Smurfit Kappa Group has confirmed that the government of Venezuela has taken temporary control of Smurfit Kappa Carton de Venezuela’s business in Venezuela for a period of 90 days.
In a statement, the paper and packaging company said the government of Venezuela has detained two of its employees and it is making all possible efforts to secure their release.
Venezuela's economy is in freefall, with many blaming President Nicolás Maduro and his government for the dire situation . Hyperinflation, power cuts, and food and medicine shortages are driving millions of citizens out of the country.
Smurfit Kappa said it has been providing goods and services to its customers in Venezuela for almost 80 years giving employment to almost 1,600 direct employees.
During that time Smurfit Kappa has operated to "the highest business and ethical standards", invested significant amounts of capital in its business, developed a highly progressive Corporate Social Responsibility program and dedicated significant financial support and resources to the education and health of the less privileged members of the communities in which the company operates.
The company said 9 out of 10 unions last week confirmed their support and desire to continue working with Smurfit Kappa as a result of good labour practices and compliance with local laws and regulations.
As a result of this action by the Venezuelan government, Smurfit Kappa said it is impossible for it to manage its affairs in a way that complies with normal business standards.
"Consequently, as of 28 August 2018, the company is not responsible for the use of its installations, machinery and equipment, its employees’ safety, that of its surrounding communities, any environmental impact, or the quality of the paper and packaging manufactured in the operations," the statement said.
"SKG’s clear desire has been, and is, to continue operating a viable, sustainable and environmentally responsible business in Venezuela giving secure employment. In the event that the announced action continues, Smurfit Kappa Group is fully committed to protecting the interests of its stakeholders."
It is understood there are no Irish staff at the plant.