11 heads of state, including Raúl Castro, met in Caracas this weekend

At the ALBA summit in Venezuela this weekend, President Hugo Chávez announced the elaboration of an economic framework — called EcoAlba — for the bloc, as well as the creation of a permanent secretariat, and two small nations officially gained full membership in the trade and integration agreement.

EcoAlba defines economic rules within the ALBA bloc, which “allows its positioning on an international level,” according to a Venezuelan foreign ministry communiqué.

The communiqué only said that EcoAlba will define issues such as “linking and complementarity of production, coordination of economic policies, technical preparation for joint projects at a proper educational institution, the organizational structure necessary to allow continuity of the ALBA Economic Council, and the expansion of the range of the Banco del ALBA and Sucre.”

“EcoAlba is a political and geopolitical platform that allows to launch a more ambitious economic project,” Chávez said during the opening speech of the 9th ALBA summit at the presidential palace in Caracas.

No details were immediately available.

Discussions at the summit included an expansion of the Sucre currency compensation system to include Ecuador, and an ALBA-Argentina agreement for economic, scientific and technological cooperation. The ALBA bloc is supporting Argentina’s claim for the Falkland Islands, known as Malvinas in Latin America, against the United Kingdom. 

Use of the Sucre trade compensation system expanded from six transactions and a total of 10 million Sucre in 2010 — the year it was launched — to 431 transaction totaling 216 million Sucres in 2011.

Suriname and Santa Lucia formally joined ALBA during a ceremony Feb. 5, in the presence of Prime Ministers Desiré Delano Bouterse and Kenny Anthony. This brings the total membership of the bloc to 11 nations.

Haitian President Michel Martelly was in Caracas to thank the ALBA members for their support and announce Haiti’s “permanent observer” status in the bloc.  The ALBA summit passed a new work plan for Haiti, which includes health, education, energy, food production, infrastructure and technical assistance. Cuba, Venezuela and ALBA have played a crucial role in Haiti’s post-earthquake reconstruction since 2010, providing relief services and investing hundreds of millions of dollars in the country’s energy and healthcare infrastructure. A Cuba-led program in Haiti provided 800,000 emergency surgeries and currently operates 23 community hospitals, 30 rehabilitation rooms, nine health centers, as well as an eye surgery program and a program to battle cholera.  

Raúl Castro arrived in Caracas Saturday, joining Venezuela’s Chávez, Bolivia’s Evo Morales, Ecuador’s Rafael Correa, Nicaragua’s Daniel Ortega, Dominica’s Roosevelt Skerritt, San Vincent’s Ralph Gonsalves, and Antigua’s Winston Baldwin Spencer.

ALBA news: Agreements with Haiti, Argentina; Suriname and St. Lucia join

According to company officials quoted by the Spanish news agency, Brufau visited the Sacarbeo 9 platform and met with Basic Industries Minister Tomás Benítez.  The source called Brufau’s trip a “courtesy visit” that’s “normal” for this kind of project.

Anti-Castro congresspeople in the United States continue to exert pressure on Repsol and other foreign oil companies to refrain from drilling in Cuba. 

The use of the drilling platform that began drilling on Tuesday costs Repsol more than $500,000 a day, according to press reports.

Courtesy visit to Cuba: Brufau

Castro's closing speech at the Party conference: 'Moral, not judicial power'

Beginning what the country’s aging leaders expect to be a rejuvenation process and a transition of the Communist Party of Cuba away from economic micro-management, 811 PCC delegates met at the first Party Conference ever over the weekend at the convention center in Havana, to discuss internal changes.

The closed-door meeting of the sole political party on the island came after a stalwart Congress in April, which mainly tackled economic reform.

The main task ahead for the 800,000-member party, a Prensa Latina article cited leadership before the conference, is to establish a “closer connection to the people” and involve Cubans in crucial decisions. Before last year’s rank-and-file Congress, the PCC had not mobilized its grassroots since 1997, even though Party statutes require a meeting every five years.

Raúl Castro, who is also the PCC’s first secretary, urged more open debates and asked the media — a state monopoly — to abandon “useless secretiveness.” 

“It’s necessary we all get accustomed to speak truth, looking each other in the eye, to disagree and discuss, even disagree with what the bosses say, when we believe that reason supports us — of course in the appropriate setting, in the opportune moment, at meetings, not in the corridors,” Castro said in his closing speech. “We must be willing to get into trouble while defending our ideas and resolutely confront what is badly done.”

Meanwhile, the PCC delegates pledged in a resolution after the conference to stop meddling with “functions and decisions that correspond to the state, government and administrative institutions.” 

Castro outlined a party that shifts from a micro-manager of state companies and ministries to a hands-off institution that designs policy and keeps corruption in check. 

“Its power is moral, not judicial,” Castro said about the future PCC in his closing speech.

Although they didn’t say so in the final document of the conference, the Party delegates apparently agreed to term limits of two consecutive five-year periods in higher positions. Castro said in his closing speech that the practice’s “gradual” implementation is beginning immediately, even before party statute changes are made and the Cuban constitution is amended. He did not explain whether the term limits will apply to the general elections in 2013.

Raúl Castro, 80, began his first five-year term as president in 2008. In a recent speech in Trinidad and Tobago, he alluded to a succession “in a maybe close future.”

In the final resolution, the delegates also pledged to replace 20 percent of the Central Committee membership through 2013, citing the “necessity to achieve better results in the promotion of women, blacks, mestizos and young people” to top positions. 

Over the past few years, the Party has quietly appointed younger militants, women and minorities to key provincial positions. Making a bigger splash during last year’s Congress, the 115-member Central Committee — a kind of Party legislature — added 59 new members. Newcomers include Central Bank President Ernesto Medina, and Luis Alberto Rodríguez López-Calleja, president of military business holding GAESA and son-in-law of Raúl Castro. Forty-eight Central Committee members are now women, and 36 are black or mixed-race. However, the powerful 15-member politburo — the executive body which recruits its members from the Central Committee — still is the exclusive domain of revolutionary veterans.

Reiterating his previous criticism, Castro said that the aging leadership has left the country without “experienced and mature substitutes that have sufficient skills.”

Even so, the historical leaders will get this last task done, he said.

“We are not willing, even though we’re not that young anymore, to waste this last opportunity.”

Castro also urged party militants to reinforce their battle against corruption, admitting that previous efforts had failed.

“It’s true that the Party, for years and years, waged a battle against this scourge,” Castro said in his 40-minute speech. “However, it fought the battle on one side, and the government on the other.”

Castro appointed Lina Pedraza as comptroller general in 2010 to lead a crackdown against corrupt Cuban officials. According to unofficial accounts, close to 300 people have been arrested, including many PCC members and a handful foreign businesspeople.

He said that “abundant” information about specific corruption cases is already circulating among Party cadres, and will be published once the process is concluded.

Twenty-percent turnover through 2013: the Central Committee

Although the production agreement is a notch below a direct investment, this is the first time a foreign company becomes active in Cuba’s sugar industry. As part of a radical restructuring of the sector since 2002, the Cuban government announced a few years back it was opening up sugar to foreign investors. 

Companhia de Obras e Infraestrutura (COI), an Odebrecht subsidiary that is also the foreign partner in the Brazilian-financed expansion of the Port of Mariel, said it will sign a 10-year agreement to operate the 5 de Septiembre sugar mill. The 30-year old sugar mill in Rodas, near the port of Cienfuegos, was closed early during the 2010 harvest due to “inefficiency”, according to local press reports.

The objective, an Odebrecht official told news agency Reuters, is to increase sugar production and milling capacity, and help with the revitalization of the sugar sector. 

While Odebrecht has experience in operating sugar mills in Brazil and elsewhere in Latin America, the bigger prize for foreign investors in Cuba’s sugar industry is ethanol production and electricity generation. Last week, a spokesman for Brazil’s foreign ministry spokesman told reporters after a recent visit of the foreign minister to the island that Cuba is about to engage in ethanol production, as “Fidel’s resistance in this field is being overcome.” The historic leader of the revolution has maintained in his opinion columns that ethanol reduces food production and raises food prices.

A sugar industry executive familiar with the project told Reuters that Odebrecht is also developing a $258 million sugar mill joint venture in Angola with state company Sonangol that intends not only to manufacture 260,000 tons of sugar, but also produce 30 million liters of ethanol and 45 megawatts of electric energy. Odebrecht’s bioenergy division is one of Brazil’s largest ethanol producers.

The Brazilian conglomerate has been active in Cuba since 2007, beginning with railroad and road repair projects, and — so far — culminating in the $700 million Mariel project. According to Brazilian press reports, Odebrecht is interested in building roads and railroads, petrochemical and other industrial plants, hotels and resorts, as well as water supply and water treatment systems in Cuba; the company would also like to become an electricity producer on the island.  

“Our guarantee are the increasingly close relations between the two countries,” COI Chief Executive Ricardo Guimarães told Opera Mundi in 2010. “Because very little has been built since the end of the Soviet Union, the need for infrastructure construction and modernization is strong.” 

Brazilian President Dilma Rousseff is due to arrive in Havana Jan. 30, where she will witness the signing of several economic agreements.

5 de Septiembre sugar mill in Rodas

If she indeed visits the island, this would make her the second sitting member of Florida’s congressional delegation since 1959 to officially travel to Cuba.

During her speech at a luncheon by the Tampa Bay World Trade Center honoring her, among others, for her role in bringing Cuba flights to Tampa International Airport, the three-term congresswoman urged local leaders to rekindle Tampa’s once-strong economic ties to Cuba.

“We have got to market ourselves as a gateway to Cuba,” Castor said.

At the same time, she criticized Cuba’s human rights record and Havana’s close ties with the government of Iran.

“The government of Cuba certainly doesn’t make it easy for someone like me to visit,” she said.

Even so, “it’s unconditional,” she answered a reporter’s question whether her travel plans were conditioned on unilateral moves by Cuba. She said she would like to travel just by herself, without a delegation, and doesn’t intend to meet with the Castro brothers.

In 2003, her predecessor, Rep. Jim Davis (D-Tampa), became the first sitting member of the Florida Congressional delegation since 1959 to officially travel to Cuba. His visit, which included meetings with officials as well as a high-profile photo opp with a Cuban dissident group, did not produce any obvious improvements for Tampa’s Cuba relations.

Davis was in the audience during Castor’s speech.

The company had reported a 2-percent rise of Cuban luxury cigar sales for the six months ended March 31, 2011.

Even so, the Corporación Habanos S.A. joint venture, of which UK-based Imperial Tobacco holds half, doubled its after-tax profits last year.

According to the annual report, the Habanos joint venture logged in a profit after taxes of 10 million British pounds (US$15.72 million), on revenues of 35 million British pounds in 2011 ($55 million). That compares to an after-tax profit of 5 million British pounds ($7.8 million), on revenues of 39 million British pounds ($61.3 million) in 2010.

“Our luxury Habanos cigar portfolio has again delivered another good performance,” Imperial said in its annual report.

According to the report, which did not provide a breakdown of Cuban cigar sales, they rose at a particularly brisk pace inRussia, Brazil and China, partly thanks to new limited editions of Cohiba- and Montecristo-brand cigars. The report did not talk about cigar revenues in European Union markets.

Through the Habanos joint venture with Cuban state company CubaTabaco, Imperial Tobacco has the worldwide marketing monopoly for Cuban premium cigars.

During a preparatory visit of Foreign Minister Antonio de Aguiar Patriota to Havana Jan. 16-17, the two nations agreed to work on “important projects for the Cuban economy,” a communiqué by Brazil’s foreign ministry said. According to a Brazilian foreign ministry spokesman, there is space for Brazilian investments in “generic pharmaceuticals, including anti-cancer drugs, in petroleum refining, and production of lubricants.” He also cited sugarcane-based biofuels, saying that the resistance of Fidel Castro is “being overcome.”

Most importantly, as part of Rousseff’s visit to Cuba, Brazilian development bank BNDES is expected to release the second, $230 million, tranche of a nearly $600 million credit for an expansion of the Port of Mariel. Rousseff visited the construction site Jan. 31.

A Cuban-Brazilian joint venture led by Brazil’s Grupo Odebrecht began construction of the crucial infrastructure project last year, thanks to a first $232 million tranche of the BNDES loan. The port project, which includes a new container terminal and offshore oil logistics center, is expected to be completed by mid-2013.

Meanwhile, Companhia de Obras em Infraestrutura (COI), the Odebrecht subsidiary in charge of the port project, announced it will enter an agreement with state company Azcuba to operate a sugar mill in Cienfuegos province.

The first company that will announce it will set up shop in a prototype Special Development Zone at the port just west of Havana is São Paulo-based Fanavid S.A. The glassmaker will open a manufacturing facility at the Port of Mariel to supply Cuba, Brazil and the Caribbean region with architectural glass, a Foreign Ministry spokesman in Brazil said after Patriota returned from Cuba.

The zones, allowing companies to benefit from less red tape and simplified customs processes, are part of a government effort to convince more foreign investors to produce high value-added goods and service exports in Cuba.

Other Brazilian activities:

•Rousseff announced Jan. 31 that Brazil is providing Cuba a rotating credit facility of $400 million for food purchases in the South American country.

•In November, Cuba became the first non-African country to participate in the Brazilian “Mais Alimentos” program, designed to strengthen family farming and bolster food production. Rousseff confirmed that, under the program, Brazil’s Agriculture Development Ministry will grant $200 million in financing for up to 165,000 private farmers in Cuba through 2015 to buy Brazilian-made tractors and other equipment, as well as training and technology transfer. 

•The head of Brazil’s state postal office (ECT), Wagner Pinheiro de Oliveira, was in Havana Jan. 19 to expand a two-year old cooperation program between Brazil’s and Cuba’s postal systems. Under the agreement, Brazil provides support for operations, training, logistics, finance and information technology.

•Finally, Brazilian officials signed agreements to help establish a geological database in Cuba, to support the Technology and Quality Center of the Heavy Industry Ministry in Cuba, and to expand a network of breast milk banks.

“This is a market that’s opening up,” Foreign Ministry spokesman Tovar Nunes told Brazilian reporters last week. Cuba is “absolutely interested in expanding the partnership with us and is betting on that port as a focus of export-oriented investments.”

Increasing investments are paralleled by a rise in trade. Bilateral trade has risen 30 percent from 2006 to 2010, when it reached $488 million, the Brazilian foreign ministry said. In the first 11 months of 2011, trade volume was $570 million.

Meanwhile, the Brazilian foreign ministry announced Jan. 25 that it granted Cuban opposition blogger Yoani Sánchez a tourist visa to attend the screening of a new documentary film about Cuba and Honduras, Feb. 10 in Brazil. Sánchez had applied for a visa with the Brazilian embassy Jan. 20. Rousseff is not expected to meet with Cuban opposition members during her visit.

Before a meeting with Raúl Castro Jan. 31, she criticized the U.S. embargo and defended Brazil’s “strategic and enduring partnership to help accelerate Cuba’s development” against media criticism over human rights issues. She suggested human rights issues should be treated in multilateral fora.

Brazil's showcase investment in Cuba is the expansion of the Port of Mariel

Effective Feb. 1, Michael Robins, currently deputy chief financial officer, was promoted to chief financial officer; Dean Chambers, who is currently chief operating officer, will be executive vice president, development; and Brian Tiessen, currently senior vice president metals, has been appointed executive vice president operations. 

On Jan. 1, David V. Pathe assumed the post of CEO and president of the company. He had been chief financial officer since joining the company in 2007. Pathe took over from long-time President Ian W. Delaney, 68, who retained the post of chairman.

Michael Robins joined Sherritt in 2011. Prior to Sherritt, he held senior executive positions at Atomic Energy of Canada Ltd., Indigo Books & Music and AT&T Canada. Robins is a chartered accountant and will have responsibility for all finance-related functions. 

Dean Chambers has been with Sherritt since 2007. He has a background in both engineering and finance and has acted as Sherritt’s partner representative in several of its major joint ventures. In his new role, Chambers will be responsible for corporate development, technologies and projects. 

Brian Tiessen has been with Sherritt since 1993 and has held various senior roles in both the operations and corporate areas. He will have responsibility for the coal, metals, oil & gas and power operations. 

Sherritt, Cuba’s largest foreign private investor, has recently expanded into nickel mining in Madagascar and Indonesia.

By José Manuel Pallí, Esq.

The lethal crumbling of the building at the corner of Infanta and Salud streets, in Centro Habana, puts an exclamation mark to the byzantine debate over whether the changes in Cuba are significant or not.

Some 15 years ago, in the midst of a wave of sympathy (close to mass hysteria) the tragic death of Princess Diana generated, Mother Teresa’s death barely a week thereafter helped many to put lives and death in a proper and more balanced perspective. Here’s hoping that all Cubans look at the Calle Infanta tragedy as a sign that it is time to roll up our sleeves to help our fellow Cubans build a better Cuba, rather than sit tight waiting to pick up the pieces.

In the early 1990s, shortly after the fall of the Berlin wall, I had a series of conversations with large international real estate developers who sought my advice on how to go about doing in Cuba what they were doing in Mexico, where we became acquainted, and in other touristic destinations the world over. As I have said numerous times since then to prospective investors large and small, as well as to those among my fellow Cuban-Americans who seek my advice on how to improve their chances of recovering the real property expropriated or confiscated by the Castro government, I told them two things:

1. As a U.S. lawyer, subject to the Treasury Department’s rules that constrain all U.S. subjects in dealing with embargoed countries like Cuba, I was very limited in what help I could provide to them; and

2. Even if I could be of more help than that, it was — and still is — impossible to foresee the legal environment that would be in place at the time when competing claims between pre- and post-revolutionary owners over land in Cuba could be effectively resolved. All I could do for them — other than telling them what present Cuban laws say — was speculate on what future law might say (an “opinion” akin to those our cherished rating companies love to sell us on).

After hearing that, most foreigners would ask me to introduce them to one or another Cuban exile organization — back then it was mainly one — so they could get from them a sense of what to expect in a future Cuba. Those who got back to me after that type of consultation said they were told that brim and stone would fall on them when Castro was thrown out of power (presumably to be replaced by those consulted, in those days when we could almost touch Castro’s Final Hour…).

The Centro Habana deaths are a reminder that obduracy is not a trait exclusive to Cuban exiles. My reading of the Cuban Foreign Investment Law –Decreto Ley 77/95 — is that, under its article 16, paragraph 2, sections “a” and “b”, foreign investment cannot be destined to the construction of housing for the Cuban people, leaving this logro de la Revolución, together with its two other hallowed accomplishments, health and education for the Cuban people — both also guaranteed under Article 9 of Cuba’s Constitution, though clearly excluded under article 10 of its foreign investment law — out of bounds for foreign investors. If so, why? The arcane views that make some old true believers in socialism see profitable ventures as anathema are totally out of touch with a reality where new types of investment vehicles, such as a Benefit Corporation, could be used to channel funds for preserving and building housing units in Cuba.

But with regard to the tension between the interests of pre-revolutionary owners and those of foreign investors, Cuba’s position has lately been, in my view, more realistic — dare I say reasonable — than expected. In 1999, when the U.S. government threatened Spanish hotel management company Sol Meliá, among other foreign investors in Cuba, with sanctions under the Helms–Burton law, Cuba’s then vice-president, Carlos Lage, publicly said that Cuba would not be an impediment to any foreign investor in the island if they chose to negotiate with the pre-revolutionary owners whose property was expropriated under the laws decreed by the Cuban government between 1959 and 1961.

Cuban legal literature mostly describes the present Cuban Registro de la Propiedad as the result of a gradual reordering or reordenamiento gradual, serving different priorities enunciated in Cuba’s Housing Laws- of the one existing until 1959. However, there is no evidence that those records kept in the “old” Spanish-style Registro have been destroyed. My understanding is that they are simply archived, safeguarded for their historical value.

Through contacts and consultations with foreign lawyers during the process of drafting its 1995 foreign investment law, Cuba’s legislators apparently realized that foreign investors tend to give considerable “historical value” to those old title documents and their corresponding recording entries that could show up in the title chain to lands they were investing in. In that sense, due diligence became part and parcel of any foreigner’s real property investment in Cuba. Some of those investors may have even cut deals  — though I am not aware of any case where such a deal has been publicized — with the pre-revolutionary owners.

Eventually, the way to publicize those and other similar arrangements as part of the restoration or completion of an otherwise lame title chain may be through the use of an acta de notoriedad.

An acta de notoriedad is a notarial document whereby the Civil Law Notary declares the existence of certain well-known facts — that he or she has verified — in order to support or solidify the rights of the party who requests the acta over a given piece of real property. In this situation, where an agreement has been reached between a pre-revolutionary owner, whose rights appear in the old “historical” recording entries, and the foreign investor or any other party who is presently in the use and possession of that property, the well-known facts to be accredited would be the existence of that agreement, and the acquiescence by the pre-revolutionary owner to its terms. Once the acta is recorded at the Registro de la Propiedad, the rights of the foreign investor are shielded by the recording principles (principios del derecho registral) that govern under a Spanish-type recording system.

This is, obviously, a very simple explanation of a tool whose use is bound to run into practical difficulties, one of which is likely to arise from the fact that under present Cuban laws — see articles 26.1 and 29, section “d” of Resolución 114/07 del Ministerio de Justicia, for instance — the root of title to almost every housing unit in Cuba is presumed to be the title issued by the state as a result of the application of the Urban Reform laws of the 1960s, or else the administrative acts resulting in the expropriation or confiscation of real estate assets from the then-owners.

To remove these kind of impediments to stronger property rights, a similar effort to that made by those who cut the individual deals described above — and which will then be reflected in actas de notoriedad — will have to be undertaken by Cuban society as a whole, in order to find, through a freely expressed social consensus, the pillars of coincidence among disparate interests upon which a future Cuba will have to be built, coincidences to be reflected in Cuba’s future laws.

José Manuel Pallí is a Cuban-born member of the Florida Bar, originally trained as a lawyer in Argentina. He is president of Miami-based World Wide Title, and can be reached at jpalli@wwti.net

Under the agreement, the company, formerly known as Leisure Canada, will work closely with owner Ivanhoe Cambridge to provide asset management services and oversee construction and renovation projects at hotels in Vancouver, Victoria, Toronto, Ottawa and Montreal. The contract also includes one hotel each in Washington, D.C. and Seattle.

In Cuba, 360 VOX’s Wilton Properties subsidiary has three hotels and resorts in Cuba on its drawing boards. 

One of the assets managed by 360 VOX: The Fairmont Washington