MACCIH to investigate DESA, government contracts, funding

The Misión de Apoyo Contra la Corrupción y la Impunidad en Honduras (MACCIH) announced Thursday that it would begin investigating, not the murder of indigenous activist Berta Cáceres, but the funding and government contracts of DESA, the company building the Agua Zarca dam for possible corruption and money laundering.

Mission spokesperson, Juan Jimenez Mayor announced the OAS mission would look into DESA, how it got its government contracts for the Agua Zarca dam and ENEE electricity purchase, and how it grew from a company with less than $1000 in capital in 2009 to have over $17 million in 2014.  In particular, Jimenez Mayor said the Mission wanted to verify the source of the funds, and whether DESA was money laundering.

Another aspect of the Agua Zarca project that Jimenez Mayor said was interesting was the awarding of the original environmental license in 2010, and the enlarged project environmental license in 2011.  The latter, approved by Dario Roberto Cardona, then sub secretary of the Secretaria de Recursos Naturales y Ambiente (SERNA).  Jimenez Mayor noted that while Cardona was being prosecuted for issuing the expanded environmental license in 2011 without proper consultation with the indigenous communities around Agua Zarca, he wondered why the issuer of the first environmental license, then Minister Rigoberto Cuellar, was not being investigated for the same crime since the same problem exists with the first environmental license issued in 2010. 

Jimenez Mayor also pointed to Congress, and its approval of an electricity buying contract from DESA to ENEE that called for ENEE to purchase more electricity than initially agreed on.

DESA denies there was an increase in its electricity production licensed by Cardona, and maintains it properly consulted with the municipality through open meetings, and that ILO 169 has not been codified into Honduran law.

The Agua Zarca project remains suspended.  The recent withdrawal of two of the international funding agencies (the Netherlands Development Bank (FMO) and the Finland Fund for Industrial Cooperation (FINFUND)) has not resulted in its cancelation because much of the funding comes from the Banco Interamericano de Integración Económica (BCIE) which has not withdrawn its support.

Being An Environmentalist Can Kill You

Global Witness, an NGO that exposes corruption and environmental abuse, released a report this week that called Honduras the most dangerous country to be an environmentalist. 

The numbers are heartbreaking.

Global Witness looked at the period 2002 - 2014 to accumulate statistics on the death of environmental activists around the world.  Brazil had the highest number of deaths, at 477, while Honduras had 111. Almost all of those deaths happened since 2010.  If you look at the rate of death of environmentalists over the last 5 years, it turns out Honduras leads, with 101 deaths.

Here's how the numbers work. 

From 2002 to 2009, Honduras had 0, 1, 2, or 3 deaths per year of environmentalists.  Starting with 2010, those numbers skyrocketed:  21 deaths in 2010, 33 deaths in 2011, 25 deaths in 2012, 10 deaths in 2013, and 12 deaths in 2014.  90% of the Honduran environmentalist deaths occurred in the last 5 years!

Global Witness found that mining and other extractive industries caused the largest number of deaths in 2014, with a tie for the second spot between Water and Dams, and Agribusiness.  These three accounted for 84% of the environmentalist deaths in 2014.

This violence has come down particularly hard on indigenous environmentalists.  Three Tolupan leaders were shot and killed during an anti-mining protest in 2014. 

The Global Witness report came out the same day that another Honduran indigenous environmentalist, Berta Cáceres, won the Goldman Prize:

The Goldman Environmental Prize honors grassroots environmental heroes from the world’s six inhabited continental regions....The Prize recognizes individuals for sustained and significant efforts to protect and enhance the natural environment, often at great personal risk.

Cáceres was honored for her grassroots organizing of opposition to the Agua Zarca dam project.  Agua Zarca was a joint project of the Honduran company Desarrollos Energeticos S. A. (DESA) and SinoHydro, the Chinese government owned company recognized as the largest dam builder in the world.  DESA received a $24 million loan from the Banco Centroamericano de Integración Economico for the project. 

As the Goldman page for Cáceres notes, the project was promoted and approved in a corrupt and fraudulent fashion, failing to do the required consultation with the local Lenca communities that lived within the region slated for the reservoir, a violation of ILO 169 and other treaties to which Honduras is a signatory.

DESA was founded in 2008 and claims to be a Honduran pro-environment company:

DESA has always been concerned for the protection of the environment and because of this all its business practices and maintenance follow strict guidelines to be in harmony with nature.

Nature maybe, but not in harmony with the Honduran people, who they seems to despise. 
 DESA guards killed Tomas Garcia while he was protesting against the dam.  They attacked protesters with guns, clubs, and machetes over and over again during the protest, with impunity for all the wounds and the death inflicted.

DESA doesn't list its ownership or any company officers. DESA was able to employ and command Honduran military troops in the protection of of the dam site and equipment. DESA also arranged for trumped up arms charges to be filed against Berta Caceres, to try and jail her to stop the protests.

Ultimately they've failed.  SinoHydro has left Honduras and the dam project is halted.

And Berta Caceres has been honored with the Goldman Prize, which we can hope will help protect her from the fate of too many other Honduran environmental activists.

Bad Model Cities

Under the rubric of "Model Cities" the Lobo Sosa administration presented a law to Congress which will give the government the right to expropriate any contiguous region of land for the use of "Special Administrative Regions" which will be owned in full by the government, but have their own fully autonomous court system, not answerable to the Supreme Court. This is based on Stanford economist Paul Romer's ideas about "Charter Cities".

Romer's idea of Charter Cities, documented here and here, was advanced by him as a development initiative for poor countries. His specific analog is Hong Kong, which he says brought so much good to China. Romer seems to ignore the fact that it brought no good to China for 156 years, from 1839 until 1997 when it was removed from its status as a British colony and merged, fully formed and developed, as a part of China. It was only when integrated into modern China that it brought any good to the country.

According to La Tribuna's description, these Special Administrative Regions pretty closely model what Romer is suggesting. A large region of land (Romer recommends 1000 square km.) would be allocated by the Honduran government, with a charter set by the National Congress. Mind you, Romer sets the target developed population at 10 million, more than the entire population of Honduras. The Charter outlines the basic set of rules under which the city will begin to operate. It is, however, not answerable to Honduran law or the Honduran constitution and may establish, within the guidelines of its charter, any set of laws it wishes using the form of government specified in the charter (eg, it need not be representative of the population in any way).

As Romer sees it, investors will fund these charter cities by setting up services and collecting fees for them (water, sewer, electricity, etc.). Land title either remains with the national government, which then benefits from the rents on the lands, or is transferred to the development authority, which then finances itself by leasing (not selling) land to developers.

Romer says these are not gated communities for the rich. He sees this as the natural evolution of the maquila, with the first residents being maquila workers assembling garments and making toys, people with little formal education. He holds the mistaken belief that such workers today already can afford city services (electricity, water, sewer) and rents on their existing salaries. Everyone would have to rent, in Special Administrative Regions. No one would own their own residence.

These regions are sort of like today's Export Processing Zones that house the maquilas, except that they will have residents who are no longer full Honduran citizens, governed instead by the laws and rules set up by the local administration to administer these areas. There is no requirement for worker participation in the local government, for example. It harkens back to the banana company towns, with the potential for all the benefits and worker abuses, except that these would be industrial rather than agricultural workers.

Why is this idea attractive to the Honduran government? It might be the claimed potential for development of the host country, although Romer basically glosses over that part in his descriptions; but I think it specifically is attractive to the Honduran government because such zones are claimed to attract the people who currently leave the country to pursue social and economic opportunities in other countries. It is said to bring home all the migrants who currently enter the US illegally after traversing Guatemala and Mexico and being victimized by criminals in those countries.

Romer came to Honduras on January 3 and presented the idea of constructing a charter city in Trujillo to the BCIE, Juan Orlando Hernández, and Porfirio Lobo Sosa. Romer is interested in setting up and financing a demonstration project in Honduras if the government will only turn over the land to him for a few years. Juan Orlando Hernandez said of the pilot

"There are many countries that are fighting to be the site of this project. Honduras has all the possibilities to do it and the government, we are interested in doing it to benefit all the population."

It's clear that this law was fast-tracked after Romer's visit. Perhaps the government should, as Mario Argueta noted in an editorial in El Heraldo, remember previous development attempts that gave concessions to foreigners. They all failed, and were bad for Honduras.

Are Special Administrative Regions Lobo Sosa's solution to the Bajo Aguan problem?

"It Should Be Automatic"

Mario Canahuati, Honduras's Foreign Minister, says Honduras's readmission to the OAS should be automatic when the OAS next convenes in Peru on June. He currently is in the US to meet with Miguel Insulza to lobby for Honduras's reinsertion in the OAS. In a La Tribuna article, he's quoted as saying "the seventh point of the Tegucigalpa-San Jose Accord says Honduras should be reintegrated into the different forums, and nothing remains but for the OAS to fulfill its promise under the document." In Canahuati's vision, it's automatic because they've fulfilled the letter, if not the intention, of the clauses of the Tegucigalpa-San Jose Accord, so they should be allowed back in to play with other countries.

The OAS has a slightly different view. Albert R. Ramdin, the Assistant Secretary General of the OAS, said that the OAS “continues to seek solutions”, and “supports the efforts started by the governments of Central America to create the necessary conditions for the readmission of Honduras to the Organization”.

The OAS determined last July, under Article 21 of the Democratic Charter, that there had been an "unconstitutional interruption of the democratic order of a member state", and that diplomatic initiatives to correct the situation had failed. More than two-thirds of the member countries voted to suspend Honduras. Although suspended, Article 21 still required that Honduras uphold all its OAS obligations, including human rights obligations.

Under Article 22, restoration may be proposed, once the situation is resolved, by the Secretary General of the OAS (Miguel Insulza) or any member state, and will require that two-thirds of the member countries vote in favor of restoration.

You see the problem. While the United States, and several Central American countries are working for Honduras's readmission as a member in good standing in the OAS, there are other countries that have expressed concerns. These countries, including most of South America and Mexico, remain uncertain about whether Honduras should be readmitted at this time.

Honduras hasn't exactly complied with its human rights obligations as required under Article 21. It was added to the OAS Human Rights organization's "black list" in April. It also is not clear that even if the will was there to uphold human rights on the part of the government, that the judicial system has the required independence. Human rights violations aren't grounds for suspension, but they certainly will be taken into account in discussing reincorporation. While the US would like to say the situation is resolved and that Porfirio Lobo Sosa was democratically elected, as Hillary Clinton said in Costa Rica last month, there are other governments that have a different view.

Why is all of this important? What's at stake is the unlocking of aid from the World Bank and International Monetary Fund. Both have stated in the past that Honduras being reincorporated into the OAS would be required before funding could actually be restored. That funding, along with money from the BCIE and BID is critical to staving off a complete collapse of the Honduran economy.

The OAS discussions in June in Lima, Peru should be interesting.

Unspeakable Truths

Ramon Custodio, the Human Rights Commissioner, sounded the alarm yesterday that the truth commission being formed by Eduardo Stein might be considering suggesting social and legal reforms as part of its mandate. Stein confirmed yesterday that it was possible the commission would look into suggesting reforms with the idea of preventing future crises.

Custodio's comments, and those of others, come following the announcement late this week that Stein would head a truth commission made up of 3 international representatives and two Honduran representatives, and that one of those Hondurans would be from the Frente de Resistencia with President Lobo selecting the other. Stein suggested the international representatives be ex-foreign ministers or jurists well versed in issues of human rights. While Stein suggested names in his report to Porfirio Lobo Sosa, he made it clear that President Lobo would be making the selection of representatives on the commission.

Maria de Bográn, presidential designate and advisor to President Lobo Sosa, said yesterday that Stein's report to the President

told us about making an analysis of some reforms, not precisely constitutional; it spoke of some reforms of social laws that needed to be made clearer or better.

She stated that the position of the President, and the Government, is that the commission has no mandate to suggest constitutional reforms.

Custodio, however, asked if this wasn't a continuation of the cuarta urna, the fourth ballot box whose proposal triggered this constitutional crisis. He inferred that the truth commission would be suggesting changes to the "written in stone" articles of the Constitution, including the prohibition on re-election of the president:

If what we removed with the cuarta urna they're going to impose on us with a yoke hidden in the truth commission, then Mr. Stein is presiding over and coordinating a constitutional commission.

Custodio went even further, accusing Stein of not being impartial:

Mr. Stein has in his background his bias about the Honduran crisis because he was part of the commission which declared that the Honduran elections were not legitimate and called at the time for the reincorporation of Mr. Zelaya as President of the Republic. So he is a person representing attributions that perhaps are not appropriate for the impartial, ethical carrying out (of the mandate of the truth commission) and could affect the relative stability that we've gained.

I think there is too much indulgence of the OAS. They're the cause of this problem...

Custodio's is not the only voice sounding the alarm. Federico Álvarez, an ex-president of the Central American Bank of Economic Integration (BCIE in Spanish) thinks things are moving much too fast, and that the truth commission needs commissioners who are questioned by no one:

We could have looked for investigators of international reputation, a group of constitutional law professors, who would be happy to be here with no interests and no links to anyone (involved in the crisis), and people would be more calm.

Álvarez suggested that there needs to be a separation between what Hondurans need to do to reform their constitution with the goal of strengthening their democracy, and what the truth commission might want to do with the constitution:

The only thing we know is what Stein said, and he said that it is necessary to revise the process by which a president is removed from office, ignorant of what article 239 of our constitution says.

Álvarez had already come out against Stein before recent reports about the nature of the proposed Truth Commission. In a February 6 editorial in La Tribuna he stated that Stein was disqualified by being a representative of a government (Guatemala) that had passed judgment on what happened in Honduras. This is not precisely true. While the government of Guatemala has expressed an opinion, it was not the government of which Stein was a part, since he was a member of a prior administration. Álvarez seems to be referring to Stein's membership in the Carter Center's mission to Honduras in October, 2009, to know the truth of the human rights violations and decide whether conditions were apt for an election.

So why this manifest anxiety over suggestions of reforms? How did Maria de Bográn's comment about the report suggesting the commission might consider suggesting reforms to social laws transform itself, in the representation of Custodio and Álvarez, into constitutional reforms and the suggestion that the truth commission was the feared "constituyente" that the cuarta urna might have initiated?

One possible cause of anxiety-- not openly alluded to by Federico Álvarez or Ramon Custodio-- could be Stein's proposal that one representative on the commission be from the Frente de Resistencia. That appears to be almost literally unspeakable: to date no Honduran press coverage of this part of Stein's proposal has appeared. On February 7, Juan Barahona, a leader of the Frente de Resistencia, rejected the Truth Commission itself as "pure show". But since the proposal by Stein that a representative of the Frente be included, there has been no further comment, and no official communication. Of course, since that selection is to be made by Porfirio Lobo Sosa, it is hard to imagine that he or she would be a legitimate representative of the popular resistance. The Honduran press and officials-- including Ramon Custodio in an interview with Spanish media-- continue to claim that the inclusion of former UD presidential candidate César Ham in Lobo Sosa's cabinet was equivalent to representation of the resistance, a position explicitly disclaimed by the Frente Nacional de Resistencia Popular itself in a communique on January 26.

In this case, it seems, silence is golden. As with all monsters in closets, the fear has to be expressed somehow. So Custodio and others like him pass over in silence the real threat of having a Truth Commission actually hear from opponents of the coup and critics of the pretense that the present government is free of entanglements with it. But their imaginations run directly to where they fear listening to the people might take an independent commission: the absolute need for constitutional reform.