On December 3 and 4, the Privy Council will hear a challenge by
Belizean environmentalists and business owners to their government’s
approval of plans to build the Chalillo dam on the Upper Macal River.
This is the first environmental case in the long history of the Privy
Council, which still serves as the final court of appeal for Belize and
commonwealth countries.

The upper Macal River Valley is one of the most intact wilderness areas
left in Central America. It is home to an extraordinary array of rare
and endangered species, including jaguars, tapirs, and the last 200
scarlet macaws left in the country. Leading biologists at London’s
Natural History Museum who have studied the area said that the proposed
dam would irreversibly damage this biological gem and urged that other
options be considered ahead of building as planned.

BECOL, a Belizean subsidiary of Fortis, a Canadian multinational
corporation, plans to build the dam and to sell the power to Belize
Electricity Limited (BEL), the sole Belizean utility also owned by
Fortis. In January 2002, BACONGO, a coalition of environmental groups
in Belize, initiated legal action before the Supreme Court of Belize to
overturn the environmental impact assessment for the project. BACONGO
asserts that the EIA, carried out by AMEC, a giant worldwide consulting
firm headquartered in London, was seriously flawed and that the
Belizean Department of the Environment illegally rammed through
approval of the EIA. Leading technical and scientific experts have
repeatedly raised serious – and still unanswered questions -about the
viability, safety, and impacts of the proposed dam.

AMEC has claimed that its involvement was as an arms-length
environmental consultant, and that its involvement in the project ended
after the approval of the project was given. However, recent
submissions to the court show that its engineers are still leading the
project in Belize.

The Supreme Court of Belize and a three-judge panel of the Caribbean
Court of Appeals upheld the government’s approval of the project,
though the reasoning of these decisions was widely varied. In May, the
Court of Appeals granted BACONGO leave to bring the case to the Privy
Council. In anticipation of this hearing, the Belizean Parliament
rushed through a law ordering BECOL to construct the Chalillo dam
without further review and irrespective of any court order. Preliminary
work at the site began in May 2003.

At an initial hearing in late July, a judicial committee of the Privy
Council denied an application for a temporary injunction on
construction of the project, but warned the government of Belize about
the new law, which BACONGO challenged as unconstitutional. The
government of Belize has now begun the process to repeal the law before
the hearing December 3.

A panel of five judges who normally sit in the House of Lords, will
hear BACONGO’s case in the Privy Council’s building on Downing Street.
The hearings that will begin at 10:00am on Wednesday, December 3rd and
Thursday, December 4th will be open to the media and the public.

BACONGO will be asking the Privy Council to find that the EIA review
and approval of the Chalillo dam was illegal and to order BECOL and the
Government to halt further construction of the dam and to reconsider
the project with a full and proper EIA. The following is a brief review
of BACONGO’s concerns about the EIA process and the project:

Lack of Economic Justification

Fortis claims that the Chalillo dam will be the most economic option
for generating power within Belize and would help decrease energy
reliance on energy from Mexico. The 150 foot high dam is projected to
cost $30 million and is expected to provide only some 5 megawatts of
new capacity. By comparison, the Pergau dam in Malaysia that was found
to be uneconomic by a UK court would have produced 600 MW capacity at
five times less cost per megawatt. In that case, the court decided that
UK foreign aid could not be spent to finance the dam, because it did
not aid Malaysia’s development.

As a result of BACONGO’s litigation, Fortis was forced to reveal a
secret contract on the dam between the Government and the two Fortis
subsidiaries. The contract provides the companies with very favourable
terms for the project. For example, the utility will be compelled to
purchase power from the Chalillo dam instead of any other source, even
if it is cheaper. More than 90% of the power from the project would be
produced when Belize could purchase less expensive power from Mexico,
causing an immediate loss of at least $1.5 million US.

Belize now has total electrical capacity of 50 megawatts and the demand
is projected to grow at 5-10 megawatts per year. Thus, Chalillo will
satisfy just one year’s increase and will not in any way relieve the
nation’s dependence on Mexican power.

Fortis continues to refuse to reveal a number of the fundamental facts
and studies regarding the economics of the dam. For example, Fortis has
not revealed how much it pays for energy from other sources, though it
claims that the new dam would be the “least cost.” This claim is based
on a 1999 energy study by General Electric, which Fortis has also
refused to make public. At present, Belizeans pay twice as much for
electricity as their neighbours in Guatemala and Mexico. Stan Marshall,
President of Fortis in Canada, indicated that electricity rates in
Belize could go up with the construction of the Chalillo dam.

Poor Understanding of the Basic Geology and Hydrology

The Belizean Department of the Environment gave its approval to the EIA
and the project even though there were serious problems with the
geological and hydrological studies of the project. These are issues
that go to the safety and economic viability of the project.

In papers submitted to the Privy Council, BECOL has finally admitted
that AMEC’s EIA mischaracterized the rock at the site as “granite”.
Instead the rock at the dam site consists of softer sandstone and
shale. The lack of granite at the site raises questions about the
solidity of the foundation for the dam and the availability of hard
rock at the site for crushing and mixing into concrete for the
construction of the dam. Dr. Richard Goodman, former Professor of
Geological Engineering at the University of California at Berkeley, has
stated: “I view it as a major, and potentially disastrous mistake if
the foundation of this dam was incorrectly classified as granite.”

The government’s own geologist stated that AMEC had mischaracterized
the rock at the dam site and suggested that different a design might be
needed for the dam. However, further geological studies of the area
ordered by the Department of Environment in the Environmental
Compliance Plan (ECP) for the dam have not been made public nor are
there any indications of a reconsideration of the dam’s design.

After months of clearing and blasting at the site, BECOL still has not
reached granite and recently applied for a license to open a new
granite quarry a half kilometre away from the dam site. The lack of
granite at the site appears to have already delayed construction and
will add to the costs of construction.

During a visit to the dam site in early November, geologist Brian
Holland not only confirmed the lack of granite at the site, but also
saw evidence of a fracture which runs right through the hillside where
the dam is to be attached. Holland then found that a well-known fault
line in the vicinity of the dam had been removed from a seismic map of
the area in the EIA.

The safety of the dam is of great concern to more than 12,000 people
living downstream. According to Luis Godoy, Deputy Mayor of San
Ignacio/Santa Elena, the failure of the dam “would send a tsunami-like
wave of water rushing toward San Ignacio and Santa Elena and would
inundate the towns, putting the lives of the residents at risk, as well
as causing great property damage.”

The hydrological studies regarding the dam are also inadequate.
According to Dr. Chris Bowles, hydraulic and hydrologic engineer, “it
is my professional opinion that the hydrological data provided [in the
EIA] is highly deficient and by no means sufficient to make a sound
decision concerning the construction of the project.”

There appears to be very little water in the river. In November, at the
height of the rainy season, the entire Macal River is flowing through 4
small pipes in a causeway that BECOL has constructed across the river
at the dam site.

EIA claims that it will be flash floods that will fill the 22 mile long
reservoir behind the dam 13.5 times each year. Yet data in the EIA
itself makes it clear that there has not been sufficient rainfall in
several years to support this assertion. It appears that BECOL has
seriously overestimated the amount of water in the river, which also
calls into question its assertions about the economics of the project.

Inadequate Wildlife Studies

In 2001, eighteen top environmental scientists wrote:

“Given the rarity of the Upper Macal River valley floodplain
vegetation, the high-quality of intact wilderness found there, and
nearly a century of experience with dams in tropical environments, it
is our opinion that the Chalillo dam would impact the ecosystems of the
region and many of the species which inhabit it. The preponderance of
existing evidence indicates that these impacts would be significant and
long lasting.”

“In the absence of thorough multi-year surveys of vegetation and fauna,
and reliable models of the potential impacts of the dam, it would be
reckless to undertake the Chalillo project.”

There is evidence that the Upper Macal has the highest density of large
cats in the neotropics, including jaguars, ocelots and puma. It is the
only known nesting grounds in Belize for a rare subspecies of scarlet
macaw, numbering fewer than 200 in Belize and 1000 in the world. It is
one of the last intact habitat areas for the rare Central American
tapir, Belize’s national animal. The area has a very high diversity of
amphibian species, and at least one frog (Rana juliani) that is not
known to exist anywhere else in the world. Finally, the Upper Macal is
a critical component of the proposed “Meso-American Biological
Corridor”, a multimillion dollar international project, agreed to by
all the countries of Central America including Belize, to ensure a
wilderness corridor from southern Mexico to Panama.

The wildlife studies within the EIA were undertaken under contract by
AMEC by scientists from London’s Natural History Museum (NHM) who had
been involved for years in research in the region. The NHM assessment
also concluded that the proposed project would have serious
implications for the endangered species in the Uppper Macal, including
the scarlet macaw, and urged that other options be considered ahead of
building as planned. It further stated that if project were not to be
abandoned then “Much more information is required for an informed and
defensible decision.” Displeased with the NHM’s assessment, AMEC tried
to bury it in the appendices of its 1500-page EIA and to discredit its
findings. To date, AMEC and other proponents of the dam have yet to
identify a single credentialed biologist or scientist to counter the
views of the NHM.

The ECP includes a requirement for studies of the efficacy of building
nesting boxes for the endangered subspecies of scarlet macaw whose nest
sites would be flooded by the dam. To date no such studies have been
carried out.

Incomplete Archaeological surveys

The EIA includes a preliminary survey that found numerous ancient Maya
heritage sites that would be affected by the dam. The EIA states that
“nothing is known about the settlement pattern in the area”, and that
the sites that were found in the brief survey of the reservoir area
were “undocumented”. Dr. Keith Prufer, a specialist in Precolumbian
Maya archeology at Auburn University stated “these studies provide only
partial and fragmentary data on the area that would be affected by the
Chalillo project.” He added that “I have no doubt that the dam would
adversely affect important cultural resources, including the structures
and sites I observed during my visit to the area, which have not been
included in the EIA.” Additional archaeological studies are apparently
just now underway.

Need for Meaningful Public Participation

The Department of Environment approved the EIA after ignoring hundreds
of pages of critical comments from scientific and technical experts and
before holding a public hearing. In December 2002, the Belize Supreme
Court ruled that the Department had erred and ordered the Department to
hold such a hearing. However, the Court did not overturn the
Department’s decision and expressed the hope that Department might
reconsider its decision in light of that hearing.

The Department working in cooperation with BECOL rushed ahead with a
hearing in January 2003. The Department ignored requests from BACONGO
that the hearing be structured to gather expert testimony to address
the outstanding technical issues outlined above. In April, the
government attempted to cut off any further public debate and
discussion of the dam with the passage of the Macal River Hydroelectric
Act. There was a strong response from the public and media in Belize
that saw the Act as unconstitutional and a threat to Belize’s
democracy. The government of Belize now plans to revoke the act in time
for the Privy Council hearings.

For full details on the BACONGO case and the controversy over the Chalillo dam, please see www.stopfortis.org
This site includes many of the court documents in the case, including
the full affidavits and statements of the experts quoted above and a
number of others.