London, December 5th, 2003 - Hearings before the Privy Council of London came to a close yesterday in the lawsuit against the environmental approval of the Chalillo hydroelectric dam in Belize, proposed by Newfoundland-based Fortis, Inc. While the outcome is uncertain, it was clear that the judges were troubled that the project was approved with key issues still unresolved. The judges also criticized the government for its failure to reveal key documents on the economics and safety of the project. However, the court will also consider a plea from Belize's Attorney General to let the project go forward despite these concerns, because of the size of the project and the fact the company had already invested millions of dollars in it.

    The court may decide on the case as early as December 25th, though it may take considerably longer.

    This was the first environmental lawsuit to reach the Privy Council of England, and in two days of hearings, the courtroom was treated to fireworks rarely seen at these levels of the legal system. It was also the first challenge to a major decision of the government of Belize, and many in Belize are hoping this case will make the government more accountable.

    The case already achieved a victory for justice when the government was forced to repeal an unconstitutional law, which purported to ensure the construction of the dam "notwithstanding" the decision of any court. The law was repealed just in time for the first day of hearings in this case, in response to a strong warning from the Privy Council this August. The government has also been forced to reveal key documents, including the geology study that Belizean communities downstream from the proposed dam had requested for more than a year.

    In addition, the hearing helped place the dam project on trial in the court of public opinion worldwide: many of the top Canadian newspapers featured the campaign, it was the lead story on the national CBC afternoon and evening news programs, and it was reported on BBC World Service. Below is a partial list of the articles on this case, and a copy of an editorial by Robert F. Kennedy, Jr. as it appeared in the Toronto Star, published this week.

    Also, hundreds of people joined the petition on the StopFortis website www.stopfortis.org, which has now reached 8,000 signatures. You can also take action at www.savebiogems.org/macal.

First day: Concealment of geological report on dam foundations

    The first day of hearings was dedicated to an exposÈ of how the government and Fortis covered up a key report which showed that their assessment of the geological foundations of the dam site were wrong. The report, commissioned by Belize's technical committee in February 2002 and completed in May 2002, had been requested for a year and a half by environmental groups and communities downstream of the dam, but was only released last week by lawyers for the government. The report demonstrated major flaws in the company's original assessment of the proposed foundations of the dam including: 1) An incorrect claim that the dam site was made of granite (in fact it is made of sandstone and weak shale); 2) A map in which the company removed a fault line just upstream of the dam site; and 3) The potential for the proposed dam reservoir to "leak like a sieve" because of limestone caves upstream. The concern was that this project would be like the "disastrous" dam projects in Guatemala, built in the same limestone system.

    The judges expressed strong dissatisfaction for the way the government and company had concealed information and had to have it "squeezed out in dribs and drabs." Counsel for the Belizean groups argued that if the report had been released earlier, it could have made a difference in the court decisions in Belize that preceded this one, and may have convinced the Privy Council to grant an injunction in May.

    BACONGO also argued that the government decided to build the dam without having critical information on whether the dam would cause the endangered Scarlet macaw to go extinct in Belize, and what important Maya archaeological sites in the region would be flooded by the project. Second day: Belize government pleas to allow construction to continueóeven if approval was illegal.

    Belize's Attorney General joined the government's counsel, Edward Fitzgerald (known in the United Kingdom for defending death row prisoners before the Privy Council) in a plea to the court not to overturn the decision to build the dam even if the approval process was illegal. Earlier, the judges had questioned Fortis' attorney, Rabinder Singh, on the extraordinarily favorable terms Belize gave to Fortis (including guarantees of high rates of return for 50 years, tax-free status, and guarantees that the government would waive any laws to accommodate the company). The Attorney General responded that Belize needed to give such favorable contracts to foreign companies to attract foreign investment. Belizeans in the courtroom cringed, knowing the history of corruption in the country.

    The Attorney General also argued that the dam would make Belize "energy independent," and cited inflated figures for the amount of electricity the dam would produce.

    The government of Belize's optimistic claims for the Mollejon dam, located downstream of the proposed dam, never materialized. That dam produces only three-fourths of the electricity its proponents had said it would, and is now the major reason for the high rates of electricity in Belizeóthe highest of any country in Central America. BACONGO's attorney, Richard Clayton, pointed out that the dam would only produce 5 MW of electricity, enough to power three medium-sized hotels, and less than one year's growth in Belize's energy needs.

    The government also argued that the flaws in the assessment of the dam's foundations were not important, and that granite and sandstone were made of the same materialóand therefore essentially the same. Evidence in the court showed that this was like claiming that diamonds and coal, or water and ice are "essentially the same" because their composition is identical. BACONGO also argued that a change in dam foundations requires a change in dam design. The difference in dam foundations could add to the costs, and undermine the safety of the project.

Demanding justice from Fortis and the Belizean government

    The Coalition to Save the Macal River Valley will continue to demand accountability from Fortis and the government, through full public disclosure and debate. The Coalition will seek to obtain secret contracts and documents about this project, which the government and Fortis are still keeping from the people of Belize. The Privy Council has helped bring out much of the truth about this project. Full disclosure will show how unsafe, uneconomic and environmentally damaging this project is, and the people of Belize will reject it.

Canada under fire over dam

Ottawa agency complicit in Belize plan that will endanger local people and environment, writes Robert F. Kennedy Jr.

    As Paul Martin prepares to take the reins as Canada's new prime minister in Ottawa this month, Canada's current foreign environmental policies will be on trial in London.

    Tomorrow, a panel of five Privy Councilors, Britain's highest court of appeal, will hear a case brought by Belizean environmentalists and business owners against the approval of Canadian-backed plans to build a 50-meter-high concrete hydroelectric dam in the rainforests of this small Central American country.

    If completed, the Chalillo dam would not only flood one of the world's most important wilderness areas and drown irreplaceable traces of the ancient Maya civilization, but will put 12,000 people living downstream at risk.

    The project sponsor, Newfoundland-based Fortis, Inc., monopoly owner of Belize's electricity utility, has close ties to the governments in Ottawa and Newfoundland, and just bought up distribution utilities in Ontario, Alberta and British Columbia.

    Two years ago, Fortis rammed approval of the project through using a flawed environmental assessment that was secretly paid for by Canada's foreign aid arm, the Canadian International Development Agency.

    This deal was part of CIDA's private-sector branch "CIDA, Inc.," whose real mission appears to be "poverty"óalleviation for some of Canada's largest and most powerful companiesóthe Halliburtons of Canada.

    In papers submitted to the court, Fortis now admits that the taxpayer-sponsored report was wrong about the geological foundations underpinning the dam. The report said the dam would be built on solid granite, when, in fact, the site is made of fractured sandstone and shaleóa dam designed on the basis of the CIDA report could collapse and cause disaster downstream.

    When CIDA, Inc. was confronted with this, and other flaws in its report, last year on CBC's Disclosure, the agency denied it did anything wrong. Now the dam is under construction, and the consequences of CIDA's flawed assessment are becoming evident. The low flow of the river, reaching just knee deep in the rainy season, makes it apparent that the dam will not provide a fraction of the electricity CIDA's report projects.

    Contractors at the site have found no granite at the site to crush as an ingredient to make concrete for the dam. In addition, locals say that seismic tremors caused a 20-meter-deep gaping hole to open at the site, and construction workers drilled through to water flowing underground. Experts warn that this could drain the dam's reservoir before it is filled.

    And, most troubling, the continued uncertainty about the dam's foundations has raised the specter of dam collapse, and potential liability for Fortis and the Canadian government. Regrettably, CIDA continues to bury its head in the sand, and Fortis seems undeterred.

    That's because Fortis seems to be protected. A 50-year contract with the Belizean government guarantees the company at least US$200 million in electricity sales from the dam, by forcing the dam's high costs onto Belizean ratepayers. Already, Belizeans pay the highest electricity rates of any country in Central Americaónearly two times more than their neighbors in Guatemala or Mexico, even though half of their electricity is imported at low cost from Mexico.

    Tomorrow, the Privy Council will be asked to stop the dam's construction until proper studies are completed and Belizeans' right to a fair and impartial public hearing is upheld. But Canada should not wait for the Privy Council's decision to live up to its responsibilities and repudiate past mistakes. "Poverty alleviation" should not be a cloak for lopsided contracts that provide huge profits to a Canadian company and endanger and further impoverish the people of Belize.

    The new prime minister will be off to a good start if his minister for international development ends CIDA's complicity with Fortis, recalls its flawed taxpayer-sponsored report and works to protect the people of Belize, as well as the tapirs, Scarlet macaws and jaguars that are at risk from this unjustifiable dam.