The Nicaragua Canal


Dividing a country to connect two oceans

By Rey Edwards, finance campaigner, with contributions from Mónica López Baltodano

In December 2014, Chinese businessman Wang Jing appeared at a press conference in Tola, Nicaragua, to announce the start of a mega-project connecting the Pacific Ocean and Caribbean Sea, bisecting the Central American country. Wearing a black tie and white shirt, Wang Jing remarked placidly, “This moment will be written in history for sure.” Then, on cue, a flurry of confetti enveloped the stage and cheers erupted from the crowd. But to many Nicaraguans — and international skeptics — the Nicaragua Canal would come with great environmental and social costs, and be an enormous and unjust transgression.

The press conference was part of the project’s official groundbreaking ceremony. Estimated to cost $50 billion (nearly five times Nicaragua’s GDP), the Nicaragua Canal is an ambitious project involving the construction of two deep water ports, a pipeline, cement plants, dredging sites, power plants, a hydropower dam, an airport, maintenance roads, tourist resorts, free trade zones, a dry canal (a railroad to bring freight overland) and a massive water canal. If completed, the canal would become the largest in the world, extending 278 km across the Nicaragua, surpassing the Panama Canal by over 200 kilometers. It could move some 5 percent of the world’s shipping traffic — including ultra large bulk carrier ships, which the Panama Canal cannot accommodate. With such a massive project, environmental and social impacts are inevitable. The increased shipping, dredging and rapid environmental upheaval could spell disaster for thousands of species and millions of people served by the region’s unique ecosystem. Although project proponents expect it to be completed by 2020, ordinary citizens are divided over the canal, and local opposition is growing.

The proposed route of the Nicaragua Canal, which would run through Lake Nicaragua (center).

Real costs and impacts

According to local communities and environmentalists, Wang Jing and his company HKND, or Hong Kong Nicaragua Canal Development, have set in motion what would be an extraordinary mistake. The canal’s proposed route would cut through Lake Nicaragua, the largest lake in Central America; directly affect seven protected areas and destroy approximately 193,000 hectares of natural forests.

The region is home to endangered species including sea turtles, tapirs, macaws and freshwater sharks. A canal would prevent species from migrating throughout Central America and end the Mesoamerican Biological Corridor, a conservation region that spans parts of seven Central American countries and southern Mexico. The region serves as a natural corridor for the continent; meaning that if the canal is built, the migration patterns and ultimately the survival of local fauna could be irrevocably jeopardized. The dredging necessary to construct the canal also creates major environmental hazards, particularly for Lake Nicaragua — the main freshwater reserve for Central America.

Since Lake Nicaragua is too shallow for large shipping vessels, approximately 105 km of it would need to be dredged. This would not only have major impacts on the lake ecosystem, but all along the canal, as dredged material would be scattered across 35 excavated material placement areas along the route. Hundreds of communities who live along the proposed route would also be impacted. In particular, 52 percent of the planned route would impact five indigenous territories, including land belonging to the Rama and Kriol communities. The project would jeopardize the livelihoods of thousands who farm, fish and live in the region.

Container ships transit the Panama Canal. Photo credit: Patrick Denker, Flickr, Creative Commons

Moreover, local groups have raised concerns that the project’s consultation process did not respect indigenous peoples’ right to Free, Prior and Informed Consent, as required by the UN Declaration on the Rights local communities would be forcibly displaced, which, according to nonprofit Cultural Survival and others, would drive the indigenous Rama language to extinction. Lake Nicaragua is an important source of fresh water for 200,000 people, and at 3,191 square miles, it is the largest lake in Central America. Construction of the channel across the lake would disrupt its highly biodiverse ecosystems, and ships transiting the canal could introduce industrial contaminants and invasive species. According to the International Society of Limnologists, this ecosystem disruption will be made worse as climate change causes more periods of drought in the future. With no alternative source of drinking water, and with the canal’s potential risks to the country’s pristine rain forests, the Nicaraguan scientific community has publicly called for the project’s suspension.

This society of ours, predisposed to voluntarily taking the sleeping pills of Nicaragua’s modern colonization, is now synthesized into President Ortega’s mega-concession, which in essence is the antithesis to humanity’s struggles for liberation.
- Mónica López Baltodano

Many questions remain

Officially, the Nicaragua Canal is a private venture of HKND and Wang Jing. And while the Chinese government has repeatedly denied its involvement, state-owned enterprises China Railway Construction Corporation and manufacturing company XCMG are project partners. Very little information is known about the project’s financing. Wang Jing has stated that he spends $10 million of his own money on the project each month, but details end there.

Wang Jing at an event marking beginning of construction on the canal. Photo credit: Getty Images.

Wang Jing himself is also somewhat of a mystery. According to media reports, he was born in Beijing, studied traditional Chinese medicine and made a fortune in the telecommunications industry. But, according to research by Nicaraguan lawyer Mónica López Baltodano, Wang Jing has linked the canal concession to a set of more than 16 hidden, offshore companies registered in the Cayman Islands, Hong Kong, Beijing, Nicaragua and the Netherlands. In an interview with Reuters, he said simply, “I’m very ordinary.” But the ordinary businessman has been central to a questionable project which was negotiated behind closed doors and gives HKND unprecedented control of much of Nicaragua’s natural resources.

Despite environmental and social concerns, Nicaraguan President Daniel Ortega has touted the project as a cure for the nation’s poverty. Nicaragua is among the world’s poorest nations, and Ortega claims the canal project will spur economic development and would double the country’s GDP and eradicate poverty.

However, the increasing number of protests against the canal suggests not all Nicaraguans agree with Ortega. Since August 2014, Nicaraguan groups have organized more than 42 peaceful marches and have collected thousands of signatures calling for the project’s suspension. Canal opponents believe that by approving the project, the government has essentially legalized the expropriation of land from Nicaraguan citizens to foreign parties. The master concession agreements and Law 840, or Law of the Canal — which transferred rights to design, engineer and run the megaproject — grant unrestricted rights over natural resources such as land, forests, air and islands to the authorized licensee: HKND.

According to Nicaraguan lawyer Azahalea Solis, “The Supreme Court disregarded compliance with constitutional norms and through erroneous arguments … dismissed 34 appeals for unconstitutionality introduced by 180 citizens … By doing this, the Court ratified a project that puts at risk several conventional and constitutional rights, and imposed an agreement negotiated in secrecy with a private individual.”

Protestors march against the canal concession, carrying a sign calling President Ortega a traitor. Photo credit: Jorge Mejia Peralta

A pressing concern is the impact the canal project is already having on those voicing dissent. In March, Henry Ruiz of the Nicaragua based group National Council for the Defense of the Lands, the Lake and Sovereignty testified at the Inter-American Commission on Human Rights, alleging the Nicaraguan government intimidated, repressed and detained citizens who participated in anti-canal marches. In one instance, Ruiz testified, more than 200 police officers violently dispersed a demonstration. “My friend Octavio Ortega, coordinator of our organization, was the victim of violent police aggression that fractured his left arm and injured one of his eyes. Another friend, Manuel Vega, was brutally hit and injured to the point that he had to have 16 stitches on his head… [T]he worst case of was Mr. Jose Maria Calderon, who lost his right eye to a rubber bullet.”

A Nicaraguan dream?

The idea of a canal in Nicaragua has existed throughout the nation’s 200-year history; but the question of whether it was the dream of Nicaraguans, or that of foreign interests, remains. And now, as public opposition increases, Nicaraguans are voicing their growing desire for a sustainable path towards development, instead of one centered on massive upheaval. In a video produced by anti-canal group Zanja TV, campesino activists vow never to give up their land, while voice-over narration describes the stakes for the country.

“It’s a ditch designed for the maritime world enterprises and for the transnationals whom are always in demand for their products to be distributed across the world. But is that real development? We’re missing that discussion in Nicaragua. And we need to agree to have it. Because it is not true that the only option for Nicaragua is the canal.”

This article originally appeared in Friends of the Earth’s spring 2015 newsmagazine.



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