Power to the people fivas 2010


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FIVAS (Foreningen for Internasjonale Vannstudier) 2010. Rapporten tar for seg den pågående satsingen på vannkraftutbygging i Guatemala, viser hva som kan gå galt og hva som må tas hensyn til i fattige land, og land med sårbare grupper slik som urfolk. Rapporten er også tilgjengelig på spansk.

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Power to the people fivas 2010

  1. 1. Power to the People?Hydropower, indigenous peoples’ rights and popular resistance in Guatemala 1
  2. 2. The Association for International Water Studies (FIVAS) is an indepen- dent, non-profit organization that monitors the role of Norwegian aid and companies in the water sector in developing countries. FIVAS seeks to prevent support for policies and projects with adverse environmental and social impacts and to contribute to im- proved decision-making processes. Acknowledgments This report could not have been realized without the help and guidance of many people with knowledge in the area of hydropower, environmental and social impacts, Guatemala and indigenous rights. A study of this kind, looking at actors, interests and power relations in such a complex sector, requires inputs from many different sources. We owe special thanks to everyone in Guatemala who helped us conduct the study. They were tremendously helpful in facilitating access to information, and patient and thoughtful in taking the time to share their views and experiences with us. Thanks also to the Norwegian Embassy in Guatemala, Norwegian Church Aid, Norwe- gian People’s Aid and the Norwegian Solidarity Committee for Latin America (LAG) for valuable contributions along the way. A special thanks to Jody Scholz and Andrew Preston for editing, proofreading and valuable inputs. We dedicate this study to Ronaldo Cardenas, environmental activist and committed defender of the rights of local and indigenous communities, who left this world unex- pectedly on the 2nd of January 2010. Ronaldo helped us in our work with this study, and we will forever appreciate his valuable insights and knowledge. His compassion and dedication to the environment and unwavering commitment to the fight for justice will follow us in our work in the future. The views expressed in this report are those of the authors and do not necessarily represent the official policy or position of interviewees, unless directly cited. Published in September 2010 Design and layout by Odgers Speed Design Authors: Cecilie Hirsch and Miguel Utreras Photos: Cecilie Hirsch Published with the financial support of the Norwegian Agency for Development Cooperation (Norad) Copies can be downloaded from the FIVAS website www.fivas.org Osterhausgate 27, N-0183 Oslo, Norway. Tel: +47 22 98 93 25 email: fivas@fivas.org2
  3. 3. Contents1 Introduction 4 1.1 Methodology 62 International Context 7 2.1 Indigenous Rights 7 2.2 Hydropower standards and guidelines 113 The case of Guatemala 14 3.1 Background 14 3.1.1 Geography and people 14 3.1.2 Indigenous Peoples in Guatemala 16 3.1.3 The legacies of the armed conflict 17 3.1.4 Environmental policies 19 3.2 The power sector in Guatemala 22 3.2.1 1990s: An era of privatization 22 3.2.2 Strategic plan for hydropower 24 3.2.3 Actors in the hydropower sector 26 3.2.4 Current developments in the power sector 26 3.2.5 The legacy of Chixoy 29 3.2.6 Legal and institutional framework 30 3.3 Project development: social, environmental and legal aspects 33 3.3.1 Project preparation 33 3.3.2 Benefits for whom? 34 3.3.3 Control of territory 37 3.3.4 Environmental impacts and EIAs 39 3.4 Community resistance and local strategies 45 3.4.1 Energy sovereignty 48 3.4.2 Popular consultations 48 3.4.3 Rio Hondo 49 3.4.4 A break with the liberal model 50 3.4.5 Persecution of leaders and criminalization of social protest 514 Norwegian Context 57 4.1 Norway on energy 58 4.2 Norway on CSR and development cooperation 58 4.3 Clean Energy for Development 59 4.4 Norway and Guatemala 61 4.5 Lessons learnt 675 Conclusions and recommendations 68 Acronyms and abbreviations 71 Meetings 73 3
  4. 4. 1 IntroductionThe debate about hydropower has been revitalized in the consideration given to local communities; underestima-context of climate change and the huge unmet needs for tion of and insufficient compensation for social andenergy in many countries. Hydropower projects are being environmental impacts; and unequal cost- and benefit-promoted by developers and financial institutions across sharing1. Groups that are already marginalized are oftenthe world as part of the solution – a low carbon means to highly vulnerable to further deprivation, when subjectedmeet the world’s energy needs. to so-called development projects, such as hydropower.How hydropower development benefits different stake- Hydropower in Norway has been developed under veryholders depends on a range of factors: the local cultural, different conditions to many other countries. Whereaseconomic, political and ecological context; mechanisms Norway has a well-functioning local and national democ-for distribution of benefits; the type and scale of the hy- racy, with a solid legal framework, many countries in thedropower project; the processes before and during plan- Global South have weak or nascent democracies that lackning and construction; how the hydropower plants are the institutional structures necessary to provide for themanaged and by whom; agreements for environmental needs of the poor and marginalized – those who compriseand social mitigation, compensation and resettlement; the the majority of the population in these countries.role of the state, companies and civil society in develop-ment processes, to mention but a few. In many countries, local communities are highly depen- dent on rivers for economic, nutritional, cultural andDams have generated serious and complex environmental spiritual sustenance. Rivers have traditionally providedand socio-economic impacts. Some of the major criti- water for small-scale irrigation and agricultural produc-cisms directed at project developers include inadequate tion, and have also played an important role in meeting the domestic water needs of local communities. Hydropower development affects rivers, ecosystems and the surrounding land. Local people cannot always count on a functioning state and legal framework to protect their rights and safeguard access to the river and sur- rounding lands. At the same time, electricity and profits generated by the hydropower project often do not reach poor local communities, but instead benefit the wealthy, the companies and those able to pay the electricity tariffs. Guatemala has a history of exclusion of indigenous peo- ple. Many of the areas with existing plans for hydropower development are areas inhabited by poor peasants and indigenous groups. Furthermore, Guatemala is a small1 World Commission on Dams (2000) Dams and Development – A New Framework for Decision-making4
  5. 5. River in Quiche, Guatemala. Local communities are dependent on rivers for economic, nutritional, cultural and spiritual sustenance.country, with fragile ecosystems and high biodiversity.This has created conflicts in many parts of the country. This study is a contribution to the debate about hydro- power development, indigenous rights and the rights ofConflicts concerning hydropower are nothing new. Since affected communities in the face of development projectslarge-scale hydropower first began to be developed in the in general. The report has four sections. The first provides1960s, there have been conflicts, in which local and indig- a general overview of the current state of hydropowerenous communities have frequently voiced strong opposi- development and includes a presentation of relevanttion. In many instances, their rights have been violated, international standards and trends as well as indigenousincluding their right to use rivers and surrounding lands; rights. The second section of the report presents Guate-their right to decide their own development; their right to mala as a case study, while the third examines relevantparticipate in decision-making processes; their right to be Norwegian policies. In the final section of the report, weconsulted; and their right, as indigenous peoples, to free, put forward our conclusions and recommendations.prior and informed consent. We have chosen Guatemala as a case for various reasons:The World Commission on Dams (WCD) concluded in 1) the potential for hydropower development in theits report from 2000 that respect for indigenous rights country and the environmental context as a small coun-is a prerequisite for sustainable development. The WCD try with high biodiversity; 2) the large percentage of therecommendations include the implementation of prin- population that is indigenous; 3) the fact that hydropowerciples from ILO Convention 169 on Indigenous and development in the region has been defined as a Norwe-Tribal Peoples that protect the right of indigenous peoples gian strategic interest; 4) the fact that Norwegian actorsto consultation and free, prior and informed consent in are already looking at possible investments in the country,special instances such as relocation. while the governments of Norway and Guatemala have 5
  6. 6. expressed interest in collaborating on both hydropower ics relevant to hydropower development. Furthermore, indevelopment and securing indigenous rights; and 5) the collaboration with various experts on specialized topics,arrival of the newly established Norwegian company SN we have analysed laws, official documents, environmentalPower Africa and Central America in the region. impact studies and articles from the Guatemalan press.We hope this study will contribute to the ongoing discus- Communities were visited in Zona Ixil, Zona Reina andsion surrounding Norway’s Clean Energy Initiative as well Xalala in the state of Quiche; the municipality Tajamulcoas Norway’s international energy policy, in general. Fur- in the state of San Marcos; and the state of Altaverapaz.thermore, we hope that Norwegian actors will review this Other observations have been undertaken in the state ofstudy prior to investing or getting involved in develop- Zacapa and the municipality of Chuarrancho. Duringment activities in indigenous areas. Lastly, we hope that visits to local communities we interviewed local leaders,this study will serve local communities and organizations people from the communities and local organizationsworking for just and sustainable water management. about their position regarding hydropower projects that are planned or under construction on their territories. In addition, we visited areas where consultation processes on hydropower projects have been carried out.1.1 Methodology For more detailed information on the energy sector inInformation gathering has been undertaken by collecting Guatemala, we conducted interviews with key govern-written material from international and national (Guate- ment and state actors. These interviews covered govern-malan and Norwegian) sources, and through interviews ment plans for the sector and the related legal and politi-and meetings with different actors in the sector in both cal framework used to realize these plans. We conductedcountries. interviews with the Ministry of Natural Resources and the Environment (MARN), the Ministry of Energy andInformation gathering in Guatemala was conducted dur- Mining (MEM), and the National Council of Protecteding a series of field visits carried out over the course of Areas (Conap). The second section of the report includesseveral months comprising two distinct periods: June- information from interviews conducted with differentAugust 2009 and November-December 2009. The sources civil society actors, including social, indigenous and en-and information from Guatemala used in this study com- vironmental organizations, as well as academics. Devel-prise interviews, official documents (laws and regulations, opers, including members of AGER and ANC, were alsopolicy documents and EIA studies), observations, news- interviewed.paper articles and documentation from various organi-zations. The collection of information was mainly done To get a broader picture of Norwegian policy and practicethrough interviews with different actors in the sector: in the area, we talked to the Norwegian embassy in Guate-state actors, actors from civil society, affected communi- mala, Norad, Norfund, SN Power, and Norwegian civilties and companies. We made several trips to different society organizations, such as Norwegian Church Aid,communities, and observed or participated in discussions Norwegian People’s Aid and the Norwegian Solidarityat a variety of conferences and other events featuring top- Committee for Latin America (LAG).6
  7. 7. 2 International ContextDevelopment initiatives in indigenous areas are contested developers, with the result that indigenous communitiesaffairs in many developing countries. Sources of conflict are excluded from decision-making arenas.are often related to competing visions of what develop-ment means and who gets to decide what form it should ILO Convention 169 is a comprehensive and legallytake. This is especially true regarding questions related binding convention that exclusively covers indigenousto access to natural resources, land ownership and the and tribal peoples’ rights. The Convention is the principalimportance of environmental stewardship. Conflicting instrument used to uphold the collective rights of indi-development ideologies, rights, and ethical questions genous peoples. Latin America is the region in the worldregarding mining, oil and gas extraction, and large-scale where most countries have ratified the ILO convention;infrastructure projects have been heavily debated in 14 countries as of September 20092. The convention add-recent years. Hydropower projects have not been exempt resses many aspects of indigenous people’s lives, such asfrom this. The question of hydropower development education, customs, environment, land rights, the right tocentres on control of territory and water resources, which be consulted, the right to participate in decision-makingin turn determines who benefits and who has access to processes, self-identification and spiritual values. Articlesnatural resources. 6 and 7 of the convention address the right to consul- tation and participation in decision-making processesHydropower development worldwide is a US$40 billion a involving indigenous peoples and the right to decide theiryear industry, involving a wide range of actors, including own priorities in the process of development as it affectsstate agencies, dam-building companies, consultancies, them.donor agencies, banks and international finance insti-tutions. Projects, once conceived by developers, tend to Consultation is a process to be undertaken between thegather a momentum of their own, in which financial respective government and indigenous peoples within theand technical aspects are prioritized, and environmental country. Indigenous peoples are to be consulted aboutand social aspects are given less consideration or simply legislative or administrative measures which may affectoverlooked. them directly, and are to participate in the formulation, implementation and evaluation of plans and programmes for national and regional development that concern them2.1 Indigenous Rights (see box). Articles 13 and 16 concern land and relocation, where the term “lands” includes the concept of territories,Historically, dams and hydropower projects have had which “covers the total environment of the areas whichserious impacts on the livelihoods, territories and culture the peoples concerned occupy or otherwise use”. Reloca-of indigenous peoples. Due to discrimination and mar- tion shall take place only with the indigenous groups’ freeginalization, indigenous peoples have borne a dispropor- and informed consent. Free, prior and informed consenttionately higher share of the negative impacts of projects. (FPIC) is an important principle that has been furtherIndigenous peoples’ rights are often not addressed in elaborated in the United Nations Declaration on thenational legal frameworks, and are therefore ignored by Rights of Indigenous Peoples (2007).2 Argentina, Belize, Bolivia, Brazil, Chile, Colombia, Costa Rica, Ecuador, Guatemala, Honduras, Mexico, Paraguay, Peru and Venezuela 7
  8. 8. Indigenous women in Guatemala ILO Convention 169 Article 6 Article 13 1. In applying the provisions of this Convention, governments shall: 1. In applying the provisions of this Part of the Convention governments shall respect the special importance for the cul- (a) consult the peoples concerned, through appropriate pro- tures and spiritual values of the peoples concerned of their cedures and in particular through their representative institu- relationship with the lands or territories, or both as applicable, tions, whenever consideration is being given to legislative or which they occupy or otherwise use, and in particular the col- administrative measures which may affect them directly; lective aspects of this relationship. 2. The consultations carried out in application of this Con- 2. The use of the term “lands” in Articles 15 and 16 shall vention shall be undertaken, in good faith and in a form ap- include the concept of territories, which covers the total en- propriate to the circumstances, with the objective of achieving vironment of the areas which the peoples concerned occupy agreement or consent to the proposed measures. or otherwise use. Article 7 Article 16 1. The peoples concerned shall have the right to decide their 2. Where the relocation of these peoples is considered nec- own priorities for the process of development as it affects essary as an exceptional measure, such relocation shall take their lives, beliefs, institutions and spiritual well-being and the place only with their free and informed consent. Where their lands they occupy or otherwise use, and to exercise control, consent cannot be obtained, such relocation shall take place to the extent possible, over their own economic, social and only following appropriate procedures established by national cultural development. In addition, they shall participate in the laws and regulations, including public inquiries where appro- formulation, implementation and evaluation of plans and pro- priate, which provide the opportunity for effective represen- grammes for national and regional development which may tation of the peoples concerned. affect them directly.8
  9. 9. In 2007 the United Nations Declaration on the Rights of their own time; and informed means that informationIndigenous Peoples (UNDRIP) was ratified by the UN (relevant, understandable and accessible) should be pro-General Assembly after more than twenty years of discus- vided in their local languages and subject to local normssion within the UN system. The declaration represents an and customs. Indigenous peoples should be free to makeimportant advance in the rights of indigenous peoples; choices about the way they are governed and what hap-indigenous representatives played a key role in the de- pens on their lands.velopment of the declaration3. The question of consultation and consent has been a to-The declaration takes the fundamental elements of ILO pic of debate regarding development projects. The WorldConvention 169 and further elaborates self-determination Bank and others have expressed concern that consentand collective rights. In this context, articles 18, 19, 23, would effectively mean “a right of veto” for indigenous28 and 32 are of special importance. Free prior and groups. Consultation is often understood as a processinformed consent (FPIC) is an important element that which only requires exchange of information that leadsrecurs throughout the declaration. FPIC involves not only to “broad support of affected communities”, and does notconsulting with indigenous peoples, but gaining their involve sharing or transferring decision-making authorityconsent and cooperation. Consent implies giving appro- and more inclusive and collaborative decision-making.val or assent after thoughtful consideration. Where ILO The Intenational Finance Corporation (IFC), the privateConvention 169 only talks about consent in relation to sector arm of the World Bank group, supports consulta-relocation (article 16.2) and stipulates that states should tion rather than consent. The World Resource Instituteobtain agreement or consent, the declaration goes further (WRI) promotes free, prior and informed consent as pre-by saying that governments shall consult to obtain free, ferable to consultation. Related to hydropower projectsprior and informed consent. (see below), the World Commission on Dams is the only standard that recommends the inclusion of this principle.According to article 32 of the declaration, states shallconsult and cooperate to “obtain their free and informed The Inter-American Court of Human Rights has playedconsent prior to the approval of any project affecting a vital role in recent years, hearing different cases relatedtheir lands or territories and other resources, particu- to the rights of indigenous peoples in Latin America. Thelarly in connection with the development, utilization or cases before the Inter-American Court of Human Rightsexploitation of mineral, water or other resources”. The have generated important precedents on the obligationsprinciples of consultation and consent promote mutual of States. The court has ruled in favour of demandsunderstanding and consensus in decision-making, and presented by indigenous peoples from different Latinavoid the imposition of decisions. Free refers to a process American countries. The fundamental importance ofwithout external manipulation, interference, coercion and these judgements is the use of principles established inintimidation; prior refers to timely disclosure of infor- the ILO Convention 169 regarding the right to free, priormation where indigenous peoples can make decisions in and informed consent, consultation, and real participa-3 The vote was carried by an overwhelming majority of 143 countries in favour, 4 against (Canada, Australia, New Zealand, and the United States) and 11 abstentions. 9
  10. 10. United Nations Declaration on the Rights of Indigenous Peoples Article 18 Article 28 Indigenous peoples have the right to participate in decision- 1. Indigenous peoples have the right to redress, by means that making in matters which would affect their rights, through can include restitution or, when this is not possible, just, fair representatives chosen by themselves in accordance with and equitable compensation, for the lands, territories and their own procedures, as well as to maintain and develop their resources which they have traditionally owned or otherwise own indigenous decision-making institutions. occupied or used, and which have been confiscated, taken, occupied, used or damaged without their free, prior and in- Article 19 formed consent. States shall consult and cooperate in good faith with the indig- Article 32 enous peoples concerned through their own representative institutions in order to obtain their free, prior and informed 1. Indigenous peoples have the right to determine and de- consent before adopting and implementing legislative or ad- velop priorities and strategies for the development or use of ministrative measures that may affect them. their lands or territories and other resources. Article 23 2. States shall consult and cooperate in good faith with the indigenous peoples concerned through their own represen- Indigenous peoples have the right to determine and develop tative institutions in order to obtain their free and informed priorities and strategies for exercising their right to devel- consent prior to the approval of any project affecting their opment. In particular, indigenous peoples have the right to lands or territories and other resources, particularly in con- be actively involved in developing and determining health, nection with the development, utilization or exploitation of housing and other economic and social programmes affecting mineral, water or other resources. them and, as far as possible, to administer such programmes through their own institutions. 3. States shall provide effective mechanisms for just and fair redress for any such activities, and appropriate measures shall be taken to mitigate adverse environmental, economic, social, cultural or spiritual impact.4tion of indigenous peoples in decision-making processes. peoples are obligated to comply with three importantThe rulings also highlight the rights of local communities guarantees from international law: 1) effective partici-and indigenous peoples to define their own vision of pation, through good faith consultations, to obtain free,development. prior and informed consent; 2) equitable benefit-sharing between affected populations (groups) and the State; andImportant cases in the Inter-American human rights sys- 3) objective and impartial preparation and monitoring oftem include the case of the Saramaka people vs. Surina- Environmental Impact Studies6.me; the case of the indigenous community Sawhoyamaxaand the indigenous community Yakye Axa in Paraguay; The Organization of American States (OAS) is also de-the case between of the Maya Achi community and the veloping an American Declaration of Indigenous Rights.massacre Plan Sanchez in Guatemala; and the case of the The OAS working group is currently engaged in the finalMayan communities in the district of Toledo, Belize. revision of the draft declaration. Indigenous and state delegations are participating and submitting proposalsThe Inter-American Court of Human Rights ruled in in the debate and negotiation sessions where the text isNovember 20075 that States that wish to authorize pro- being drafted.7jects affecting natural resources and tribal and indigenous4 http://www.un.org/esa/socdev/unpfii/en/drip.html5 Caso del Pueblo Saramaka Vs Surinam, sentencia del 28 de noviembre de 2007 (Excepciones preliminares, fondo, reparaciones, y costas).6 Carlos Loarca: Mecanismos de impunidad ambiental para la hidroeléctrica Xalalá contra la consulta comunitaria de buena fe del Ixcán7 http://www.oas.org/consejo/CAJP/Indigenous%20special%20session.asp10
  11. 11. 2.2 Hydropower standards and guidelinesThe World Commission on Dams (WCD) was set up in1998 by the World Bank and the International Union forConservation of Nature (IUCN). WCD published a reportin 2000 that was the result of two years of research, dia-logue and consultation regarding the development effectsof big dams. It is, to date, the most complex, global evalu-ation of specific development projects ever undertaken. Itwas a unique process, with representation and participa-tion from different interest groups: the hydropower indus-try, academia, government, NGOs and representatives ofaffected communities.The final report concluded that dams and hydropowerprojects have made a significant contribution to develop-ment, but have also exacted an unacceptably and un-necessarily high price in terms of environmental andsocial consequences. The WCD report8 recommended a“new framework for decision-making” for projects in thewater and energy sector, aimed at avoiding a repeat of themistakes of the past. The WCD framework promotes arights-based approach, aimed at addressing the unequalpower relations between developers and affected com-munities, and based on negotiated legal settlements. WCD countries, there exists a broad international consensusemphasizes that the livelihoods of affected groups should regarding the core values and strategic priorities set out inbe improved as a result of the projects and that dams and the recommendations. A number of financial institutionshydropower should be seen as one of many alternatives for have since recognized the value of the report and adoptedrenewable energy production. the recommendations, including the European Invest- ment Bank (EIB), the European Bank for ReconstructionThe WCD report received a mixed response, but despite and Development (EBRD) and HSBC9. The report hascriticisms and rejection by a number of dam-building also been the focus of numerous multi-stakeholder dia-8 World Commission on Dams (2000) Dams and Development – A New Framework for Decision-making9 “HSBC is one of the largest banking and financial services organisations in the world. HSBC’s international network comprises around 8,000 offices in 88 countries and territories in Europe, the Asia-Pacific region, the Americas, the Middle East and Africa”. Source: http://www.hsbc.com/1/2/about 11
  12. 12. logue processes throughout the world. Germany and the Besides the WCD recommendations, there exist a numberNetherlands have restricted purchases of Clean Develop- of different international standards and frameworks aimedment Mechanism (CDM) carbon credits from big dams at ensuring sound project development and addressing theto those in line with WCD guidelines, while, under EU issues mentioned above. These include the Sustainabilitylaw, carbon credits purchased from hydropower projects Guidelines and Sustainability Assessment Protocol of thelarger than 20 MW can only be used in the European International Hydropower Association (IHA), the WorldEmissions Trading System (ETS) if in compliance with Bank’s Operational Policies and Performance Standards,WCD recommendations. and the banking sector’s Equator principles.In spite of the consensus that has coalesced around the The Sustainability Guidelines and accompanying Sus-core principles of the WCD report, substantial challenges tainability Assessment Protocol were developed by IHAin hydropower development still remain. Communities between 2004 and 2006. The protocol is currently underdirectly affected by projects are often not participating in review and a revised protocol is expected in 2010. Thedecision-making processes. Comprehensive assessments IHA protocol is neither a standard, nor a set of guidelines,of alternatives for renewable energy production are rarely but a voluntary assessment framework that measuresundertaken. Environmental Impact Assessments are often “performance” by giving “scores” on a range of aspectscarried out at a late stage or poorly conducted, with the regarding the quality of project development. Unlikefocus on mitigation rather than preventive measures. The WCD, the protocol neither defines minimum standardsconsequences for people living downstream are often not that developers should follow nor rights that should beadequately taken into account. Communities that have respected. A project that violates local communities’ orsuffered negative impacts, as a result of dam construction, indigenous rights or international human rights can inare inadequately compensated, unsuccessfully relocated practice get a good overall score.and provided with inadequate forms of livelihoods. The World Bank alone has financed over 550 dams world-Among the international standards and guidelines in the wide. The Bank’s Operational Policies address issues suchhydropower sector, WCD is the only one that promotes as indigenous peoples, the environment, natural habitatfree, prior and informed consent, stating that there is and dam security. In its policies, the World Bank statesa need for “negotiated agreements and decision-making that avoidance of impacts is preferable to mitigation, whileprocesses based on free, prior, and informed consent where improving livelihoods for affected communities is desir-projects affect indigenous and tribal peoples”. Key elements able. However, the policies also allow for restoration of lostof the WCD strategic priority on “public acceptance” livelihoods, and pay insufficient attention to downstreaminclude the recognition of rights, assessment of risks, nego- impacts and the importance of environmental flows. Thetiated agreements and decision-making processes based on IFC Performance Standards include detailed guidelinesFPIC. Access to information and legal assistance to enable for relocation of affected groups and a grievance mecha-stakeholders’ informed participation in decision-making nism, but there are also many vague formulations such asprocesses is required. Moreover, the WCD considers public “adequate openness” regarding project information andacceptance to be “essential”, achieved through “agreements an overemphasis on monetary compensation instead ofnegotiated in an open and transparent process”. sustainable livelihoods.12
  13. 13. The Equator Principles are voluntary standards for finan- implementation of the project”. In principle 5 on “Con-cial institutions to manage environmental and social risk sultation and Disclosure” the Equator Principles statein their project finance transactions. The principles were that “the government, borrower or third party expert hasestablished in 2003 by nine banks and are based on the consulted with project affected communities in a struc-IFC Performance Standards on environmental and social tured and culturally appropriate manner. For projectssustainability. The IFC Performance Standards go further with significant adverse impacts on affected communi-than the IHA Sustainability Guidelines and Assessment ties, the process will ensure their free, prior and informedProtocol in calling for free, prior and informed “consulta- consultation and facilitate their informed participationtion”, “informed participation” and “broad community as a means to establish, to the satisfaction of the EPFI10support”. The Equator Principles call for “consultation whether a project has adequately incorporated affectedand participation of affected parties in the design, review communities’ concerns…The borrower will tailor itsand implementation of the project”. Nevertheless, the consultation process to the language preferences of the af-Performance Standards stop short of the rights-based fected communities, their decision-making processes, andapproach of WCD and the requirement for the free, prior the needs of disadvantaged or vulnerable groups.”and informed consent of indigenous peoples and vulner-able groups. The performance standard also states that According to WCD, negotiations with affected people thatthe views of affected communities should be considered result in legally enforceable agreements are essential forfor issues beyond just mitigation measures, including “the developing projects. People affected by the project (in thesharing of development benefits and opportunities, and reservoir, upstream, downstream, catchment and con-implementation issues.” struction areas) should be included in the impact assess- ment. These affected people should be the first to benefitIHA’s Sustainability Guidelines and Sustainability Assess- from the project, and agreements should be negotiatedment Protocol imply that “community acceptance” of the with them.project is desirable, but not essential. The IHA guidelinescall for participation in decision-making through a pro- IFC requires free, prior, informed consultation and goodcess that the community views as “open, fair and inclu- faith negotiation with the affected communities whensive.” Community participation is emphasized primarily indigenous people are to be relocated and encourages thein mitigation measures. Neither the Guidelines nor the use of “negotiated settlements” to acquire land rights. TheProtocol provide guidance as to how to facilitate effective IFC Performance Standards say vulnerable people shouldcommunity participation or acceptance, or what these not be “disadvantaged in sharing development benefits”would constitute. The IHA framework does not call for and that development opportunities should be identi-free, prior, and informed consent of indigenous or tribal fied, but stop short of requiring benefit-sharing. The IHApeoples. framework makes no reference to the legal enforceability of agreements and puts much less emphasis on negotia-The Equator Principles promote “consultation and tions with affected communities. Nor does IHA requireparticipation of affected parties in the design, review and benefit-sharing with affected communities.10 Equator Principles Financial Institution. 13
  14. 14. 3 The case of GuatemalaIn this chapter we give an overview of Guatemala’s eco- hotspot and Guatemala has the largest percentage oflogical context, its environmental policies, its indigenous protected areas in Central America. Due to the country’speoples and the privatization of the energy sector in the location on the land bridge between North and South1990s. This is followed by a presentation of the various America, with the Pacific Ocean on one side and theactors in the sector, and selected topics that emerge from Atlantic on the other, in addition to differences in altituderelations between the various actors. ranging from 0 to over 4 000 meters above sea level, Gua- temala is characterized by exceptionally diverse ecosys- tems and great biological diversity16.3.1 Background113.1.1 Geography and people Guatemala and biodiversityGuatemala covers an area of 108,889 km² that borders Guatemala is recognized as a biodiversity hotspot. TheBelize, El Salvador, Honduras and Mexico. In 2009 the country has 14 eco-regions, and in 2005 over one-thirdpopulation was estimated to be around 13.3 million of Guatemala was forested17. About half of the forests arewith a population density of 122 per km² 12. Guatemala classified as primary forests, which are considered to con- tain the highest levels of biodiversity. According to figuresis the most populous of the Central American countries, from the World Conservation Monitoring Centre, Guate-and population growth was estimated to be 2.1 percent mala has 1 246 known species of amphibians, birds, mam-in 200913. The majority of the population is indigenous mals and reptiles. It is also home to at least 8 681 speciespeoples14. According to UNHCR15, 65 percent of the of vascular plants. With around 30 percent of the area de-Guatemalan population is rural and three quarters of the clared protected areas, Guatemala has the largest percent-indigenous population live in the rural departments. age of protected land in Central America18.In spite of being a small country, Guatemala has im-pressive cultural and ecological diversity. Mesoamerica, Guatemala is rich in renewable and non-renewable en-which includes Guatemala, is recognized as a biodiversity ergy resources, and only a small percentage of these have11 Much of this section is based on Hirsch, C. (2010) The political ecology of hydropower development in Guatemala: Actors, power and spaces. Master thesis University of Life Sciences12 CIA World Factbook 201013 Ibid14 Numbers vary from 40 to 65 percent. According to many indigenous organizations, the number is 65 percent, while official numbers are 40. From the 2001 census, 40 percent of the population was indigenous groups, but the methods have been questioned. In the census K’iche made up 9.1 percent; Kaqchikel 8.4 percent; Mam 7.9 percent; Q’eqchi 6.3 percent; other Mayan 8.6 percent; indigenous non-Mayan 0.2 percent; and others 0.1 percent. In addition to Spanish, there are 23 officially recognized Amerindian languages, including Quiche, Cakchiquel, Kekchi, Mam, Garifuna, and Xinca.15 The UN Refugee Agency http://www.unhcr.org/refworld/topic,463af2212,469f2e812,4a66d9b550,0.html16 Detlefsen et al (1991) Plan de acción forestal de Guatemala.17 36,3 percent, according to The Economic Commission for Latin America (ECLA)18 28 percent in 2007, according to The Economic Commission for Latin America (ECLA)14
  15. 15. Guatemala is a country with high biodiversity.been exploited. Guatemala is the largest oil-producing na-tion in Central America. With over 3 000 rivers, the coun- YUCATAN PENINSULAtry is regarded as ripe for hydropower development, with GULF OF MEXICOa potential production capacity of up to 5 000 MW, ofwhich only 11 percent has been exploited19, according to MEXICOthe National Commission for Electrical Energy (CNEE). CARIBBEAN SEA BELIZEThe topography is irregular, with a volcanic chain andtwo mountain ranges: Sierra Madre and Sierra los Cu-chumatanes. Climate varies in the country’s three climate GUATEMALAzones, which are the tropical climate zone (under 1,000metres above sea level), temperate zone (1,000-2,000 HONDURASmetres above sea level), and the cool zone (over 2,000 PACIFIC OCEANmetres above sea level). Guatemala’s climate is character- EL SALVADOR NICARAGUAized by two seasons – the wet season that lasts from Mayto November and the dry season which prevails betweenNovember and April. Despite its many natural resources, Guatemala is one of the poorest countries in Latin America, and a country withGuatemala has a complex water system, with 40 watersheds huge inequalities. The distribution of income remainsand 3 000 rivers flowing to the Pacific Ocean, the Atlantic highly unequal; Guatemala ranks 122 on the UN HDI indexOcean and the Gulf of Mexico. Amongst the largest rivers, (2008) with more than half the population living belowwhere a potential for hydropower has been identified, are the national poverty line20. In 2007, 27 percent of the adultthe Usumacinta, Motagua, Sarstún, Ixcan and Polochic. population was illiterate and life expectancy was 70 years21.19 Comisión Nacional de Energia Electrica (CNEE), Plan de Expansion indicativo del Sistema de Generación 2008-202220 56 percent, estimation 2009 http://hdrstats.undp.org/en/countries/country_fact_sheets/cty_fs_GTM.html#21 UNDP Human Development Report 2009 15
  16. 16. Mayan ceremonies are an important part of the Mayan culture.3.1.2 Indigenous Peoples in Guatemala the rest of the population, indigenous people have been subjected to political exclusion, cultural discriminationMany international reports have revealed the grave situa- and economic marginalization from society.”23tion of the indigenous peoples of Guatemala, and the hugeinequalities that exist between society in general and the The indigenous groups in Guatemala are among the poor-indigenous population. This has resulted in calls for the est in the country. Figures from 2006 show that, amongGuatemalan state to comply with both the Peace Agree- the indigenous population, 74.8 percent are poor, and 27.2ments signed in 1996 and ILO convention 169, ratified percent live in extreme poverty24. Furthermore, over 70by Guatemala in 1995. The 2002 report of the UN special percent of the people living in rural areas are poor. Quicherapporteur22 on the situation of human rights and funda- and Altaverapaz are the poorest states in the country andmental freedoms of indigenous people, says the following home to a majority of indigenous groups25. Lack of educa-about Guatemala: tion and access to health services is a problem in many poor communities. Many indigenous groups live in the “Guatemala is a multi-ethnic, pluri-cultural and multi- central highlands of Guatemala, largely due to agricultural lingual society, in which around half of the population policies implemented by the state or the armed conflict of 12 million belong to the Maya, Xinca and Garífuna that have forced local communities to relocate or migrate. indigenous peoples. In a number of regions of the country, especially in rural areas, indigenous peoples The four largest indigenous groups in Guatemala are make up a majority of the population. National identity K’iche, Kaqchikel, Mam and Q’eqchi. In addition there are in Guatemala is based to a large extent on the living others Mayan groups, and a few non-Mayan groups such as cultures of its indigenous peoples with their traditions, the Xinka and the Garifuna. In addition to Spanish, there their community values, their languages and their spiri- are 23 officially recognized Amerindian languages, includ- tuality. But far from being full and equal partners with ing Quiche, Cakchiquel, Kekchi, Mam, Garifuna, and Xinca.22 Report of the Special Rapporteur on the situation of human rights and fundamental freedoms of indigenous people, Rodolfo Stavenhagen, submitted in accordance with UN Human Rights Commission resolution 2001/57. Mission to Guatemala23 Ibid24 Instituto Nacional de Estadistica (INE) 200625 In Quiche, where 93.5 percent of the population is indigenous, 81 percent of the population lives in poverty, with 25.6 percent of the population living in extreme poverty. The situation in Altaverapaz is even more acute where 78 percent of the population lives in poverty and 43.5 percent lives in extreme poverty. Indigenous people account for more than 98 percent of the population in Altaverapaz.16
  17. 17. Source: http://www.guatemalainfo.com/images/map_of_guatemala_.jpg 3.1.3 The legacies of the armed conflict The country suffers from severe and unequal land distri- bution, mainly due to a lack of will by powerful political Guatemala is a country that has been deeply scarred by and economic groups to undertake land reform. Unequal years of authoritarian government and a violent conflict land distribution was one of the causes of the civil war. The which lasted for 36 years (1960-1996). Many people were peace agreements from 1996 address land distribution, re- displaced by the violence and civil war. Estimates vary from settlement and return to communities, as well as socioeco- 240,000 to 1 million people. 14 years after the Peace Agree- nomic and political integration. However, the agreement ments many people are still waiting for compensation and has not been implemented successfully, largely because of many have not been able to return to their communities. resistance from the military and economic elites. Displa- 17
  18. 18. cees from the armed conflict have been discriminated The Peace Agreementsagainst and stigmatized, making it difficult for them toreturn to their communities. The Peace Agreements constitute a framework with com- mitments to assure a long lasting peace process and to solveThe UN special rapporteur (2002) stated that “one of the the enduring conflicts that have historically excluded thefundamental problems affecting the indigenous peoples majority of the indigenous population from decision-mak-relates to the right to land. The lack of access to land, the ing processes. The first breakthrough was the Human Rightslack of response to land-related claims, lack of respect for Accord, signed in March 1994, followed by the Agreementtraditional places such as communal forests, forced re- on Identity and Rights of Indigenous Peoples (AIRIP) fromsettlement of indigenous peoples as a result of economic 1995 and the Demilitarization Accord from 199626.development projects, and problems stemming from lossof land caused by the armed conflict, create a situation of The AIRIP accord mandates a constitutional amendmentrising social tensions.” Ever increasing numbers of indig- redefining Guatemala as a multi-ethnic, multicultural andenous people and poor peasants have turned to land oc- multilingual nation, and represents a reference point forcupations as their last resort for addressing unequal land the structural changes that the state needs to undertakedistribution. The occupations have led to crackdowns by to incorporate the Mayan, Garifuna and Xinca peoplesthe authorities, especially during the Oscar Berger gov- in all aspects of national life. Unfortunately, this has noternment (2004-2008). yet been accomplished and different international bodies have stressed the urgency of reforms related to indigenousDue to a long history of expulsions, relocations, forced peoples. The agreements have to a large extent disappearedresettlement and migration, many local communities lack from public debate and from the agendas of the politicalaccess to the land they need. The increased and intensified parties. AIRIP proposes reforms, including institutionaluse of the land in Guatemala has put ecosystems under models for participation by indigenous people in decision-severe pressure. The use of land for agro exports and cattle making, and the establishment of mandatory consultationranches, mining activities and larger infrastructure projects mechanisms and institutions representing indigenousare now threatening the areas for local settlements and peoples. AIRIP indicated the need for changes in munici-especially indigenous groups. pal laws to take into account indigenous communities and their leaders, respect for common law, distribution ofLastly, and of fundamental importance, the many years public expenditure and the ratification of the ILO Conven-of conflict and repression of all types of organisation and tion 169.opposition have left a legacy of disrupted social networks,fear and lingering distrust in many local communities. The Peace Accords also acknowledged the historic neglectThe killings and persecution of local leaders and others are of the infrastructure needs of rural and other disadvan-strong in the memory of the affected communities. The taged communities and the importance of modern utili-lack of trust in the state is also evident. ties, such as electricity and water. A commitment was made to expand electricity coverage to disadvantaged groups.26 Strengthening of Civilian Power and the Role of the Army in a Democratic Society18
  19. 19. Some of the laws and reforms approved in Guatemala in 3.1.4 Environmental policiesrecent years are directly related to commitments fromthe Peace Agreements and are of vital importance for In recent years severe environmental issues have come tostrengthening the rights of indigenous peoples. These the fore in Guatemala, such as deforestation, soil erosion,include the Law of Development Councils (2002), the contamination and water pollution. According to the Na-Municipal Code (2002) and the Reform of the Penalty tional Council of Protected Areas (CONAPE), more thanCode regarding Discrimination (2002). The first two are 85 percent of the rivers in Guatemala are contaminated27.intended to increase participation by indigenous peoples The environmental degradation is due to a combination ofand recognize their political institutions. factors, including weak regulation and poor enforcement, a lack of environmental policies, and powerful interests inIn March 1995, Guatemala ratified ILO Convention 169 the agro-business, industrial and mining sectors28.on the Rights of Indigenous and Tribal Peoples. Theconvention entered into force in June 1997. The Law of The environmental degradation in Guatemala was con-Development Councils created development councils at firmed by the United Nations Verification Mission in Gua-local, municipal, provincial, regional and national level. temala (MINUGUA) in 2001. According to MINUGUA,The local development councils were to be elected by the the environmental destruction was a result of the samelocal communities, but primarily with an administra- social processes that generate concentration of wealth, andtive mandate, in particular concerning the use of local at the other extreme, social exclusion and poverty in thebudgets. The Municipal Code includes neighbourhood country. They asserted that it was not possible to separateconsultations (”consultas vecinales”), in which local natural resources from their “economic, cultural, socialcommunities can give their opinion about development and political dimensions”.29projects “that affect all the citizens of the municipality”. During the 1980s and 1990s the environmental, legal andAfter a long period of authoritarian government, an institutional framework of Guatemala was elaborated,elected civilian government took power in Guatemala largely inspired by international processes such as the Rioin 1986. However, the country was still in the midst of conference on environment and development in 1992. Anconflict which disrupted the process of democratization. emerging environmental movement pushed for the realisa-Alvaro Colóm from the social democratic party, Unidad tion of new laws and regulations. The Law of Environ-Nacional de Esperanza (UNE), won the presidential elec- mental Protection and Improvement was passed in 1986,tions in 2007 and took office in 2008. Colóm stated that resulting in the creation of the National Commission ofhe would create a government with a “Mayan face”, and Environment, later turned into the Ministry of Natural Re-focus on education and health, as well as social pro- sources and Environment (MARN). Other important lawsgrammes. include laws on forestry (1996), protected areas (1989) and conservation and sustainable use of biodiversity.76 Personal communication, August 200928 SAVIA 2009, Realidad Ecológica de Guatemala29 MINUGUA 2001 19
  20. 20. Guatemala has over 3000 rivers.Importantly, Guatemala does not have a particular water Degradation of groundwater and contamination oflaw for regulating water resources. The Guatemalan water sources are two serious problems. Rivers are heav-constitution acknowledges water as state property and ily contaminated by intensive agriculture, agro-industrialprioritizes use for social interests, but without a water law, activities and wastewater from urban areas. Mining and oilwater is in practice administered and used without regula- extraction have serious environmental effects, contaminat-tions30. Several processes have been started during the last ing both soil and water, as reported by several organiza-30 years to elaborate a law proposal31, but these have met tions. The north of Guatemala and the state of Petén havestrong resistance. The last intent was made in 2006, a pro- mostly been impacted by oil extraction. The impacts fromcess initiated by the Commission for the environment and mining on the environment and local communities, asnatural resources in the Congress, accompanied by the en- reported by the organizations, include destruction of floravironmental organization CALAS. Nevertheless, without and fauna; excessive use of water; and the use of chemicalsintegrating the rights of indigenous and local communi- that severely contaminate water, affecting both ecosystemsties and securing the human right to water, the proposal and the health of local communities32.have been met by strong opposition from environmentaland social organizations, and indigenous groups, particu- During the last decade the mining sector has expandedlarly in Totonicapán. Furthermore, powerful interests in in Guatemala. The small percentage of royalties paid tothe agro-business sector also oppose a water law. municipalities (0.5 percent) and the state (0.5 percent) has30 Hurtado Paz y Paz, M. (2006) Protestas sociales y recursos naturales en Guatemala. FLACSO. Guatemala City.31 A law proposal for water “Ley General de Aguas” was presented in September 2004 by congress member Alfredo Cojtí, and was elaborated by CALAS.32 Comisión Pastoral Paz y Ecología - Copae (2009): Situación actual del agua de los rios Tzala y Quivichil en el area de influencia de la mina Marlin, ubicada en los municipios de San Miguel Ixtahuacan y Sipikapa, departamento de San Marcos, Guatemala. Segundo informe annual del monitoreo y analisis de la calidad del agua. Diocesis de San Marcos.20
  21. 21. been the subject of extensive debate, as well as the envi- ventive33. A series of institutions have been created to dealronmental and health impacts in the areas of exploitation. with environmental issues, but these face several challenges,Weak enforcement of environmental regulations is felt by such as lack of resources, lack of competent staff and littlecommunities, when livelihoods and the environment are de- coordination between the different entities34. High turnoverstroyed, and health endangered. Civil society organizations of bureaucrats in the various entities causes a lack of conti-claim that the state is doing little to protect local communi- nuity in priorities, which results in a lack of implementationties, and companies are operating in a legal and institutional of long term programmes and projects. Weak institutionsvacuum. Local communities have mobilised and started to have been taken advantage of by different actors, companies,reject mining and big infrastructural projects in their areas. groups and individuals for their own interests.Furthermore, Guatemala is considered one of the world’smost vulnerable countries to climate change. The GlobalDecadal Climate Risk Index for 1997-2007 ranked Guate-mala 11th of 177 countries, underscoring the country’s veryhigh vulnerability to climate-related events. In recent years,storms and droughts have had massive human, environ-mental and economic impacts in Guatemala, particularlyaffecting poor communities in rural areas. Climate changemitigation is used as an argument for the development ofthe hydropower sector, potentially rendering local residentseven more vulnerable to climate change than before.A severe problem facing the country is the lack of a plan forland use, with accompanying laws and regulations, for zoningof different land uses and land management which wouldhave permitted consideration of fragile ecosystems andsecured the rights of indigenous peoples. Guatemala has alsosigned various conventions and agreements that have not yetbeen implemented in the legal framework of the country.According to a study from FLACSO (2006), the current legalenvironmental framework is ample but not very effective,and the initiatives are reactive rather than proactive and pre- Guatemala has many original water sources.33 Margarita Hurtado Paz y Pax (2006) – Protestas sociales y recursos naturales en Guatemala. FLACSO. Guatemala City34 Such as INAB, CONAP and CONRED. MEM and MIGA are also important actors related to environmental issues. 21
  22. 22. 3.2 The power sector tant new actors have emerged in services, banking and in Guatemala35 non-traditional agriculture. Together with international proponents of neoliberal policies, such as the World Bank and the IMF, these groups have had a strong influence on3.2.1 1990s: An era of privatization the making of many of the laws, and the elaboration of the current legal and institutional framework.During the 1990s, and especially after the Peace Agree-ments, Guatemala has pursued economic reforms on the The electricity sector was privatized and liberalized in 1996basis of macroeconomic stabilization where neoliberal through the General Law of Electricity. Privatization waspolicies have predominated, following the Washington driven through by the energy and mining minister LeonelConsensus. Neoliberal policies have affected many sec- Lopez Rodas and the government of Alvaro Arzu, and sup-tors of Guatemalan society and introduced changes in the ported by the Multilateral Investment Guarantee Agencylegal framework promoting liberalization of the economy (MIGA) of the World Bank Group. The Arzu period fromand privatization of public companies and services. The 1996 to 2000 was the most aggressive period in Guatemalaemphasis on private initiatives has reduced the role of the in terms of privatization and structural adjustment36.state to that of regulator. Important laws were made in thewake of the Peace Agreements, such as the Hydrocarbon The drastic reform of the electricity sector included split-Law (1991), the General Law of Electricity (1996), the ting it up into different functions, including production,Mining Law (1997), and regulations for the commercial- transmission, distribution and electricity trading, favour-ization of the Hydrocarbon Law (2004). Nevertheless, ing and promoting private participation in the sector. Twomany of these laws were passed without public debate and important institutions were created: the National Commis-consultation, and participation from civil society and af- sion for Electrical Energy (CNEE), as the regulatory agen-fected groups. cy, and Administrador del Mercado Mayorista (AMM), the wholesale market administrator of the sector. In practice,In Guatemala a minority, mainly ladinos and people of Eu- this has led to private and foreign companies entering theropean heritage, represent the economic and political elite. sector where the state mainly provides authorisations andPowerful groups in the country range from the military to acts as a regulator.the financial sector to the agro-business sector, with organ-isations such as the Agrarian Owners Group (UNAGRO) Prior to the reform, electricity was provided by two stateor the Coordinating Committee of Agricultural, Commer- owned companies, EEGSA37 in the metropolitan region,cial, Industrial, and Financial Associations (CACIF). With and INDE38 throughout the rest of the country. Thethe introduction of the new economic model, impor- Electricity Law of 1996 sought to increase private invest-35 Much of this section is based on Hirsch, C. (2010) The political ecology of hydropower development in Guatemala: Actors, power and spaces. Master thesis University of Life Sciences36 Ferrigno, I. (2009). El oscuro negocio de la luz. FLACSO. Guatemala City.37 Empresa Electrica de Guatemala38 Instituto Nacional de Electrificacción22
  23. 23. ments in the sector and improve efficiency by introduc-ing competition in electricity generation, and privatizing The Electricity Reform 1996the distribution network39. In 1998, 80 percent of EEGSAwas sold to the Spanish company Iberdrola. The distribu- Under the new normative, institutional and operativetion assets of INDE were broken down into two regional framework for electricity, the system was divided into fourdistribution companies, DEORSA (serving the east of the operational areas: generation, transmission, distributioncountry) and DEOCSA (serving the west) and put up for and electricity trading. More and more private compa- nies are getting involved in power generation, in additionauction with 50-year concessions. The Spanish company to the state company INDE; two private companies areUnión Fenosa Internacional S.A. won the bid for both involved in transmission, in addition to INDE; 16 publiccompanies in 1998, supported by the Multilateral Invest- institutions and three private companies are involved inment Guarantee Agency (MIGA)40. Since privatization, distribution; while 14 private companies are engaged inINDE has been dramatically downsized and left in control electricity trading – in total, 67 entities, of which 49 areof power stations, mainly hydroelectric, as well as continu- private (73.13 %). In addition there are 800 so-called “biging to own and operate the national transmission grid. users”.The net sale revenue from the privatization of the distribu- The Ministry of Energy and Mining (MEM) is responsibletion companies (US$ 110 million) was placed in a trust for planning, coordination and enforcement in the sec- tor, implemented by the National Commission of Electricfund to finance an ambitious rural electrification pro- Energy (CNEE), which functions independently of thegramme (PER) initiated in 199841. The two distribution ministry.companies DEORSA and DEOCSA were made contrac-tually responsible for executing the investments of the The public company INDE was split into three: Empresaprogramme.42 The plan made the privatization even more de Generacion de Energia (EGEE), la Empresa de Transporteattractive, as the distribution companies were paid $650 y Control de Energia (ETCEE), and la Empresa de Distribu-for each new eligible connection achieved43. cion de Energia Electrica (EDEE). In 1998 the latter two were converted into DEORSA and DEOCSA. 91.4 per- cent of the shares in these two companies are owned by Distribuidores Electrica del Caribe, under which the Spanish company Union Fenosa operates within the country. Source: Ferrigno 2009 El Oscuro negocio de la luz. FLACSO.39 Comisión Nacional de Energía Eléctrica40 “MIGA supported the project by providing investment insurance coverage against the risks of currency restriction, expropriation, war and civil disturbance, and breach of contract”. MIGA in conflict affected countries, 2003.41 Foster & Araujo 2004 ”Does infrastructure reform work for the poor? A case study from Guatemala”42 DEORSA and DEOCSA are responsible for the distribution assets, and INDE is responsible for operating transmission assets.43 Connections 200 meters or more beyond the existing power grid and not included in the companies concession area. Source: MIGA in conflict affected countries, 2003. 23
  24. 24. 3.2.2 Strategic plan for hydropower responsibility” and insists that their investments will con- tribute to local and national development.The plan to expand the hydropower sector was initiatedby the former president, Oscar Berger, and the Gana44 Plans to expand the hydropower sector in Guatemalagovernment (2004-2008). The Strategic Plan for Hydro- are also part of a larger regional policy, the Plan Meso-power Projects was formulated in 2004 to respond to américa (former Plan Puebla Panama). The plan, initi-increasing electricity demand and an increase in oil prices, ated in 2001, is a large infrastructure project extendingand reduce dependency on fossil fuels. Several studies to from Puebla in Mexico to Panama. The project promotesdevelop the hydropower sector were carried out as early “regional integration and development” in the region.as the 1970s, but actual development was disrupted by the The plan is intended to stimulate trade by building orarmed conflict. In October 2007, three months before the improving large-scale infrastructure projects such ascurrent government came into office, the then minister of roads, airports, harbours, and electricity and telecommu-energy and mining enacted the Energy and Mining Policy nications grids.for 2008-2015.The current Colóm government moved ahead with the Plan Mesoaméricaplans, despite lack of participation by affected parties andcivil society organizations. On the 25th of May 2008 Presi- The plan consists of integration of the energy, transportdent Colóm announced an initiative aimed at changing the and telecommunications sectors; trade facilitation; sus- tainable development; human development; tourism; andcountry’s “energy mix” by favouring hydropower and coal. disaster prevention and mitigation. Transport (85 percentAt this point oil prices were at their highest. The goal is to of investments) and energy (11 percent) are the tworeduce the country’s dependency on oil and by 2022 gener- most important components.ate 60 percent from renewable resources45.At present, the state does not plan to develop projectsitself,46 arguing that private companies will do a better job, The Mesoamerican Plan has been criticized for followingand that the state does not have the capacity or financial a neoliberal model of development, favouring multina-resources. Private and foreign companies are given various tional companies over the environment, local culture,incentives to operate in the country through the Law of indigenous rights and local communities who have littleIncentives for Renewable Energy (2003), while informa- voice in the development process. Critics argue that thetion for companies is easy to access from the Guide for project only serves to put in place infrastructure that al-Investors published by the Ministry of Energy and Mining. lows free trade agreements to flourish and private compa-The Guatemalan state encourages the companies’ “social nies to operate47.44 Gran Alianza Nacional45 MEM 28th of February http://www.mem.gob.gt/Portal/home.aspx46 Personal communication, Ministry of Energy and Mining47 CIEPAC http://www.ciepac.org/encontrados.php24
  25. 25. Construction of the hydropower project Xacbal in Quiche.A decade ago, governments in the region agreed to de-velop a system for electricity interconnection (SIEPAC)48. The legal framework for the energy sectorSIEPAC consists of the construction of at least 1,800 km in Guatemala230 kV transmission line from Panama to Guatemala, • The Guatemalan Constitutionaimed at developing a regional electric market. Guatema- • General Law of Electricity (decree 1996)la’s interest in the system is first and foremost in export- • Regulations of the General Law of Electricitying electricity. Apart from Costa Rica, other countries in (Gov.ac No 256-97)the region have an electricity deficit49. In 2006, Guatemala • Regulations of the Wholesale market administrator,signed an agreement with Mexico to develop the electric- Administrador Mercado Mayorista (Gov.ac no.299-98)ity interconnection. The interconnection was finalized • Technical norms from the National Commission ofin 2009, and Guatemala will buy energy from Mexico to Electric Energy (CNEE) and AMMcover the country’s social tariff. The interconnection with • The Law of Incentives for Renewable Energy (2003) • The Law of the Environment (1986)Mexico is financed with public funds and loans to the • The Law of Protected areas (1989)state, yet another form of assistance to companies that • Regulations for Environmental Impact studies (2003)wish to export. • Municipality Code (2002)48 Sistema de Interconexion Electrica para America central49 It should be noted that the Costa Rican system is managed publicly with great success 25
  26. 26. Important actors in the sector in Guatemala are • the Ministry of Energy and Mining (MEM) • the regulating agency, the National Commission of Electric Energy (CNEE) • the wholesale market administrator, Administrador del Mercado Mayorista (AMM) • the Ministry of Natural Resources and the Environment (MARN) • the public company INDE • the distributors (mainly DEOCSA and DEORSA) • the developers and companies • the investors and the banking sector • the large-scale users (industry, mining, maquila industry) • the municipalities, the mayors and the Development3.2.3 Actors in the hydropower sector Councils • intermediaries (consultants, lawyers, conflict resolutionThe privatization of the electricity sector in Guatemala has organisations)created a new situation for the different actors involved. • actors from civil society (grassroots organizations,Previous to privatization the state was the main actor unions and NGOs)responsible for developing hydropower projects. While the • the local affected communities50state still manages projects developed prior to the privati-zation and has principal responsibility for the transmissionnetwork, the state’s role has largely been reduced to that Electricity generation is liberalized with free competition,of a regulator. With a weak regulatory capacity and the with agents and large-scale users freely entering into agree-absence of the state in many parts of the project develop- ments based on the conditions set out in the contracts, inment process, communities, as well as private and foreign terms of duration, quantity and price. Transmission andcompanies, are largely left in a legal vacuum. Privatiza- distribution are regulated by CNEE.tion has opened the doors for the participation of privateactors and transnational companies who are encouragedto develop the sector. Several private initiatives have been 3.2.4 Current developments in the power sectorproposed to develop hydropower projects, facilitated by theMinistry of Energy and Mining (MEM). According to the Ministry of Energy and Mining, im- portant advances have been made since the beginning ofThe Ministry of Energy and Mining (MEM) is responsible the Colóm government’s term in 2008. At that time, 46for formulating and coordinating the policies and plans of percent of electricity came from fossil fuels, and only 37the state and programmes in the sector and for applying percent from renewable energy. By the end of 2008, thethe General Law of Electricity. The ministry gives the final proportion was 45.8 percent from renewable energy, and,authorization for use of water and rivers. during the Colóm administration, renewable projects with a total of 1 202 MW of generating capacity haveThe National Commission of Electric Energy (CNEE) is been developed. 312 MW was added to the system dur-the technical organ of the ministry in charge of compliance ing 2009, and 444 MW of capacity are currently underwith the General Law of Electricity. CNEE is the regulator construction. Nearly 90 percent of this new production iswhich issues technical norms and regulates prices. generated from hydroelectric projects51.The Wholesale Market Administrator (AMM) is a private In October 2009 the transmission station Los Brillantes inentity, established by law, which coordinates transactions the county (departamento) of Retahuleu was inaugurated.between different participants in the electricity market, The station secures the electricity interconnection betweensecuring free competition in the market and promoting Guatemala and Mexico. This means that Central Americainvestments. is now connected with Mexico, as part of the already50 The affected communities are defined in a broad way, including the surrounding communities and the downstream communities51 MEM 28th of February 2010 http://www.mem.gob.gt/Portal/home.aspx26
  27. 27. Hydropower projects in Guatemala County In operation Under Under preparation Estimation of Total Construction or EIA process proposed projects* Alta Verapaz 5 1 3 17 26 San Marcos 1 1 3 17 22 Quiché 2 2 9 13 Huehuetenango 13 13 Baja Verapaz 2 1 1 4 8 Esquintla 5 1 – 1 7 Petén 7 7 Quetzaltenango 4 1 1 – 6 Zacapa 1 – 3 – 4 Santa Rosa 2 – – 2 4 Chiquimula 1 3 4 Guatemala 2 1 3 Izabal 1 1 1 3 Retalhuleu – 1 – 1 2 Salama 1 1 Xela 1 1 El Progreso 1 1 Jalapa 1 1 Suchitepeques 1 1 Jutiapa 1 1 Not specified 4 4 Total 24 9 16 83 132 Source: Hirsch, C. (2010) The political ecology of hydropower development in Guatemala: Actors, power and spaces. Master thesis University of Life Sciencesmentioned Plan Mesoamerica. This will facilitate energy 10 to 340 MW55. Projects are under planning or construc-exports. In addition, the county of Petén has now been tion in the counties of Altaverapaz, San Marcos, Quiche,connected to the national grid (SNI)52. Huehuetenango, Baja Verapaz, Esquintla, Petén, Quet- zaltenango and Zacapa.Over 20 hydropower projects are currently in operation inGuatemala, nine of which are operated by the state. The Particularly since the expansion of the mining andoldest is from 1926; four were built during the 1960s and hydropower sectors, conflicts have arisen over natural1970s; and two in the 1980s. One project, in particular, has resources and the control of territories; local commu-left its mark on the country: the Chixoy dam from 1983, nities have been opposed to large-scale infrastructurethe largest hydropower project in Guatemala (300MW). projects and investments from transnational companies.No projects were built during the most violent years of the The focus on the potential of hydropower seems to havecivil war, up until 1995. Between 1995 and 2009 16 projects overlooked the people living in the affected areas, as wellhave started operations, only one of them operated by as indigenous rights, the environment and the specialthe state. To date, there are around 10-15 projects under ecological context of Guatemala. The framework for theconstruction and several in the planning phase.53 Over 30 sector has created new and complicated dynamics, oftenprojects have been proposed by the National Commission fraught with conflict, between the state, business interestsfor Electrical Energy (CNEE).54 The projects range from and local communities.52 Sistema Nacional Interconectado53 Date: 28th of February: 30 proposed projects, according to Invest in Guatemala. http://www.investinguatemala.org/index.php?option=com_content&task=view&id=45&Itemid=4654 Plan de Expansion indiactivo del Sistema de Generacion 2008-202255 http://www.investinguatemala.org/index.php?option=com_content&task=view&id=45&Itemid=46 27