In April 2017, three years after this road was created to mark the official start of the construction of the Great Nicaraguan Interoceanic Canal in Brito, on the country’s Pacific ocean western coast, it remains unpaved, and is only used by horses from nearby farms. Credit: José Adán Silva/ IPS

By José Adán Silva
PUNTA GORDA/BRITO, Nicaragua, Apr 25 2017 (IPS)

Less than three years from the projected completion in Nicaragua of a canal running from the Caribbean Sea to the Pacific Ocean, there is no trace of progress on the mega-project.

IPS traveled to both ends of the routet: Bluefields, on the Caribbean coast in eastern Nicaragua, 383 km from Managua, and Brito, on the Pacific coast in the southern department of Rivas, 112 km from the capital.

In the South Caribbean Coast Autonomous Region, IPS traveled by boat from Bluefields, the regional capital, to the town of Punta Gorda to the south.“About two years ago, foreigners used to come and travel around by helicopter and boat from the mouth of the Punta Gorda River all the way upstream. They were escorted by the army and would not talk with anyone, but they have not returned." -- Anonymous indigenous leader

There are 365 small scattered indigenous settlements along the banks of the rivers, in a region divided into two sectors: the Southern Triangle, facing the sea, and the Daniel Guido Development Pole, along the banks of the Punta Gorda River – the Caribbean extreme of the projected canal.

According to the plans of the Hong Kong Nicaragua Canal Development (HKND) group, in charge of the project to build the Great Nicaraguan Interoceanic Canal, in this sparsely populated jungle area bordering the territory of the Rama indigenous people, a deep-water harbour must be built, as well as the first locks on the Caribbean end for the ships that cross to or from the Atlantic Ocean.

The entire Great Canal project, according to HKND, is to include six sub-projects: the canal, the locks, two harbours, a free trade zone, tourist centres, an international airport, and several roads.

Other connected works are a hydroelectric power plant, a cement factory, and other related industrial facilities to ensure the supply of materials and the successful completion of the canal in five years, counting from 2014, when the project officially got underway.

But in Punta Gorda there are no infrastructure works, no HKND offices, and among the local population nobody is willing to openly talk about the subject.

“The silence is a matter of caution, people think you might be a government agent,” a local indigenous leader of the Rama and Kriol Territorial Government (GTR-K), an autonomous organisation of indigenous communities that own the lands that will be affected by the canal, told IPS on condition of anonymity.

In the days prior to IPS’ visit to the region, army troops and the police carried out operations against drug trafficking, and there was an overall sense of apprehension.

The members of the GTR-K are divided between supporting and opposing the project, but negotiations with the government representatives have been tense and conflict-ridden, to the extent that complaints by the local indigenous people demanding respect for their ancestral lands have reached the Washington-based Inter-American Commission on Human Rights.

“About two years ago, foreigners used to come and travel around by helicopter and boat from the mouth of the Punta Gorda River all the way upstream. They were escorted by the army and would not talk with anyone, but they have not returned,” said the indigenous leader of this remote territory that can only be accessed by boat or helicopter.

Silence on the subject is not just found among the locals. There is no talk anymore at a government level about what was once a highly touted project.

Fishermen and stevedores on one of the docks on the Punta Gorda River, near where it runs into the Caribbean Sea, the projected Caribbean extreme of the interoceanic canal, where local residents have not seen any visible sign of progress on the works officially launched more than two years ago. Credit: José Adán Silva/ IPS

However, Vice President Rosario Murillo, the chief spokesperson of the government of her husband Daniel Ortega, president of Nicaragua since 2007, announced this month that with Taiwan’s support, a deep-water harbour, not connected to the plan for the canal, would be built in the same area with an investment that has not yet been revealed.

María Luisa Acosta, coordinator of the Legal Aid Centre for Indigenous Peoples, told IPS that the Special Law for the Development of Infrastructure and Transportation in Nicaragua Relating to the Canal, Free-Trade Areas and Associated Infrastructure, known as Law 840, was passed in June 2013 without consulting local indigenous and black communities.

A year later, on July 7, 2014, HKND and the Nicaraguan government announced the route that had been chosen for the canal, running from the Rivas Isthmus across Lake Cocibolca, also known as Lake Nicaragua, to Punta Gorda.

The route would negatively affect the indigenous communities of Salinas de Nahualapa, Nancimí, Veracruz del Zapotal, Urbaite de las Pilas and San Jorge Nicaraocalí, along the Pacific, while in the Caribbean region it would impact the Creole communities of Monkey Point and Punta Gorda, as well as the Rama people of Wiring Kay, Punta de Águila and Bangkukuk Tai, home to the last speakers of the Rama language.

According to leaders of different indigenous communities, government representatives began to pressure them to give their consent over their lands to allow the canal to be built, giving rise to a still lingering conflict.

The canal is to be 278 km in length – including a 105-km stretch across Lake Cocibolca – 520 metres wide and up to 30 metres deep.

It was to be built by the end of 2019, at a cost of over 50 billion dollars – more than four times the GDP of this Central American country of 6.2 million people, 40 per cent of whom live in poverty.

The construction of a harbour, the western locks and a tourist complex is projected in Brito, a town on the Pacific coast in the municipality of Tola.

The town is named after the Brito River, a natural tributary of Lake Cocibolca, which winds through the isthmus until flowing into the Pacific Ocean. The works were officially inaugurated in Brito in December 2014.

The president of HKND, Wang Jing, together with Nicaraguan government officials, appeared in the media next to the construction equipment to inaugurate the work on a 13-km highway, which would be used to bring in the heavy machinery to build the initial infrastructure.

It was the last time Wang was seen in public in Nicaragua.

There is no new paved highway, just a dirt road which in winter is difficult to travel because it turns into a muddy track.

No heavy machinery is in sight, or vehicular traffic, workers or engineering staff.

Here, as in Punta Gorda, people avoid talking about the canal, and if they do it is on condition of anonymity and in a low voice.

“In Rivas we drove out the Chinese with stones when they tried to come to measure the houses, and after that, the police harassed us. They disguised themselves as civilians – as doctors, vendors and even priests, to see if we were participating in the protests,” said one local resident in Brito, who was referring to the 87 protest demonstrations held against the canal in Nicaragua.

In Managua, Telémaco Talavera, the spokesman for the state Commission of the Great Nicaraguan Interoceanic Canal, said briefly to a small group of journalists, including IPS, that studies on the canal continue and that “the project is moving ahead as planned.”

However, Vice President Murillo announced in January that a 138-km coastal highway would be built along the Rivas Isthmus, to cater to the tourism industry and improve transportation, at a cost of 120 million dollars – with no mention of the canal.

One month later, government machinery was moved to Rivas to begin building the road where the canal was supposed to go.

Hundreds of small farmers came to Managua from the Caribbean coastal region in southern Nicaragua on Oct. 27 to take part in the 55th protest against the construction of the interoceanic canal, which is set to displace thousands of rural families. Credit: Carlos Herrera/IPS

By José Adán Silva
MANAGUA, Nov 3 2015 (IPS)

The international scientific community’s fears about the damage that will be caused by Nicaragua’s future interoceanic canal have been reinforced by the environmental impact assessment, which warns of serious environmental threats posed by the megaproject.

The report “Canal de Nicaragua: Executive Summary of Environmental and Social Impact Assessment” was carried out by the British consulting firm Environmental Resources Management (ERM) and commissioned by the Hong Kong Nicaragua Canal Development (HKDN Group), the Chinese company that won the bid to build the canal.

The 113-page executive summary sums up the study, whose unabridged version has not been made publicly available by the government, ERM or HKND.

In the study, ERM says the megaproject could be of great benefit to the country as long as best international practices on the environmental, economic and social fronts are incorporated at the design, construction and operational stages, for which it makes a number of recommendations.

But it spells out specific risks and threats to the environment in this impoverished Central American country of 6.1 million people with a territory of 129,429 square kilometers.

The canal will go across the 8,624-sq-km Lake Cocibolca, also known as Lake Nicaragua – the second largest lake in Latin America after Venezuela’s Lake Maracaibo. The route will be nearly four times longer than its rival, the Panama Canal.

The 276-km canal will link the Atlantic and Pacific oceans; of that length, 105 km will cross Lake Cocibolca.

Salvador Montenegro, former executive director of the Aquatic Resources Research Centre of the National Autonomous University of Nicaragua (CIRA/UNAN), stressed that the executive summary suggests additional studies on Lake Cocibolca, to fully assess the risks to the environment and to recommend actions to mitigate them.

“These are the same observations that I have been making, which were never taken into account,” Montenegro told IPS. “On the contrary, they accused me of being a traitor to the government and of being in the opposition, when the only thing I was doing was trying to preserve the health of Lake Cocibolca.”

The scientific researcher was dismissed from his post in the university allegedly due to pressure from the government of left-wing President Daniel Ortega, in office since 2007, who backs the canal project driven by the government investment promotion agency, Pro-Nicaragua, headed by his son Laureano Ortega.

Now Montenegro forms part of the Grupo Cocibolca, a group made up of scientists, academics, environmentalists and activists openly opposed to the future canal.

Ometepe Island within Lake Cocibolca in western Nicaragua. Scientists, environmentalists, political opponents, academics, social organisations and people whose lives will be affected have come together against construction of the interoceanic canal and in defence of the lake. Credit: Karin Paladino/IPS

Mónica López, an activist who belongs to the group, summed up for IPS the main findings in the ERM study which she believes make it clear that the project would open the doors to an unprecedented environmental catastrophe for Latin America.

She said ERM concluded that neither HKND nor the government have the experience to carry out a project of this magnitude.

The report says “the government would be wise to consider engaging with international development agencies such as the World Bank or the Inter-American Development Bank,” to avoid damage in sensitive areas like the Mesoamerican Biological Corridor, the Indio Maíz Biological Reserve, the San Juan River, Lake Cocibolca and surrounding nature reserves.

“The study says that in normal situations, these areas would generally be considered untouchable due to their social and ecological fragility,” López noted.

ERM says that if further studies are not conducted and “mitigation and offset measures” are not successfully implemented, “biodiversity impacts would be significantly worse than described.”

It recommended further studies to identify seismic risks posed by construction of the canal; gauge the impact of dredging in the lake; identify the threats from the introduction of saltwater into the lake; and assess the risk of a reduction of the outflow of water from the lake to the San Juan River.

It also concludes that without the implementation by HKND and the government of the environmental and social mitigation measures recommended in the report, not even Route 4 – the one that was selected and the only one considered viable – would have the positive net impact for the environment that could justify construction of the canal.

Based on the ERM executive summary and the considerations of local and international scientists and other experts, the Grupo Cocibolca sent a letter to the president on Oct. 26 asking for the repeal of the law that made the canal project possible.

Ortega has not responded. But HKND, through its officials outside of Nicaragua, announced further studies with a view to moving ahead on the project that will have a projected cost of 50 billion dollars – the largest megaproject that the world has seen in the last few years.

HKND’s chief project adviser, Bill Wild, told the local media that the company had made some “optimisations, with a higher cost to the project, to avoid and reduce environmental and social impacts and keep the risks to a minimum.”

According to Wild, the studies that began to be carried out in 2013 will continue until 2016 and will be complemented by additional topographic and hydrological research, to be conducted by the Australian consultancy CSA Global.

Map of southern Nicaragua with the six projected canal routes. The fourth, in green, was the one that was selected. Credit: ERM

The executive vice president of HKND Group, Kwok Wai Pang, told the local newspaper El Nuevo Diario that now that the ERM study has been presented, “more in-depth studies will be carried out along the route.

“During the feasibility study we conducted topographical, seismic, hydrological and archaeological research and we collected a large volume of seismic information and data on water levels, salinity intrusion and other questions, to draft a conceptual design.”

Telémaco Talavera, spokesman for the president’s Great Interoceanic Canal of Nicaragua Commission, downplayed the concerns expressed by ERM and environmentalists.

Speaking with IPS and three other journalists, he expressed confidence in HKND’s capacity “to work out, with great wisdom, any inconvenience that may emerge, and which are normal in projects of such magnitude.”

Not just environmental problems

But despite the government’s and HKDN’s upbeat attitude about the project, it is overshadowed by factors other than environmental issues.

On one hand, specialised media outlets reported in September that because of China’s current financial crisis, HKND magnate Wang Jing had lost as much as 84 percent of his fortune, previously estimated at more than 10 billion dollars, which has shrunk to some 1.2 billion dollars.

On the other hand, growing resistance by peasant farmers along the projected canal route has hurt the international business climate for the company, according to López, the activist.

So far, 55 demonstrations against the project have been held in Nicaragua. The latest, held Oct. 27 in Managua by rural residents from different parts of the country along with other protesters, made the international headlines because of the violent clashes between the demonstrators and supporters of the megaproject.

In its executive summary, ERM says the social opposition affects the project’s viability.

“The land expropriation and involuntary resettlement process to date has not met international standards,” the ERM report states. “The Project risks losing its social license to operate and may jeopardize the viability of the Project by not following international standards.”

So far, the government has given HKND permission to expropriate 2,909 square kilometres of land along the projected route.

The canal law was approved in 2013. But small-scale work on the project along the Pacific Ocean did not officially get underway until December 2014.

HKDN projected that the work would take five years, and the canal would be operating in 2019. But ERM predicts that it will not meet that deadline.

Edited by Estrella Gutiérrez/Translated by Stephanie Wildes

Executives of the Chinese company HKDN and members of the Nicaraguan Grand Interoceanic Canal Commission, behind a large banner on Dec. 22, 2014, in the Pacific coastal town of Brito Rivas, during the ceremony marking the formal start of the gigantic project that will cut clean across the country. Credit: Mario Moncada/IPS

By José Adán Silva
MANAGUA, Mar 31 2015 (IPS)

The new interoceanic canal being built in Nicaragua has brought good and bad news for the scientific community: new species and archeological sites have been found and knowledge of the local ecosystems has grown, but the project poses a huge threat to the environment.

Preliminary reports by the British consulting firm Environmental Resources Management (ERM) revealed the existence of previously unknown species in the area of the new canal that will link the Pacific and Atlantic oceans. The study was commissioned by Hong Kong Nicaragua Canal Development (HKND Group), the Chinese company building the canal.

Among other findings, the study, “Nicaragua’s Grand Canal”, presented Nov. 20 in Nicaragua by Alberto Vega, the consultancy’s representative in the country, found two new species of amphibians in the Punta Gorda river basin along Nicaragua’s southern Caribbean coast.

The two new kinds of frogs have not yet been fully studied, said Vega, who also reported 213 newly discovered archaeological sites, and provided an assessment of the state of the environment along the future canal route.

The aim of the study was to document the main biological communities along the route and in adjacent areas, and to indicate the species and habitats in need of specific conservation measures in order to identify opportunities to prevent, mitigate and/or compensate for the canal’s potential impacts.

The 278-km waterway, which includes a 105-km stretch across Lake Cocibolca, will be up to 520 metres wide and 30 metres deep. Work began in December 2014 and the canal is expected to be completed by late 2019, at a cost of over 50 billion dollars.

The environmental impact study will be ready in late April, Telémaco Talavera, the spokesman for the presidential Nicaraguan Grand Interoceanic Canal Commission, told Tierramérica.

“The studies are carried out with cutting-edge technology by an international firm that is a leader in this area, ERM, with a team of experts from around the world who were hired to provide an exhaustive report on the environmental impact and the mitigation measures,” he said.

Three farmers study the route for the interoceanic canal on a map of Nicaragua, which the Chinese firm HKND Group presented in the southern city of Rivas during one of the meetings that the consortium has organised around the country with people who will be affected by the mega-project. Credit: José Adán Silva/IPS

Víctor Campos, assistant director of the Humboldt Centre, told Tierramérica that HKND’s preliminary documents reveal that the canal will cause serious damage to the environment and poses a particular threat to Lake Cocibolca.

The 8,624-sq-km lake is the second biggest source of freshwater in Latin America, after Venezuela’s Lake Maracaibo.

Campos pointed out that HKND itself has recognised that the route that was finally chosen for the canal will affect internationally protected nature reserves home to at least 40 endangered species of birds, mammals, reptiles and amphibians.

The route will impact part of the Cerro Silva Nature Reserve and the Indio Maiz biological reserve, both of which form part of the Mesoamerican Biological Corridor (CBM), where there are endangered species like scarlet and great green macaws, golden eagles, tapirs, jaguars, spider monkeys, anteaters and black lizards.

Along with the Bosawas and Wawashan reserves, Indio Maíz and Cerro Silva host 13 percent of the world’s biodiversity and approximately 90 percent of the country’s flora and fauna.

This tropical Central American country of 6.1 million people has Pacific and Caribbean coastlines and 130,000 sq km of lowlands, plains and lakes. There have been several previous attempts to use Lake Cocibolca to create a trade route between the two oceans.

The Cocibolca Group, made up of a dozen environmental organisations in Nicaragua, has warned of potential damage by excavation on indigenous land in the CBM, on the country’s southeast Caribbean coast.

One site that would be affected is Booby Cay, surrounded by coral reefs and recognised by Birdlife International as an important natural habitat of birds, sea turtles and fish.

Studies by the Cocibolca Group say that dredging with heavy machinery, the construction of ports, the removal of thousands of tons of sediment from the lake bottom, and the use of explosives to blast through rock would have an impact on the habitat of sea turtles that nest on Nicaragua’s southwest Pacific coast.

Map of Nicaragua with the six possible routes for the Grand Canal. The one that was selected was number four, marked in green. Credit: Courtesy of ERM

The selected route, the fourth of the six that were considered, will run into the Pacific at Brito, 130 km west of Managua. A deepwater port will be built where there is now a beach that serves as a nesting ground for sea turtles.

ERM’s Talavera rejects the “apocalyptic visions” of the environmental damage that could be caused by the new waterway. But he did acknowledge that there will be an impact, “which will be focalised and will serve to revert possible damage and the already confirmed damage caused by deforestation and pollution along the canal route.”

The route will run through nature reserves, areas included on the Ramsar Convention list of wetlands of international importance, United Nations Educational, Scientific and Cultural Organisation (UNESCO) biosphere reserves, and water basins.

According to Talavera, besides the national environmental authorities, HKND consulted institutions like the Ramsar Convention, UNESCO, the International Union for Conservation of Nature and Birdlife International, “with regard to the feasibility of mitigating and offsetting the possible impacts.”

The canal is opposed by environmental organisations and affected communities, some of which have filed a complaint with the Inter-american Commission on Human Rights (IACHR).

In an IACHR hearing on Mar. 16, Mónica López, an activist with the Cocibolca Group, complained that Nicaragua had granted HKND control over the lake and its surrounding areas, including 16 watersheds and 15 protected areas, where 25 percent of the country’s rainforest is concentrated.

López told Tierramérica that construction of the canal will also lead to “the forced displacement of more than 100,000 people.”

In addition, she criticised “the granting to the Chinese company of total control over natural resources that have nothing to do with the route but which according to the HKND will be of use to the project, without regard to the rights of Nicaraguans.”

The 2013 law for the construction of the Grand Interoceanic Canal stipulates that the state must guarantee the concessionaire “access to and navigation rights to rivers, lakes, oceans and other bodies of water within Nicaragua and its territorial waters, and the right to extend, expand, dredge, divert or reduce these bodies of water.”

The state also gives up the right to sue the investors in national or international courts for any damage caused to the environment during the study, construction and operation of the waterway.

In the IACHR hearing in Washington, representatives of the government, as well as Talavera, rejected the allegations of the environmentalists, which they blamed on “political interests” while arguing that the project is “environmentally friendly”.

They also repeated the main argument for the construction of the canal: that it will give a major boost to economic growth and will enable Nicaragua, where 42 percent of the population is poor, to leave behind its status as the second-poorest country in the hemisphere, after Haiti.

This story was originally published by Latin American newspapers that are part of the Tierramérica network.

Edited by Estrella Gutiérrez/Translated by Stephanie Wildes

Three farmers study the route for the interoceanic canal on a map of Nicaragua, which the Chinese firm HKND Group presented in the southern city of Rivas during a meeting with people who will be affected by the mega-project. Credit: José Adán Silva/IPS

By José Adán Silva
MANAGUA, Aug 1 2014 (IPS)

Víctor Sánchez doesn’t want gold or the comfortable future income he was promised.

He just wants to live the life he has always lived on his farm along the Banks of the Las Lajas river – but the river is slated to become part of the route followed by the Nicaragua Interoceanic Grand Canal.

Sánchez, a 59-year-old small-scale farmer from the southwestern department or state of Rivas, told IPS that he isn’t familiar with the details of the mega-project that the government touts as the ticket for this country to lose its dubious status as the second-poorest in the Western Hemisphere, after Haiti.

He is worried that he will be removed from the land where he has always lived with his extended family, and that he won’t receive compensation for his property.

That’s what he told representatives of the HKND Group at a Jul. 15 meeting in the International University of Agriculture and Livestock in Rivas. HKND is the Hong Kong-based Chinese company that was granted the concession to build the canal.

The Chinese technicians, with the support of interpreters and Nicaraguan officials, provided details of the ambitious project to a local audience in the city of Rivas, the departmental capital, 110 km south of Managua.

The canal will connect the Pacific and Atlantic oceans by means of a 278 km waterway, which includes a 105 km stretch across Lake Cocibolca.

The numbers involved are impressive: the canal will cost 50 billion dollars to build and will be up to 520 metres wide, with a monimum depth of 27.6 metres and a maximum of 30 metres. An estimated 5,100 vessels a year will make the 30-hour crossing through the canal.

Pang Kwok Wai, assistant director of HKND’s department of construction management, explained that the work is set to begin in December in the municipality of Brito, in Rivas, on the Pacific coast.

The department will be split in half by the canal and part of the local population will be relocated.

The project will create a city of 140,000 people on the Pacific side of the country. A 29 sq km duty-free zone will also be established in Rivas, along with four tourist complexes, an international airport with warehouse capacity for thousands of tons of cargo, a deepwater port, giant bridges and other “sub-projects” in the terminology used by HKND.

In June 2013, the government of leftwing President Daniel Ortega granted the concession for HKND Group to build and run the canal for 50 years, extendable by another 50 years.

The government argues that the canal will definitively transform the economy of this Central American nation, where 42.5 percent of the population of 6.1 million lives in poverty and 70 percent of jobs are in the informal economy.

Telémaco Talavera, the president of the National Council of Universities and a member of the Special Commission for the Grand Canal, told IPS that to carry out the work, large industrial companies will be created that will require local labour power: 50,000 direct jobs during the construction phase and 200,000 permanent jobs after 2019, when the canal is to be completed.

HKND also announces the construction of new cement, steel, dynamite, asphalt, fuel and energy plants.

The Nicaraguan government estimates that as a result of the construction work, GDP growth will accelerate from the current four-five percent to 10.8 percent in 2014 and 15 percent in 2015.

The government projects that GDP will climb from 11.2 billion dollars to 24.7 billion dollars in 2018.

HKND Group, led by the mysterious Chinese businessman Wang Jing, has given the world the impression that the project is a sure thing, from its news releases.

But doubts about the company, and especially about the fund created to finance the canal, are far from being cleared up.

The company says it hired the China Railway Construction Corporation to carry out the technical feasibility studies, the U.S. McKinsey & Company for the information analysis and the UK-based Environmental Resources Management consultancy for the social and environmental impact assessments.

HKND technical experts have repeated in public and private meetings in Nicaragua and China that the company invited businesspeople from China, Russia, the UK, the United States, Germany, Belgium and Australia to support the project.

Hopes for the future…and doubts

The canal has raised hopes among thousands of Nicaraguans for a more prosperous future, according to two national surveys.

One of the pollsters, MyR Consultores, found in a July poll that 31.3 percent of respondents thought the canal would bring benefits to a smaller or greater extent.

Another survey, by the Americas Barometer of the Latin American Public Opinion Project at Vanderbilt University in the U.S., presented in Managua this month as well, found that 72.8 percent of those interviewed stressed the generation of jobs by the canal as a potential benefit.

But 43.4 percent of respondents were worried about the environmental effects that the project could have.

That fear is shared by dozens of environmentalists and non-governmental organisations, like the Nicaraguan Foundation for Sustainable Development, which under the leadership of biologist Jaime Incer, environmental adviser to the president of Nicaragua, is opposed to the construction work with the argument that it will irreversibly affect Lake Cocibolca.

The lake is the biggest in Latin America: 8,624 sq km of freshwater. According to the organisation’s estimates, the construction of the canal would affect 400,000 hectares of jungle and wetlands.

Incer told IPS that Nicaragua gave HKND authority over the lake and surrounding areas, which include more than 16 watersheds and 15 protected areas representing 25 percent of the country’s rainforest.

HKND Group has not yet completed its environmental impact studies. Nevertheless, it has already decided on the route to be followed by the canal, as well as the construction of a 400 sq km artificial lake and 41 giant deposits along the route to store the earth that is removed.

Another aspect criticised by opponents is the lack of transparency surrounding the project’s financing. Detractors have not received any response to their questions about who is financing the project and how they operate.

The company and its executives in Nicaragua, as well as the Nicaraguans in charge of the project, have avoided revealing the identity of their sources of financing.

“The fund is guaranteed, but it is confidential; these matters are business secrets, especially because of the companies that trade on the stock market,” said HKND’s Pang.

Talavera, with the Special Commission for the Grand Canal, told IPS that the important thing at this time is to explain to the population the reach of the mega-project and to guarantee that it brings benefits for the country. “The details about the financing will be provided when the time is right, if the financing partners decide on that,” he said.

The country’s refusal to reveal information about the partners and the origin of the funds has given rise to speculation. For example, opposition lawmaker Eliseo Núñez has insinuated that the Chinese government is behind the project – a suspicion that Wang Jing has consistently denied.

Edited by: Estrella Gutiérrez / Translated by: Stephanie Wildes

The San Juan River in Nicaragua, one possible route for the canal. Credit: Oscar Navarrete/IPS

By José Adán Silva
MANAGUA, Aug 23 2013 (IPS)

The law passed in Nicaragua to grant a concession to a Chinese company to build a canal between the Pacific and Atlantic oceans repealed legislation that protects Lake Cocibolca and its tributaries.

Lake Cocibolca, also known as Lake Nicaragua, is the biggest source of freshwater in Central America and the second largest lake in Latin America after Venezuela’s Lake Maracaibo.

The alarm over the new threats to the lake was sounded by two local NGOs, the Nicaraguan Alliance on Climate Change (ANACC) and the National Risk Management Body (MNGR), in representation of 20 environmental groups in the country.

Law 840, dubbed “the great inter-oceanic canal law” by the press, was approved by the legislature in June, with the votes of the governing left-wing Sandinista National Liberation Front (FSLN) of President Daniel Ortega.

The canal, which will go across the lake, will be nearly four times longer than its rival, the Panama Canal.

The concession to build and run the canal for 50 years, extendable by another 50 years, was won by the Hong Kong-based Chinese company HK Nicaragua Canal Development Investment Co. Ltd. (HKND Group), owned by Chinese tycoon Wang Jing. The cost of building the canal is an estimated 40 billion dollars.

According to the MNGR, the new legislation repealed the laws that defend the country’s natural resources and bodies of water, included in the “legal compendium on potable water and sanitation”.

The compendium, compiled in 2011 by the national commission on potable water and sanitation and sewage, includes 85 laws, decrees, municipal ordinances, constitutional provisions, international treaties and administrative regulations that protect the country’s bodies of water.

But the canal law establishes that it is the state’s obligation to guarantee the concession-holder “access to and navigation rights on rivers, lakes, oceans and other bodies of water in Nicaragua, and the right to extend, expand, dredge, divert or reduce such bodies of water.”

The state also gives up the right to sue the investors in national or international courts for any damage caused to the environment during the studies for and the construction and operation of the canal.

Law 840 also revoked the principle of application of the general law on national waters, which established that Lake Cocibolca “must be considered a national reserve of potable water, being of the utmost interest to, and highest national priority for, national security.”

Nicaragua granted HKND control over the lake and its surrounding areas, including 16 watersheds and 15 protected areas, where 25 percent of the country’s rainforest is concentrated, David Quintana of the Nicaraguan Foundation for Sustainable Development told Tierramérica*.

The proposed canal routes run through nature reserves that are home to hundreds of species of plants, birds, mammals, reptiles, amphibians, fish, molluscs and crustaceans.

The assistant director of the Humboldt Centre, Víctor Campos, said the canal would simply destroy any chance of making Lake Cocibolca the source of water for all of Central America at some point in the future.

“Construction of the canal and conservation of water for human consumption are mutually exclusive – you either have a canal or you have a reservoir of water for the population,” Campos told Tierramérica.

The canal will be built across 190 km of land, while an additional 80 km of the route will go through Lake Cocibolca. It will serve larger ships than the Panama Canal.

Biologist Salvador Montenegro, director of the Research Centre for Aquatic Resources of the National Autonomous University of Nicaragua, told Tierramérica that the work on the lake will generate enormous amounts of sediment that will muddy the water and suffocate most of the fish and other forms of life.

Montenegro said the size of the canal – 520 metres wide and 27.6 metres deep – poses the worst environmental scenario for the lake and surrounding watersheds.

“A small oil leak, an earthquake, or the strong winds that blow in that area could cause an ecological catastrophe that would forever put an end to potential human consumption from the lake,” the activist said.

The same concern was voiced by Jaime Incer Barquero, a scientist who advises President Ortega on environmental issues.

“We are still in time to rectify this and not make the extremely serious mistake of endangering the biggest source of water in the country and Central America; no canal is worth as much as that lake,” Barquero told Tierramérica.

In the face of the barrage of criticism, the president has stated that the environmental impact study will be decisive in determining the future of the canal project and the route it will take.

But the environmental and technical authorities did not respond to the arguments of the possible environmental risks, and have merely stressed the economic benefits that the canal will bring to Nicaragua.

HKND spokesman Ronald MacLean has stated in several communiqués that the British consultancy Environmental Resources Management would carry out a professional environmental impact assessment of the different routes considered for the canal.

“Obviously, we also have to address the environmental question, because we will have to see what impact the project will have and what will be the cost of a remediation programme so that the final outcome is positive,” he said in an early August email sent out by the company’s public relations firm in Managua.

Meanwhile, environmental organisations, business groups and opposition sectors, as well as indigenous communities worried about threats to their land and their access to water, are preparing to bring legal action against the project.

* This story was originally published by Latin American newspapers that are part of the Tierramérica network.

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