Nicaragua's Grand Canal: more questions than answers

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Nicaragua’s Grand Canal: more questions than answers

By Emily Schechter


The project to build a Grand Canal in Nicaragua could destroy protected areas in the country. (© Christian Aid/Les Stone)

In Nicaragua, they have been waiting to see where exactly the Grand Canal will be built, so that they can decide what the effects will be. But the announcement at the beginning of July, has created more questions than answers. The biggest question is why they haven’t done an Environmental Impact Study (EIS). Both national and international law need this.

In June 2013, the Nicaraguan government very quickly passed a law to allow the construction. They had not discussed it with environmental experts.

They gave an unknown Chinese company (the Hong Kong Nicaraguan Development Investment Co. Ltd (HKND)) the $50-billion contract to build the Grand Canal. The company will have rights to the canal for 50 years (and will be able to renew the rights for another 50 years after that).

It will compete with the canal in neighbour country Panama, but it will be much longer. The Nicaraguan canal will link the Atlantic and Pacific Oceans along a route of nearly 280 kilometres (including 105 kilometres across Lake Nicaragua). It will be 230 to 520 metres wide.

The canal will start at the east Caribbean Sea coast, at Punta Gorda. Then it will go west to the lake, then past the city of Rivas. It will reach the Pacific at the Brito River.

This route will put at risk the San Miguelito Wetlands (a protected site), the Southeast Biosphere Reserve and the Ometepe Island Biosphere Reserve. Private wildlife reserves will also be in danger, and it will threaten many endangered species.

Many people worry that the canal lock system will take too much water from Lake Nicaragua, the country’s largest supply of fresh water.

Officials from HKND have said that ‘the canal will not change the level of Lake Nicaragua. It will not affect how much water the local people will have.’ But it is difficult to see how they can say this without an EIS.

HKND paid Environmental Resource Management (ERM) (a consultancy firm) to find the best route. And when people asked them questions about environmental damage, they said that it was impossible without going through protected areas.

About 119,298 people (people from 270 villages, four towns and one city in an area of 10 kilometres around the route) will be directly affected by building this canal. And people from another 320 villages and five towns could be affected when the canal is in use eg. they might have to cross the canal to get to work or take their food to market.

These are very isolated areas. The poorest people in the country live on $1-$2 a day. They will now have even more problems to get enough money to survive.

And it is not only environmental problems. The law that will allow the building of the canal affects Nicaragua’s control of its environment.

HKND and other investors have agreed to pay Nicaragua up to $10 million a year over 10 years. They will slowly give the canal back to Nicaragua. After a hundred years, it will all belong to Nicaragua.

But they will only begin the payments if and when the canal begins to work. Another part of the agreement is that HKND also has control over five smaller tax-free projects: two ports, one free-trade zone, several holiday complexes in popular tourist areas, one airport and several new big roads.

What would happen if HKND decided not to build the canal, but only do these other projects (which will earn them a lot of money)? Some people believe that this is what they really want, and that the government might now lose ownership of the canal completely.

Centro Humboldt is a Christian Aid group that works in many of the areas that could be affected. They are fighting for environmentally sustainable land development and climate change adaptation. The organization has talked a lot about the possible environmental effects of the project. And they have said that the company must be open about everything they are doing.

After they decided the route of the canal, Centro Humboldt has talked about its serious technical problems and lack of research. The biggest problem is that they have not done an EIS.

ERM had also done social and environmental studies to compare some different routes. They recommended the best route. But HKND and the Nicaraguan government have not made this public yet.

It is worrying how HKND is not impartial about the public assets of Nicaragua. Director Victor Campos said ‘[the canal follows] a route decided by ERM. They are paid to do this by the investor. There is no time for the national canal commission to do a technical review and say if it is OK.’

In normal law, the Nicaraguan Environmental Ministry should have eight months to evaluate and respond to an EIS. But HKND and the Nicaraguan government have said that they will start building in December 2014.

The people are asking the government and HKND for answers. But both are not following correct procedures. They are not listening to worries about the environment and not following the country’s law. This does not look good for the communities and wildlife that will be affected by this very big project. Or for the people of Nicaragua, who could lose one of their greatest assets.

Emily Schechter is programme officer for Christian Aid in Nicaragua.

NOW READ THE ORIGINAL: (This article has been simplified so the words, text structure and quotes may have been changed).