March 26, 2002
Environmentalists Sue Over Secret Canadian

Deal to Dam Belize Rainforest

for details of the deal, see Dam Economics

TORONTO AND WASHINGTON -- Belizean environmental groups filed a lawsuit last week before the Supreme Court of Belize to block a controversial Canadian-backed hydro dam in Belize's Macal River Valley.

The lawsuit charges that Belize's Public Utility Commission acted illegally in approving a secret deal between two companies – both owned by Fortis Inc. of Newfoundland – and the Belize Government to construct and operate the Chalillo dam.

The lawsuit brought by the Belize Alliance of Conservation NGOs (BACONGO) argues that the Public Utilities Commission (PUC) improperly okayed a power purchase agreement for the dam without public notice, hearings or analysis of its impact on the market and ratepayers, as required by Belize's electricity law. The PUC made the agreement accessible to the public only after rubber-stamping its approval.

"Fortis can no longer hide the truth. Fortis has secretly engineered a sweetheart deal for its shareholders that is bad for the consumers and the environment of Belize," said Jamillah Vasquez, executive director of BACONGO. "We trust that our Supreme Court will find the PUC approval of Chalillo illegal and void."

According to an affidavit filed with the Supreme Court by former senior energy executive Ambrose Tillett, the agreement obliges Belize Electric Limited – two thirds owned by Fortis – to buy power from the dam – also owned by Fortis– even if its output is more expensive than other potential suppliers.

In effect, the agreement would force electricity consumers to pay Fortis 9.6 US cents per kilowatt hour for hydro even when Mexican gas-fired producers or local diesel generators could be supplying power for about 5 and 8.5 cents per kilowatt-hour, respectively.

The agreement also protects Fortis from any financial liability for damages or injury to life or property downstream by transferring that responsibility to the government of Belize.

BACONGO's lawsuit comes just three weeks after a precedent-setting decision by the Supreme Court to accept BACONGO's first case, which argues the government's conditional approval of the Canadian-funded environmental impact assessment of Chalillo is illegal. The Court is expected to set dates to hear this case within the next month or two.

Meanwhile, the government has ordered a halt to construction of the access road to the dam site which started earlier this year.

"It is astounding that Fortis would be involved in such blatant attempts to run roughshod over the laws of Belize," said S. Jacob Scherr, Senior Attorney of Natural Resources Defense Council.

"Fortis' conduct in Belize is an international disgrace," said Gráinne Ryder of Probe International. "Without legal action to expose them, corporations like Fortis will never learn: secret deals for private profit at public expense are unacceptable anywhere. The Canadian government's conduct is equally culpable because it financed a public consultation in which the public was kept ignorant of the details of Fortis' scheme."


Jamillah Vasquez, Belize Alliance of Conservation NGOs (BACONGO), Phone 501 2 33385

, Natural Resources Defense Council, Phone (202) 289-2388

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