Posted on February 28, 2015 by ACOGUATE
Translation by NISGUA
On November 7, 2013, the National Electrification Institute (Instituto Nacional de Electrificación, INDE) signed an Emergency Purchase contract with the Brazilian company Intertechne Consultores, S.A. to conduct the geotechnical, seismic, geological and geophysical feasibility studies for the Xalalá dam, without informing and consulting the affected communities. More than a year later, affected communities organized through the Association of Communities for Development, Defense of Territory and Natural Resources (ACODET) are still waiting for the decision of the Constitutional Court on the irregularities of the contract and the lack of consent.
|Photo credit: ACOGUATE archive
Even though the company was unable to begin their groundwork during 2014, tension in the region has increased. On December 12, the Ministry of Energy and Mines declared it would no longer be actively pushing the Xalalá project forward during the current administration, however communities remain concerned about its continued development. ACOGUATE has accompanied ACODET since 2007 and accompanied consultations in the Ixcán and Uspantán in 2007 and 2010.
Legal action against irregularities within the contract and the right to be consulted
The Xalalá dam is currently the largest planned hydroelectric project in Guatemala. With a generating capacity of 181 megawatts, if built, the dam would be the second most powerful in the country after the Chixoy dam. It is estimated to directly affect 58 communities in the region. The contract signed between INDE and Intertechne Consultores, S.A. on November 7, 2013 is for a period of 12 months, and is now being questioned due to irregularities in the contract.
On April 10, 2014, the office of the General Comptroller (Contraloría General de Cuentas, CGC) filed a legal complaint against 12 members of the INDE board of directors, noting irregularities in contracting the Brazilian company to conduct the feasibility studies of the Xalalá dam – a contract valued at Q40.8 million. According to the General Comptroller, Nora Segura: “It is clear that the adjudication process of the feasibility study was not transparent. There are many irregularities and neither the law nor the internal process of INDE were respected, much less the government procurement law, which is why a criminal complaint was filed.” In particular, the CGC called attention to three irregularities, stating that they infringed upon government procurement law:
- INDE hired Intertechne directly without going through the public bidding process of GUATECOMPRAS, claiming a national emergency,
- INDE paid an advance that was 20% higher than the maximum allowed for the contract, and
- At the time of signing the contract, the Brazilian company did not have headquarters in Guatemala but instead, established a subsidiary company 60 days later.
A month later, Amilcar Pop, the President of the Congressional Committee on Integrity (CGC), filed a complaint against members of the INDE board of directors – including Minister of Energy and Mines Erick Archila, former INDE Manager Marinus Boer, and INDE Project Manager Widthmark Estrada – for fraud, abuse of authority, embezzlement and failure to report to the Office of Administrative Offences of the Public Prosecutor’s Office. Amilcar Pop found that the contracting process was set out to directly benefit Intertechne. Alongside the CGC, Amilcar Pop found that the lack of offers from interested companies to conduct the feasibility study – leading to the eventual abandoning of the study in March 2013 – was likely due to INDE’s requirement that each company pay $10,000 US just for the right to participate in the bidding process. According to Amilcar Pop: “While complying with legal requirements, that condition was put in place to guarantee that no one would participate and therefore, demonstrate the need to award the contract without any competition.”
Even President Otto Peréz Molina gave contradictory answers regarding the irregularities. He called for the resignation of INDE’s manager, Marius Boer, who retired a week before being called to present before Congress. On April 10, Otto Peréz Molina publicly stated that he was in agreement with the cancellation of the contract. He changed his discourse three days later, however, when he said that the feasibility study for the Xalalá hydroelectric dam was of national priority, and therefore, INDE was exempt from following the Law of Contracts and Purchasing and instead, needed only to follow its own internal decision-making procedures. Since the start of the project, the government has stated on several occasions that Xalalá is a priority and that feasibility studies would be carried out during Molina’s administration. It was not until December 12, 2014 that the Minister of Energy and Mines stated the administration would not actively push the Xalalá project forward, feasibility studies would continue despite ongoing opposition and it would be the next administration which would make a decision.
|Photo credit: ACOGUATE archive
The Supreme Court denied the preliminary hearings requested to contract Intertechne. The Attorney General’s Office declared itself unfit to rule on the impacts of the contract, arguing that the Office could not intervene in the activities of an autonomous institution like INDE. On June 12, 2014, affected communities represented by ancestral authorities of the Xalalá and Las Margaritas Copón communities filed an injunction against the irregularities of the INDE contract and Intertechne. On July 22, ancestral authorities went before the Procedural Complaints Court and with legal support from Maya Lawyers and third-party support from Congressman Amílcar Pop, argued the illegality of Intertechne’s contracting process. They also presented arguments around the lack of consultation with the communities before the contract was signed, effectively ignoring the results of the community consultations in the municipalities of Ixcán in 2007 and Uspantán in 2010. INDE failed to appear at the public hearing.
In its decision, the Court declared the injunction to be of partial merit and recognized the lack of prior and informed consultation with the communities by INDE. However, the Court did not annul the contract, stating that it would be the responsibility of the Public Prosecutor’s Office, who defended the contract at the public hearing. In addition, the Court’s ruling requested that impacted communities participate in the study, which was subsequently appealed by ancestral authorities, the Congressional Committee on Integrity, and INDE.
In its second public hearing on October 8, 2014 in the Constitutional Court, INDE argued that they did in fact consult communities, presenting the “right to passage” signed by various Community Development Councils (COCODEs) in the region as evidence. However, the ancestral authorities insisted that no consultation process took place and that INDE only came to communities to offer development projects, which cannot replace consultation in accordance with national and international law. Likewise, the chairman of the Congressional Committee on Integrity argued that, “These rights were not respected in the least, and [the contract] threatens the constitutional right of the Guatemalan people, as outlined in Articles 58, 66 and 67 of the Constitution, where the rights of indigenous peoples are recognized.” He also noted there were already two feasibility studies made in the 1970s, which showed the soil in the region where the dam would be built is too sandy, making it unfit to withstand the planned Xalalá construction. In addition, this puts into question the justification of a new feasibility study, with a demonstrated lack of transparency on part of INDE in relation to the project. A decision on the injunction is still pending from the Constitutional Court.