Extracted from original text of Chapter 4.

The problems mentioned there by Alida Spadafora [interview] are suitably illustrated in here giving an introduction to a series of HEP schemes currently under construction in the Bocas del Toro province in north-west Panamá. A 2006 report[i] presented a cost-benefit analysis of the four hydroelectric projects. The four dams (Chan 75, Chan 140, Chan 220 and Bonyic) are located in the Changuinola-Teribe hydrographic basin, three projects on the Changuinola River, and one on the Bonyic River. The rivers start in the Amistad National Park and the dams themselves are situated within the Palo Seco Protected Forest.

The required investment for the dams would exceed $538 million, and would result in a combined installed capacity of 446 megawatts. The analysis estimated that the company executing the projects would earn approximately $87 million in yearly profits, which translated into an economic ‘net present value’ of $92 million, representing overall net benefits for Panama. The report concludes that “the projects would most likely be both economically and financially feasible. Nonetheless, they would cause environmental damage in an area of global conservation interest and impose serious hardship on indigenous communities living along these rivers.”[ii] Crucially, they note that these monetary values obscure the environmental and social impacts and costs that the projects would have.

The specific case of one of these four dams, the Chan-75 HEP project, is worthy of further attention as it highlights the collusion of government and private companies and the gangster-like attitude adopted towards affected communities. Perhaps the body count resulting from this case of gangsterism is rather less than in many other case studies given in this book, but the arrogance and the willingness to ride roughshod over local people is as strong as ever. Here we present a few of the benefits and advantages of the scheme as predicted largely by the website of AES Changuinola, the company managing the project. Here we present a few of the social and environmental problems already caused and predicted to occur as a result of the scheme. The latter also lists several articles to which readers are referred for a more in-depth treatment that this case deserves. Several of these articles document the human rights abuses that have been committed against the Ngöbe and the Naso peoples in considerable detail, and in this regard the reader is referred specifically to Cultural Survival’s ‘Dam Nation’ article. These abuses are also considered again in Chapter 8 of this book and reference forward specifically to this website’s items entitled ‘The Ngöbe-Bugle and dam projects on the Río Changuinola‘ and ‘Testimony from the Naso‘ provides further evidence of the gangster attitudes of the Panamanian government and of the companies involved in the development towards the people affected.

Application to the Clean Development Mechanism of the United Nations has been made for subsidies to support the Chan-75 project on account of the savings in greenhouse gases estimated for the project. The application made by AES Changuinola failed to mention the social and environmental impacts or the social opposition to the scheme. In fact it cited “ample support” from local populations, but when the UN Special Rapporteur on indigenous rights visited the project area he found “significant discontent”.[iii] Osvaldo Jordan goes further in his critique of the development: “The Chan 75 hydroelectric project … revealed the monstrosity of the neo-liberal multicultural citizenship regime that had been adopted by the Panamanian state in the 1990s.”[iv] In similar vein, Finley-Brook and Thomas assert that the case demonstrates “hybrid neo-liberalisation as private and state institutions sell formerly collective resources to feed urban electrification and foreign carbon markets.”[v]

Oscar Reyes from Carbon Trade Watch considers the Chan-75 project to be another example that proves the UN’s Clean Development Mechanism is being treated as “a subsidy stream for environmentally destructive projects.” He states that “it risks a lose-lose scenario, where the people and environment of Panama are threatened by a project that would allow industries elsewhere to continue polluting.”[vi]

The issue of the Clean Development Mechanism and the issuing of carbon credits to dam projects is taken up again in greater detail in Chapter 10. 

[i]   Cordero, S., Montenegro, R., Mafla, M., Burgués, I., and Reid, J. (2006) ‘Análisis de costo beneficio de cuatro proyectos hidroeléctricos en la cuenca Changuinola-Teribe’, INCAE Business School, Alianza para la Cooperación y el Desarrollo, Asociación ANAI, and the Conservation Strategy Fund (July).
[ii]   Ibid., p.10
[iii]   James Anaya (7 September 2009) Informe del Relator Especial sobre la situación de los derechos humanos y las libertades fundamentales de los indígenas: Observaciones sobre la situación de la comunidad Charco la Pava y otras comunidades afectadas por el proyecto hidroeléctrico Chan 75 (Panamá), Report presented to the Human Rights Council at the UN General Assembly.
[iv]   Osvaldo Jordán (2008) ‘“I entered during the day, and came out during the night”: power, environment and indigenous peoples in a globalising Panama’, Tennessee Journal of Law and Policy 4 (2) 467-505. [Quote from P.500]
[v]  Op.cit. (Finley-Brook and Thomas, p. 269.
[vi]  Osvaldo Jordan and Oscar Reyes (2008) UN ‘clean development’ money sought for dam that threatens World Heritage Site in Panama, La Alianza para La Conservacion y El Desarrollo and Carbon Trade Watch /Transnational Institute, http://www.tni.org/article/un-%E2%80%98clean-development%E2%80%99-money-sought-dam-threatens-world-heritage-site-panama (Accessed 23/09/2010)

The following is a blog entry from ENCA member James Watson during the months of June and July 2015 when he accompanied the Honduran organisation COPINH (Civic Council of Popular and Indigenous Organisations of Honduras).

Tuesday 30^th June 2015

The COPINH group – Maryeli, María, Agostín and Selvín.

A couple of days after arriving in La Esperanza, COPINH invited me on a trip away from their base in the town, to visit one of the communities that serve as their main focus fighting for indigenous rights in Honduras. San Marco de la Sierra is a mountainous area just south of La Esperanza. Its inhabitants are campesino farmers whose livelihood is primarily subsistence agriculture, working family plots of land on precipitous mountainsides. Although close on the map, the journey from La Esperanza takes 5 hours, half of it driving on crumbling highways and winding mountain roads, and half walking on treacherous slopes in the thick Honduran heat. When heavy rains wash out the road the community can be completely isolated for weeks. COPINH has been active in various struggles for San Marco’s indigenous and human rights over the years. On this trip, COPINH was returning because of a new threat to their land, water and environmental and spiritual heritage.

The Muddy Waters of Hydroelectric Dams and ‘Trickle Down’ Economic Development

Hydroelectric dams are a difficult issue for environmentalists. At first sight, they represent a good clean source of renewable energy – much needed to avert climate change. However, they have are not without a significant negative impact. Physically, they involve some loss of land to the artificial lakes they create, and can involve homes being dispossessed – although this depends on the size of the dam and the nature of its surroundings. They interrupt and control the flow of water downstream, which can interfere with water supplies to communities and the environment – but on the other hand they can be tools to manage extremes of flooding or drought.

In reality, hydroelectric projects need to be seen in their specific socioeconomic context. The proposed San Marco project will put five dams along the stretch of the San Juan River which runs through the region. The companies and Honduran officials involved say the individual dams will be quite small, with minimal physical impact.

But the overall context of regional money and power paints a very different picture. The dams are among hundreds that have been planned throughout Honduras since the current corrupt government passed a law allowing the privatisation of water resources. Water is precious in Central America. It is essential for communities to live on, but it has increasingly become a commodity to be owned and extracted for Western companies. Hydroelectricity, mining (which uses vast amounts of water for mineral extraction and contaminates it in the process) and soft drinks production have made it more valuable in the hands of companies than communities. In fact, hydroelectricity is fundamentally connected to mining in Honduras. A significant part of the country’s hydroelectricity generation is channelled straight into new mining projects – which the current government has extended to include over 30% of the nation’s land-area! Water is now just one of the many valuable resources abundant in Central America being sold at rock bottom prices to foreign “investors”.

Honduras leads the way internationally for opening itself to this sort of ‘investment’. But the Honduran oligarchy that negotiates this business has more interest in its own wealth and in importing the trappings of European and United States society, than it does in helping its own country to develop. As such the wealth that should roll into the country in return for its resources is a mere trickle, and goes straight into private bank accounts which are used to buy foreign products. This simple reality is key to understanding why in many ‘developing’ countries around the world, top-down, investment-led, ‘trickle down’ economics has completely failed to improve the lives of anyone but the richest elites.

When it comes to the remote indigenous in Honduras however, the most important perspective is that of local power, land and culture. Although the San Marco project officials say the dam will be small, it will carve out sections of the land and river and surround them in fences, blocking access for the campesinos. It will impose a new power structure of owner vs owned on their land. The indigenous Lenca live off the land and value and protect it. Traditionally they own it as communities, not collectives. The rivers have a deep spiritual significance to them and are part of their identity.

The communities in San Marco have not been consulted in any way about what the project will entail – in a casual dismissal of international law. Put simply, the dam organisers do not value the campesinos’ opinions, their way of life, or even their existence. COPINH has fought countless battles against other dam projects. Countless times they have faced violence, intimidation and murder, with officials set to profit from projects paying off community members, private security guards and the military to do their dirty work. Hydroelectric dam projects in Honduras are as dirty and destructive as any other grand extractive undertaking in this most exploited of countries.

Information, Misinformation and Violence – The Local Realities of Hydroelectric Projects

I went to San Marco with 4 COPINH members – Selvín, Maryeli, María and Agostín – who were expected at a community meeting to discuss the damming project. We spent 2 nights in the community, in a beautiful and remote mountain setting as green as any movie rainforest setting. The day in the community was busy from dawn until dusk, my companions giving a string of presentations to inform the community of their experiences of dam projects elsewhere.

San Marco’s isolation puts information at a premium. TV is not available, but radio is, and among other stations COPINH’s community radio can be received in the mountains. COPINH has an important role in providing information that strengthens the community. They are especially vulnerable to promises and misinformation from the companies involved in the dam building, and several community members have already been contacted with promises of money. It is a common tactic across Latin America for companies concerned about potential resistance to their plans to buy out individuals in order to divide and weaken the autonomy of communities. The COPINH meeting was mainly aimed at bringing their experience of the reality of Honduran dam projects to prepare San Marco for such interference.

The meeting was well attended, with over a hundred people some of whom had walked for 4 hours to be there. Here the group are participating in a discussion of the ILO’s Convention 169 on Indigenous Rights, and what it means to them.Selvín and Maryeli talked about other dam projects in general, and then María spoke. She is from Rio Blanco where COPINH’s indigenous organising has recently stopped the Agua Zarca project – a success which gained COPINH’s general coordinator Berta Cáceres the Goldman International Environmental Prize. But Rio Blanco still faces violence from Agua Zarca’s vested interests. María has been attacked twice and threatened with death. She told me that she has machete scars on the top of her head from an attempt to kill her. Her right hand is bandaged with half a finger missing – brutally cut off in an assault just a few weeks ago which has forced her to go into hiding in La Esperanza.

I was also honoured to be asked by COPINH to speak to the meeting. In my clumsy Spanish I talked a little about the international context – about the ‘trickle down’ model of development and how it is used in my country to justify exploitative extractive projects in ‘developing’ countries, without actually producing any development. Thankfully though, I didn’t have to speak for long, and as everyone was dropping off we took that opportunity to walk the 30 minutes down to the river itself to swim and enjoy what San Marco was fighting for.

Rio San Juan is a beautiful and majestic site with great importance both physically and spiritually for the Lenca who live around it

The day after the meeting, we travelled back to La Esperanza. That was a week ago, but this week COPINH received the appalling news of the murder of 2 people from the San Marco community that we stayed in, and the disappearance of another. As yet I haven’t heard anyone confirm what happened or why. But it seems unlikely to be a coincidence in such a small community that it happened at this time of conflict. The suspicion is that the dam companies and the municipal government that is in business with them have already found community members to coerce with money and promises, enough to use murder to break any opposition.

This is the model used throughout Honduras, including in Rio Blanco, and it seems this violence is never far away. It was a shock to hear that such a beautiful and seemingly peaceful place had been hit so brutally by violence. That is simply the shameful reality underneath the clean and prosperous promises of hydroelectric dam projects in Honduras.

James Watson 30th June 2015 Blog, Indigenous Struggles and Human Rights in Honduras

A 2006 study by Cordero et al[1] outlines the environmental and social concerns associated with the four dam projects in the Changuinola-Teribe hydrographic basin. These include effects on La Amistad International Park, which is a prime area of biodiversity, and which forms part of a biological corridor between North and South America, meaning that ecological damage could be far-reaching. Access roads would expose La Amistad International Park to deforestation. Aquatic biodiversity would be affected over 704 kilometers of rivers, and aquatic species could be lost within a total area of 1,493 sq km.

The study estimated the gross value of greenhouse gas emissions (caused by deforestation) at $24.9 million, and the costs of attempts at transporting fish around the dams at $1.3 million. Environmental costs unaccounted for in the economic analysis include loss of biodiversity, thermal stratification of the reservoir water (unnatural temperatures, decreased oxygenation) and the loss of integrity of La Amistad National Park and the Palo Seco Protected Forest.

In terms of socio-cultural impacts, the people living in the region to be affected by the projects are primarily indigenous (Naso and Ngöbe peoples – refer to Ch.8). They live relatively autonomously and with subsistence economies, which would be undermined by the hydroelectric projects. Losses of $56.2 million were predicted for these groups, in association with compromised access to resources and the costs of changes in lifestyles.

A key finding of the analysis was the profound inequity in the distribution of costs and benefits.

This is a clear case of an investment that may well be economically efficient, but will be inequitable. This analysis shows that an energy company, lenders and the government will reap the benefits of the project, while the costs will fall disproportionately on particular indigenous communities and on the natural ecosystems surrounding them.[2]

Compensation is one way of mitigating such disparities, and the authors suggest that the profits generated by the projects would be sufficient to alleviate and compensate for some of the economic and environmental costs to the indigenous communities. However, they also note the lack of any satisfactory plan to do so.

[1]   Cordero, S., Montenegro, R., Mafla, M., Burgués, I., and Reid, J. (July 2006) ‘Análisis de costo beneficio de cuatro proyectos hidroeléctricos en la cuenca Changuinola-Teribe’, INCAE Business School, Alianza para la Cooperación y el Desarrollo, Asociación ANAI, and the Conservation Strategy Fund.
[2]  Ibid., p.11

The Chan-75 Hydroelectric Project (HEP) has been constructed by Alliance Energy Systems (AES) Changuinola whose parent company is based in the USA. A total of $563 million has been invested into development of the project.[1] Construction work began in 2007 and the project entered into the commercial phase in 2011. The area covered by the whole project is 6,215 hectares and it makes use of water from both the Changuinola and Calubre Rivers.[2] The HEP is projected to generate a nominal power of 223 MW, which is “equivalent to the consumption of 1.5 million barrels of fuel per year.”[3] Advocates of the project believe that it will help decrease Panama’s dependence on fossil fuels.

The construction of the dam has provided several opportunities for development, such as the construction of infrastructure. There have also been significant economic benefits of the project which are summarised in the company’s propaganda[4]:

• Job opportunities: Over 800 Panamanians have been employed by the project.
• Creation of new services: services such as supermarkets, restaurants, launderettes and medical services have been provided for the communities of Bocas del Toro.
• Support for local supply businesses: AES has spent over $2 million on construction supplies and materials, buying 99 per cent of these products from suppliers in the Bocas del Toro province.
• Income for local institutions: in 2008, AES paid over $4,000 in taxes to the Municipality of Changuinola and the Ministry of Economy and Finance.

AES Changuinola believes that “all parties are winners”[5].

[1] Sherly Diaz (2009) Hydroelectric Project: model of sustainable development, The Panama Post, 31 Aug – 06 Sept 2009, P.13.
[2] Transnational Institute (2008) The Chan-75 Hydroelectric Project: a factsheet, TNI http://www.tni.org/article/chan-75-hydroelectric-project-factsheet (Accessed 22/09/2010)
[3] Op Cit. (Sherly Diaz)
[4] AES Changuinola (2008) An economically beneficial project, AES, http://www.aeschanguinola.com/eng/beneficialproject.asp (Accessed 22/09/2010)
[5] Ibid. (AES Changuinola)

Chan 75 dam under construction 2010