Both ENDS


Barro Blanco

In Western Panama runs the river Tabasará. Since 2011 a dam called Barro Blanco is being built here. The dam is expected to generate about 28 Megawatts of energy andstimulate Panama’s economy. Moreover, generating ‘green’ electricity will reduce CO2 emissions. It looks like everyone will benefit from this development – but is that so?

 

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Indigenous People

Around the basin of the river live the indigenous Ngäbe-Bugle, a tribe of about 200,000 people. These people are threatened in their existence by the dam. The Barro Blanco will cause a part of their homes, their religious, cultural and historical sites to disappear under water. The flowing river will turn into a stagnant lake, with serious consequences for the food supply and  scenery. The environment and biodiversity around the river will be radically impoverished.

 

The big players

The construction and financing of the dam is in the hands of large parties. The company Genisa is responsible for its construction and operation. Funding will be provided by several foreign investors.

 

One of them is the Dutch Finance Company for Development (FMO). Together with the Deutsche Investitions-und Entwicklungsgesellschaft (DEG) and the Central American Bank for Economic Integration (CABEI) they put 77 million U.S. dollars in the dam. FMO, for 51% owned by the Dutch state, is a major player in the financing of development projects, with a loan portfolio of nearly € 6 billion in 2011.

 

No consultation

The Ngäbe-Bugle community is angry about the lack of public participation in the decision-making around Barro Blanco. Genisa has failed to organize a proper public hearing. The local environmental and human rights organization M-10 indicates that no one in the local communities has been consulted prior to the decision to build the dam. A decision like this requires free, prior and informed consent of the indigenous population. This is a right that is enshrined in the UN Declaration on the Rights of Indigenous Peoples. However, the Ngäbe were not able to exercise this right.

 

Furthermore, Genisa promised in their social and environmental reporting that no one has to move for this project. An independent study by the UN in 2013, however, showed that the water level will be several meters higher than claimed by Genisa’s earlier reports. This will certainly cause a number of houses and a school to be flooded.
 

Barro Blanco dam august 2013-edit

 

When the Ombudsman of the European Investment Bank (EIB)wanted to reinvestigate the environmental impact report, Genisa withdrew their funding request with them, so this new study was never conducted. It remains unclear exactly how many people will be affected by the construction of the dam.

 

Early 2012 the Ngöne-Buglé tribe occupied the Inter-American highway passing through Panama. Through government intervention at least 2 of them died, 40 were injured and more than a 100 were arrested. What was to be expected, did not happen. The Ngöne-Buglé were not silenced and continued their peaceful protests. As the construction of the dam proceeded these protests became more violent and the atmosphere between residents and government forces turned grim. Early 2014 the prolonged protest, in which the supply of building materials was blocked, was nearly escalated. As of today, it is a delicate situation.

 

 

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The role of FMO

Anouk Franck of Both ENDS has followed the project from the beginning. She saw that the proper procedures were not always followed in the decision-making around Barro Blanco. FMO should therefore withdraw from the project: "With such a major intervention, FMO needs permission of the local residents based on sufficient information. According to some of the Ngäbe-Bugle that right has been violated in the planning and construction of Barro Blanco, with major consequences for the local population. We've been discussing this with FMO for years. A development bank that takes its standards on human rights seriously should not be involved in this project. Certainly not FMO, that prides itself on being a socially responsible bank."


 

FMO has sustainability high on the agenda. According to Franck, they focus on corporate governance and they pay attention to the interests of local stakeholders. When Both ENDS objected to the decision of FMO to invest money in the dam in 2011, FMO replied that all conditions were met. Franck finds that strange because even before the decision was made, there were protests in Panama against investments on indigenous territory.

Parliamentary inquiries

The problems with Barro Blanco have not remained unnoticed in Dutch politics. Following a documentary on Dutch television in 2012, questions were asked in parliament. In 2014, the role of FMO in the construction of the dam was discussed. Minister Ploumen of Foreign Trade and Development saw no reason to urge FMO to withdraw the loan. She acknowledges that some of the locals do not feel represented in the public consultation on the dam, yet she draws no consequences from this.

 

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Complaints mechanism

Unlike the World Bank and EIB, FMO had no formal complaints mechanism until recently. Independent investigation into the complaints of the Ngäbe-Bugle was therefore not possible. After encouragement by and in cooperation with Both ENDS such a complaints mechanism was developed for FMO. This came into force in January 2014. FMO is the first bilateral European development bank that established such a mechanism and DEG has joined in. The mechanism has no legal power, but serves as a tool to resolve conflicts between stakeholders and FMO.

 

Ngäbe indigenous near Barro Blanco dam  

On May 5th, 2014, a complaint was filed with FMO by the Ngäbe-Bugle regarding the construction of Barro Blanco. They claim that FMO has not adhered to its own social and environmental standards with the investment in this dam. Franck: "The expert panel of the complaints mechanism is now discussing the issue with all parties and will go through all the available documentation. Then the panel will decide to start a dialogue or to investigate. After both parties have been consult, the panel will write a report with recommendations, and the complaints office of FMO will oversee the implementation of those recommendations. "

 

This process could take months. Nevertheless, it is a step in the right direction. This first case can lead to big banks and companies being called to account more often regarding the consequences of their activities on people and environment.


What's next?

The situation around Barro Blanco, however, remains unchanged. Until a decision is made, the Ngäbe-Bulge will continue to protest. Franck: "The dam is almost ready. This means that the forced eviction of these families comes closer and closer. They have set up a camp around the dam in a final attempt to stop the employees and machinery of the construction company. The situation is very tense. There is a constant threat of violent intervention by security forces and the police. Police have now deployed huge lamps that ensure that occupants cannot sleep. We have no idea how this will end."

 

Construction suspended
On February 10th 2015, the Environmental Agency of Panama, 'ANAM', made a very positive announcement: the construction of the dam has been temporarily suspended. M-10 was delighted to hear this, as they have been pressing for a halt to the construction of the dam for a long time. "We have been intimidated and some of our members were even sued in the court, but we have always persisted in claiming our right to be consulted on projects in our territory” said Manolo Miranda, a representative of M-10. Both ENDS is of course very glad with this decision. In 2014, we worked with our partner organisation SOMO to help M-10 with filing a complaint against FMO. It is therefore also very likely that the suspension of the construction of the dam will influence the processing of the complaint. For now, though, M-10 and the Ngöbe community are happy that their concerns are being taken seriously.

 

Construction resumed yet again, under pressure from FMO

On Monday May 4th the Panamanian government announced that the construction of the dam will be finished nevertheless. The contract with the original developer, Genisa, will most likely be terminated and other developers will be hired to finish the project. According to Ngöbe Buglé community representatives this will not make any difference: the dam will cause damage to their environment anyway. As a sign of protest they left the roundtable dialogue with the Panamanian government, which was launched in February 2015 to seek a joint solution for the problems caused by the project. Both ENDS, too, fears that contracting another developer will change little to nothing: as soon as the dam is put into operation, a large area will be flooded.

 

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FMO claims to be aware of the social and environmental problems the dam will cause, but the report in response to the complaint has still not been released by the bank. On top of this, on May 18th Dutch newspaper ‘De Volkskrant’ reported that FMO has put pressure on the Panamanian government to proceed with the construction of the dam. Behind closed doors FMO has insisted on continuing construction, because, according to the bank, stopping the project or continuing with another construction company, would cause serious financial losses.

 

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FMO did not comply with its guidelines

On May 29th 2015, almost a year after the complaint was filed, the report of the Independent Complaints Mechanism (ICM) of FMO and the German development bank DEG was published. The long-anticipated report concludes that the banks have not sufficiently taken into account the rights of the local population and the impact on the environment. As such, it determines that FMO has not complied with its own policies. Although FMO and DEG acknowledge that they “were not fully appraised at credit approval”, they do not propose concrete steps to come to a solution. The banks claim to face limitations in their influence over the (government-led) stakeholder dialogue in Panama.  In reality, however, FMO did attempt to influence the Panamanian government by sending a letter to the Vice-President, insisting that the suspension of the dam construction should be lifted.

 

Anouk Franck of Both ENDS is surprised by FMO's reaction: "Instead of insisting on resuming the project, the bank should have shown that it takes the rights of the local population seriously and that it acts in accordance with its own policies. Whenever we have meetings with its representatives, FMO assures us that it supports its clients to improve their social and environmental policies and practices. But in the case of Barro Blanco, the bank has clearly done the exact opposite. In light of the conclusion of the ICM’s report, determining the bank did not comply with its own policies, we urge FMO to withdraw from the project. Furthermore, to prevent similar situations in the future, human rights impact assessments should become standard procedure at FMO. This is an important instrument to ensure that human rights and environmental standards are guaranteed in future projects."

 

M-10 Dutch ambassador

In response to the report, the M-10 – also on behalf of local authorities and European partners, including Both ENDS – presented a letter to the Dutch and German ambassadors in Panama. In the letter, the M-10 calls on the Dutch and German government to oblige FMO and DEG to respect the rights of local people. Moreover, the signatories urge the governments to ensure that their national development banks conduct human rights impact assessments in the case of high risk projects and refrain from financing projects that impact on the land and natural resources of indigenous peoples without their free, prior and informed consent.

 

Indigenous lands under threat once more. 

Despite the fact that construction of the Barro Blanco dam was suspended early 2015 by Panamanian environmental authorities, the locks of the dam were closed on the 24th of May 2016. Genisa, the company executing the project, planned to fill up the 103 meter reservoir to test it, but did not warn the people living in the area. For them, it does not really matter if this is a test or not: their land is in danger of being flooded and some of them risk being displaced. This completely goes against the agreement between the Panamanian government and the leaders of the indigenous population. Last year it was decided that the dam reservoir would not be filled until all stakeholders would reach an agreement. M-10 reports that local people protesting against the current events continue to be harassed and detained in some cases. As the FMO invests in the project, the bank is partially responsible for the current illegal actions taking place. To ensure that the situation doesn’t escalate, the FMO should exercise its influence as a responsible funder and re-open the floodgates of the Barro Blanco. For now, all work should stop until a new agreement is reached between the different stakeholders.

 


For more information and background articles:


2 June 2016:     Indigenous land submerged by illegal clusure of dam

1 June 2015:     FMO did not follow its own rules in financing Barro Blanco dam

18 May 2015:    Dutch FMO pushed Panama to continue construction Barro Blanco dam

6 May 2015:      Construction of Barro Blanco dam will be resumed

11 Feb 2015:    Construction Barro Blanco dam finally suspended

7 May 2014:      Complaint against FMO on grievance mechanism.org

3 March 2014:  Parliamentary questions about construction Barro Blanco dam in Panama

18 Feb 2014:    Situation tense for indigenous Ngäbe people near Barro Blanco dam

14 Feb 2014:    Filing a complaint with the FMO?

19 June 2013:  Will VN-rapporteur James Anaya investigate Barro Blanco dam in Panama?


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