From the Franklin River to the Chalillo Dam
Energy And Repressive Politics In Central America
by Toni Solo
Twenty 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.
Decisions 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.[1]
Lack of democracy means irrational energy solutions
In most of Central America, electricity demand is likely to increase steadily 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.
Regional 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.
The Franklin Dam experience in Tasmania
That 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.
In 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.
A 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.
Central America's dismal record: Chixoy and El Cajón
Central 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 government.
Around 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.
Other 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 Development Bank.
Short term benefits, environmental disaster
Honduras 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.
As 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.
Decreased 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." [2]
The environmental balance
These 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.
The 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 the isthmus.
The 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."
Pearce 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. [3]
Climate change and regional uncertainty
While 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.
Inherently 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.
Sustainability and economic straitjackets
Of 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 needs.
In 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.
Decison 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.
Belize : the Chalillo case
The 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 thermal plants.
For 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.
The 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 in
Chalillo.
It 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.
Compounding its omissions, 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." [4]
Studies 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".[5] Still, Fortis and the Belizean government intend to go ahead.
In 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. [6] A public announcement of their judgement is expected in January 2004.
An inseparable trio: business, energy, politics
In 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."
The 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.
- Toni Solo is an activist based in Central America. Contact:- tonisolo52@yahoo.com
FOOTNOTES
1 "Lights Out in Honduras", James Gollin November 1995 http://www.planeta.com
2 Unit for Sustainable Development and Environment - Organization of American States, report issued this year 2003
3 WWF INTERNATIONAL Research Paper "Dams and Floods" Fred Pearce June 2001
4Probe International, Letter to AMEC Urging Retraction of Faulty Environmental Assessment, February 21, 2002 http://www.probe international.org
5 Tropical Education Centre Press release. August 9th, 1999 http://www.belizezoo.org/zoo/zoo.html