VZCZCXRO7317
PP RUEHDA
DE RUEHAK #0584 0881224
ZNR UUUUU ZZH
P 281224Z MAR 08
FM AMEMBASSY ANKARA
TO RUEHC/SECSTATE WASHDC PRIORITY 5723
INFO RUCPDOC/USDOC WASHDC PRIORITY
RUEATRS/DEPT OF TREASURY WASHDC PRIORITY
RUEHIT/AMCONSUL ISTANBUL PRIORITY 4056
RUEHDA/AMCONSUL ADANA PRIORITY 2817
RUEHRC/USDA FAS WASHDC

UNCLAS ANKARA 000584 
 
SIPDIS 
 
DEPT PASS USTR FOR MMOWREY 
TREASURY FOR OASIA 
USDOC/ITA/MAC/SNAJDI 
DEPT PASS EXIM FOR MARGARET KOSTIC 
USDA OSEC FOR DEP U/S TERPSTRA 
USDA FAS FOR OA YOST; ITP/SHEIKH; FAA/DEVER 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: EAGR EINV ETRD TU
SUBJECT: PARLIAMENT PASSES ANOTHER LAW TO SAVE CARGILL'S SWEETENER 
PLANT IN TURKEY 
 
 
¶1. (SBU) Summary: The Turkish Parliament yesterday passed an 
amendment to the Soil Protection and Land Use Law that is intended 
to protect several thousand companies from closure, including 
Cargill's Orhangazi sweetener plant.  This is the third attempt by 
the ruling party AKP to give an amnesty to industrial facilities 
built on agricultural land without the required licenses.  With the 
amendment, the companies will have a two-year period to obtain the 
missing licenses, during which they may continue to operate. 
Although the amendment seems to address the objections listed in 
previous court rulings against prior laws intended to protect 
Cargill and others, it can provide only limited shelter against more 
legal challenges from foreign investment opponents. End Summary. 
 
¶2. (SBU) On March 26, the Turkish Parliament passed an amendment to 
the Soil Protection and Land Use Law, which is being publicly 
referred to as the "Cargill Law."  The amendment gives amnesty to 
industrial facilities built on agricultural land before October 11, 
2004 without the required licenses.  To benefit from the amnesty, 
the companies must apply to the Ministry of Agriculture and Rural 
Affairs (MARA) to get the missing licenses within one year of 
issuance of this amendment.  The industrial facilities may continue 
to operate for two years after the issuance of this amendment, while 
the companies' license applications are processed.  The companies 
will also be required to pay a YTL 5 (USD 4) per square meter fee to 
the GOT for non-agricultural use of land, and commit not to disrupt 
the "integrity of agricultural land." 
 
¶3. (SBU) This was the fifth attempt by the ruling AKP party to give 
an amnesty to industrial facilities built on agricultural land.  The 
first was in 2004 and required the companies to complete their 
licensing within 6 months following issuance of the legislation. 
Cargill was unable to benefit from this legislation due to 
objections from local administrations and subsequent court rulings. 
The GOT passed a second law in 2005 intended to define these 
industrial facilities as "Private Industrial Zones."  The Council of 
State issued a stay order on this law in 2006, which caused 
interruptions in operations at the Cargill plant.  The AKP then 
amended the Soil Protection and Land Use law in 2006, but the 
amendment was vetoed by former President Sezer.  The amendment was 
passed again by the Parliament in 2007, but the Constitutional Court 
stopped implementation of the law, arguing that such establishments 
harmed the integrity of agricultural land.  The latest amendment 
addresses the Court's concerns and requires that companies maintain 
the integrity of agricultural land as a precondition for amnesty. 
 
 
¶4. (SBU) Commenting on the legislation, Cargill representatives 
noted that the opposition CHP Party could refer the new amendment to 
the Constitutional Court for review.  However, the wording of this 
amendment is precisely the same as the previous one that the Court 
upheld, so the CHP may see no value in asking for another Court 
review.  However, they expect further challenges during the 
permitting process.  Regarding permits, Cargill plans first to wait 
for the results of their appeal of local court rulings against their 
previous permit applications under the 2005 law.  If the Danistay 
(High Court) rules against Cargill or a decision is not forthcoming, 
they will re-apply for permits under the newly amended law. 
 
¶5. (SBU) Comment: While the stated purpose of the amendment is to 
allow over 20,000 industrial facilities built on agricultural land 
to continue operation, the vast majority of those companies -- 
Turkish-owned and operated -- have never been threatened with 
closure.  Cargill has been singled out by local politicians and 
NGOs, who have led the seven-year legal war against a major foreign 
investor that made a relatively rare greenfield investment in 
Turkey.  Although this legislative amendment includes the correct 
wording required by the previous Constitutional Court ruling, there 
is no guarantee that it will bring the legal warfare to a close. 
Cargill's investment symbolizes foreign investment for many FDI 
opponents, and they will look for ways to continue the fight.  End 
Comment. 
 
 
WILSON