years ago a bitter environmental conflict over the
Franklin dam in Tasmania ended with a victory for
environmentalists concerned to prevent needless destruction
of their country's ecosystem. Now people in another
British ex-colony, Belize, are also fighting a controversial
hydroelectric project, the Chalillo dam, against the
Canadian multinational company Fortis. The dam fits
into the controversial regional Plan Puebla Panama
aimed at neo-liberal style economic integration in
the Central American isthmus. The contrast between
the Franklin dam in Australia and the record of hydroelectric
projects in Central America is sharp and opportune.
taken now about energy policy in Central America will
irrevocably affect the region's future development.
Opponents of the vertically imposed Plan Puebla Panama
are often derided as ignorant anarchist opponents
of any economic development in the region. In fact,
even the World Bank has recognised that environmental
concerns and poverty reduction are inextricably linked.
In 1995 Kenneth Newcombe, Chief of Global Environment
Coordination at the World Bank said, "Our aim
has always been to abolish poverty. Now we understand
that solving poverty and protecting the environment
go hand in hand." It is a shame that 1995 insight
has been lost along the way somewhere.
of democracy means irrational energy solutions
most of Central America, electricity demand is likely
to increase at between 5%-6% per year, needing billions
of dollars of investment. Honduras alone expects to
need to spend US$140 million per year over the next
decade, for example. But who is taking the decisions
about that investment in a region where governments
are weak, notoriously undemocratic, often repressive
and generally corrupt? The Central American Electrical
Interconnection System (SIEPAC) now being installed
was agreed with hardly any consultation with the peoples
of Mexico and Central America.
governing elites strike deals with multilateral lending
organizations and transnational corporations on programs
that clearly prejudice the best interests of local
people financially, environmentally and politically.
Local people incur higher levels of national debt
for services which will cost them more both in terms
of capital investment and in end-user charges in years
to come. Their environment will be irreversibly damaged.
Many indigenous groups will suffer. Genuine democratic
participation in planning processes is not even considered.
Franklin Dam experience in Tasmania
was the reality in Australia too until twenty years
ago a coalition of environmentalists blockaded the
dam construction on a tributary of the Franklin river
in Tasmania, Australia's last wild river. They were
fighting the country's Hydro Electric Commission,
a giant state entity habitually accustomed to getting
its own way. The environmental coalition was lucky
to get television coverage. They used it effectively
to get across to people in Australia the extent of
the environmental loss the Franklin dam project implied.
June 1980, 10,000 protestors marched through Tasmania's
capital, Hobart. In response, the state government
tried to argue for a less damaging dam project that
would still have drowned much of the wilderness area.
Through July 1980 the conflict sharpened. Organized
labor supported the dam. But protestors undercut pro-dam
propaganda with an effective information campaign
showing viable energy options that offered better
employment prospects and substantial capital savings.
compromise referendum to break the deadlock in December
1981 offered voters a choice between two dams. More
than a third of voters spoiled their ballot papers
writing on them "NO DAMS". By November 1982,
over 2500 people were helping to physically blockade
the dam protesting the Australian federal government's
decision not to intervene and stop construction. Local
opinion polls showed people two to one against the
dam. A total of 1217 people were arrested during the
blockade. In June 1983 a newly elected Labour government
won a court decision and the dam was stopped.
America's dismal record: Chixoy and El Cajón
America has more than its fair share of similarly
conflictive hydroelectric projects but the political
conditions are very different. In Guatemala, the Chixoy
hydroelectric program was controversial from the start.
Begun in 1975, it was run by German, Swiss and US
companies with money from the World Bank and the Italian
the time when thousands were marching in Hobart, Tasmania,
in 1980, the Guatemalan army murdered 70 indigenous
women and over 100 children near Chixoy. Between 1980
and 1982 a total of over 400 Maya Achi people were
massacred in separate incidents during attempts to
secure justice for their communities, affected by
the dam. On top of that human cost, the dam has been
an expensive failure, overunning its original cost
projection of US$270 million by over five times. In
the early 1990s 45% of Guatemala's national debt derived
from the Chixoy dam project.
hydroelectric projects causing conflict in the region
in recent years have included the Bayano and Tabasará
dams in Panama, the Usumacinte and Chapparal Frontera
dams in Mexico and the Patuca and El Tigre dams in
Honduras. Honduras has perhaps the most emblematic
hydroelectric project in the region, the El Cajón
dam, about 150 kilometres northwest of the capital
Tegucigalpa. Protected by an army base at its entrance,
the huge dam was finished in 1985 with over US$700
million from the World Bank and the Inter American
term benefits, environmental disaster
is still paying off those loans now. For 5 years the
dam's four huge turbines supplied nearly three quarters
of the country's electricity and even generated a
small amount of foreign exchange through sales of
power exported to neighbouring countries. But the
project quickly developed major engineering problems,
massive water filtration and chronic environmental
deterioration in the adjacent countryside.
the dam failed, by 1995 the country was losing around
US$20 million a month in lost industrial production.
The government had to make repeated requests for additional
finance to the international financial institutions,
who paid up rather than see the project fail completely.
Even for government bureaucrats, the environmentalist
climate change message was already sinking in.
rainfall, compounded by aggravated erosion when the
rains did arrive, accelerated deforestation, filling
the dam's reservoir with sediment. The dam managers
did well to avoid catastrophic failure during Hurricane
Mitch in 1998. Describing the El Cajon basin this
year the Sustainable Development Unit of the Organization
of American States writes, "The basin presents
a generalized erosion process, signifying irrecoverable
loss of nutrients due to the overexploitation of natural
resources. In its turn this causes negative effects
on the flora, wildlife, water quality and fish population."
large dams provoke soil erosion that results from
deforestation caused by the overall impact of the
dam's construction. This soil erosion begins sedimentation
processes that start to affect the dam's performance
within a few years. Below the dam, clear unsedimented
flowing water tends to accelerate erosion. But the
main problem is the ambient deforestation.
combination of these major civil engineering projects
with widespread illegal logging in fragile biospheres
devastates the environment and accelerates climate
change. A fundamental cause of this process is weak
or absent government regulation, an endemic phenomenon
in Central America made more acute by arrogant know-all
neo-liberal bureaucrats in the World Bank, the International
Monetary Fund and the Inter-American Development Bank.
Exactly these factors have jeopardised the important
Rio Platano Biosphere, again in Honduras, and the
Bosawas natural reserve in Nicaragua. But Rio Platano
and Bosawas, like the Macal River Valley in Belize,
are typical of vulnerable environmental areas throughout
neglected factor is sustainability. As Fred Pearce
of the World Wildlife Fund writes, " Sustainable
development need not require the total cessation of
dam building. But it will require detailed assessment
of the environmental and social impacts in advance,
and in particular a clear understanding of the benefits
of freshwater ecosystems, including wetlands and groundwaters,
and their dependence on hydrological flows."
contends that dams disrupt downstream flows sustaining
fisheries and fertile soils. He points out that large
dam reservoirs can generate as much or more greenhouse
gases than fossil fuel power plants. As they grow
old they become significantly less efficient, more
costly to maintain and run risks of catastrophic failure
as climate change causes extremes of rainfall and
drought. El Cajón in Honduras is a perfect
example of this syndrome. Pearce also notes the negative
affects of badly designed hydro-power projects on
rural communities, often forced out of fertile valley
regions into less fertile highlands. 
change and regional uncertainty
it may be true currently that Central American governments
are tending to reduce reliance on poorly planned hydro-power,
that may not necessarily be good news. Governments
are trapped between the need to guarantee future power
needs and the limited options allowed them by IMF,
World Bank and Inter American Development Bank policies.
These bodies have promoted the bogus benefits of "free-market"
policies and privatisation for over twenty years.
hopeless anyway for the poor majority in Central America,
these policies offer no help to countries faced with
the accumulating effects of regional climate change.
In terms of energy policy, climate change provokes
uncertainty among regional policy makers about further
development of hydro-electric projects. Factors exacerbating
their uncertainty are repeated droughts affecting
agricultural production, higher incidence of forest
fires, and increased displacement of populations abandoning
agricultral areas rendered arid and unsustainable.
and economic straitjackets
all the countries in the region Costa Rica is the
best placed to develop a genuinely sustainable energy
policy. It has conserved its environment and resisted
pressure to privatize its state utilities. This fact
and the country's relatively low level of foreign
debt leaves the government more options in terms of
infrastructure investment to meet its growing energy
neighbouring countries, high indebtedness, public
sector cutbacks as a result of structural adjustment
programs and privatization of state owned public utilities,
mean that governments are unable to invest in energy
infrastructure. So investment decisions favor the
wishes and needs of multilateral lenders and corporate
private investors. These decisions are not taken democratically.
makers typically ignore the wishes and interests of
local people. Renewable options like wind, tidal and
solar power generation get low priority when they
are considered at all. Only lip service is paid to
the sustainability of hydro-power projects - leaving
the way open for yet more loans for inappropriate
giant hydroelectric schemes and yet more debt, as
happened in Honduras with El Cajón and in Guatemala
with Chixoy. This mix is self-evidently disastrous
for people in Central America.
the Chalillo case
recipe for irrational decision making is clearly present
in the case of the Chalillo dam in Belize. Electricity
generation and distribution in the country is controlled
by Belize Electricity Limited (BEL). BEL buys about
85% of the country`s electrical energy from Mexico`s
national power company the Comision Federal de Electricidad
(CFE) and the Canadian owned Belize Electricity Company
Limited (BECOL), a subsidiary of Fortis Incorporated.
Currently BECOL owns the only hydroelectric plant
in Belize, the 25MW (megawatt) Mollejon dam. BEL generates
the country's remaining power requirement from diesel-burning
the last five years, Fortis has been trying to build
a dam at Chalillo in the Macal River Valley in Maya
mountains. The dam will provide an additional 5.3
MW of generating capacity with some estimates suggesting
a possible generating capacity of up to 9MW. The Chalillo
Dam will flood 1,100 hectares of virgin jungle, destroying
habitat for wildlife including rare jaguar, tapirs
in danger of extinction, and the Morelet crocodile.
The project might also damage the world's largest
coral reef after the Great Barrier reef in Australia,
as well as Mayan archeological sites.
Belize Alliance of Conservation NGO's, has been trying
to block Fortis from completing the dam. They argue
that the devastating environmental effects will provoke
an irreversible ecological catastrophe. Belize fits
the pattern of other impoverished Central American
countries with a feeble government dominated by domestic
and foreign business interests. Frequently, national
governments in the region are unable to afford an
Environmental Impact Assessment (EIA) on this kind
of project, leaving it in the hands of agencies who
often have a conflict of interest. That was the case
was in the interests of AMEC, the Canadian company
who carried out the EIA, for the project to go ahead.
So evidence against the project was left out or played
down. Even AMEC's information on the geology of the
rocks beneath the dam was found to be misleading.
Canada's Probe International discovered that core
samples indicating sandstone and shale were misrepresented
as indicating granite. Information about geological
fault lines was fudged too, omitting to mention possible
risks to the structural integrity of the dam.
its ommissions, AMEC's report also discounted input
from eminent conservation advisers. A senior scientist
who worked on the British Natural History Museum's
authoritative ecological report on the dam proposal,
Lt. Colonel Alistair Rogers, wrote: "It is absolutely
clear that constructing a dam at Chalillo would cause
major, irreversible, negative environmental impacts
of national and international significance - and that
no effective mitigation measures would be possible."
on the dam's effects are incomplete. Most independent
studies indicate the dam is not economically viable.
Several have indicated that electricity prices will
rise as a result of the Chalillo dam. Roger Sant,
President of US energy multinational AES Global Power
and also Chairman of the Board of World Wildlife Fund-US,
has acknowledged concerns about the environmental
impacts and described the project as "not economically
feasible". Still Fortis
and the Belizean government intend to go ahead.
August this year court action in Britain, the former
colonial power, for an injunction to halt work on
the dam failed. The final decision on the dam's future
now rests in London with the British Privy Council's
Judicial Committee, an arcane, unrepresentative appointed
body inherited from feudal times. Comprised of senior
judges from British Commonwealth countries and judges
from the UK parliament's House of Lords, the Committee
provides a final appeal court for member countries
of the British Commonwealth that choose to accept
its authority. A public announcement
of their judgement is expected in January 2004.
inseparable trio: business, energy, politics
July this year, the Second Meso-American Forum against
Dams "For the Peoples' Water and Life" took
place, appropriately, in Honduras. The 150 delegates
noted in a statement that around 500 hydroelectric
projects exist in the region "the proliferation
of hydroelectric projects in our countries is not
due to the energy needs of our peoples but responds
to the need to set up the necessary infrastructure
to develop the neo-liberal economic model through
the Free Trade Area of the Americas (FTAA), the various
Free Trade agreements on a continental level, the
Puebla-Panama Plan and the Colombia Plan, among others."
Chalillo dam is a relatively small project. But it
encapsulates everthing that is wrong with energy policy
decision making in Central America. The contrast with
the Franklin dam experience in Australia is instructive.
Chalillo is yet another example of how the needs of
the majority in Central America are trodden underfoot.
The main components are always multinational corporations
and weak governments using undemocratic decision making
processes approved by the main international financial
institutions. As a result, sustainable development
in Central America is as much on the verge of extinction
as the Belizean tapirs.
"Lights Out in Honduras", James Gollin
November 1995 www.planeta.com
2. Unit for Sustainable Development and Environment
- Organization of American States, report for 2003
3. WWF INTERNATIONAL Research Paper "Dams and
Floods" Fred Pearce June 2001
4. Probe International, Letter to AMEC Urging Retraction
of Faulty Environmental Assessment, February 21,
2002 www.probe international.org
5. Tropical Education Centre Press release. August
9th, 1999 www.belizezoo.org/zoo/zoo.html
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