An El Salvador official has suggested criminalizing the payment of extortion fees by businesses, touching off a debate that cuts to the heart of the country’s security dilemma.
The debate really began on March 4, when El Salvador’s top beverage company, Industrias la Constancia (ILC), announced that the company was temporarily halting operations in its Agua Cristal bottled water division due to the “heightened insecurity affecting the communities around ‘La Tiendona’ market” (see press release below).
There was no mention of extortion payments, but many people have been murdered in La Tiendona in recent months, largely in retaliation for not paying extortion fees. (ILC is owned by beer and soft drink giant SABMiller.)
The President’s Technical Secretary Roberto Lorenzana later weighed in on the announcement during a televised interview with Canal 10.
“I’m going to say something I don’t know whether or not I should say,” La Prensa Gráfica reported the official as saying. “[Industrias] La Constancia] […] is one of the businesses that has been paying extortionists. They have paid hundreds of thousands of dollars to criminals, and today criminals have grown used to extorting them.”
Lorenzana proposed that the payment of extortion fees should be punished by law, and that companies should instead denounce those responsible, El Diaro de Hoy reported.
The official added that it was unfortunate that some businesses should pay extortion fees while evading taxes, although he said that this was not the case for ILC.
SEE ALSO: Coverage of Extortion
Lorenzana’s comments immediately sparked a backlash within the business community. The director of the Association of Distributors of El Salvador (Asociación de Distribuidores de El Salvador – ADES), Sonia Jules deemed the official’s response “irresponsible,” and defended companies that are targeted by criminal groups, El Diario de Hoy reported.
“The company is not to blame. If companies have paid (extortion fees), it’s so that they can continue providing jobs, entering new markets and selling products,” the director of ADES explained. “Why? Because the government does not provide security.”
Jules added that businesses work hand in hand with the police and Attorney General’s Office to combat extortion.
InSight Crime Analysis
El Salvador is in a deep security crisis, and Lorenzana’s comments and the business community’s responses illustrate how difficult it is to climb out of this period of turmoil.
The government sees private business as one of the sources of the criminal groups’ power, especially those that contribute to the criminal economy through things like extortion, and those who do not report these criminal acts.
The business community see the government — or the lack thereof — as the problem. When it is victimized, the business community diverts its resources towards either increasing its security or paying the criminals to keep their distance (and sometimes protect them from other criminals).
The effects can be devastating, and the scale of the criminal economy startling. Micro-, small- and medium-scale businesses alone lose between $30 million and $60 million per month in extortion, according to the National Council for Small Businesses of El Salvador (Consejo Nacional de la Pequeña Empresa de El Salvador – CONAPES).
Each blames the other for their problems and neither is willing to put forward the money necessary to reverse these trends.
Who is right? Both arguments have their merit.
The business community’s reprisals draw attention to the fact that extortion victims — be they individuals or businesses — have little choice in the matter. Extortionists often threaten their victim into paying their fees, and refusal can lead to violent or even deadly reprisals.
SEE ALSO: El Salvador News and Profiles
In a recent example in neighboring Guatemala, alleged members of a street gang killed two people on a bus, apparently in relation for the failure to pay an extortion fee. Destroying or incinerating the property of companies who refuse to pay extortion is a common tactic used throughout Latin America.
Given the associated risks, criminalizing the payment of extortion can be deemed unjust and ineffective in deterring people from submitting to such pressure.
However, elites have also systematically impoverished governments, weakened judicial systems to fit their own needs and avoided paying taxes. The result is a chronically inadequate, corrupt or absent state, often of the elites’ own making.
In the end, fighting extortion, and criminal groups in general, require that both sides make sacrifices. But public confrontations like the one between Lorenzana and the business community do little to push El Salvador in the right direction.