The Mesoamerica Project, The Energy Policy of The Guatemalan Government and The Extractive Industry and Their Link To Human Rights Abuses

THE MESOAMERICA PROJECT AND THE ENERGY POLICY OF THE
GUATEMALAN GOVERNMENT, AND THEIR LINK TO HUMAN RIGHTS

ABUSES
By Christopher Moye
Context
In 1954 the Social Democratic elected Guatemalan Government promised land reform to millions of poverty stricken rural
farmers. The strategy was to buy land from wealthy land owners like the multinational United Fruit Company, in order to then
equitably redistribute it to those in need. This policy resulted in an American backed coup, whose commercial interests and anti-
communist sentiments were respectively threatened and sparked by this land redistribution, eloquently described in Stephen
Kinzer and Stephen Schlesinger‟s book Bitter Fruit1, thus ushering in an era dominated by military dictatorships and internal
armed struggle - the guerillas on one side, the military/oligarchy on the other, with the indigenous communities trapped in the
middle. As a result, more than 200,000 civilians, predominantly indigenous, were killed by the military, pointing to one of the
worst cases of Genocide in Central and Latin American history2. Then, after 36 years of internal conflict, both sides signed the
Peace Accords in 1996, putting an end to the Cold War logic that had dominated political discourse during that time. The Peace
Accords did not stipulate that military officers were to be brought to justice, with many of the higher strata then entering into the
civil political arena through the formation of political parties, including the General Rios Montt, famous for his „scorched earth‟
policy of 19823. The failure to properly implement the Peace Accords was continued by the policies of successive governments,
all of which ushered in the era of privatization, seen most flagrantly under the leadership of the 1996 President Alvaro Arzu. In
his United Nations report, Roman Krznaric claims that as a result Guatemala suffered. Firstly income disparities increased: “In
1989 the poorest 20% of the population received 2.7% of national income, a figure which fell to 1.7% by 2002. In contrast, in
1989 the richest 20% of the population received 62.7% of national income, increasing to 64.0% in 2002.4” Rates of poverty
failed to improve: “In 2000 56% of the population (some 6.4m people) lived in poverty, with around 16% living in extreme
poverty”. The situation worsened in relation to 1996, with “extreme poverty rising to 22% in 2002. 5” Currently, “an estimated
2% of the population own 72% of agricultural land, which is used mostly for plantations of sugar, coffee, bananas and rubber, in
addition to cattle ranches. Their properties average around 200 hectares in size (although some exceed 900 hectares) and
dominate fertile regions such as the Southern Coast.”6 Krznaric continues: “More recent estimates are based on surveys of
particular regions but suggest that land inequalities have further increased. For instance, in 1979 22% of rural heads of household
were landless, while in 1998 this figure was estimated to have risen to 33%. In the early 1990s around half of agricultural land
(belonging mostly to large landowners) was thought to be unused or uncultivated. The indigenous population face particular
problems of land access. World Bank analysis demonstrated that „individuals in rural areas in the lowest income ranges are
owners of the smallest parcels, but within each income range, the indigenous have the greatest probability of having the least
land‟”.7 Finally, in 2007 Guatemala voted in the Social Democrat Alvaro Colom in opposition to the rightwing military candidate
Otto Perez Molina. It was seen as a vital day for the indigenous population, whose rural support had ensured Colom his victory.
Colom had acknowledged the historic oppression they had suffered and had promised to address their economic, social and
cultural needs with a new social democratic paradigm of economic development not seen since 1954.8 Since then, aggressions
against human rights defenders have soared9, crime figures have risen to unprecedented levels (some 6300 Guatemalans were
murdered in 2008, as many as in Mexico, a country with nine times the population)10, impunity has worsened11 and there has
been a proliferation of mining permits for the exploitation of resources found on indigenous ground (see Annex) as well as an
increase in grants for the construction of hydroelectric plants12; many of these potentially affecting the land of indigenous
communities who rely on subsistence agriculture for survival. In addition, military bases have been placed in these strategic
locations to safeguard them, indicating the extent to which the current government distrusts and fears local community
opposition to the planned projects and harping back to an earlier age of military dominance. 13 In this sense history is repeating
itself, adapting to a modern context, where Guatemala is analogous to a Coliseum constructed over the bodies of millions of
1
Kinzer, Stephen; Schlesinger, Stephen; Bitter Fruit; The Story of the American Backed Coup in Guatemala,
http://www.hup.harvard.edu/catalog/SCHBIR.html, 1982.
2
United Nations Refugee Agency, http://www.unhcr.org/refworld/country,,MARP,,GTM,4562d94e2,469f3a874a,0.html, 2003.
3
Aaronovitch, David; The terrible legacy of the Reagan years, The Guardian, June 8, 2004.
4
United Nations Systems in Guatemala (2003) Guatemala: Una Agenda Para El Desarrollo Humano (Guatemala City). Human Development
Report, 229, 2003,
5
United Nations Systems in Guatemala 2003, 228.
6
World Bank (2003) „Poverty in Guatemala‟, Report No. 24221-GU, February 20, 2003, World Bank (Washington).
7
Krznaric, Roman; The Limits on Pro-Poor Agricultural Trade in Guatemala: Land, Labor and Political Power; United Nations Development
Program, Human Development Report, page 5, 2005.
8
BBC news, http://news.bbc.co.uk/1/hi/world/americas/7081312.stm, November 2007
9
Organization for the Protection of Human Rights Defenders (UDEFEGUA), http://udefegua.org/
10
International Crisis Group, on evidence to the House Committee on Foreign Affairs‟ Subcommittee on the Western Hemisphere., Washington,
DC, En caché, 9 June 2009
11
International Crisis Group, on evidence to the House Committee on Foreign Affairs‟ Subcommittee on the Western Hemisphere., Washington,
DC, En caché, 9 June 2009
12
Solano, Luis: “El negocio de la electricidad: transformación de la matriz energética y sus impactos”, El Observador No 16, diciembre 2008 –
enero 2009, pagina 33.
13
Centre de Estudios de Guatemala (CEG), http://www.ceg.org.gt/fotos/Situacionseguridadjusticianov09.pdf, page 19, 2009
2
indigenous peoples and then used as a ring within which different forms of imposed power - economic, military, oligarchic, and
political - compete for supremacy. The architecture of this metaphorical Coliseum refers to the legacy of western influence,
providing the backdrop to the gladiatorial struggles that these different forms of imposed power play out between themselves and
against others, creating complicated internal divisions from which to direct the external struggle. The article seeks to answer a
fundamental question through the prism of a specific development project: have the aforementioned sectors of imposed power
been radically altered relative to the power of indigenous communities so that these have succeeded in diminishing the authority
of its competitors, or does the new, supposedly benevolent, economic paradigm of the current Government genuinely reflect the
interests of indigenous communities?
Introduction
The development project referred to above is the Xalalá project; a business venture promoted by a confluence of international
and national interests (both political and economic) and by the Guatemalan Government through the regional Mesoamerica
Project agreement. It has as its aim the construction of a hydroelectric plant in between the Guatemalan Departments (like states)
of Quiché and Alta Verapaz, thus responding to the energy needs that those same interests define as crucial for the development
of Central America. The article begins by describing the type of development promoted by international financial institutions,
through the regional Mesoamerica Project in Central America, and how this relates to the regional energy sector development
promoted by the Guatemalan Government as well as what mechanisms of indigenous participation are involved in this Project. It
then seeks to demonstrate how this international financial investment is being used primarily to attract multinational companies
from the extractive sector and from the energy sector, through partnerships with the elite wealthy sector of Guatemala, with
incentives provided by the Mesoamerica Project, and all at the expense of local communities whose interests are considered only
as a by-product of this convergence of economic power. Subsequently, the article focuses on the Xalalá Hydroelectric Project
(XHP) as a specific example of this convergence of economic power, as incentivized by the Mesoamerica Project, and how this
has failed to incorporate the effective participation of civil society in such an initiative, despite mechanisms of participation being
put in place. The article concludes with an analysis of how this development, suffused with neo-liberal ideology and promoted
from above, comes into conflict with indigenous conceptions of development promoted from the grassroots level, thus
demonstrating that a profound debate on what sort of development should be had in Guatemala was never concluded to the
satisfaction of those likely to be directly affected by such development: namely the indigenous population. While 1954 thus
displayed the power of American commercial and governmental interests over Guatemala, 2010 demonstrates the extent to which
the influence of external power has proliferated and diversified to include other commercial and political interests, whilst still
enacting the same principle that underlined the power struggles of the past: that those with economic, political and military
power can secure their interests at whatever cost to those who do not have such power, and who are only marginally included in
the decisions that influence the direction that that power will take.
DEVELOPMENT FROM ABOVE
The Mesoamerica Project and its international backers
The Mesoamerica Project is an agreement signed by the Central American countries, Colombia and Mexico with the aim of
creating joint infrastructure projects, schemes of regional integration and other ventures across a range of economically active
areas in order to entice foreign investment as a means to attain globally competitive development. The Mesoamerica Project
defines its concept of development through its Mission and Vision statements “Mission: to contribute toward sustainable
economic growth and to the preservation of the environment and of the natural resources of the region, coordinating and
accumulating efforts between the Mexican government and the Central American countries in a climate of respect for
sovereignty,” while its vision for 2011 and 2015 is the successful “increase of the productive and competitive capacities of its
people and economic organizations,” as well as figuring in “global markets with a collection of products and services” 14
respectively. The implementation of these ends is done through the structural organization of the Mesoamerica Project, which is
composed of the Summit of Heads of State, the Executive Committee, the Directing Committee and the National Offices. The
“Executive Committee is comprised of eight committee members designated by each President to promote and coordinate the
work of the Project in their respective countries. Each of the committee members has been assigned the responsibility of leading
one initiative”15 whose development is deemed crucial for the enticement of foreign investment to that area, as seen below:
Belize – Climate Change
Colombia – Tourism
Costa Rica – Transport
14
Proyecto Mesoamérica, http://www.proyectomesoamerica.org/, 2009.
15
Proyecto Mesoamérica, Organigrama del Proyecto Mesoamérica, http://www.proyectomesoamerica.org/main-pages/organigrama.htm, 2009
3
El Salvador – Integration of the Telecommunication Services
Guatemala – Energy
Honduras – Facilitation of Commercial Exchange and Competition
México – Human Development
Nicaragua – Sustainable Development
Panamá – Prevention and Mitigation of Natural Disasters16
The financing of each initiative, detailed in the graph provided below, gives some indication of the development priorities that
the Project Mesoamerica wants to promote through the enticement of foreign investment:
Plan Puebla Panamá: Recipe for Development or Disaster17
Notice how Transport, Energy and Trade Facilitation are prioritized over Human and Sustainable Development, a point I shall
return to later. The investment and financing for each of these initiatives comes from a diversity of sources. According to a study
done by InterAction, an international NGO composed of 180 member organizations worldwide, the Mesoamerica Project is
financed by regional and international interests, with a substantial portion of its funds coming from the member countries and
“21% from the Inter-American Development Bank (IDB)”18, which makes it the single largest investor of the Project, whilst
another sizeable portion comes from the private sector, meaning that investment interests that do not represent the voters of the
region exceed the financial input of Central American governments, who in theory represent their voters, as one can see below19:
16
Proyecto Mesoamérica, Organigrama del Proyecto Mesoamérica, http://www.proyectomesoamerica.org/main-pages/organigrama.htm, 2009
17
OpCit, McElhinny, page 5
18
McElhinny, Vince and Nickinson, Seth; InterAction; "Plan Puebla Panamá: Recipe for Development or Disaster?” http://bic.caudillweb.com/en/Project.Resources.16.aspx y
Plan Puebla Panama: Recipe for Development or Disaster, 2005, page 17
19
Ibid, McElhinny, page 16
4
The power of representative democracy at the Mesoamerica bargaining table is thus inferior to any possible union of private and
foreign interest, compromising the decisions that can be made in representation of ordinary voting Guatemalans and emphasising
the interests of those who hold investment capital. The fact that the IDB is the single largest investor is also significant, given
that the borrowers who finance the IDB are the member states of the European Union, the USA, Canada, Japan, Israel, Croatia,
Switzerland, China and South Korea. The USA has the largest single voting power within the IDB, with 30% of the vote20, in
accordance with the size of its investment, as well as holding a veto power in the Board of Governors over all decisions that
relate to capital increases and Funds of Special Operations (FSO‟s), due to the 75% majority required to pass such resolutions21.
In addition, according to a study done by the Political Science Department of Nevada University, the USA also “holds
substantially more influence in the IDB‟s Board of Executive Directors than its voting weight suggests”22 and is thus able to
“dictate IDB policy on major issues and lending to particular countries.”23 The fact that the World Bank (WB) is a contributor to
the Mesoamerica Project also adds weight to the influence of the USA on how funds are used for development in the region, due
to the fact that the USA holds 16% of the vote over WB constitutional issues24 when an 85% majority is required to pass changes
to that constitution, allowing the US to influence the philosophy that underpins the use of WB funds. This provides us with some
indication as to what sectors have more power on the bargaining table of the Mesoamerica Project, in turn allowing us to better
understand why certain initiatives are prioritized over others. Thus international governmental interests, and in particular the
USA, allied with international financial institutions and private investment interests (whose names have not been disclosed by the
Mesoamerica Project) have considerable say over the type of development promoted by the Mesoamerica Project, implying an
ideological premise that is shared between these political and economic interests and from which development in the Central
American region springs. What is this ideology?
Neo-liberalism, the Central American Free Trade Agreement and the Mesoamerica Project
InterAction defines this political affiliation between member states of the Mesoamerica Project and the international interests that
help fund it as a “neo-liberal reform agenda,”25 whilst David Harvey, a New York University Professor, in his work “A Brief
History of Neo-liberalism” defines this philosophy as “the doctrine that market exchange is an ethic in itself, capable of acting as
a guide for all human action,” whose implementation has “depended upon a reconstitution of state powers such that privatization,
finance, and market processes are emphasized” while state “interventions in the economy are minimized” and “the obligations of
the state to provide for the welfare of its citizens are diminished.”26 The link between this definition of neo-liberal philosophy
and the Mesoamerica Project is then further explored by InterAction when analyzing proof that the Project is a function of the
U.S.-Central America Free Trade Agreement (CAFTA): “Many of the proposed investments share a common parlance with the
trade liberalization discourse, which refers to them as trade facilitation or more recently, as competitiveness enhancing. Indeed,
there is an intimate complementarity between the PPP (Mesoamerica Project) and Free Trade Agreement agendas. Specifically,
in both cases the ultimate goal is to lower the barriers to the free flow of goods and services within and through Mesoamerica. In
some cases, PPP initiatives that entail policy reforms advance important concessions in trade liberalization that would otherwise
have to be negotiated at the formal bargaining table (i.e. intellectual property rules, deregulation, privatization, and the Singapore
issues).”27 This link is strengthened by the fact that in the 48th point of the statute Declaration of the 10th Summit of the Tuxtla,
Villahermosa, Mexico, Dialogue and Agreement Mechanism of the Mesoamerica Project, a specific reference is made to the
CAFTA agreement, where the signatories “confirm the importance of the CAFTA agreement on the region, for which it is
instructed that the Ministers in charge of foreign trade follow up the fulfillment of the established agreements and the optimal
administration of those same instruments with the purpose of maximizing its use.”28 Remember, as seen in the above graph, how
Human and Sustainable Development are placed below Transport, Energy and Trade Facilitation needs, thus acceding to the
afore defined neo-liberal philosophy that prioritizes finance and market processes above state oriented welfare programs –
another indication of how the dominant private interests that fund the project set the agenda. Four years after the ratification in
Guatemala of DR-CAFTA, the impact on the economy of the country has been ambiguous, particularly for the rural sector.
According to a study by the Coordinator of NGOs and Cooperatives (CONGCOOP) in Guatemala the trade deficit with the USA
reached a negative balance of 406 million dollars in 2006, and, more generally, the treaty has caused imports to grow at the
20
Inter-American Development Bank (IDB), http://www.iadb.org/aboutus/IV/go_voting.cfm?language=English, 2009
21
Strand, Jonathan, R; Department of Political Science University of Nevada, Las Vegas; “Measuring voting power in an international institution:
the United States and the Inter-American Development Bank”, http://www.springerlink.com/content/m9lb3fbbpcjfr3nr/fulltext.pdf, 2003, page 22.
22
Ibid, Strand, page 21.
23
Ibid, Strand, page 21.
24
Wade, Robert ; Review of International Political Economy 9 (2): 215–243; "U.S. hegemony and the World Bank: the fight over people and
ideas".. doi:10.1080/09692290110126092, (2002).
25
Op. Cit, McElhinny, page 49.
26
Harvey, David; A Brief History of Neo-liberalism; Oxford University Press, USA, 2005, description.
27
28
Proyecto Mesoamérica, Declaración de la X Cumbre del Mecanismo de Diálogo y Concertación de Tuxtla, Villahermosa, México, 28 de Junio
2008, 2008.
5
expense of exports. The country also lost food security as a result of the liberalization of tariffs for staple grains, imposed by DR-
CAFTA and the conventions of the World Trade Organization. According to the calculations of the Institute of Agrarian and
Rural Studies (IDEAR – referenced in the report), in the last year 90% and 70% of the national consumption of rice and maize
respectively, came from imports, while almost 100% of wheat flour is now imported from overseas. These crops were
traditionally grown within Guatemala largely by indigenous subsistence farmers, who now struggle to make a living because of a
fall in sales, leading to poverty and destitution and to an increasing lack of resources that they can use to respond to emergencies.
This fact can be confirmed by the recent report of the National Coordinator for the Reduction of Disasters (CONRED), which
calculated that 2628 families in the Department of Chiquimula for example, had lost 762,729 Quetzales worth of white maize as
a consequence of drought (around $95,000)29, accounting for a 50% reduction in the ordinary production of that crop30 and
resulting in 43% of children under the age of five affected by malnutrition31. Sales of staple food lead subistence farmers to hold
a surplus of capital, enabling them to react to crisis, and this growing importation of staple food has affected precisely this
ability. Paradoxically, the surge in the importation of staple foods in Guatemala has not led to significantly lower prices for
consumers, as confirmed by the UN's World Food Programme's analysis of staple food prices of 2009 and covering five years,
where they state that “only Colombia, Guatemala, Haiti, Nicaragua and Peru are still experiencing prices above their long term
averages.”32 Thus the argument that trade liberalisation would lead to a decrease in prices, increasing consumption of staple
foods and decreasing poverty is not borne out by the evidence, and without financial reserves to help them in times of crisis,
subsistence farmers, predominantly indigenous, will suffer more33. Faced with this, CONGCOOP considers it essential that basic
foodstuffs should be considered as public necessities, not subject to the fluctuations of the market, in order to avoid vulnerability
to the impact of the world financial crisis and to avoid the further endangerment of the population‟s right to food. 34 The fact that
such considerations were not properly evaluated in the negotiations is a measure of the attitudes that prevail with regard to the
indigenous communities in Guatemala. Using DR-CAFTA as a model of development for the Mesoamerica Project thus expands
the scope and implementation of the neo-liberal principles defined above – with serious repercussions for poor Guatemalans.
Labor standards and DR-CAFTA: a pre-cursor to the likely effects of the Mesoamerica Project
In addition to the aforementioned negative economic effects, this continued neo-liberal agenda has potentially grave
consequences for Guatemalan workers, because we have already seen the penalties incurred by the Guatemalan labor force due to
DR-CAFTA‟s shunning of established trade rules usually mediated through the World Trade Organization. An example of this
can be demonstrated by the omission of the Generalized System of Preferences (GPS) in the DR-CAFTA agreement,
summarized in a report by the US Labor Education in the Americas Project: “Under GSP, duty-free trade benefits provided to
countries are conditioned on countries taking steps to improve internationally-recognized worker rights. Failure to take steps has
the potential to threaten trade benefits for exporters. Under CAFTA, countries are only required to enforce their current labor
laws. Failure to do so can lead only to a fine against the violating government, a fine which is then returned to the government to
improve enforcement.”35 The fears that labor rights would not be met under the CAFTA agreement have since materialized, as
the influential Council on Hemispheric Affairs has pointed out: “Nothing gained on trade, agriculture loses out,” whilst it “is
directly contributing to the daily strife facing Central American workers by promoting an economic arrangement that depends on
low wages and poor labor standards, without ensuring reliable protections for workers‟ rights” whilst also creating a “race to the
bottom, with countries all over the world striving to offer the cheapest labor force, and the least protections against corporate
exploitation of workers, communities, and the environment”.36 All of this is confirmed in detail by the report of the International
Labor Organization‟s mission to Guatemala in February 2009, where they signaled their concern regarding the general lack of
independence of the judiciary and of government bodies when dealing with labor issues, as well as the appalling record on labor
rights of the Guatemalan Government37. And indeed the civil society groups who have suffered the most persecution over the last
five years in Guatemala have been trade unionists. According to a report posted by Peace Brigades International: “During the
past five years trade unions have experienced constant persecution and acts of violence. More than forty union workers were
29
National Coordinator for the Reduction of Disasters (CONRED), Communities of the dry corridor, Guatemala, 2009.
30
El Periódico, Inseguridad Alimentaria, Guatemala, 01.09.2009.
31
Syria Draught Response, “Response, Food Security & Acute Malnutrition Appeal”, March 2010.
http://redhum.org/emergencias2.php?emergencia=321
32
United Nations World Food Programme, Trends in Staple Food Prices in Selected Vulnerable Countries, Issue No 5, October 2009
33
United Nations Office of the High Commissioner for Human Rights (OHCHR) Baja Verapaz, Chiquimula, Izabal, Jalapa, Jutiapa, El Progreso,
South of El Quiché and Zacapa make up the dry corridor (OHCHR), Report of the OHCHR office for Guatemala, 2009.
34
Ozaeta, Juan Pablo; “REPORTE TRIMESTRAL Cuatro años de ratificación del TLC-CAUSA, frente a un modelo económico colapsado”;
Coordinadora de ONGs y Cooperativas (CONGCOOP); http://www.congcoop.org.gt/design/content-upload/REPORTE%20CAFTA.pdf
35
US Labor Education in the Americas Project, “Worker Rights Under the New Guatemalan Government”,
http://www.usleap.org/files/USLEAPReportback2008.pdf, August 2008, page 2.
36
Council on Hemispheric Affairs, “Dealing with a Bad Deal: Two Years of DR-CAFTA in Central America”, http://www.coha.org/dealing-with-
a-bad-deal-two-years-of-dr-cafta-in-central-america/, Nov 2008.
37
International Trade Union Conference, http://www.ituc-csi.org/guatemala-a-dysfunctional-labour.html, 2009.
6
killed between 2005 and 2010 in Guatemala. According to statistics from the Interior Ministry, the National Civilian Police and
the Guatemalan Indigenous and Campesino Trade Union Movement (MSICG), 2009 was the worst year with 16 union members
killed. During the same period (2005-2010), 132 union members suffered threats and attacks, with the majority (76 cases) also
taking place in 2009. According to the Committee for Trade Union Freedom, 93% of the workers killed were “in conflict due to
complaints they had made relating to labor rights or access to natural resources”. The same source indicates that nine of every 10
workers killed were members of MSICG. As a result of the violence experienced in recent years, nearly 200 union members are
currently in exile.”38 The International Trade Union Confederation has also written a report on labor rights in Guatemala in which
they claim that the country has one of the worst records in the world relative to this issue 39. All of the above is happening with
the direct knowledge of the United States, whose Trade Representative, Ambassador Ron Kirk, has announced that the US will
file a case against Guatemala for labor rights violations40. We will see if this complaint leads to improved labor standards. The
Mesoamerica Project, suffused with the same neo-liberal ideology that drove DR-CAFTA, thus potentially bypasses and further
complicates the ability to lobby for greater labor rights due to the various mechanisms that powerful economic agents can now
use to trade in the region freed of established ethical codes. These problems occur in a country that has a 10.4% tax to GDP
ratio41, where the UK, for example, has a 37.3% ratio42, acceding to the neo-liberal idea of a reduced state whose only function is
to incentivize investment and to subsidize economic growth for powerful economic agents without properly taking into account
the social problems derived from the implementation of such a strategy, and highlighting the extent to which neo-liberal ideology
(as defined above) has trodden over alternative conceptions of development (indigenous subsistence farming) and of how it has
defined the Guatemalan political and economic landscape. There is good reason for this: according to the US State Department‟s
Guatemalan 2009 Investment Climate Statement “the major Guatemalan incentive program, the Law for the Promotion and
Development of Export Activities and Drawback, is aimed mainly at "maquiladoras" – mostly garment manufacturing and
assembly operations - in which over half of production inputs/components are imported and the completed products are exported.
Investors in this sector are granted a 10-year exemption from both income taxes and the Solidarity Tax, Guatemala‟s temporary
alternative minimum tax. Additional incentives include an exemption of duties and value-added taxes on imported machinery,
and a one-year suspension (extendable to a second year) of the same duties and taxes on imports of production inputs and
packing material. Taxes are waived when the goods are re-exported. The waiver for customs duties, value added tax and income
tax was scheduled to expire on December 31, 2007, with a phase out period of two years. However, in July 2007, the WTO
adopted a decision that allows the WTO Subsidies Committee to continue to grant annual extensions of the transition period of
export subsidies to Guatemala and other countries until the end of 2013, with a final phase out period of two years.”43 It seems
that if Guatemala is to be „investor friendly‟ and competitive, low tax receipts are seen to be a necessity, never mind the extent to
which this contributes toward the harsh poverty figures alluded to above. In sum, it is through the aforementioned responsibilities
that the Mesoamerica Project thus influences development in the signatory countries, always underpinned by the influence of
international private and state orientated investments and all bound by a common, neo-liberal philosophy, diverging only within
the confines that this philosophy allows, the implementation of which has thus far not helped resolve the major social and
economic problems referred to earlier on and which the majority of Guatemalans face on a daily basis. How can civil society
influence the development proposals that stem from the interests surrounding the Mesoamerica Project so as to improve their
bargaining power, as well as their quality of life, and so as to protect them from possible future harmful effects?
Mechanisms of civil society participation in the development promoted by the international interests and by the
Mesoamerica Project
One of the functions of the Executive Committee of the Mesoamerica Project is to “establish the pertinent alliances with the
private sector, academics and civil society, in accordance with its objectives.”44 The participation of civil society in the
Mesoamerica Project is assured through a “Consulting Council” that should be “composed of the interested entities of the
Consulting Council of the Central American Integration System” (CC SICA) and “by all those organizations that the Executive
Committee feels should participate in the Council.”45 The CC SICA was initially formed from the signatory countries of the
Central American Integration System (SICA), another regional institution set up to facilitate coordination between member
38
Peace Brigades International Guatemala, Monthly Information Package, April 2010, http://www.pbi-
guatemala.org/fileadmin/user_files/projects/guatemala/files/english/MIP_No._79.pdf, pages 1-2.
39
International Trade Union Confederation, “Annual Survey of violations of trade union rights,” 2009, http://survey09.ituc-
csi.org/survey.php?IDContinent=2&IDCountry=GTM&Lang=EN
40
Legal Brief, US files labour rights case against Guatemala, Tue 03 August 2010, www.legalbrief.co.za/article.php?story=20100803084859437
41
U.S. Department of State, Background Note: Guatemala, http://www.state.gov/r/pa/ei/bgn/2045.htm
42
Adam, Stuart; Browne, James; A Survey of UK tax System; Institute for Fiscal Studies, http://www.ifs.org.uk/bns/bn09.pdf, April 2009, page 3
43
US State Department, 2009 Investment Climate Statement – Guatemala, http://www.state.gov/e/eeb/rls/othr/ics/2009/117436.htm, Feb 2009
44
Proyecto Mesoamérica, Funciones y Estructura del Proyecto Mesoamérica,
http://portal2.sre.gob.mx/mesoamerica/index.php?option=com_content&task=view&id=6&Itemid=20, 2009
45
Proyecto Mesoamérica, VI CUMBRE DEL MECANISMO DE DIALÓGO Y CONCERTACIÓN DE TUXTLA, ACTA QUE INSTITUCIONALIZA EL
MECANISMO DEL PLAN PUEBLA - PANAMÁ, GRUPO TÉCNICO INTERINSTITUCIONAL DEL PLAN PUEBLA – PANAMÁ, 25-03-04, Decimo Sexta pagina 6.
7
states, and has now been transposed onto the Mesoamerica Project.46 It is composed of various sectors of civil society from the
signatory countries of the Mesoamerica Project here listed: Organizations of Producers and Services, Organizations of the Labor
Sector, Chambers of Commerce, Academic Sectors, Community Organizations and Organizations of the Decentralized Sector.
The indigenous communities of Central America, for example, are represented within the sector denoted as „Community
Organizations‟ through the membership of the Indigenous Council of Central America (CICA) in the CC SICA. Each sector has
its own representatives within what are called national chapters. The national chapter of community organizations of the
Guatemalan CC SICA, for example, is comprised of 32 representatives from civil society, including well known national
indigenous movements like Waqib Kej and national unions like the Central Workers Union of Guatemala (CGTG).47 In order to
participate in the CC SICA and therefore in the discussions of the Mesoamerica Project, civil society must fulfill the following
criteria:
Be an organization of Central American origin or from another country incorporated into the SICA, with active membership and
with regional projection and composition as well as having its own statute.
Have ends that do not contradict the objectives, purposes and principles of the SICA.
Be of a regional Central American character; a demand which must be fulfilled by having entities that belong to at least four
member states of the SICA, as well as being authorized to represent such entities.
Have a recognized trajectory and represent a significant number of national entities associated with the sector within which it
operates its regional functions, and that it represents a substantial number of individuals.
 Have a regional office and an assembly or other organ within which the decisions are made.
Be authorized to make regional proposals on behalf of its members through authorized regional representatives. Each institution
must designate as a liaison, a legally entitled representative who must be of Central American nationality and who must have a
substitute.48
Needless to say that according to these criteria local communitarian social movements directly affected by a Mesoamerica
Project initiative would have to forge significant regional alliances in order to influence policy, and even then these efforts would
only be of a „consulting‟ character – in other words no executive power is given to such bodies. In Article‟s 11a and 11b of the
Consulting Statute of the CC SICA for example, its purposes are designated as functions of counseling and recommendations
before the bodies of Central American integration, like the Mesoamerica Project.49 In addition, Article 11h obligates the CC
SICA to “communicate and consult constantly with all grassroots movements and maintain information systems of all civil
society organizations”50 but beyond this aim no executive authority is granted. The role of civil society is thus reduced to that of
a passive observer who may comment or complain, but who cannot influence the course of events, unless the Executive
Committee approves. An example of how civil society can influence the Executive Committee of the Mesoamerica Project is the
example of the aforementioned Indigenous Council of Central America (CICA), whom, according to SICA information, made
proposals to the Executive Committee of the Mesoamerica Project to include “a group of governmental experts in matters of an
indigenous nature, so that they can act as advisors to the signatory countries of the Mesoamerica Project with regard to
indigenous participation.”51 Supposedly this was how the Counseling Group for Indigenous Participation (GAPIE) was set up,
which has as one of its objectives “to count on the participation of the members of the indigenous population and of ethnic
communities in the design, implementation, follow up and evaluation of the Development Plan of the Mesoamerican Project” 52 –
one of the least funded areas (see graph above). According to InterAction however, the creation of GAPIE was promoted by the
signatory governments of the Mesoamerica Project, and not by CICA itself, eventually leading to the pulling out of CICA from
the Project‟s mechanisms of participation in protest at the creation of this competitive entity. 53 Further complicating matters,
InterAction highlights that CICA itself had been criticized by indigenous groups in Mexico, Honduras and Costa Rica for not
being representative of the indigenous population in Central America and of being “co-opted”54 by the World Bank and the IDB.
Thus civil society participation in the Mesoamerica Project has significant limitations in as far as there are questions relating to
46
Sistema de la Integración Centroamericana, Estructura Organizativa del Comité Consultivo del Sistema de la Integración Centroamericana,
http://www.sica.int/ccsica/n_org_ccsica.aspx, 2009.
47
Sistema de la Integración Centroamericana, Comité Consultivo del Sistema de la Integración Centroamericana, Memoria del Taller para la Constitución del Capítulo
Guatemala del CC-SICA, http://www.sica.int/busqueda/Centro%20de%20Documentaci%C3%B3n.aspx?IDItem=19802&IdCat=32&IdEnt=63&Idm=1&IdmStyle=1, 2 de
Septiembre del 2005, pagina 18.
48
Sistema de la Integración Centroamericana (SICA), Comité Consultivo del Sistema de la Integración Centroamericana
http://www.sica.int/ccsica/miembros_ccsica.aspx?IdEnt=63, 2009.
49
Sistema de la Integración Centroamericana, Comité Consultivo del Sistema de la Integración Centroamericana, Estatuto Consultivo del CC-SICA, 31-08-07.
50
Sistema de la Integración Centroamericana, Comité Consultivo del Sistema de la Integración Centroamericana, Estatuto Consultivo del CC-SICA, 31-08-07.
51
Plan Pueblo Panamá, Antecedentes del Grupo Asesor para la Participación Indígena y Étnica (GAPIE),
http://www.rree.gob.sv/sitio/sitiowebrree.nsf/pages/sppp_gapie, 2004
52
Plan Pueblo Panamá, Portal Oficial del Grupo Asesor para la Participación Indígena y Étnica (GAPIE), http://www.proyectomesoamerica.org/gapie/index.htm, 2004
53
54
8
its limited representative status. Nevertheless it is through these complex bureaucratic instruments that the Mesoamerica Project
attempts to guarantee the participation of civil society in the development that the Project defines as its Mission and Vision. In
conclusion it is important to note that the primary aim of the Mesoamerica Project, through all its initiatives and through all of its
mechanisms of participation is to “improve the quality of life of the inhabitants of the region”55 and the current Guatemalan
Government has signed up to this aim. How does this international development project specifically influence the development
of Guatemala, and do the aforementioned mechanisms of participation properly influence this development? This article will
now focus on the energy initiative of the Mesoamerica Project, which the Guatemalan Government is in charge of, and will seek
to demonstrate how this initiative is a function of the extractive industries and other commercial interests through the example of
what is called the Northern Transversal Strip project – also funded by the Mesoamerica Project. It will follow this analysis by
focusing in more detail on one of the projects that complements the Project Mesoamerica energy initiative, namely the Xalalá
Hydroelectric Project (XHP), in order to demonstrate how the mechanisms of participation failed to incorporate the desires of the
indigenous communities who are threatened with displacement should this project go ahead, and whose conception of
development differs radically to that of the neo-liberal conception currently dominating development doctrine in the region.
The Guatemalan Government and its obligations to the Mesoamerica Project

Some historical context is necessary before embarking on an explanation of the obligations that the Guatemalan Government
holds to the Mesoamerica Project relative to the energy market. The neo-liberal ideology and its domination of Guatemalan
political discourse after the collapse of Cold War politics, as argued above, can be amply demonstrated through the recent history
of the electricity market in Guatemala. In 1996, with the passage of the General Law of Electricity under the then President
Alvaro Arzu, Guatemala substantially reduced the role of the state in the provision of electricity, in which the two state entities
then charged with generating and distributing electricity, the National Institute for Electricity (INDE) and the Guatemalan
Electricity Company (EEGSA), were privatized and their tasks given over to the market, resulting in the Spanish giant Union
Fenosa gaining rights to the distribution of electricity for up to fifty years extending over 80% of the country – a virtual
monopoly. The privatization of EEGSA resulted in the selling off of its thermoelectric plants to the American Constellation
Power Development group in 1997, followed by the acquisition of its Guatemalan subsidiary by another American company
called Duke Energy in 2001. In addition, EEGSA, in 1998, then sold its shares on the international market, which was bought out
by a consortium of American, Spanish and Portuguese interests, under the name Distribuidora Eléctrica Centroamericana. The
intention of creating a competitive energy market based on thriving competition and reduced prices thus resulted, between 1998
and 2001, in a hike of electricity prices of 85% for the average consumer, and of 62% between 2001 and 2006, in turn leading to
the introduction of a „social tariff‟ and a „solidarity tariff‟ for poor consumers who use less than 100 and 50 kwh per month
respectively and who could not otherwise afford the prices. The state subsidy is paid directly to the generators and distributors of
electricity, who in turn pass it on to the specific consumers – a measure which ensures that the companies maintain sufficient
profit, since otherwise its consumer base and thus its profit margins would be depleted56. All of this is substantially detailed in
the journalist Luis Solano‟s excellent analysis of the history of the electricity market in Guatemala, from which I have borrowed
heavily (see previous footnote). Thus the market, and the possibilities always existent in market dynamics - whereby
monopolization occurs with subsequent price increases (as seen by the dominance of multinational companies in this sector with
the notable example of Union Fenosa in the electricity distribution market) - becomes the sole determinant of electricity
provision, while the role of the state is left to that of regulation and intervention when market „distortion‟ (such as excessively
high prices) takes place, in order to primarily ensure that the social effects are not too extreme. The high cost of the
implementation of this type of energy market relates not only to money, but to severe human rights abuses. The Unit for the
Defense of Human Rights Defenders of Guatemala have reported the death of two members (Evelinda Ramirez Reyes and
Octavio Roblero) of a social movement called FRENA – a resistance movement in the Department of San Marcos who arose
specifically in objection to the absurdly high costs of electricity (as distributed by Union Fenosa) which were blighting the ability
of the poor to pay their bills. Both of the victims were violently gunned down 57. Amid this violent conflict the Guatemalan
Government acknowledges that the price of electricity is too high58, but the acknowledgement focuses on the effects of high
prices on possible investment opportunities, rather than highlighting its effect on the poor. This is highlighted by the reaction to
electricity prices on the part of Guatemalan investment interests and textile industry experts, through the commissioning of a
report in which they claim that “in an efficient electricity market the hourly price of kilowatts should be $0.068 under
55
Proyecto Mesoamérica, ¿Qué es el Proyecto Mesoamérica?, http://www.proyectomesoamerica.org/, 2009
56
Solano, Luis; “El negocio de electricidad: transformación de la matriz energética y sus impactos”; El Observador No 16, Diciembre 2008 – Enero
2009, paginas 20-25.
57
Friends of the Earth International, “Justice for the assassinated Union Fenosa activists”, http://www.foei.org/en/get-involved/take-action/justice-
for-union-fenosa-activists, Feb 17th 2010.
58
Ministerio de Energía y Minas. Comunicado de prensa, 25 de mayo de 2008.
9
international standards; however in a failed market – such as the current one – this price has reached $0.1503 without the
inclusion of taxes or tariffs.”59 It was in response to this problem that the energy initiative of the Mesoamerica Project was
unveiled.
According to the web page of the Mesoamerica Project one of the aims of the energy initiative is the creation of a “Regional
Electricity Market”60 in order to promote the exchange of electricity between the signatory countries, thus creating competition
price efficiency. It is hoped that this will lead to the increased global commercial competitiveness of the region by incentivizing
foreign investment, the likes of which have thus far avoided large investments in Guatemala due to the limitation in its electricity
supply and its concomitant high cost. The projects that are included in the energy initiative are:
• The Central American Project for the Creation of an Interconnected Electricity System (SIEPAC).
• México-Guatemala Interconnection Project
• Guatemala-Belize Interconnection Project
• Rural Electricity and Energy Area
• Area for the Promotion of Renewable Energy and for the use of Biocombustibles61
SIEPAC (see the Annex for a map) for example, which “has been financed in the order of 90% by the IDB” 62, has, as one of its
aims, “the design, engineering and construction of a transmission line of 1, 790 Km of 230Kv” that passes through the Central
American region and which will count on the “secure supply of electricity of up to 300MW”63 for the “creation of a Regional
Electricity Market” and for the promotion of “private investment in large electricity generators oriented toward the regional
market, with modern technology fed by more efficient and cheaper fuels.”64 As we have seen the Guatemalan Government was
assigned the responsibility of leading this energy initiative, and it implements this initiative at the national level through the
Energy and Mining Ministry, which must “ensure, in accordance with its obligations,” the “fulfillment of the legal requirements
and international treaties signed and ratified by Guatemala in all matters relating to energy.”65 The energy policy implemented by
the current Guatemalan Government has thus far carried on the energy initiative of the Mesoamerica Project, of creating a
Regional Electricity Market, as seen in the published intention of the Energy and Mining Ministry of “converting the country into
a producer and exporter of energy for the neighboring countries, attracting investment, generating employment and changing the
generation of electricity in the country.”66 Note also, the importance of IDB finance in this project. In conclusion, the creation of
this electricity infrastructure as part of the neo-liberal Mesoamerica Project is how the State of Guatemala thus acts as a promoter
of private investment for the creation of a commercially competitive electricity sector with affordable regional energy prices.
What sectors of the energy market does the Guatemalan Government want to attract through these incentives and what is the
primary purpose of this initiative?
The usefulness of hydroelectric plants as a manner of fulfilling Guatemalan obligations to the Mesoamerica Project
The purpose of creating the aforementioned infrastructure, thus fulfilling Guatemala‟s obligation to the Mesoamerica Project,
stems partially from the utility of constructing hydroelectric plants in a country that has “38 hydrographic sources”67 of water – a
rich supply. The possibilities involved in this market thus offer major hydroelectric companies the chance of handsome profits.
Of the 1,811 Mega Watts (MW) of electricity generated by Guatemala over the 2009-2010 stationary period, 34% was generated
specifically by hydroelectricity68. According to the Spanish firm Union Fenosa, one of the largest electricity distributors in
Guatemala and holding distribution monopoly rights for up to 50 years, the country has the potential of generating “10,890
MW”69 of electricity through hydroelectric plants, thus demonstrating its enormous potential as an exporter. In addition, Sergio
Velasquez of the National Commission of Energy and Electricity (CNEE), one of the government bodies in charge of approving
all new electricity generating projects, declared that Guatemala requires an annual increment of 125MW in order to respond to
national demand, which he projects will reach an annual peak of 3,125MW in 202070. Up to the date in which this article was
59
elPeriódico “Altos costos de electricidad ahuyentan a inversionistas”, 22 de enero 2008.
60
Proyecto Mesoamérica, Energía, http://www.proyectomesoamerica.org/
61
Proyecto Mesoamérica, Iniciativa Energetica Mesoamericnana, http://www.proyectomesoamerica.org/documentos/SIEPACesp.pdf
62
Banco Interamericano de Desarrollo, Avanza Mesoamérica, 29-07-09
http://www.iadb.org/news/detail.cfm?language=Spanish&id=5534
63
Proyecto Mesoamérica, Energía, El Sistema de Interconexión Eléctrica para América Central (SIEPAC), http://www.proyectomesoamerica.org/, 2009.
64
Proyecto Mesoamérica, Iniciativa Energetica Mesoamericnana, http://www.proyectomesoamerica.org/documentos/SIEPACesp.pdf.
65
Ministerio de Energía y Minas, Administración Funcional de la Dirección General, Funciones Generales
de Energía, http://www.mem.gob.gt/Portal/Documents/ImgLinks/2008-10/814/ESTRUCTURA%20Y%20FUNCIONES%20-%20DGE.pdf, 2008.
66
Ministerio de Energía y Minas, Dirección General de Energía, Electricidad, Guía del Inversionista del Ministerio de Energía y Minas,
http://www.mem.gob.gt/Portal/Documents/ImgLinks/2009-12/1361/Gu%C3%ADa%20del%20Inversionista.pdf, 2009, pagina 6.
67
Ministerio de Energía y Minas, Dirección General de Energía, Electricidad, Guía del Inversionista del Ministerio de Energía y Minas,
http://www.mem.gob.gt/Portal/Documents/ImgLinks/2009-12/1361/Gu%C3%ADa%20del%20Inversionista.pdf, 2009, pagina 24.
68
Ministerio de Energía y Minas, Estadísticas del Subsector Eléctrico, http://www.mem.gob.gt/Portal/Home.aspx?secid=42, 2009
69
Solano, Luis: “El negocio de la electricidad: transformación de la matriz energética y sus impactos”, El Observador No 16, diciembre 2008 – enero 2009, pagina 33.
70
Rosenberg, Mica; Reuters, Guatemalan coffee farms aim to sell electricity, http://www.reuters.com/article/idUSN2425054420070725, 25-07-07
10
written the CNEE has already approved 37 new hydroelectric projects and 2 new geothermic projects, all of which will generate
an extra “1,681MW” of electricity and which will enter “into the national grid over a period ranging from 2009 to 2017.”71 If one
takes the sum of electricity generated over the 2009-2010 stationary period (1,811MW) and adds it to the expected electricity
generated from the 37 new approved hydroelectric plants and from the 2 geothermic sources (1,681MW), one can see that the
CNEE expects Guatemala to produce 3,492MW of electricity for the 2017 year, 367MW extra in comparison to the projected
national demand for 2020. If one also considers that the CNEE will probably approve many more electricity generating projects
over the next decade, it‟s not hard to see that the electricity exportation capacity of Guatemala is already being tapped into, thus
fulfilling Guatemala‟s obligations to the Mesoamerica Project of creating a “Regional Electricity Market.”72 In fact, Guatemala
already exports more electricity than it imports, with 131.9 million kWh of electricity exported in 2007 and 8.11 million kWh 73
imported in the same year, thus proving that the Guatemalan Government‟s energy policy is not one that merely responds to
national demand, but to regional demand.
The purpose of promoting the construction of hydroelectric plants in Guatemala

This increase in hydroelectric electricity may sound good from an environmental perspective if it was genuinely the intention of
the Guatemalan Government to reduce its carbon emissions through these projects, yet this does not appear to be so easily
inferred from the facts. Guatemala has publicly announced its decision to increase its production of petroleum from 14,000
barrels a day to 80,000 barrels a day by 2011 for example74. Undoubtedly some of this will be exported; but one can also see that
a large amount will be used to provide for the energy requirements of emerging industries, demonstrated by the fact that from the
moment the Colom Government came into power it increased the number of mining permits, thus increasing its potential carbon
output due to the associated energy costs this industry requires. Take a look, in the Annex section of this report, at the graphs
provided by the Energy and Mining Ministry for the permits issued from 2003 to 2007, compared to the number of mining
permits the Colom Government considered for approval in 200975. Almost 400 petitions for exploration and exploitation were
made that year. This coincides with a marked increase in global demand for metals and minerals, where for example, the price of
copper in 2001 was $0.71 per pound, rising to $4 per pound in 200876, and where the price of gold rose from $250 per pound in
2001 to $1000 per pound in 200877. In other words the various hydroelectric projects and the expanding oil extraction targets that
are being planned are primarily being done, it seems, to provide electricity for the extraction and exportation of natural resources
to feed increased global demand and exploit high prices, or for the exportation of electricity, not to provide the indigenous
population with the development they crave or to reduce carbon emissions. This also answers the question of what Guatemala
feels will drive demand for more electricity in the future, so that energy supply will meet the figures stipulated above by the
CNEE for 2020. Further proof that the Guatemalan Government‟s aim does not include a primary concern for its environment
may be demonstrated by a paper that the World Bank commissioned entitled the “Extractive Industries Review” 78, where it is
claimed that mining does not meet the very requisites that the World Bank itself stipulates as important for reducing poverty and
carbon emissions. Nonetheless the former head of the World Bank Paul Wolfowitz chose to ignore this advice and continued
supporting the mining industry in those regions79, thereby incentivizing harmful development. In Guatemala only one ton of C02
is emitted per person, compared to the US where 20.6 tons of C02 are emitted per person80. Currently, 50% of carbon emissions
in Guatemala stems from deforestation, which the aforementioned industries perpetuate, (73,000 hectares of land are lost in
Guatemala every year); 44% stems from the burning of combustible fuels for transport and electricity (which the mining industry
also contributes to), while 6% of carbon emissions is generated by industry. 81 And in economic terms the benefits for the state of
Guatemala derived from mining are minimal. The Mining Law for example, passed in 1997 at the urging of the World Bank 82,
requires companies to pay the Government only 1% of the price of mining products in taxes83, while Rosa Maria de Frade,
member of the Congressional Commission of Energy and Mines, gave the example of the Canadian mining company Goldcorp
71
El Periodico, Aumenta interés por los proyectos hidroeléctrico, http://www.elperiodico.com.gt/es/20090817/economia/110571 17-08-09
72
73
Cemtral Intelligence Agency (CIA), The World Fact Book, Central America and the Carribean, Guatemala,
https://www.cia.gov/library/publications/the-world-factbook/geos/gt.html, 2009
74
Solano, Luis: “La transnacionalización de la industria extractiva”, El Observador No 19, Junio – Julio 2009, pagina 29
75
Ministerio de Energía y Minas, http://www.mem.gob.gt/Portal/Home.aspx?tabid=225 y el Anuario Estadístico Minero de 2007.
76
Mo* Paper, CATAPA, Alle goud? Mijnbouw, ecologie en mensen rechten. Número 23, 2008.
77
www.goldprice.com
78
Extractive Industries Review: The future role of the World Bank Group in Extractive Industries. Draft report dated August 21, 2003.
79
Mo* Paper, CATAPA, Alle goud? Mijnbouw, ecologie en mensen rechten. Número 23, 2008.
80
Benítez, Inés; “La eterna primavera en peligro”, Inter Press Service, http://ipsnoticias.net/nota.asp?idnews=86788, 2007
81
Benítez, Inés; “La eterna primavera en peligro”, Inter Press Service, http://ipsnoticias.net/nota.asp?idnews=86788, 2007
82
Amuchastegui, Maria; “Guatemala: Mining misery”; CorpWatch; http://www.corpwatch.org/article.php?id=14452, 2007
83
Ministerio de Energia y Minas, Ley de Mineria Decreto Numero 48-97,
http://www.mem.gob.gt/Portal/MEMDocuments/DGM/Ley/ley%20de%20mineria%20y%20su%20reglamento.pdf
11
Inc. and the taxes it pays of around 18%, whilst elsewhere in the continent the same company is obliged to pay far higher rates
(between 42% and 64% in countries such as Canada, the US, Mexico and Argentina) thereby demonstrating that the economic
benefits of attracting mining companies do not extend to Guatemalan tax-payers in the way they do to other tax-payers elsewhere
through accumulated state revenue. It is not hard to see therefore, how the expansion of the aforementioned industries is only
likely to increase Guatemala‟s output of C02, both in the transport and in the industrial sector, thereby threatening native forest
and biodiversity due to the environmental problems associated with the aforementioned industries and leading to minimal
economic benefits for Guatemalans. The fact that such expansion is happening regardless of the environmental, social and
economic problems it perpetuates may be further demonstrated by taking a brief look at a major infrastructure transport project
called the Northern Transversal Strip (FTN). This project is also the most potentially profitable hydroelectric generating area of
Guatemala as well as one of the most resources rich areas in addition to housing countless indigenous communities who live in
poverty.
The Northern Transversal Strip (FTN) and its link to hydroelectric projects and to the Mesoamerica Project
The FTN project refers to the construction of a 362 kilometer long highway across the North of Guatemala in order to link the
western and eastern coasts so as to facilitate the transportation of extracted resources for the purposes of exportation. According
to a report commissioned by the Copenhagen Initiative for Mexico and Central America (CIFCA) called „Xalalá Project -
Development for all?‟, the FTN “is a government development project in the north of the country that in its first inception in
1970, aimed at exploiting the natural resources of the region, namely petrol, minerals, hydrographic sources, wood and other
industrial projects. The interests of transnational firms thus coincided with the interests of the Guatemalan oligarchy,” 84 during
the internal armed conflict. The project never got off the ground back then but has recently been re-introduced into the national
development plan and approved by Congress, with a loan of $201 million from the Central American Bank for Economic
Integration85 as part of the Mesoamerica Project‟s investment program86, brining in with it a confluence of economic power
interested in the region. The Israeli company Solel Boneh International (SBI), for example, was the only company to take part in
the bidding process and was subsequently awarded the contract to build the highway, largely, it seems, due to its historic
relationship with Guatemalan Government officials. SBI arrived in the country during the counterinsurgency of the 1980‟s, in
which Israel played a crucial role in the training of the Guatemalan military, as well as in providing military arms, transport,
equipment and advice to the military on a plan of colonization in the very region of the Northern Strip87. Between 1997 and 2006
SBI was the principal beneficiary of millionaire contracts issued by the Ministry of Communication, Infrastructure and Housing
(MCIV), amid allegations of corruption and bribery of public officials88 and indeed amid accusations that the former Vice-
President of the MCIV, one Berta Lilia del Valle, previously worked for SBI. 89 The same allegations have arisen regarding the
Northern Strip bidding process, where the independent congressmen Rosa Marie Frade and Nineth Montenegro objected to the
fact that the bidding process was not opened up to include other companies beyond SBI90. In the region over which the FTN is
being built there are possible areas of petroleum extraction, with new contracts being sought; there are various large and small
hydroelectric projects; there are sugar cane and African palm plantations proliferating across the area within regions like Chisec
and Polochic (area 1 on the map) for the production of biofuels, and there are mining projects being planned in areas like Izabal
(area 11), Alta Verapaz (area 1) and Huehuetenango (area 10) – all seeking to benefit from the construction of this highway. A
brief look at the companies interested in investing in the area and their strategies for doing so is illuminating:
84
Reemstsma, Kerstin; Briones, Soledad; Ibero, Marta: “Proyecto Xalalá, ¿Desarrollo para todos?” elaborado por la Iniciativa de Copenhague para Centroamérica y
México, nov. 2008, pagina 10.
85
Central America Data, http://en.centralamericadata.com/en/article/home/Guatemala_Approves_Loan_for_Traversal_Highway, Tuesday, August
11, 2009
86
Project Mesoamerica, http://www.proyectomesoamerica.org/boletin/externo/boletin012009.htm, December 2008 Bulletin.
87
Cheryl A. Rubenberg .Israel and Guatemala: Arms, Advice and Counterinsurgency. MERIP Middle East Report, No. 140, Terrorism and
Intervention. (May - Jun., 1986), pp. 16-22 y 43-44.
88
Grupo de Apoyo Mutuo, Comunicado de prensa, 27 de marzo de 2007.
89
Grupo de Apoyo Mutuo, Comunicado de prensa, 27 de marzo de 2007.
90
elPeriodico, “Congreso aprueba préstamo para financiar la Franja Transversal”, August 11th 2009,
http://www.elperiodico.com.gt/es/20090811/pais/110007/
12
Map of the FTN project (the areas 11, 1, 7 and 10 being the areas in which the extractive industry is interested)
The American Louis Berger Group, one of the four largest construction firms in the world and involved in the reconstruction
process in Iraq, is in charge of administering the construction of the FTN project91. According to the American NGO CorpWatch
this group has been the subject of strong criticism for “pocketing millions, and leaving behind a people increasingly frustrated
and angry with the results,” in Afghanistan.92 In addition, other oil transnational‟s like Perenco and Petrolatina Energy
(subsidiary of British firm Taghmen Energy), who have links to the family of the former President Oscar Berger 93, are keen to
invest in the area given the FTN project. We also have the mining companies Nichromet, Skye Resources, Compañía
Guatemalteca de Níquel (subsidiary of the Canadian mining company HudBay Minerals94) and BHP Billiton, all vying for
possible opportunities. Some of these companies already have a history with Guatemala. Perenco, for example, is an independent
oil & gas company with operations in 16 countries across the globe95. According to their website: “wherever we operate, every
effort is made to improve the quality of life while preserving traditional cultures.”96 Not, however, according to several social
movements in Peten (northern region of Guatemala – area 5 on the map), who issued a press release on the 15th of April 2010
where they claim that the company bribed various State officials into supporting Perenco in their attempts to expand the
extraction of petroleum from a protected area, and where various threats have been issued against leaders of those social
movements for opposing this project97. And indeed the Congressman of the region, Manuel Baldizon, as well as the Energy and
Mining Ministry and various Mayors from the municipalities of the region have supported and signed a contract with Perenco in
which they renew existing petroleum extraction contracts (contract 2-85) which allows for the possible expansion of petroleum
extraction into what is called the Parque Nacional Laguna del Tigre, a protected area, even though this contravenes the Law of
Protected Areas passed in 1989.98 The parties involved claim that the Law of Protected Areas is not retroactive, and since the
current contract allowing Perenco to extract petroleum from the region was signed in 1985, this does not apply to them. Both the
Environment Ministry (MARN) and the National Council for Protected Areas (CONAP) came out against the renewal of the
contract, with the matter eventually referred to the President, who was given the opportunity of deciding whether or not he would
give the go ahead – always under the looming threat that Perenco issued of leaving the country should the contract not be
extended.99 The President, citing the abiding poverty existent in the country and the need for economic growth to deal with the
problem, subsequently approved the contract extension, while an environmental NGO by the name of CALAS then presented an
appeal to the Constitutional Court, which to date has not been declared on100. The balance between environmental concerns and
91
Solano, Luis: “La Franja Transversal del Norte: Neocolonización en marcha”, El Observador No 6, junio 2007, pagina 9, El Observador 6
92
CorpWatch, “Contractors in Afghanistan are making big money for bad work”, October 6th, 2006
http://www.corpwatch.org/article.php?id=13518
93
94
Comment: Hudbay is one of the most polluting companies operating on Canadian soil:
http://www.minesandcommunities.org/article.php?a=9526&highlight=ngos
95
Perenco, http://www.perenco.com/about-us/company-overview.html
96
Ibid Perenco
97
Asociación Oxlajú, Fundación ProPetén, Pastoral Social del Vicariato, Apostólico de Petén, Frente Petenero contra las Represas, Parroquia de La
Libertad, Consejo Nacional de Desplazados de Guatemala, Asociación de Campesinos de La Libertad –ACLIP-, COMUNICAD...doc
98
Solano, Luis: “Sobre la ampliación del contrato a Perenco”, El Observador Enfoque no 6, 30 de Abril 2010, http://dgroups.org/?btxnpvmv, page
5.
99
Solano, Luis: “Sobre la ampliación del contrato a Perenco”, El Observador Enfoque no 6, 30 de Abril 2010, http://dgroups.org/?btxnpvmv, page
5.
100
Prensa Latina, Agencia Informativa Latinoamericana, Presentan amparo contra extensión de contrato petrolero en Guatemala,
http://www.prensa-latina.cu/index.php?option=com_content&task=view&id=208327&Itemid=1, 24th July 2010.
13
economic concerns is thus clear, with the pendulum swinging in favour of the former – we shall see whether or not the
President‟s justification holds in relation to poverty. In November 2006 and January 2007 forced evictions took place in Izabal
(area 11 on the yellow map) on lands that the mining firm Skye Resources claimed as its own, but which also overlapped with
the collective rights claimed by the local indigenous population. Skye Resources has repeatedly stated that the company carried
out “extensive consultation activities”101; however, indigenous residents insist that no consultation ever took place.102 In the same
area, security guards paid by the mining company Compañía Guatemalteca del Níquel, HudBay Mineral‟s subsidiary company in
Guatemala, have been accused of killing a man by the name of Adolfo Ich, after locals had gathered to resist a possible forced
eviction from their mineral rich lands – HudBay Minerals deny these occurrences had anything to do with them. 103 BHP Billiton
is exploring for nickel in the Izabal region (area 11 on the map), and in particular within a lake which has been designated as a
protected area. The Association of Friends of Lake Izabal (ASALI), a local social movement, has campaigned on behalf of 1,000
fisherman and their families who rely on the lake for their survival, and as a result have received countless threats, with the
Director of the movement, Eloyda Mejia, having to move to the capital city so as to ensure her security 104 as well as receiving
protective accompaniment from the international NGO Peace Brigades International. The interests of transnational firms in the
region also coincide, converge and compete with the investment and industrial interests of some of Guatemala‟s and Central
America‟s richest families, creating a subtle network of affiliated interests – a brief description of which I will now provide.
Guatemalan and Central American interests within the FTN region
The representation of the interests of the aforementioned firms, for example, must naturally include Guatemalan lawyers, and the
Lawyers Office of A.D. Sosa & Soto, whose President is Rodolfo Sosa Leon, son in law of the former President Oscar Berger,
provide legal advice to the Petrolatina Energy company (Taghmen Energy) as well as to Compañía Guatemalteca de Níquel and
Skye Resources105. Having such distinguished contacts cannot be harmful. Out of the conglomerate of firms (20 in total) that
Solel Boneh brought together in order to bid for the FTN project, one finds the Corporación Aprinsa ltd, whose representative is
the engineer Enrique Batres Carrillo, the former Vice-Minister of the Ministry of Communication, Infrastructure and Housing
(MCIV).106 In addition Solel Boneh is involved in other projects in the area of the FTN for which it is bidding and which will
reap the benefits of the construction of the highway, such as, for example, the construction of a hydroelectric plant on the Xacbal
river (area 7 on the map above) in Quiche107. This project belongs to a Honduran group called the „Grupo Terra‟, which was
founded in 1978 and which focuses its interests on the energy sector in industries such as oil as well as on chemicals,
telecommunications and infrastructure projects108. The project also includes the interests of the Hidro Xacbal ltd company, the
Extractora Minera de Occidente and the Guatemalan subsidiary of the Canadian mining company Goldcorp, Montana
Exploradora, which in turn has links to the son of the former President Oscar Berger as well as to the influential Widmann family
of the Guatemalan oligarchy.109 In addition, we have the industrial interests of the former Minister of the Energy and Mining
Ministry, Carlos Meany – who only recently stepped down in June (2010). He is part of a powerful alliance of interests whose
focus extends to a mineral rich region called Polochic in Alta Verapaz (zone 1 on the yellow map) and which created the
Foundation for the Fostering of Natural Resources and for the Sustainable Development of the Polochic Basin (or „Fundación
para el Fomento de los Recursos Naturales y el Desarrollo Sostenible de la Cuenca del Polochic‟).110 The Foundation is
composed of seven companies: the Compañía Guatemalteca del Níquel; Skye Resources; the mining company Mayaniquel ltd
(subsidiary of BHP Billiton); the Guatemalan company Chabil Utzaj, who specialize on sugar cane plantations; the Guatemalan
rubber producing company Baleu; the Guatemalan company Inversiones de Desarollo ltd, who cultivate African Palm and which
belongs to an influential Guatemalan family known as Maegli Muller; the Guatemalan wood processing company Maderas el
Alto, which belongs to Carlos Meany (the aforementioned former Minister of the Energy and Mining Ministry); and finally the
Luis Augusto Turcios Lima Foundation111. This agglomeration of transnational and national interests each seek to mutually
benefit from the region, for which a shared agenda is more profitable, utilizing established political and economic contacts that
101
Sandra Cuffe: “Guatemala: Recuperating the Land that Belongs to Us “, Rights Action, 22 Aug 2007,
102
Sandra Cuffe: “Guatemala: Recuperating the Land that Belongs to Us “, Rights Action, 22 Aug 2007,
103
Business and Human Rights, http://www.business-
humanrights.org/Categories/Individualcompanies/C/CompaaGuatemaltecadeNquelCGNpartofHudBay
104
London Mining Network, “BHP Billiton: Image and Reality, http://londonminingnetwork.org/2008/11/bhp-billiton-image-and-reality/, Nov 5th
2008.
105
106
Ibid, Solano 2007.
107
Ibid, Solano 2007.
108
Grupo Terra, http://www.terra.hn/
109
110
Inforpress Centroamericana No.1719. “Polochic: zona económica en ciernes”, 31 de agosto de 2008.
111
Siglo Veintiuno. “Invertirán en zona del Polochic”, 23 de agosto de 2007.; Solano, Luis; “El Gobierno de Solidaridad de Alvaro Colom”, El
Observador no 11-12, April 2008, http://aselobs.org/contents/ElObservadorNos.11-12.pdf, page 49.
14
are able to secure those interests. Multinational companies in Guatemala are thus fully complicit in the insidious business
strategies seen across the FTN region, even if they claim not to be responsible for the human rights abuses occurring there.
Conclusion
This is merely a brief sample of the conflicts and convergences emerging in the area and provides some indication as to the type
of business, nepotistic networking and political maneuvering that dominates Guatemala and which has serious environmental and
social repercussions – none of which seems to dissuade transnational firms from working and investing in the area and none of
which dissuades international financial institutions from investing and incentivizing multinationals into working in the area
through the Mesoamerica Project. So that the FTN project can be successful the generation of electricity is thus important in
attracting the interest of multinational companies, the likes of which will naturally need electricity for its commercial and
industrial ventures, and Guatemala, in charge of the energy initiative of the Mesoamerica Project, is already attempting, as we
have seen, to attract this investment in order to fulfill its obligations to the Project and in order to promote these possible natural
resource exploitation projects. From this carbon intensive, socially harmful, international and national push for development, and
located in the FTN region, enters the story of the Xalalá Hydroelectric Project (from now on referred to as XHP), which fits into
the requirements of the Mesoamerica energy initiative of attracting “private investment in large electricity generators oriented
toward the regional market”112 and which is being promoted by the Guatemalan Government. In theory civil society, through the
national chapters of the SICA Consulting Council, could influence the nature of this energy initiative, and thus could influence in
the carrying out of the planned XHP through its participation in the Executive Council of the Mesoamerica Project. This article
now focuses on the recent history of the XHP project in order to investigate whether or not the mechanisms of participation (the
CC SICA) of the Mesoamerica Project and of the Guatemalan Government have successfully incorporated the development
wishes of the indigenous communities likely to be directly affected by such a project, thus supposedly assuring that there is an
equilibrium of power with respect to the different groups whose interests collide in the region.
THE RECENT HISTORY OF THE XALALÁ HYDROELECTRIC PROJECT
Context
Xalalá is located between the municipality of Ixcán in the Department of Quiché, and the municipality of Cobán, in the
Department of Alta Verapaz (the northern most border linking areas 1 and & 7 on the yellow map above), exactly in the zone
where part of the Northern Strip highway will be constructed. This region unites the Chixoy and Copón Rivers, whose
strengthened flow would thus feed into the planned XHP. Should the dam be built it could displace more than 13, 968 Maya-
Qechí farmers113. The project is the seventh largest of Guatemala, with an electricity generating potential of 181 MW,114 a dam
height of 82 meters with a planned reservoir of 7.5 km², and fits the requirements of the energy initiative of the Mesoamerica
Project and the Energy Policy of the Guatemalan Government for the “creation of a Regional Electricity Market” and for the
promotion of “private investment in large electricity generators oriented toward the regional market, with modern technology fed
by more efficient and cheaper fuels.”115 The project has already passed through several stages of negotiation, including a bidding
process in which a variety of transnational firms “failed to express any interest.116” The firms involved in the bidding were:
1) the American firm AES Corporation,
2) the Colombian firm Empresas Públicas de Medellín,
3) another Colombian firm called ISAGEN,
4) the Brazilian firm Constructora Norberto Odebrecht,
5) the Guatemalan firm Sinérgica,
6) the American firm Duke Energy,
7) the Italian giant Enel,
8) the Spanish giant Union Fenosa, and
9) the Korean Company Dong Myon117
Notice how the vast majority of the bidders coincide with member states belonging to the IDB. Various investors linked to the
bidding indicated some of the problems that led to their lack of interest: “1) In the social management and in the acquisition of
buildings the investor was left alone, without State aid, 2) A feasibility study did not exist. This obligation was left in charge of
112
113
Reemstsma, Kerstin; Briones, Soledad; Ibero, Marta: “Proyecto Xalalá, ¿Desarrollo para todos?” elaborado por la Iniciativa de Copenhague
para Centroamérica y México, nov. 2008, pagina 20
114
México, nov. 2008, pagina 20
115
116
Idem, Solano, pagina 17
117
15
the investor118”. There was also the suspicion that the Government had already secretly agreed to favor the Brazilian firm, leading
to the pulling out of all the other firms from the process.
Environmental problems
Other problems conveniently not mentioned by the investors were cited by CIFCA, in their detailed study of the detrimental
environmental and social effects of the project: “the flooding of nuclear habitats, of tillable and fertile land, of pastures, a
possible change in the biodiversity of the surrounding area, the eradication of fishing as an option of survival (for the surrounding
communities), the cutting off of the existing means of communication between communities and of the profound relation that the
communities have with their land and natural resources.”119 The Chixoy and Copon rivers, as well as the planned flooding area,
border the Cerro Visich nature reserve, which is an area of biodiversity where there exists multiple species of flora and fauna, all
threatened by extinction should this project go ahead.120 In addition to this the process through which environmental impact
assessments of major infrastructure projects like XHP are made in Guatemala is controversial. The private agent proposing a
development project is responsible for ensuring that an environmental impact assessment is done. The role of the State, through
the Ministry for Natural Resources, is to ensure that the assessment has ticked all of the requirements that the Ministry deems
legal, not to actively carry out the assessment. The inclusion of civil society in the environmental impact assessment is a
provision of the State‟s requirements; but civil society has only a total of twenty days in which to present objections, suggestions
and opinions on projects that affect their future and on complex scientific issues over which they have little knowledge121. This is
the primary means through which major development happens in Guatemala. The role of civil society, or more specifically the
role of the indigenous communities in this process, is thus one of reaction to development proposals, not one of actively
promoting development. In this sense the role of the State is to support development on behalf of powerful economic interests,
and facilitate the consent of those who will be affected by such development, not to understand the real development wishes of
those who will be affected, and then to facilitate that development through financial support.
Social problems and recent developments
The last point may be demonstrated by the problem of „social management‟ highlighted by the investors, which refers to the
protest of various communities in the Department of Quiche, Ixcán (area 7 on the map) against the construction of XHP,122144 of
which (approximately 21,155 people) organized a community consultation (similar to a referendum) in which 18,982 people
voted against the project with only 1,829 in favor, whilst 334 abstained123. The fact that such protests worried the transnational
firms involved in the bidding is proved by an article written in the Guatemalan national daily newspaper Prensa Libre on the 10th
of November of 2009: “One of the failures of the bidding process of the previous year, explained the investors, was that the
contract established that only the interested parties should be charged with the responsibility of resolving the different social
118
119
120
121
Reemstsma, Ibid, pagina
122
Solano, Luis: “El negocio de la electricidad: transformación de la matriz energética y sus impactos”, El Observador No 16, diciembre 2008 – enero 2009, pagina 31
123
Solano, Luis: “El negocio de la electricidad: transformación de la matriz energética y sus impactos”, El Observador No 16, diciembre 2008 – enero 2009, pagina 31
16
aspects of the communities, and this did not include the help of the State.”124 In response to the anxieties of the investors the
Guatemalan National Institute of Electricity (INDE), another government body in charge of evaluating the construction of all
hydroelectric projects, decided that the State should produce a feasibility study in which they would include three types of
analysis: “a social diagnosis, a study of the social and institutional actors involved and their relations of power, and a strategy of
intervention for the hydroelectric project.”125 For the social diagnosis “a census will have to be made of the population, of
services, education, health, economic activity, housing and food security. In addition, the cultural aspects should be emphasized,
as well as development projects and knowledge and perceptions of electrical energy. Another important point will be the
assessment of land conflicts, infrastructure and the use of natural resources.”126 The third part of the study will “create a strategy
of intervention that permits INDE to create a process of trust in the communities. This strategy should take into account the
characteristics of the populace and the methods by which they relate one to another, as well as the prevention of conflicts.”127 The
article emphasizes the willingness of the State to “enter into a state of harmony with the people” without which “the project will
not go ahead,”128 but does not mention if the community consultation should be taken into account when elaborating this „social
diagnosis‟. This strategy is illuminating, given that it takes a major hydroelectric project to stimulate the interest of Government
in addressing the needs of the poor communities who live in the region and who have thus far been utterly ignored - about which
I will return to later. Through this strategy the Guatemalan Government responds to the anxieties of the aforementioned investors
in an effort to promote, once again, the construction of the XHP, in accordance with its legal obligation to the Mesoamerica
Project of creating, through foreign investment, a competitive Regional Electricity Market, as well as to entice foreign investors
to fund natural resource exploitation projects like those of the Northern Strip. Thus development advances in line with economic
anxieties far removed from the local situation, and although the feasibility study puts into place mechanisms that deal with some
of the local anxieties, these were not promoted because of the local anxieties, the likes of which already expressed their
preoccupations through the community consultation, but rather due to the anxieties of foreign investors. Proof of this may be
demonstrated by the fact that the State had no such plans when they first opened the project up for public bidding. Throughout
the entire history of the XHP project not much is known of the role that the Guatemalan national chapter of the Consulting
Council of the SICA played in representing the interests of the indigenous communities likely to be affected by the Mesoamerica
energy initiative and by the XHP. It is clear however, that the social resistance that organized itself against the XHP does not
meet the strict and expansive criteria needed for joining the CC SICA, meaning that its only recourse would have been to contact
the CC SICA‟s national chapter in Guatemala, the idea being that these could then question the policy of the energy initiative in
its drive to create a Regional Electricity Market. This has not happened, therefore the effectiveness of the regional instruments of
civil society participation are in doubt, due to the failure of the same to represent the desires of the communities directly affected
by the XHP, as they are legally obliged to do in accordance with CC SICA‟s statute, Article 11h. Notice however, how concerted
and informed local activism was able to stifle the first development proposal of the XHP. It remains to be seen whether or not
this same resistance will be able to fend off the second XHP proposal, thus balancing the relation of economic and social power
currently skewed in favor of economic interests. Here then, is an ideological battle, imposed on to indigenous communities
through development projects. We will now focus in greater detail on the response of the communities to the XHP, whose
concept of development contrasts markedly to the regional and national development concept promoted by the Mesoamerica
Project and by the Guatemalan Government, as displayed through their energy initiative as well as by the commercial interests
that accompany it.
GRASSROOTS DEVELOPMENT
Historical context
The two departments that would be most affected by the XHP are Quiché and Alta Verapaz (areas 1 and 7 on the yellow map
above), both of which are located in the zone where the Northern Transversal Strip is being constructed. According to CIFCA‟s
report these two departments have the worst poverty indices of the country: “In Quiché 81% of the population live in poverty and
93.5% are indigenous. In Alta Verapaz 78% of the population live in poverty and 98.2% are indigenous.” 129 The indigenous
populations of these zones were highly affected by the repressive “National Security Doctrine”130 of the Guatemalan army during
the internal armed conflict and there exists in both regions “lack of legal certainty regarding the land of the resident
124
María Bolaños, Rosa; Prensa Libre, INDE retomará el proyecto de Xalalá, http://www.prensalibre.com/pl/2009/noviembre/10/354261.html, 6-10-09.
125
Idem, Prensa Libre.
126
Idem, Prensa Libre.
127
Idem, Prensa Libre.
128
Idem, Prensa Libre.
129
Reemstsma, Kerstin; Briones, Soledad; Ibero, Marta: “Proyecto Xalalá, ¿Desarrollo para todos?”, elaborado por la Iniciativa de Copenhague para Centroamérica y
México, 10-08, pagina 12.
130
17
communities;” the land being culturally and economically their most prized asset because of their agrarian culture. 131 The
communities in the municipal areas in which XHP would be built have thus not benefitted from the development promoted by
successive governments over the last twenty years, and in response have organized themselves so that they can demand their own
type of development, resulting in the aforementioned community consultation where they rejected not only the construction of
XHP, but also the neo-liberal concept of development which is promoting it and which is bringing in a proliferation of mining
and hydroelectric projects located on the legally uncertain land on which they live. In sum there are two ways that the
communities express their concept of development: 1) in reaction to the construction of XHP and other major development
projects 2) as expressions of fundamental principles, upon which this article will now elaborate.
1) Reactions of the communities to the construction of XHP and other major development projects
The grassroots reactions to the construction of XHP are diverse and come from various sources. First we have the reactions of the
communities that organized the communitarian consultation against XHP and other large development projects in the
municipality of Ixcán in Quiché (area 7 on the yellow map), which this article has partially detailed above. In a press release
posted after the consultation the communities expressed their anxieties about the possible negative effects that XHP would have:
“The construction of hydroelectric plants could flood extensive areas of land, as well as altering the size of the reservoirs that the
rivers create, thus affecting our food security.”132 And indeed CIFCA, in the aforementioned report, published a map detailing
which communities might be affected:
Following on from these anxieties the communities then demand that a revision be done to the “current legislation that regulates
the conditions and requisites for the generation of electricity and for the exploitation of natural resources, in particular the
Hydrocarbon Law and the Law for the Development of Renewable Energy Projects.”133 They express their disagreement with the
prioritization by the Government of exporting electricity and of focusing on the extractive industry. Complementing the anxieties
of the communities are the studies done by the national NGOs Madre Selva (Mother Earth) and Conavigua (National
Coordination for the Widows of Guatemala – who lost their spouses during the internal conflict), both of whom focus on the
harmful consequences that XHP, as it currently stands, might have on its surrounding area. The reports serve as tools “for the
communities so that they can count on scientific and technical elements that allow them to ensure that their environmental rights
are being upheld.”134 The Front of Guatemalans Affected by Dams and in Defense of their Water (FGAARDA) and the
Association of Communities for the Defense and Development of Natural Resources (ACODET) are two other social movements
from the area that contributed to the debate. Their reactions to XHP were detailed in a press release on the 19 th of January of
2009135, which cites a 2000 study promoted by the World Bank itself, called the World Dam Commission, in which over one
hundred Dam building experts, with substantial experience of constructing large hydroelectric plants like XHP across the world,
concluded that, when analyzing the costs and benefits of such projects, “in general the impacts over ecosystems are more
negative than they are positive, and have provoked, in many cases, significant and irreversible losses in species and
131
Reemstsma, Kerstin; Briones, Soledad; Ibero, Marta: “Proyecto Xalalá, ¿Desarrollo para todos?”, elaborado por la Iniciativa de Copenhague para Centroamérica y
México, 10-08, pagina 7.
132
Comisión de Seguimiento a la Consulta Comunitaria de Buena Fe, La Información y la Consulta son Derechos de los Pueblos, pagina 1,
http://seguimientoconsulta.files.wordpress.com/2008/08/campo-pagado-abril-2007-la-informacion-y-la-consulta-son-derechos-de-los-pueblos.pdf, 01-05-07.
133
Idem, Comisión de Seguimiento a la Consulta Comunitaria de Buena Fe, pagina 2.
134
135
Centro de Medios Independientes, “Comunicado de prensa de las comunidades afectadas por la hidroeléctrica Xalalá”,
http://chiapas.indymedia.org/display.php3?article_id=162399, 19-01-09.
18
ecosystems.”136 This study was evaluated ten years later by a group called Water Alternatives, who produce a journal on water,
politics and development, in a report they published called The World Commission on Dams +10: Revisiting the large
dams controversy137, where they concur with the Commission‟s findings that “"dams have made an important and significant
contribution to human development, and the benefits derived from them have been considerable. In too many cases an
unacceptable and often unnecessary price has been paid to secure those benefits, especially in social and environmental terms, by
people displaced, by communities downstream, by taxpayers and by the natural environment"138, but add that there should “also
be opportunities for renewed reflection – in light of the changing drivers of dam development, including climate change – on the
whole approach to water storage and energy production that could include not just concrete dams but also other 'technologies'
such as groundwater and wetlands management, water harvesting, conjunctive management of groundwater and surface water,
renewable energies like solar, wind, and geothermal, decentralised and small-scale technologies, and intensive water and energy
conservation, among others.”139 These are precisely the types of alternative debates that ACODET and FGAARDA are calling
for and which are not seriously being discussed in Guatemala as alternatives for large scale dams like XHP. We also have the
public pronunciations of various indigenous communities of Guatemala who met at a national social forum called: the Third
Meeting of Guatemalan Communities Affected and Threatened by Hydroelectric Plants and in Defense of their Natural
Resources,140 where the pronunciations strongly criticise the energy initiative of the Mesoamerica Project in the promotion of
undesirable ventures like XHP, pointing to the fact that companies pay barely any taxes (1% of profits), the likes of which are
completely insufficient in meeting the development demands of indigenous communities, and where the primary purpose of the
construction of hydroelectric plants is for the exportation of electricity and for the proliferation of extractive industries. They
point out that these major development projects are not principally for the benefit of indigenous communities and their desires
for development, but primarily a response to international investment and to multinational corporations.141 All of these diverse
expressions have been unanimous in their criticism of the Government for not having properly consulted the communities prior
to the initiation of the XHP. One of the tools that indigenous communities have at their disposal so that they can react to
development projects promoted on their living space by external interests are the communitarian consultations. The legal basis
for such consultations can be found in the Constitution of the Republic of Guatemala, article 66, and in the Municipal Code, in
articles 63, 65 and 66. In addition the 169 Indigenous People‟s Convention of the International Labour Organisation, which the
State of Guatemala has ratified, and the dictate of the “InterAmerican Court of Human Rights”142 both legally oblige the
Guatemalan State to respect communitarian consultations. Nonetheless these have thus far not been recognized by the State of
Guatemala, who have utilized the argument that the consultations are not legally binding because Guatemalan legislation lacks a
detailed description of the procedures needed for carrying them out, eventhough the municipal code clearly states that such
consultations should be carried out in accordance with the cultural practices of the designated area. The Guatemalan Government
thus continues with its aim to promote the XHP without incorporating the community consultation in the aforementioned
feasibility study, while the communities directly affected by this initiative and by decisions made at the regional level through the
Mesoamerica Project are not included in the decision making process of these initiatives. This directly contradicts the apparent
primary purpose of the Mesoamerica Project of improving “the quality of life of the inhabitants of the Region,”143 because those
same inhabitants have no input or say over how to define their own „quality of life‟. But the reactions of the communities do no
restrict themselves to mere alternative proposals to the XHP, or to the fact that the communities were not consulted. The
reactions question the very basis upon which development is promoted both at the international, regional and national level,
entering into a profound conflict with the neo-liberal philosophy underpinning the actions of the international funders behind the
Mesoamerica Project and behind the Guatemalan Government.
2) Expressions of development through fundamental principles

The Catholic Ministry of Ixcán produced a report for the communities of the region that would be affected by the XHP, so that
they could use it to assert their environmental rights. The report details the importance of Mayan Cosmology in the communities
136
Idem, Comisión Mundial de las Represas.
137
Water Alternatives, The World Commission on Dams +10: Revisiting the large dams controversy, http://www.bicusa.org/en/Article.11907.aspx,
June 2010
138
Idem, June 2010, page 2
139
Idem, June 2010, page 12
140
Comisión de Seguimiento a la Consulta Comunitaria de Buena Fe; Pronunciamiento de las Comunidades Indígenas, Campesinas en el Tercer
Encuentro Guatemalteco de Comunidades Afectadas y Amenazadas por Hidroeléctricas y en Defensa de los Recursos Naturales,
http://seguimientoconsulta.files.wordpress.com/2008/08/iii-encuentro-pronunciamiento-final.pdf, 08-08, pagina 3.
141
Comisión de Seguimiento a la Consulta Comunitaria de Buena Fe; Pronunciamiento de las Comunidades Indígenas, Campesinas en el Tercer
Encuentro Guatemalteco de Comunidades Afectadas y Amenazadas por Hidroeléctricas y en Defensa de los Recursos Naturales,
http://seguimientoconsulta.files.wordpress.com/2008/08/iii-encuentro-pronunciamiento-final.pdf, 08-08, pagina 3.
142
Loarca, Carlos, “Mecanismos de impunidad ambiental para la hidroeléctrica Xalalá contra la consulta comunitaria de buena fe del Ixcán,”,
http://www.albedrio.org/htm/documentos/cloarca-002.pdf, 02-11-09, pagina 6
143
Proyecto Mesoamérica, ¿Qué es el Proyecto Mesoamérica?, http://www.proyectomesoamerica.org/, 2009.
19
that resisted the XHP: “The majority of communities centred in the possible area of influence of the XHP profess the Catholic
faith fused with elements of Mayan Cosmology, as seen in the Mayejaks celebrations (the ritual of asking for a favour or a
benediction from the creator) and in the Chinamanes celebration (the carriers of time).”144 On the web page of the Follow-up
Commission to the Communitarian Consultation of Ixcán (against XHP), the communities express this cosmology through their
profound relationship with the land, as detailed in a press releases opposing the XHP and other large development projects: “for
us the land is sacred; our ancestors taught us to take care of it and to respect it” 145 while capitalism is “responsible for its own
destruction, with its logic of capital accumulation, sustained by the ransacking of the natural patrimony and by the exploitation of
our people”146 and which “destroys our communities and restricts our sovereign development.”147 This Mayan Cosmology is
incorporated into the Guatemalan Peace Accords of 1996 through the Agreement on the Identity and Rights of the Indigenous
Peoples, articles c and d: “A Cosmology that bases itself on the harmonious relations of all the elements of the universe, of which
the human being is merely one element, where the land is the mother that gives life and where maize is a sacred symbol, the basis
of their culture. This Cosmology has been passed down from generation to generation through written materials and through the
oral tradition.”148 Their culture thus leads them to practice a profoundly agricultural life, acting as the premise from which their
concept of development springs, leading them to oppose development that harms what they deem to be sacred – the land and its
resources. Máximo Ba Tiul, a renowned Indigenous Philosopher, Theologian and Anthropologist of the Landivar University of
Guatemala, emphasises the fact that the Mayan Cosmology opposes itself fundamentally to capitalism through the spiritual
relationships that the indigenous peoples have with nature as an object of veneration and conservation, and not as an object of
exploitation or as a means to profit. Máximo describes the Guatemalan State as a mechanism of capitalism, and questions the
validity of its role as a guarantor of indigenous rights, in favour of the idea of “indigenous autonomy,” 149 an idea, claims the
Professor, that was marginalised during the Peace Agreements, eventually being substituted by the concept of decentralisation,
which created the current Departmental Councils of Development and Communitarian Councils of Development. These are local
state structures that count on indigenous participation, thus in theory incorporating their ideas in the development promoted by
the State at a local level. As a result the indigenous peoples of Guatemala are considered as subjects with rights within a
politically pre-determined structure whose inception was inspired by interests that were hostile and foreign to indigenous culture.
This is the fundamental conflict in Guatemala between the development promoted from above, and that promoted from the
grassroots level. This conflict does not only manifest itself in response to XHP, but also throughout the country in opposition to
many large scale development projects promoted by the State in representation of foreign interests. On the 15th of June 2010 for
example, 20,000 Indigenous people from across Guatemala organized a welcome party for James Anaya, the United Nations
(UN) Special Rapporteur on the situation of human rights and fundamental freedoms of indigenous peoples. Anaya was formally
presented with 36 cases by various indigenous communities relating to major development projects being planned on their land
by companies that were not respecting the results of community consultations, and that were involved in the criminalization of
community leaders. Subsequent to his visit, and referencing the cases he was given, the Special Rapporteur issued a press release
in which he highlighted:
 the obligation of the Guatemalan State to recognise the right to community consultations, as justified not
only by its ratification of the ILO 169 Convention but also by its ratification of the Convention for the Elimination of all
Forms of Racial Discrimination and by the Pact on Civil and Political Rights;
 the worrying trend of the criminalization of indigenous communities by the pursuance of judicial
procedures against them for protesting against the activities of companies on their land, pointing to active discrimination and
to a lack of equality in respect of access to justice150.
144
Boton Simaj, Santiago; Pastoral de Ixcán; ¿De que sirve la luz para quienes no quieren la luz? Un primer acercamiento para conocer el proyecto hidroeléctrico Xalalá
y la identificación de las comunidades que posiblemente quedarían en el área de influencia directa, 01-07, capitulo IV, pagina 26.
145
Comisión de Seguimiento a la Consulta Comunitaria de Buena Fe; La Información y La Consulta, Son Derechos De Los Pueblos,
http://seguimientoconsulta.files.wordpress.com/2008/08/campo-pagado-abril-2007-la-informacion-y-la-consulta-son-derechos-de-los-pueblos.pdf, 04-07, pagina 1.
146
Comisión de Seguimiento a la Consulta Comunitaria de Buena Fe; Pronunciamiento de las Comunidades Indígenas, Campesinas en el Tercer Encuentro Guatemalteco
de Comunidades Afectadas y Amenazadas por Hidroeléctricas y en Defensa de los Recursos Naturales, http://seguimientoconsulta.files.wordpress.com/2008/08/iii-encuentro-
pronunciamiento-final.pdf, 08-08, pagina 3.
147
Idem, Comunidades Afectadas y Amenazadas por Hidroeléctricas y en Defensa de los Recursos Naturales, pagina 3.
148
Congreso de la Republica de Guatemala, Acuerdo de Paz firme y duradera, Acuerdo sobre identidad y derechos de los pueblos indígenas,
http://www.congreso.gob.gt/Docs/PAZ/Acuerdo%20sobre%20identidad%20y%20derechos%20de%20los%20pueblos%20ind%C3%ADgenas.pdf, 31-03-95, pagina 2.
149
Ba Tiul, Maximo, Archivo Sonido, http://chiapas.indymedia.org/display.php3?article_id=162377, 20-02-09.
150
Observaciones preliminares del Relator Especial de Naciones Unidas sobre la situación de los derechos humanos y las libertades fundamentales
de los indígenas, S. James Anaya, sobre su visita a Guatemala (13 a 18 de junio de 2010),
http://www.ohchr.org/en/NewsEvents/Pages/DisplayNews.aspx?NewsID=10173&LangID=S; The Unit for the Protection of Human Rights Defenders
of Guatemala (UDEFEGUA) have published a report in which they claim that over 592 judicial processes (relating to the criminalization of social
protest) have been opened up against human rights defenders since 2004; http://www.udefegua.org/images/Informes/informe_udefegua_semestral.pdf
20
This declaration echoed the recent decision of the Inter-American Court of Human Rights (IACHR)151 and the findings of the
Guatemala mission of the International Labor Organization (ILO)152, both of which earlier this year called for the suspension of a
mining project in the West of Guatemala (San Marcos) until proper health and environmental studies have been carried out and
until proper consultations with the communities have been organized. In this case a serious conflict developed between a
Canadian mining company (Goldcorp inc) and indigenous communities in 2005, with the communities claiming that the
consultation they organized (which rejected the mining project) was ignored, as well as their health subsequently affected by the
effects of mining activity. The Guatemalan State has since ordered the suspension of the activities of that mining company, in
compliance with the IACHR‟s and ILO‟s recommendations, until these problems have been resolved153. But this is merely one of
the 36 cases handed over to the UN Special Rapporteur, and those 36 cases are a mere sample of a vast array of other cases in
which community consultations have been ignored. In the Department of Huehuetenango for example (area 10 on the yellow
map), 28 municipalities have already rejected all large scale development projects that would benefit transnational firms through
organised communitarian consultations, carried out over the last five years and counting on the participation of approximately
500,000 people.154 Mining projects and hydroelectric dams have been a particular focus in these democratic demonstrations.
Only five municipalities in the whole Department have not yet voted, but are in the process of organising a consultation, meaning
that eventually the first Department of Guatemala, out of the 22 existing Departments, will have expressed its communitarian
consensus, rejecting the development model thus far proposed by the State and by international investors, through the wide
spread profusion of the democratic vote.155 The multifarious movements organising this enormous democratic upheaval fully
intend to move on to other Departments in an effort to reflect the desires of all indigenous communities in their call for what
Maximo Ba Tiul calls „indigenous autonomy‟. Here then, we have the expression of Guatemalan communities of the fundamental
principles upon which their concept of development is based: namely that it should spring from their own ranks, in accordance
with grassroots democracy and their own cultural traditions.
Conclusion
We have travelled from the heights of the Mesoamerica Project, with its international investments and its neo-liberal
development philosophy, as well as its own questionable mechanisms of civil society participation, to the complementary
development philosophy promoted by the Guatemalan State with its own ineffective mechanisms of community participation,
and on to the Mayan development philosophy of the grassroots indigenous communities, the likes of which comes into direct
conflict with its competitors. This has demonstrated that relations of power between these sectors are skewed in favour of the
opaque interrelatedness of: a) western states and their control over international financial institutions; b) multinational
companies; d) powerful Guatemalan economic interests; and e) the Guatemalan Government; while indigenous communities
only count on complex and bureaucratic instruments of participation that fall woefully short of what they demand, which are
undemocratic and that are completely insufficient in meeting their requirements as well as being anathema to their cultural
heritage. The strategy of the aforementioned sectors of power is to implement a neo-liberal ideology, as defined by David
Harvey, which facilitates their political and economic interests, as seen through the CAFTA and Mesoamerica Project
agreements, resulting in a focus on privatisation and on the economic agency of financial institutions, multinational corporations
and the Guatemalan elite, all of which dominate national industry and agriculture and who benefit from a now reformed and
interventionist Guatemalan State that works in their interests. This has exacerbated the poverty of indigenous communities who
rely on subsistence farming and whose culture allies them profoundly to the land in a way that these interests cannot
comprehend, forcing indigenous communities to organise themselves in opposition both to the state and to the economic and
political forces that use it for their own interests. History thus continues to repeat itself, recycling endless social conflict, amply
demonstrated by the clashes occurring across the Northern Transversal Strip region. The XHP, touted by the current Government
as a model of its inclusive drive for development, is also emblematic of this conflict and leads us to ask a fundamental question
151
PM 260-07 – Communities of the Maya People (Sipakepense and Mam) of the Sipacapa and San Miguel Ixtahuacán Municipalities in the
Department of San Marcos, Guatemala
http://www.cidh.oas.org/medidas/2010.eng.htm
152
International Labour Conference, 98th Session, 2009, Report of the Committee of Experts on the Application of Conventions and
Recommendations, page 708, http://www.ilo.org/wcmsp5/groups/public/---ed_norm/---relconf/documents/meetingdocument/wcms_103484.pdf
153
Blake Schmidt and Christopher Donville, “Guatemala Said Goldcorp Must Suspend Operations at Marlin Mine Amid Probe”, Bloomberg News,
http://www.bloomberg.com/news/2010-06-24/guatemala-said-goldcorp-will-have-to-suspend-operations-at-its-marlin-mine.html, Jun 24, 2010
154
Collectif Guatemala (Francia), The Network in Solidarity with the People of Guatemala - NISGUA (EE.UU), Rompiendo el Silencio (Canadá),
Peace Watch Switzerland (Suiza), Movimiento Sueco por la Reconciliación - SweFOR (Suecia), Guatemala Solidarity Network (Reino Unido), Cadena
para un Retorno Acompañado –CAREA (Alemania) y Solidaridad con Guatemala de Austria (Austria); “Territorios indígenas y democracia
guatemalteca bajo presiones”; http://guatemala.at/ido%20smi/ido_sanmiguel.pdf, junio 2009
155
Collectif Guatemala (Francia), The Network in Solidarity with the People of Guatemala - NISGUA (EE.UU), Rompiendo el Silencio (Canadá),
Peace Watch Switzerland (Suiza), Movimiento Sueco por la Reconciliación - SweFOR (Suecia), Guatemala Solidarity Network (Reino Unido), Cadena
para un Retorno Acompañado –CAREA (Alemania) y Solidaridad con Guatemala de Austria (Austria); “Territorios indígenas y democracia
guatemalteca bajo presiones”; http://guatemala.at/ido%20smi/ido_sanmiguel.pdf, junio 2009
21
which has not yet been favourably answered in Guatemala to the satisfaction of all its citizens: from where should the
development of the indigenous peoples of Guatemala spring? From a State influenced by powerful national economic interests
and connected to an international commercial structure with its own powerful agents of economic development, its own
economic, cultural and political conceptions as well as its own mechanisms of civil society participation? Or from the indigenous
communities themselves, not as subjects of rights within a pre-determined political and economic structure, but as autonomous
peoples who have the moral right, particularly in light of the historic oppression that they have suffered, to establish their own
economy and manner of government in accordance with their own culture? The lack of a hearing on this key issue has silenced
an answer, while the conflicts loudly express themselves without being heeded from above, effectively muting dissent from
below. Nonetheless what is remarkable about this particular conflict is the fact that local communities, allied to national social
movements, have been able to delay the XHP project and have demonstrated an admirable capacity for organisation, in turn
indicating their ability to autonomously take care of their own interests regardless of the State or of powerful economic forces.
The next push for this paradigmatic venture will reveal whether or not local activism is able to dissuade once again international
investors and multinationals from pursuing their profits by using the Guatemalan State and regional agreements for their benefit,
and whether or not the indigenous population succeed in continuing their historic search for autonomy, whilst facing the uphill
struggle of countering the might of the cultural, economic, military and political sectors of power that have traditionally stood in
their way.
ANNEX
Number of mining permits granted by the Energy and Mining Ministry
Number of mining permits in consideration from 2009
22
Map of the SIEPAC line
23

The Mesoamerica Project, The Energy Policy of The Guatemalan Government and The Extractive Industry and Their Link To Human Rights Abuses

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The Mesoamerica Project, The Energy Policy of The Guatemalan Government and The Extractive Industry and Their Link To Human Rights Abuses

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THE MESOAMERICA PROJECT AND THE ENERGY POLICY OF THE

GUATEMALAN GOVERNMENT, AND THEIR LINK TO HUMAN RIGHTS

The Guatemalan Government and its obligations to the Mesoamerica Project

The purpose of promoting the construction of hydroelectric plants in Guatemala

2) Expressions of development through fundamental principles

Number of mining permits in consideration from 2009

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