living and economic development of the Wayúu indigenous community
The level of development in some rural areas of Colombia, particularly in the case of the
indigenous communities, is lower than in the rest of the country.
In the department of Guajira, where the Wayúu community lives, the poverty indicators are
far higher than elsewhere in the country:  the basic needs of 50 per cent of the population are
unsatisfied, whereas the average for Colombia is 32 per cent, and the proportion of people living in
abject poverty is 26 per cent.  Similarly, the illiteracy rate is 16 per cent compared with a national
average of 11 per cent, and the situation is worse with regard to the indigenous community, 70 per
cent of whose population have had no access to education.  Services infrastructure is also deficient.Guajira has three telephone lines per 100 inhabitants and only 59 per cent of the population is served
by electric power.
4. Need to facilitate the establishment of a joint venture for the mining of salt
Up to 1991 the mining, production and marketing of salt was a State monopoly.  In recent
economic history, the monopoly was managed by the Industrial Development Institute (IFI), a Stateindustrial and trading enterprise, which developed the mining of crude salt through its salt works
concession ( Concesión Salinas ).  Another State enterprise, ALCALIS, developed a national salt
refining and marketing operation.
In 1991, a combination of three factors created the need to effect a radical overhaul of the
Colombian salt market:
(i) An economic modernization process was launched, marked by an opening up to
international trade and reduced State participation in economic activities.  Againstthat background, and taking into account the weak financial situation of the IFI-
Concesión Salinas  and of ALCALIS, the process of winding up both companies was
started in 1993, together with privatization of the extraction, production and
marketing of salt.  Refining and the marketing of refined salt are currently in the
                                                     
1 In 1499, Alonso de Ojeda discovered Cabo de la Vela in the northern part of Guajira.
2 Constitutional Court, Judgement T-380 of 1993.WT/COMTD/N/8
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hands of two private operators:  Solcarsa and Refisal.  The former is supplied by the
Manaure salt works, the second by the salt works in the central part of the country.
(ii) The 1991 constitutional reform reiterated State primacy in the ownership of natural
resources, but for the first time recognized a right of ownership in respect of natural
resources located in indigenous territories.
(iii) Negotiations were held between the St ate and the Wayúu community, for the purpose
of resolving social conflicts in the Guajira region arising from the mining of marine
salt by the IFI- Concesión Salinas .
In the context of the negotiations, the State recognized the Wayúu ancestral right to the
territories where the salt works are located.  In addition, agreement was reached on participation by
the indigenous community in a new marine salt mining company, and a Social Welfare and
Development Fund of the Wayúu community was set up to promote community work in the areas ofhealth, education and basic sanitation.
As a result, it is now intended to establish the Salinas Marítimas SA company, for the purpose
of producing marine salt, with a 25 per cent shareholding for the Wayúu community.
5. The salt market in Colombia
Since 1970, salt has been mined in Colombia on the basis of a concessional arrangement with
the IFI.  The concession concerns two extraction operations:  land salt works with proven reserves in
the salt mines of Zipaquirá and Nemocón in Cundinamarca and the Upín salt mine in Meta3, and the
marine salt works in Manaure and Galerazamba.
Annual demand for refined salt for human consumption is 240 thousand tonnes, most of
which is met by two refineries:  Refisal in the central part of the country, with an output of140 thousand tonnes, and Solcarsa on the Atlant ic coast, which produces 100 thousand tonnes.
• Salinas Marítimas SA
The company Salinas Marítimas SA (SAMA) is to be set up during the first half of 1998, as a
joint venture with shareholdings of 51 per cent for the IFI, 25 per cent for the Wayúu community, and
the remaining 24 per cent under negotiation among three private operators (Granelco, RecursosGuajira and Sales de La Guajira).
SAMA will operate the Manaure salt works, pur suing the aims of economic profitability and
environmental feasibility.  SAMA is to reorganize  and modernize salt production in such a way as to
maintain the manual extraction of 150,000 tonnes by a work force of some 3,000 indigenous people,
and at the same time increase mechanized production until it accounts for two thirds of the total
volume.
- Production
Current output amounts to 300,000 net tonnes, 150,000 tonnes of which are produced by
manual harvesting.  The San Agustín plant has 160 hectares of crystallizers which are harvested once
a year.  SAMA is to increase the volume of production to 750,000 net tonnes in 1999, i.e. 600,000
                                                     
3 Other deposits, such as those of Tausa and Sutatausa, are not mined, but have more extensive reserves
than those currently operated.WT/COMTD/N/8
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tonnes in industrial form and 150,000 collected by hand.  For that purpose, it needs to commission a
second plant, increasing the area of crystallizers to 267 hectares, with harvesting 1.5 times a year.
- Investment
In order to achieve the goal of 750,000 net tonnes, equivalent to 1 million gross tonnes,
investments are needed in the two SAMA plants.  For the San Agustín plant, currently in operation,the required investment is estimated at US$1.6 million, to be used for the upgrading of the social
infrastructure, electrical system, heavy machinery and industrial and transport equipment.
Investments of US$7 million are required to bring the second plant into operation.
- Production costs
Using the present system of production under which manual and mechanized harvesting each
account for 50 per cent of total output, the average weighted cost of production is of the order of
US$15.2 per tonne.  With the upgrading of the San Agustín plant and the entry into operation of thesecond plant, mechanized harvesting will account for 80 per cent of total production, reducing the
average weighted cost of production in the salt works by 40 per cent, to US$8.8.
- Impact on living standards
Grain salt production is the only means of subsistence for the Wayúu community, and
3,000 jobs are generated directly by manual harvesting.  In addition, the SAMA company willcontribute financial resources to the Social Welfare and Development Fund of the Wayúu community,
which is to take responsibility for community work in the areas of health, education and basic
sanitation.
6. Imports of refined salt
Salt imports were banned up to 1982.  As from 1982, imports were subject to licence under an
ALCALIS monopoly and an effective tariff of 30 per cent4 .  Between 1988 and 1990, the effective
tariff was 31 per cent.  From 1991, the State monopoly was eliminated and the tariff was reduced to 5
per cent, the aim being to guarantee domestic supply and create conditions of competition.
The above-mentioned points are reflected in the import statistics (Table 1).  Between 1985
and 1990, the average annual level of imports was 13.4 tonnes, while annual imports between 1991
and 1997 amounted to 26,706 tonnes.  Over the last three years (1995-1997) the average rose to
35,419 tonnes.
Imports have grown from representing 5 per cent of apparent domestic consumption to
16 per cent in 1996 and 1997 (Table 2).
                                                     
4 15 per cent tariff and 15 per cent surcharge.WT/COMTD/N/8
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Table 1
Imports of Refined Salt (Tonnes) 1985-1997
1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997
Germany 0.0 3.6 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Brazil 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 1.4 42.8 29.8 0.0 0.0
Chile 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 95.0 0.0 0.0 0.0
Cuba 0.0 0.0 1.9 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Ecuador 62.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 116.3 6.8 0.0 0.0 1,100.0
United
States0.4 0.6 10.6 1.6 2.3 1.1 0.0 0.1 0.2 1.7 1.9 1.4 5,793.0
Ethiopia 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 250.0 0.0 0.0 0.0 0.0
Netherlands 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 12,003.0 14,501.0
Panama 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.2 0.0 0.0 0.0 0.0 0.0
Peru 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 8,280.2 19,632.9 13,392.5 34,457.5 25,006.7
Venezuela 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 36,712.8 15,586.4 0.0 0.0 0.0
Total 62.4 0.6 12.5 1.6 2.3 1.1 0.0 0.3 45,360.8 35,365.5 13,424.3 46,461.9 46,400.7
Table 2
1991 1992 1993 1994 1995 1996 1997
Imports 0.0 0.3 45,360 35,323 13,394 46,462 46,400
Domestic production 240,000 240,000 162,500 159,000 240,000 240,000 240,000
Apparent domestic
consumption (ADC)240,000 240,000 207,860 194,323 253,394 286,462 286,400
Imports/domestic
production0.0 0.0 27.91% 22.21% 5.58% 19.36% 19.33%
Imports/ADC 0.0 0.0 15.90% 12.83% 5.29% 16.22% 16.20%
During the period 1996-1997, the main import suppliers were Peru, with an average of
29,732 tonnes, or 64 per cent, and the Netherlands, which supplied 13,252 tonnes, or 29 per cent of
total imports.
No WTO Member has initial negotiator rights.WT/COMTD/N/8
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7. There is no mechanism providing for the necessary protection consistent with obligations
under the WTO Agreements
Given the exceptional circumstances in this domestic industry, the existing mechanisms under
the WTO Agreement do not permit of the necessary protection for its transformation.
In the first place, the prices for the grain salt produced by the Manaure salt works reflect the
current position in an artisanal industry.  The production cost of manually harvested grain salt is
US$25.4 per tonne, compared with US$5 for mechanized production, making the weighted average
total cost US$15.2 per tonne.  In addition, the costs of handling and transport to the plant raise the
price of the raw material to US$29.4 per tonne.  In contrast, the f.o.b. price of imported refined salt is
US$45 from the Netherlands, US$40 from Ecuador and US$72.6 and US$79 from Peru and the
United States respectively.
This difference in production costs calls for a high level of protection in the initial stages, in
order to facilitate launching of the modernization process for this domestic industry.  The budgetary
constraints and fiscal discipline dictated by the current economic climate preclude a State contribution
of the size required to offset the cost differential between manual production and mechanized
production during the transition phase or the differential between the price of refined salt and the price
of the imported product.
Secondly, the Agreement on Safeguards is not applicable since it only allows for measures to
be applied to imports of like or directly competitive products, which is not the case in this instance.
The current problem concerns the importation of refined salt, while the industry requiring protection
is the one producing crude salt.
Lastly, a higher tariff is not a viable option for various reasons.  Colombia belongs to the
Andean Community and the Common External Tariff  in force (5 per cent) can ultimately only be
modified in emergency cases for a period of up to three months or by renegotiation of the tariff up to
the maximum of the CET levels, which would be 20 per cent.  This level of protection is not sufficient
in view of the differential in the production costs of salt harvested manually.
8. Nature and scope of the measures to be adopted
The Government of Colombia intends to establish a non-automatic licence for imports of
refined salt (heading 25.01.00.11 of the Colombian Customs Tariff).  This measure will be applied up
to 31 December 2002, with a liberalization programme under which, as from 1999, import licences
will be granted up to a level of 6 per cent of domestic consumption, with an annual increase of
three percentage points until a full 15 per cent is reached in 2002, at which time the prior licensing
requirement will be lifted.
Implementation of the planned measure calls for deviation from the obligations provided for
in Article XI of the GATT.
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