Split London Court Decision Allows Controversial Belize Dam Project to Proceed

Dissent Censures Canadian Company and Belizean Government

LONDON (January 29, 2004) -- In an unusual 3-2 decision, a high court in London today decided not to halt construction on a controversial hydroelectric dam in the rainforest of Belize, Central America. The decision resulted from a lawsuit brought by a coalition of environmental groups and business owners in Belize to challenge the Belizean government's hasty approval of a 50-metre dam to be built by the Canadian-based Fortis, Inc.

It was the first environmental case in the history of the Privy Council, the final court of appeal for Belize and many countries in the British Commonwealth. (Click here to obtain a copy of the Council's decision.)

"The majority's opinion is disappointing, but the minority dissent made clear that approval of the Chalillo dam was based on the unlawful, erroneous and deceitful actions of its proponents," said Jacob Scherr of the Natural Resources Defense Council (NRDC), which has played a key role in the international effort to stop the dam. "The words of the dissent will haunt and ultimately doom this economically and environmentally unsound project."

The three-judge majority of the Privy Council acknowledged that the proposed dam would flood an area scientists say is "one of the most biologically rich and diverse regions remaining in Central America," home to such endangered species as the jaguar, tapir, and the last 200 remaining scarlet macaws in Belize. Nevertheless, Lord Hoffman, Lord Rodger and Sir Andrew Leggatt deferred to the Belizean government's political decision to allow the Canadian-backed project to go forward.

A strongly worded minority dissent found that the dam approval process violated Belizean law and should be overturned. The dissent, written by Lord Walker and joined by Lord Steyn, criticized Fortis and the Belizean government for consistently failing to disclose to three courts critical information about the project, and said that the Belizean government official in charge of the project's environmental review was not credible. The dissent also called attention to the flaws in the government's assessment of the dam site's geology, which could cause the dam to leak or become unstable.

The environmental assessment repeatedly stated that the dam would be built on solid granite. Expert geological assessments, which Fortis and the government withheld from the courts for nearly two years, showed that there is no granite at the site, which is composed of more fragile sandstone and shale.

"Today's decision confirms that Fortis and the government have not been truthful to the Belizean public or to the courts," said Tony Garel, chairman of the Belize Alliance of Conservation NGOs, which brought the case to the Privy Council. "The fundamental errors about the geology of the dam site could mean the difference between life and death for the 12,000 people living downstream from the site."

The dissent differed "respectfully but profoundly" from the majority. It found that:

• Belize's chief environmental officer's testimony was so contradictory that he was simply not credible.
• Fortis' subsidiary, BECOL, and the Belizean government withheld important information from three courts: the Supreme Court of Belize, the Court of Appeals, and the Privy Council itself.
• Fortis' information about the geology at the site was "seriously wrong."
• Fortis' environmental assessment, paid for by the Canadian International Development Agency, "was so flawed by important errors about the geology of the site" as to be unacceptable.
• Fortis at first denied that its geological assessment was wrong, and later said it did not make a difference. The dissenters strongly disagreed: "A dam which is liable to leak, and still more a dam which is liable to prove unstable, may have a more serious environmental impact (and fewer if any countervailing advantages) than a secure dam."

As a result, the dissent concluded that construction should be stopped until the information about the site's geology is made public. "The people of Belize are entitled to be properly informed about any proposals for alterations in the dam design before the project is approved and before work continues with its construction," Lord Walker concluded.

It is highly unusual to have such a sharp dissent in the Privy Council, said Scherr, and exceptional to see such clear findings of dishonesty before the court.

Canada's foreign aid agency, CIDA, was also implicated by today's decision. CIDA paid more than $500,000 Cdn for the environmental assessment of the project, which the dissent characterized as "so flawed by important errors" as to be unacceptable.

"The Canadian government should be embarrassed by the court's findings," said Elizabeth May, president of the Sierra Club of Canada and a longtime opponent of the dam project. "This report did not meet the standards acceptable in Belize, or the standards that Canadian taxpayers would expect."

Last June a Chinese state company that has the contract to build the dam began clearing the dam site. Since then it has encountered serious difficulties and delays. It found no granite, which it needs not only for a foundation, but as an essential ingredient for the thousands of tons of concrete that it will need to build the dam itself. Local eyewitness reports also indicate that government authorities have not moved to stop imported Chinese workers from illegally hunting jaguars, tapirs and other wildlife.

"We call on Fortis and the Belizean government to make public the current situation at the site, any plans for changing the dam design, and an accounting of all additional costs," said Scherr. "We strongly urge them to reconsider going forward with this flawed project."