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The situation is all too familiar. A multinational corporation, one rooted in a Western country, enters a developing nation under the guise of launching a ‘development project’ and strikes a sweetheart deal with the government that winds up being detrimental to all but the most connected of citizens.

A favourite such development scheme is the building of a megadam: the Three Gorges in China, the Narmada in India, and the San Roque in the Philippines are all heavily financed by foreign investment. These are always both colossal and costly projects, and while the employment and electricity they promise are occasionally delivered, such benefits are often effectively erased by the flooding of huge areas of land and the displacement of thousands of people.

In the case of one such project, the repercussions are even more egregious than most. Chalillo, a monumental hydroelectricity project set for construction in the Central American nation of Belize, is slated to flood over one thousand hectares of untouched rainforest in the Macal River Valley. This remote area has been desribed by one Belizean biologist and conservationist as "the cradle of biodiversity in Central America."

The dam is the work of Belize Electricity Limited (BEL), a company which holds a monopoly on Belize’s hydroelectricity industry and which has, by allegedly skirting the public consultation process, engineered a deal with the country’s government.

Justification for the dam’s construction was provided by Toronto-based AMEC, which conducted the environmental impact assessment. But environmental groups charge that AMEC, which has been involved in a variety of dams projects, conducted a faulty assessment. It omitted, they say, details on the dam’s impact and on key factors that would greatly diminish the dam’s viability once built. Both public awareness of, and opposition to, the project have been steadily rising for several years, especially in Belize itself, where environmentalism is a national passion.

The scenario is complicated by the fact that BEL is, in fact, owned and operated by Fortis, Inc., a billion-dollar multinational based in St. John’s, Newfoundland. There are still further questions regarding the Canadian government’s complicity in Chalillo: AMEC’s questionable impact assessment was actually paid for by the Canadian International Development Association (CIDA) with nearly half a million dollars of Canadian taxpayers’ money.

Noted environmentalist and Chalillo opponent David Suzuki has harsh criticism for such complicity. "We like to think that we’re the good guys," says Suzuki, "but our companies are going down to the developing world and raping and pillaging all over."

The environmental fallout

Biologists and environmentalists regard Belize’s unspoiled Macal River Valley, home to a host of endangered species, as an area of great ecological importance to Central America. It forms part of the Meso-American Biological Corridor, a massive tract of protected forest stretching from Mexico to Panama that was established by Central American governments to protect the migration routes and breeding grounds of animals such as the scarlet macaw, the Morelet’s crocodile, and the spotted jaguar. Should Chalillo go through as planned, this corridor will be fractured, and many of these species will be placed at extreme risk of extinction.

"The main concern is that the dam is going to flood a critical area of dry-season habitat for a number of endangered species," says Gráinne Ryder of Probe International, a Canadian watchdog group that has followed the Chalillo case since its inception. "That’s why this has become such a huge international issue – much of the habitat in this part of the world has already been decimated, and so this river valley is really one of the last intact areas in the world for these animals. The area’s just too valuable to destroy."

The Macal River’s forested floodplain, which would be largely submerged by the dam, contains all of Belize’s known nesting sites for the scarlet macaw, a species of which fewer than 1000 specimens remain, worldwide. Approximately 200 macaws live in Belize, and the elimination of their breeding ground would lead to the probable extirpation of the entire species.

The Wildlife Conservation Society’s Dr. Alan Rabinowitz is concerned that flooding would also "disrupt the integrity of the jaguar’s habitat in Belize," making the region "a festering wound in the body of one of the world’s largest intact jaguar sites."

"I view this as an environmental crime," says Sharon Matola, biologist, scarlet macaw expert, and the director of the Belize Zoo. "There are few places in North and Central America that remain untouched like this region. And for a project that isn’t standing up to any credible evidence that it will be beneficial, to destroy this area would be preposterous. Seventy per cent of Central America’s landscape has been eradicated over the last 40 years, and yet here’s this area that’s still unaltered and extremely important. We should work to preserve it and not to trash it."

The Project

Belize Electricity owns a complete monopoly over the country’s hydroelectricity production and over Belizeans’ access to it. Proponents of the dam project, which would provide Belize with an additional seven megawatts of electrical power, allege that it will vastly improve electricity resources and promise cheaper rates to Belize’s citizens.

Not so, say the various opposition groups that comprise the Belize Alliance of Conservation Non-Governmental Organizations (BACONGO). While Chalillo would create the additional power, alternative sources of energy such as the co-generation of power through the combustion of sugar cane waste could provide up to eighteen megawatts.

What’s more, they allege, Chalillo would only serve to make electricity even more expensive for ratepayers, who are already forced by the BEL monopoly to pay three times what most Canadians pay for their hydro. Cost estimates for the dam’s output indicate that this new source of energy will cost ratepayers 9.6 U.S. cents per kilowatt-hour, while other sources, such as local diesel generators or energy purchased from Mexico, would cost 8.5 cents and 5 cents respectively.

It is likely that Fortis-owned BEL, Canadian-owned Fortis, and the Belizean government will be the big, and perhaps only, winners in this project. Fortis, owner of both Belize’s hydro company and its electricity distributor, has ratepayers locked in for a 55-year deal; they have no choice but to buy hydro from BEL, even if cheaper options exist. The multinational would thus stand to make millions of dollars from the project. In return, the Belizean government will receive a half million dollars each year for the next fifteen years, with an increase of a hundred thousand dollars every year. And this is in exchange for Fortis’ control over Belize’s water rights alone.

"The people signing on to this [in the Belizean government] are incredibly short-sighted and have been told that there won’t be any problems," says Ryder. "They aren’t too concerned about the long term – they are very concerned about a short-term infusion of cash. Governments take on risks all the time because they can soak the ratepayers later."

The alleged cover up

In the year 2000, Fortis subcontracted the conducting of the environmental impact assessment for the dam site to AMEC, a Toronto-based engineering firm. But the assessment, Probe International and other critics claim, was shoddily performed. It neglected to address certain key issues affecting whether or not Chalillo would even be worth building in the first place.

The geological survey in particular, it is contended, failed to report geological faults and fractures in the project area, including the 30-kilometre Comma Cairn fault line. It also wrongly identified the bedrock at the site as granite, which may seriously affect construction and durability. Also neglected was the recognition of a variety of limestone caves beneath the site, which could drain water out of the dam’s reservoir and render it useless.

Further, the London Natural History Museum, which was itself subcontracted by AMEC to report on the impact on the biodiversity of the region, stated in their official report that they "highly recommended" the project be dropped, due to environmental and logistical concerns. Undaunted, Fortis has forged ahead.

While Fortis could not be reached for comment, Donna Hynes, the company’s manager of investor and public relations, told the St. John’s paper The Telegram in an interview that, "from our perspective, this project is a very doable project. The geotechnical studies that have been completed speak to the feasibility of the project and they found that the rock is suitable to support the building of a dam. As far as we’re concerned," she maintained, "that dam meets all of the requirements structurally and from a safety perspective."

The charges against Fortis and BEL of having circumvented the democratic process in hatching the deal have recently been brought before Belize’s Supreme Court. Belizean electricity law obliges projects like Chalillo to pass through a process of public notice, hearings, and domestic impact analysis. Fortis and its affiliates neglected to follow these steps. A current lawsuit against the company also claims that another infraction was committed when preparatory work and road construction were carried out at the dam site before the environmental review process was completed.

Whether or not this is the case, the fact remains that a deal was struck whereby the Belizean government, and not Fortis or BEL, will be responsible for all future financial liability from the dam, including structural damage and repairs, worker injury, or environmental fallout. As a result, if Chalillo does turn out to be an environmental and economic disaster, as many groups predict, Belize’s citizens are the ones who will have to face up to, and pay for, the consequences.

"I think it’s important to realize that governments will take on unacceptable risks because they’re not accountable," Ryder says. "It’s all secret. The trend that we see now is very much that corporations want one-stop shopping where they can go in, get a deal with a central government, and don’t have to worry about environmental procedures, don’t have to ask for approval from the communities that get affected. That’s a real violation of people’s rights," Ryder contends. "I don’t believe that governments have the authority to make those decisions on behalf of local communities."

Canadian complicity?

AMEC’s environmental impact assessment was paid for by CIDA, to the tune of $466,234. The development agency has since come under fierce attack from social-justice lobby groups, both in Canada and in Belize, for contributing so much money to such a potentially harmful project.

"The public thinks CIDA exists to help small-scale development. But we see CIDA, Inc, [the agency’s Industrial Co-operation Branch] as a political patronage machine," says Ryder. She points out that CIDA has disbursed tens of millions of dollars to companies like AMEC, to the effect that Canadian government aid finds itself going not to the countries that need it, but rather to multinational corporations that may end up exploiting those very countries.

"It’s a clear-cut case of abuse of foreign aid," Ryder alleges. "Why is aid going to a multinational corporation? Why is aid going to a corporation that promotes environmentally-damaging projects?"

CIDA representative Robert Derouin disagrees. "Not everything that’s out there in the public domain about CIDA’s role fully represents the situation. I think it’s kind of odd that just because someone is against the assessment report, they’re automatically deemed correct," Derouin says. He notes that although CIDA’s name is attached to the AMEC report, it is not responsible for all of the specific data contained therein.

"Belize is an independent nation with its own environmental review process," Derouin observes. "All CIDA did was to financially participate in the gathering of environmental data. Technically, that’s the end of our involvement. We just want to help Belize explore its options, alleviate its poverty, aid its development. We paid for the generating of the environmental information – that information then goes out to Belize’s own national review process. Belize needs to decide for itself whether it wants to proceed with the dam or not."

But anti-Chalillo activists decry what they perceive as CIDA’s failure to accept any responsibility for a dam to which it contributed nearly $500,000, as well as the Canadian assumption that the Belizean government and Fortis are equal negotiating partners. "I think that loss of sovereignty is the issue, and that encompasses the facet of lack of economic sovereignty and lack of being empowered by your own natural resources," says Matola. "CIDA’s role should be one of responsibility. CIDA must take accountability for what they’ve contributed to."

The view from here

The Chalillo dam has generated enormous opposition from a number of corners. Celebrities such as Princess Anne and Robert Bateman have weighed in, and Harrison Ford, a particularly vocal critic of the dam, did his part by writing an article for the Globe and Mail this past winter that pointed fingers at the Canadian government’s complicity in the affair. The Washington-based National Research Defense Council, a group of lawyers fighting for social and environmental justice, has joined the battle with a campaign spearheaded by Robert F. Kennedy Jr. Environmentalists of all stripes have written letters, made speeches, and published articles on the subject, as have media outlets like the National Post and the CBC.

Concerned groups such as BACONGO, Probe International, and others have united under the banner of the International Coalition to Save the Macal River Valley, and in March of this year, 30,000 signed petitions opposing the dam were presented to Fortis president Stanley Marshall.

"People are always impressed with foreign companies who come around delivering this line of bullshit," waxes Suzuki. "But the real opposition power comes when you get an alliance of people that come from the country that the company is from, and they go down there and say ‘What are you doing? Our country is not Mr. Good Guy.’ You need that alliance."

The fight against Fortis has now entered the courts, with BACONGO filing two civil suits. The first case targets Belize’s National Environmental Appraisal Committee (NEAC) for approving AMEC’s environmental impact assessment without adhering to the proper sequence of public hearings. The second suit challenges Belize’s Public Utilities Commission, which allegedly gave Fortis the go-ahead sign without considering alternative proposals, again disregarding Belizean law.

"The trouble with these guys is that they have a lot of resources and they can drag these things out," Suzuki says. "For the NGOs, this is serious money and time, and they risk running out of steam. We’ve got to stop them [Fortis] in their tracks."

Because of the suits, Fortis must now abstain from any construction on the dam until a verdict has been reached. This delay alone, which has resulted in the loss of a full year of building time, has been celebrated in Belize as a major victory. Watchdog groups and Chalillo opponents hope that, by continuing to fight the dam, Fortis will be persuaded to drop the project altogether due to temporal and financial constraints.

"These people don’t like to see sunlight," says Suzuki. "They like to do things behind closed doors. When you force them to open the door, they scurry for every crack they can get into. What opposition movements have done has been to force them into the daylight, and as much as they don’t want to do this and much as they want to paint protestors as loonies, they have been forced to confront the destructive aspects of what they’re doing."

"If there’s enough public pressure on a particular case they may say ‘oh yes, we won’t do it again,’" says Ryder. "But the minute the pressure and the scrutiny go away, unless you have a watchdog and consistent public pressure, they’ll be at it again next week. With every case like this it requires vigilance on the part of citizens. This is the meaning of building democracy, really."

– With files from Probe International, Michael Werbowski, and Sean Carrie