The report “Canal de Nicaragua: Executive Summary of Environmental and Social Impact Assessment” was carried out by the British consulting firm Environmental Resources Management (ERM) and commissioned by the Hong Kong Nicaragua Canal Development (HKDN Group), the Chinese company that won the bid to build the canal.
The 113-page executive summary sums up the study, whose unabridged version has not been made publicly available by the government, ERM or HKND.
In the study, ERM says the megaproject could be of great benefit to the country as long as best international practices on the environmental, economic and social fronts are incorporated at the design, construction and operational stages, for which it makes a number of recommendations.
But it spells out specific risks and threats to the environment in this impoverished Central American country of 6.1 million people with a territory of 129,429 square kilometers.
The canal will go across the 8,624-sq-km Lake Cocibolca, also known as Lake Nicaragua – the second largest lake in Latin America after Venezuela’s Lake Maracaibo. The route will be nearly four times longer than its rival, the Panama Canal.
The 276-km canal will link the Atlantic and Pacific oceans; of that length, 105 km will cross Lake Cocibolca.
Salvador Montenegro, former executive director of the Aquatic Resources Research Centre of the National Autonomous University of Nicaragua (CIRA/UNAN), stressed that the executive summary suggests additional studies on Lake Cocibolca, to fully assess the risks to the environment and to recommend actions to mitigate them.
“These are the same observations that I have been making, which were never taken into account,” Montenegro told IPS. “On the contrary, they accused me of being a traitor to the government and of being in the opposition, when the only thing I was doing was trying to preserve the health of Lake Cocibolca.”
The scientific researcher was dismissed from his post in the university allegedly due to pressure from the government of left-wing President Daniel Ortega, in office since 2007, who backs the canal project driven by the government investment promotion agency, Pro-Nicaragua, headed by his son Laureano Ortega.
Now Montenegro forms part of the Grupo Cocibolca, a group made up of scientists, academics, environmentalists and activists openly opposed to the future canal.
Mónica López, an activist who belongs to the group, summed up for IPS the main findings in the ERM study which she believes make it clear that the project would open the doors to an unprecedented environmental catastrophe for Latin America.
She said ERM concluded that neither HKND nor the government have the experience to carry out a project of this magnitude.
The report says “the government would be wise to consider engaging with international development agencies such as the World Bank or the Inter-American Development Bank,” to avoid damage in sensitive areas like the Mesoamerican Biological Corridor, the Indio Maíz Biological Reserve, the San Juan River, Lake Cocibolca and surrounding nature reserves.
“The study says that in normal situations, these areas would generally be considered untouchable due to their social and ecological fragility,” López noted.
ERM says that if further studies are not conducted and “mitigation and offset measures” are not successfully implemented, “biodiversity impacts would be significantly worse than described.”
It recommended further studies to identify seismic risks posed by construction of the canal; gauge the impact of dredging in the lake; identify the threats from the introduction of saltwater into the lake; and assess the risk of a reduction of the outflow of water from the lake to the San Juan River.
It also concludes that without the implementation by HKND and the government of the environmental and social mitigation measures recommended in the report, not even Route 4 – the one that was selected and the only one considered viable – would have the positive net impact for the environment that could justify construction of the canal.
Based on the ERM executive summary and the considerations of local and international scientists and other experts, the Grupo Cocibolca sent a letter to the president on Oct. 26 asking for the repeal of the law that made the canal project possible.
Ortega has not responded. But HKND, through its officials outside of Nicaragua, announced further studies with a view to moving ahead on the project that will have a projected cost of 50 billion dollars – the largest megaproject that the world has seen in the last few years.
HKND’s chief project adviser, Bill Wild, told the local media that the company had made some “optimisations, with a higher cost to the project, to avoid and reduce environmental and social impacts and keep the risks to a minimum.”
According to Wild, the studies that began to be carried out in 2013 will continue until 2016 and will be complemented by additional topographic and hydrological research, to be conducted by the Australian consultancy CSA Global.
The executive vice president of HKND Group, Kwok Wai Pang, told the local newspaper El Nuevo Diario that now that the ERM study has been presented, “more in-depth studies will be carried out along the route.
“During the feasibility study we conducted topographical, seismic, hydrological and archaeological research and we collected a large volume of seismic information and data on water levels, salinity intrusion and other questions, to draft a conceptual design.”
Telémaco Talavera, spokesman for the president’s Great Interoceanic Canal of Nicaragua Commission, downplayed the concerns expressed by ERM and environmentalists.
Speaking with IPS and three other journalists, he expressed confidence in HKND’s capacity “to work out, with great wisdom, any inconvenience that may emerge, and which are normal in projects of such magnitude.”
Not just environmental problems
But despite the government’s and HKDN’s upbeat attitude about the project, it is overshadowed by factors other than environmental issues.
On one hand, specialised media outlets reported in September that because of China’s current financial crisis, HKND magnate Wang Jing had lost as much as 84 percent of his fortune, previously estimated at more than 10 billion dollars, which has shrunk to some 1.2 billion dollars.
On the other hand, growing resistance by peasant farmers along the projected canal route has hurt the international business climate for the company, according to López, the activist.
So far, 55 demonstrations against the project have been held in Nicaragua. The latest, held Oct. 27 in Managua by rural residents from different parts of the country along with other protesters, made the international headlines because of the violent clashes between the demonstrators and supporters of the megaproject.
In its executive summary, ERM says the social opposition affects the project’s viability.
“The land expropriation and involuntary resettlement process to date has not met international standards,” the ERM report states. “The Project risks losing its social license to operate and may jeopardize the viability of the Project by not following international standards.”
So far, the government has given HKND permission to expropriate 2,909 square kilometres of land along the projected route.
The canal law was approved in 2013. But small-scale work on the project along the Pacific Ocean did not officially get underway until December 2014.
HKDN projected that the work would take five years, and the canal would be operating in 2019. But ERM predicts that it will not meet that deadline.
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