In July, a British-led legal team for the Belizean environmental organisation, Bacongo, asked the Privy Council, the highest court of appeal for Caribbean nations, to halt construction in advance of a further hearing on 3 December.
The second hearing will consider the legality of the contract between the company building and operating the dam, Canadian power conglomerate Fortis Inc, and the Belizean government.
The Chalillo project has been at the centre of a fierce campaign since 1999. Newfoundland-based Fortis already operates another dam, Mollejón, downstream from the proposed site on the Macal River, which runs through a valley near the Maya Mountains on the country's western border with Guatemala. When Fortis built Mollejón, the company claimed that it would generate more than enough energy to serve local needs, but subsequently it was found that water levels outside the wet season meant that the facility was unable to generate sufficient electricity.
According to a power purchase agreement approved by the Belizean Public Utilities Commission in January 2002, Mollejón produced around 80 million kilowatt hours annually. If Chalillo came on stream, capacity would be doubled.
The Belizean population has grown rapidly in the past few years, and the country currently has to buy in electricity from neighbouring Mexico during off-peak hours. An alternative method of generating power sustainably, using bagasse, a by-product of sugar cane, which Belize grows in abundance, was dismissed by the government. This lead to claims that the Belizean authorities had reached a beneficial deal with Fortis, who wanted to proceed with the project at all costs.
Environmental impact
The main argument from the anti-dam campaigners is that the area where the second dam is due to be built is more remote and has long been recognised as an area unusually rich in biodiversity; so much so that the US-based National Resources Defense Council designated it a 'Biogem'. Celebrities, including actors Cameron Diaz and Harrison Ford, have joined a public campaign to stop the dam being built.
Scientists from the Natural History Museum in London, which maintains a research station in Belize, a former British colony which gained independence in 1981, told us that the wealth of animal, bird and plant species is so great that any building work should be put on hold until a complete study can be carried out.
Researchers from the Belize Zoo say the area is unique in that it supports a particular variety of riverside vegetation which forms one of the main food sources for the population of the national animal of Belize, the Baird's tapir, a distant relative of the horse that is listed as an endangered species by the International Conservation Union. In addition to the tapir, which breeds in the area that would be flooded, the dam would threaten crocodiles, giant otters and one of the world's rarest parrots, a sub-species of the scarlet macaw of which there are believed to be fewer than 200 left in the wild.
The dam has been dogged by problems for the past four years. First, Fortis's partner, troubled energy group AES, pulled out, and then the environmental impact assessment study has been discredited. The study was paid for by Cida, the Canadian International Development Agency. The resulting document - which ran to more than 1,500 pages - was project managed by the Canadian subsidiary of the British construction group, Amec, which is also involved in the controversial Three Gorges Dam in China.
Amec subcontracted some of the research to members of the Natural History Museum's team, which expressed concern, not only over a risk to wildlife, but also to nearby Mayan archaeological ruins and to a small settlement which, it said, could be swept away if the dam was built - they believe that geological studies show that the dam as currently planned will be built on soft rock rather than granite. The Museum's final report, which recommended that for safety and research, the project be put on hold, was dismissed by Amec as a draft report and buried in an annexe to the 1,500 page document.
Privy council hearing
During the July hearing, the three-member board of the Privy Council expressed concern at the nature of the so-called `Third Master Agreement', which allows for the unimpeded progress of the construction phase by ordering the Belizean government to grant all necessary permits and permissions without delay.
Godsman Ellis, a Belizean hotelier and leading opponent of the dam, says the deal between the government and Fortis is very suspicious. He cites the act passed in a single day in June, which said that any court ruling against the dam - for example, by the Privy Council - would be invalid. This legislation is, according to several legal experts consulted by this publication, unprecedented both in Belize and the UK, putting Fortis effectively above the law.
The deal also places most of the risk of the project on the Belizean government. The Privy Council board, which happened to consist of contract specialists, said it had never before come across such an 'unusual' agreement.
Even though it declined to grant an injunction in this instance, the board said it was aware of the sensitivity of the case, the first environmental issue to come before the court in almost 500 years. The board also criticised Fortis for not providing information when requested during previous legal hearings regarding the case in Belize.
In its reasoning, the Council stated that the main reason it did not consider it could grant an injunction was that Bacongo was unable to offer a financial guarantee to Becol, Fortis's Belizean subsidiary, which is managing the project. The Belizean government retains a 5% stake in Becol, whose president and CEO is Lynn Young.
Recent reports say that a preliminary structure, called a coffer dam, has already been completed at the site.
John Evans, chief engineer at Fortis, told us that the company was delighted by the latest decision of the Privy Council and that the next step will be to get some more of the main structure in place, hopefully before the next rainy season. This will be sometime in early 2004 and will include the concrete body which will be mixed and rolled on site. Mr Evans said the project would need a considerable quantity of concrete and that the company would probably have to bring a large amount in as he was not convinced that the amount required could be sourced locally.
A spokesperson for Bacongo said that the ruling was by no means an end to the campaign to stop the dam, which is the second of three hydroelectric facilities planned by Fortis in Belize.
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