Nicaragua Network

1. Ortega and Wang Jing sign canal concession agreement
2. Nicaragua hit by series of earthquakes
3. US drops some claims in advance of the July property waiver
4. Nicaragua receives FAO award for reducing malnutrition
5. Nicaragua 7^th most peaceful country in Latin America
6. Campaign to end child labor and sexual exploitation
7. Solka case reversed by US court
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1. Ortega and Wang Jing sign canal concession agreement

President Daniel Ortega and Chinese businessman Wang Jing, the evening of June 14, signed the framework agreement for the building of an inter-oceanic canal across Nicaragua.  The previous day, the Nicaraguan National Assembly had approved the Special Law for the Development of Nicaraguan Infrastructure and Transportation Related to a Canal with a vote of 61 in favor, 25 opposed, one abstention and two deputies voting present. All Sandinista deputies voted for the bill and all but one member of the opposition voted against it. The new law gives a concession for 50 years to the Chinese company HK Nicaragua Canal Development (HKND) for the carrying out of feasibility and environmental studies and the building of a canal, a railroad, two deep water ports, two airports and free trade zones.  Nicaragua will receive US$1 million each year beginning immediately and will receive 10% ownership in the company each decade to own 51% in 50 years. 

At the signing ceremony, Ortega said that the goal of the project is to end extreme poverty and bring wellbeing to the Nicaraguan people.  He emphasized that the most important thing at this time is the feasibility study which will determine whether the megaproject is possible or not.  He noted that without the results of that study, any predictions are pure speculation. He added, “This is a global effort which is uniting people and attracting the best capabilities from different countries so that this project can become one in which all interested investors can take part.”

For his part, Wang Jing said, “Maritime transportation has … developed rapidly and with the objective of reducing navigation distances and costs, humanity has worked to find easier and less expensive routes.”  He emphasized that international demand exists for the building of an inter-oceanic canal that is deeper and wider and offers more benefits, adding that the dream of a canal in Nicaragua answers those demands. He invited Nicaraguan businesspeople to visit his offices in Hong Kong to follow the progress of the project.  Finally, he insisted that the canal belongs to the Nicaraguan people and he asked all to join hands in efforts to make this dream a reality.

HKND spokesperson Ronald McLean-Abaroa, a former mayor of La Paz, Bolivia, who has worked at the World Bank and taught at Harvard, said that “Nicaragua is extending a concession for the building of a canal that will be its own.” He noted, “There will be an impact on the environment, certainly.  But what we have to do is see if it can be managed so that, on balance, it is positive.” He added that what can help to make the net impact positive is the money that will be available for “programs of reforestation and watershed management.” Nicaragua is not committing “even one dollar,” he said; the risk is taken by the private company.  McLean-Abaroa noted that the environmental study by the British firm Environmental Resources Management (ERM) [which bills itself as “the world's leading sustainability consultancy”]  and the feasibility studies to be carried out by McKinsey & Company will take one or two years. He added that Nicaragua is not risking anything, concluding that “If the studies show that it can’t go forward, we won’t be able to get the money [from investors] and we will return the concession.” 

On June 17, it was announced that, while McKinsey & Company will carry out the legal and financial studies, the Chinese firm China Railway Construction Corporation (CRCC)—which is partially Chinese government owned—will be in charge of the study of the project’s technical viability.  CRCC is the second largest construction company in China.  The well-known US firm McLarty & Associates will have the task of putting together the consortium of investors for the project if the feasibility studies are positive.

On June 14, Jose Adan Aguerri announced at a press conference that the Superior Council of Private Enterprise (COSEP) would challenge several aspects of the law in court, including the lack of business representation on the commission which was formed under the new law, noting that business people had served on the commission that negotiated the recent economic agreement with the European Union.  The business community also objected to aspects of the law dealing with expropriation of property along the route of the canal.  During the National Assembly debate, independent Deputy Mauricio Montealegre had proposed an amendment which would have added business representation to the commission but Sandinista Deputy Edwin Castro answered that it was a purely governmental commission.  Deputy Jenny Martinez, chair of the Infrastructure Committee and member of the commission, said that the Canal Commission could invite others to join in the future.

Presidential environmental advisor Jaime Incer Barquero said that all the necessary studies must be carried out however long that may take and that the any likely negative impact to the environment must be weighed fairly against the positive economic effects.  He said that his environmental concerns were always received by the president but that the government at times “may have other visions and other priorities.”  Meanwhile, the Rama Kriol Territorial Government (GTRK) announced that it did not support the canal law because the Rama Kriol people were not consulted about the project as Nicaraguan law mandates.  On June 17, the Creole Communal Government of Bluefields, which represents the Afro-descendent community of the South Atlantic Autonomous Region (RAAS), expressed its solidarity with the Rama Kriol and their struggle to defend their territory. 

Some opposition figures said that the concession violates the sovereignty of Nicaragua and that statements to the contrary by Ortega and Wang Jing are untrue.  Jurist Noel Vidaurre said that, according to the new law, the investors cannot be sued under Nicaraguan law and that, if Nicaragua were to fail to fulfill its commitments under the law, it could be taken to an international arbitration panel in Europe.  What these commentators fail to note, however, is that these same measures are part of the free trade agreements signed by nations around the world, including the Central American Free Trade Agreement (CAFTA) with the United States, and countries also submit themselves to them when they join the World Trade Organization (WTO).  Some of those who now denounce this concession opposed CAFTA in 2005 while others supported it.

A protest march to the National Assembly on June 14 attracted some 200 people led by Roberto Bendaña with his new movement called “Unity Yes, Nicaragua First.”  He was joined by some members of the Independent Liberal Party, leaders of the Sandinista Renovation Movement (MRS) and of the Sandinista Rescue Movement, members of the Autonomous Women’s Movement (MAM), and of the Civil Coordinator, supporters of the Nicaraguan Center for Human Rights (CENIDH), as well as Catholic Church leaders.  Gonzalo Carrion of CENIDH said, “Those who signed on to this law are selling out their country.  They are taking advantage of the country’s economic problems to sell illusions and that is unforgiveable.” Managua Archbishop Leopoldo Brenes said, “A project of this importance should have been consulted for much more time and with all sectors and experts.”  (Informe Pastran, June 13, 14, 17; Radio La Primerisima, June 11, 14; La Prensa, June 14, 16; El Nuevo Diario, June 15, 17)

2. Nicaragua hit by series of earthquakes

On the morning of Monday, June 17, the government reported that 25 tremblers between 1.9 and 5.7 on the Richter scale had been detected in the Pacific region of Nicaragua following a 6.6 earthquake on Saturday, June 15.  The Nicaraguan Institute for Territorial Studies (INETER) said that the quakes are related to the movement of the tectonic plates off Nicaragua’s west coast, namely the Coco Plate pushing under the Caribbean Plate.  The latest trembler, at 9:12am local time on Monday, was off the coast of Puerto Sandino, at a depth of 15 kilometers.  INETER stated that there had been no further damage or injuries apart from the death in Managua on Saturday of an 81 year old man who died from a heart attack blamed on the quake.  Government communications coordinator Rosario Murillo said that the government was closely monitoring the seismic activity, and she added, “According to the experts, the energy is continuing to be freed and, while not saying that we can lower our guard, we should remain calm while continuing to be prepared and organized in our homes and communities.”

Saturday’s quake, first measured at 6.5 and later raised to 6.6, was felt at 11:35am on Saturday.  It was followed half an hour later by a 4.9 trembler.  Both were centered about 50 kilometers off the coast of the small beach community of Masachapa which was wiped out in 1992 by an earthquake-caused tsunami.  A tsunami warning was issued after Saturday’s first quake but was cancelled shortly thereafter although residents were told to look for some high waves.  The only material damages reported were to the tower of the San Juan Apóstol Church and the Oscar Danilo Rosales Hospital both in Leon. 

The director of the System for the Attention, Mitigation and Prevention of Disasters (SINAPRED), Dr. Guillermo Gonzalez said that Monday’s quake was felt all along the Pacific coast, but most strongly in the departments of Leon and Chinandega.  He added that the San Cristobal and Cerro Negro volcanoes, which had been active recently, were quiet.  (Radio La Primerisima, June 15, 17; El Nuevo Diario, June 15)

3. US drops some claims in advance of the July property waiver

Nicaragua and the US have agreed to remove 33 cases from the list of US citizens who have filed claims for return or compensation for property confiscated under the Sandinista Revolution of the 1980s. [Most of the claimants were Nicaraguan citizens who later became naturalized US citizens.] Each year in July the Secretary of State must issue a “waiver” to prevent US aid from being cut-off and the US having to veto grants and loans to Nicaragua from international financial institutions. Ninety-three cases have already been resolved this year (including the 33 cases purged from the list) according to Jose Adan Aguerri, president of the Superior Council of Private Enterprise (COSEP) which has lobbied the US to extend the waiver. Aguerri believes that six more cases can be resolved in the next 17 days which would set an annual record of 99 cases resolved since 1993 when resolutions began. In addition, an unknown number of cases have been sent for mediation to the Center of Mediation and Arbitration of the Nicaraguan Chamber of Commerce (CACONIC).

El Nuevo Diario reported that 1,888 US citizens have been indemnified at a cost to Nicaragua of US$444 million. [Since most settlements were made with long term bonds, the final cost to Nicaragua will be several times the cost to date.] The removal of 33 claims from the list means that there are now 243 remaining claims filed by 121 individuals. [At this time it is not known which cases were removed and which remain. Some claims were filed by torturers and bombers from Somoza’s dreaded National Guard. Even the conservative governments of Chamorro, Aleman, and Bolaños did not compensate individuals who committed crimes against humanity and war crimes. If those individuals remain on the US list, US aid to Nicaragua will still be at risk in future years.]

Deputy Assistant Secretary of Statefor Western Hemisphere AffairsLiliana Ayalde, visiting Nicaragua, said during “This Night” on Managua’s Channel 12 that the US values the cooperation of the Nicaraguan Police in the fight against organized crime and drug trafficking and wants “constructive relations” with the government of Pres. Daniel Ortega. She emphasized that democracy, including the participation of civil society organizations [some of which receive US funding], is always at the top of the US agenda.  (El Nuevo Diario, June 13; Radio La Primerisima, June 13;  Informe Pastran, June 12)

4. Nicaragua receives FAO award for reducing malnutrition

Vice President Omar Halleslevens received an award on behalf of Nicaragua from the UN Food and Agriculture Organization (FAO) at its meeting in Rome for having achieved the UN Millennium Goal of reducing malnutrition by at least 50% by 2015. Between 2010-1012, the Sandinista government of President Daniel Ortega reduced malnutrition from 55.1% of the population to 20.1%. Hemisphere-wide, Nicaragua’s fellow countries in the Bolivarian Alternative for the Peoples of Our Americas (ALBA) – Venezuela, Cuba, and St. Vincent and the Grenadines – were also recognized for meeting the UN hunger goal. Brazil, Chile, Dominican Republic, Guyana, Honduras, Panama, Peru, and Uruguay also received recognition for achieving that goal. Recognized as well for its contribution to hunger reduction was the work of the Organization of Fisheries and Aquaculture of Central America (OSPESCA). (Radio La Primerisima, June 17; El Nuevo Diario, June 17)

5. Nicaragua 7^th most peaceful country in Latin America

Nicaragua ranks as the 7th most peaceful country in Latin America and the 66th most peaceful of the 162 countries rated by Institute for Economics and Peace (IEP). Using 22 indicators, including internal and international conflict, the IED ranked the nations of the world and determined that the world is 5% more peaceful today than in 2008. In rank order among Latin American countries with their global rating in parentheses are: Uruguay (24), Chile (31), Costa Rica (40), Panama (56), Argentina (60), Cuba (65) Nicaragua (66), Brazil (81), Ecuador (83), Bolivia (86), Haiti (92), and Dominican Republic (94). As least peaceful ranked Colombia (147), Mexico (133), Venezuela (128), Honduras (123), Peru (113) and Guatemala (109). [The US ranked 100 on the IEP list.] (Radio La Primerisima, June 13; El Nuevo Diario, June 13)

6. Campaign to end child labor and sexual exploitation

Thirty organizations launched a Central America regional program entitled “Yes to Education and Recreation” to combat child labor and sexual exploitation on June 12 while, at the same time, 13 Managua schools joined in a march against child labor urging the government to take greater measures to end these threats to the rights of children.  National Program Director for CARE, Martha Mora, said that the Central American Campaign for the Suppression and Eradication of Child Labor and Sexual Exploitation was launched to help governmental institutions abolish child labor.  Some participants in the march, held on the World Day Against Child Labor launched in 2002 by the International Labor Organization (ILO), lauded Sandinista government programs which have outlawed child labor in the mining industry and unpaid domestic work and cited programs such as Project Love, the Battle for the Sixth Grade, and the school lunch program for their contribution to reducing child labor. Others criticized the government programs as “palliatives” and called for stronger public policies to end the exploitation of children. According to the National Survey of Child and Adolescent Labor of 2005, there were 239,220 children working in Nicaragua. The Ministry of Labor says the numbers have dropped over the last eight years and activists were demanding a new survey to show the extent of the drop. (El Nuevo Diario, June 13; La Prensa, June 12)

7. Solka case reversed by US court

A federal court in Florida last week overturned an April ruling that had ordered the government of Nicaragua to pay US$18 million to the Solorzano family for part of the SOLKA pharmaceutical company.  Nicaraguan Attorney General Hernan Estrada said that the court accepted the arguments concerning the sovereign immunity of Nicaragua and the lack of jurisdiction of US courts in the case.  The company was confiscated in the 1980s, partially returned to the family in 1990, but taken over by the government again when it went bankrupt in 2007.  To read more about this case, please go here: http://www.nicanet.org/?page=blog&id=20841&highlight=solka  (Informe Pastran, June 12; Radio La Primerisima, June 12)