Nicaragua Canal

The Nicaraguan government has commissioned a Chinese company to build a canal right across the country. The canal is intended to lift Nicaragua out of poverty once and for all but has so far had the opposite effect on the local population.


Panama Canal's big brother

Like the Panama Canal, the Nicaragua Canal will connect the Pacific and Caribbean coasts, and even larger ships will be able to navigate its total length of 287 kilometres. This will make Nicaragua an important transport hub. Besides the canal, there will be two free-trade zones, an oil pipeline, two ports, an airport and tourist complexes. According to the government, the canal will bring prosperity and lift Nicaragua out of poverty once and for all. To make all this happen, the government has awarded the contract to conduct this mega-project to an investor from Hong Kong, HKND.



Source photo: El Nuevo Diario, 7 July 2014



Land rights violated on a large scale

web_Bordje geplaatst in Monkey Point. Foto Nick

Sign in Monkey Point: "Communal indigenous property is not for sale". Photo: Nick Middeldorp


The project is already having a great impact on the local population, even before the work has actually started. "It is almost impossible to believe, but a change in the law was pushed through in less than one week, giving the Chinese investor access to all natural resources in the whole of Nicaragua for the next 100 years to develop its projects", says Mónica López, activist en environmental lawyer. "Under the new law, anyone can be evicted from their land for no reason and with no possibility to object." Furthermore, HKND is to be given control over a strip of land ten kilometres wide on each side of the canal. All the people who live there – 30,000 according to the government, but critics claim it is more likely between 100,000 and 200,000 – will have to be relocated.


Many local peasant families are justifiably afraid that they will be forced to leave their land. The will be compensated on the basis of prices recorded in the land register but, as these are often far below the market value, it will be impossible for them to buy land elsewhere. And people with no official land titles will get nothing. Many families have no options and are already moving to land in areas that are officially designated as nature reserves.


Island-dwellers in trouble

A large stretch of the canal will pass right through Lake Nicaragua, in the south-west of the country. In November 2015, Both ENDS staff members Sanderijn van Beek and Eva Schmitz spoke to inhabitants of the volcanic island Ometepe, which lies in the middle of the lake. Señor Alfredo Nuñez* has lived on the island for most of his life. Like almost all of the 35,000 people living on Ometepe, he is very worried. The lake is the largest freshwater reservoir in the region, and people are afraid that fish stocks will decline and the quality of the water will deteriorate. "The lake is only eight metres deep in some places," Alfredo sighs. "But it will have to be at least 35 metres deep for the big container ships. They are going to use explosives to make the canal deeper and this will be catastrophic for the ecosystem."


The lives of the island's inhabitants have been thrown into complete disarray since the plans for the canal were announced. Several people spent some days behind bars at the end of October 2015 after they took part in a protest against the project. "And that's not the worst of it," says Alfredo. "We spend all our money on the protests. We have to take a boat to meet other people in the canal zone and prepare the protests, and that costs money. I know people who are working in the US to earn money to pay off their debts." And besides money, it also takes up a lot of time. "Farmers like me are producing less food because we are spending a large part of our time organising protests against the canal."


*this name is fictitious for security reasons.





Inadequate compliance with international agreements

This case is illustrative of what is happening on a large scale throughout the world. Everywhere, major infrastructural projects are causing damage to local people and natural environments, despite international standards and agreements intended to prevent that.


A good example is FPIC (free, prior and informed consent). FPIC means that local communities have a say in projects conducted in their own territories, without being put under pressure (free), before the projects begin (prior) and on the basis of correct information (informed). Many governments in countries with an indigenous population do not function well enough, however, to conduct these consultations satisfactorily. Community leaders are often bribed to sign agreements, the signatures of local people are collected without them knowing what for, or they are threatened or forced to sign.


Dubious signature
This is also the case in Nicaragua. On 3 May 2016 the president of the Rama-Kriol territorial government signed an agreement with the Nicaraguan Grand Canal Commission, giving permission for the canal to run through the indigenous territory of the Rama and Kriol peoples. Under the principles of FPIC, which the Nicaraguan government also recognises, indigenous groups have to be consulted on projects carried out in their territories. Although the Rama-Kriol president signed the agreement, the indigenous inhabitants of the region claim that they were never consulted. They depend on the sea and the forest for their livelihoods and feel that the canal is a threat to their way of life. They say that they will not permit their land to be used for the canal and are now doing everything they can to get their voices heard and make clear that they do not support the regional president's decision to sign the agreement.


web_Workshop in Tiktik Kanuu. Foto van Nick

Workshop about FPIC in Tiktik Kaanu. Photo: Nick Middeldorp

   In August 2016, Maria Luisa Acosta, a human rights activist in the Caribbean, visited a number of indigenous communities in Nicaragua to explain their rights. She made the visits together with local community leaders and Nick Middeldorp, an independent consultant. Nick has investigated how the FPIC process was conducted prior to the signing of the agreement by the Rama-Kriol president. This proved very necessary, as these communities were not aware of their rights or the agreement. It was also clear that the FPIC process had not been conducted according to the rules. There were meetings, but local residents were only told about the benefits of the canal. They were also paid around €7 to attend the meetings, while community leaders who signed an agreement were given about $600.


This video, made by documentary producers Aleks Martray en María Aldana clearly shows the problems surrounding the FPIC process relating to the canal:


Human rights situation deteriorating in run-up to elections

Elections have held in Nicaragua in November 2016. Re-elected president Daniel Ortega is accused of acting more and more like a dictator. Civil society organisations are also affected by the increasing oppression. International visitors are refused admission to the country, a researcher investigating the canal was deported, and environmental activists were arrested while giving a workshop in a local community. According to lawyer Mónica López, there are also plans to extend the period during which suspects can be held in custody before being formally charged. "That is currently 48 hours," says López, "but will soon be extended – in the name of national security – to 45 days!"


In the meantime, the Nicaraguan government is taking steps to make autonomous indigenous rule impossible. Indigenous leaders are not recognised and are being replaced by people allied to the governing party, funding is being cut off, and transport between different communities is being sabotaged.


oproep handtekeningenactie Managua

Collecting signatures in Managua 


Amnesty-report 'Danger: rights for sale'
The report 'Danger: rights for sale - The Interoceanic Grand Canal Project in Nicaragua and the erosion of human rights' by Amnesty Central-America provides an overview of how the law for the canal came into being, what it entails and its possible future implications. The report shows that the law allows for large scale land expropriations and does not comply with national and international rules for participation and compensation, such as FPIC. Furthermore the Nicaraguan government oppresses any form of protest against the canal.


Dutch water sector and letterbox companies

The Dutch private sector has considerable expertise in water management, port management and dredging. At the end of 2014, the Nicaraguan Minister of the Interior held extensive talks with more than ten Dutch companies that all hope to acquire lucrative contracts from the construction of the canal. These companies, which claim to be front-runners in the area of sustainability, need to ask themselves whether it is advisable to contribute to a project that violates human rights on a large scale.


The Netherlands is also involved in the project in another way: seven letterbox companies located in this country are part of the financial structure behind the project. They are foreign companies that are investing in the canal and which have registered themselves in the Netherlands to benefit from the favourable tax climate.



web_Carlos gemeenschapsleider Bankukuk Taik

Carlos (on the left), community leader of Bangkukuk Taik, meaning Eagle Point in Rama (Punta Aguila, see map at the top of this page). This is last community where they speak Rama, and it will be evacuated for the canal. Photo: Nick Middeldorp


The benefits for Chinese investors of registering a letterbox company in the Netherlands extend further than the favourable tax climate. When companies operate in Nicaragua from the Netherlands, they are protected by the bilateral investment treaty (BIT) between the two countries. The BIT protects all investments made by Dutch-registered companies in Nicaragua. That means that the Chinese company HKND can call the Nicaraguan government to account for any measures it introduces that may obstruct the canal project. This makes it difficult for the Nicaraguan state to do anything that conflicts with the interests of investors like HKND, including policies that promote corporate social responsibility.


In this way, the Dutch government is indirectly supporting the financing of the canal project, while the Netherlands should be taking a more critical position. The government should be identifying and condemning human rights violations, rather than closing its eyes, trying to acquire contracts for its 'top sector' water, and facilitating and protecting the funding of the project by allowing letterbox companies to register in the country.


Both ENDS will continue to call on the Dutch government to accept its responsibilities in this affair and help to get it onto the agenda of policy-makers and investors regionally and internationally. In addition, we will continue to support our partners in their efforts combat the serious human rights violations, expropriation of land, intimidation and destruction of the environment that accompany the construction of the canal.


For more information on the Nicaraguan canal project, see:


  • Small_Grants.png
  • _ParisProof_new.png
  • 160916_Nicaraguakanaalknop.png
  • 160916_palmolieknop.png
  • banner_jwhi2.png
  • banner_richforests.png
  • subscribe