The Acting Secretary of State to the Embassy in Colombia

No. 183

The Acting Secretary of State refers to the Embassy’s despatch No. 578 of September 15, 1948. As a result of the memorandum of conversation, dated August 16, 1948,1 entitled “Petroleum Developments in Colombia”, the Embassy desires to know the Department’s attitude toward compulsory arbitration in the petroleum industry in Colombia.

The statement regarding compulsory arbitration to which the Embassy refers was somewhat more lengthy than indicated in the memorandum of conversation. The reasoning ran somewhat as follows:

A distinction should be drawn between compulsory arbitration as a procedure and the recommendations and results of any particular arbitral award. As a procedure, compulsory arbitration has been adopted in some states in the United States and many other countries of the world, including European and Latin American, as an alternative to strikes or lockouts in essential industries, which might otherwise seriously endanger the public interest. Consequently, it would follow that this Government should not object to the use of compulsory arbitration by other countries as a procedure for settling labor disputes threatening the public interest. In addition, in Latin America it would be difficult to keep objections by this Government to the use of compulsory arbitration from becoming public knowledge and from leading to accusations by unfriendly elements of interference by this country in the internal affairs of other nations.

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In the opinion of the Department, when in practice the use of compulsory arbitration leads to government actions or sanction of actions which are discriminatory against American firms or are objectionable for other reasons, the Embassy should, of course, assist in attempting to remedy the substantive situation. For example, the Embassy has been most appropriately concerned over the objectives of the Communists and the extent of their control within the petroleum unions, the activities of the Tropical arbitration tribunal which exceeded its terms of reference and the attempts to force the company to submit to arbitration issues which the Embassy feels should be left exclusively to the company.

The Department shares the concern of the Embassy over the protection of strategic United States interests in Colombia as well as the legitimate interests of American concerns there. It believes that the policy suggesed above will assist the Embassy in protecting such interests, as it has in the past.

  1. Not printed.