Nicaragua's Grand Canal & Environmental Justice

By: Graeme Walker and Martha Molfetas

Right now, there is a little known major infrastructure work underway in Nicaragua, and it could have dire repercussions for the environment and the people who call Southern Nicaragua home. Nicaragua’s Grand Canal will come with an estimated price tag of $40 billion and will take five years to build - some even estimate the cost may come to $50 billion.

The project is being developed by the Chinese industrialist, Wang Jing, and his Hong Kong based company, Hong Kong Nicaragua Canal Development (HKND). Once completed, HKND will hold the operational and management rights over the Grand Canal for 100 years. The Nicaraguan government has backed the Canal, with Nicaragua’s Congress ruling against legislation that would have halted the project. The exact details of how Jing will finance the Canal remain opaque, but a recent report shows that Iran and other nations may be financing it.

The planned Grand Canal has been in the pipeline for over two years, but financial problems for Jing in 2015 and long awaited environmental impact assessments have delayed its start. Current planned routes for the Grand Canal will have it bulldoze through the Indio Maiz Biological Reserve and Lake Nicaragua – the primary source for irrigation and drinking water in Nicaragua. The Grand Canal would endanger nearly one million acres of wetlands and rainforest in Southeast Nicaragua, including significant portions of the San Juan River and the Punta Gorda Nature Reserve. The wetland and rainforest area at risk acts as an essential wildlife corridor to a diverse range of flora and fauna, a major source for local livelihoods, and a huge global carbon sink. The planned scheme poses huge environmental threats to both the Nicaraguan people and to large areas of natural habitat and wildlife.

Guilbert Gates. Smithsonian Magazine, December 2014. [Link]

Larger than Life

If completed, it would be the largest man-made canal in the world. The Grand Canal will dissect through 170 miles of Southern Nicaragua at a width of 1,700 feet to accommodate larger vessels; starting in Punta Gorda in the Caribbean and ending in Brito in the Pacific. Nicaragua’s answer to the Panama Canal, this new Grand Canal would span nearly four times the length of the Panama Canal and be roughly 15 times wider to create a bypass for large vessels traversing from the Pacific to the Caribbean, and vice versa. Once completed, Nicaragua’s Grand Canal will accommodate ships larger than the Empire State Building, mega vessels that are currently too large to pass through the Panama Canal. In 2014, it was estimated that the Panama Canal generated roughly $2 billion annually. It’s likely the new Canal can achieve similar if not greater revenues thanks to its largess.


The Environmental & Human Cost

In addition to it’s vast size, the Canal would cut through the massive 3,200 square mile Lake Nicaragua, the country's largest lake and the second largest in Latin America. Once construction starts, it will put the single largest source of drinking water for Nicaraguans at risk through maritime traffic and construction pollution and emissions. The Lake watershed area is home to approximately 750,000 people; many of whom rely on the water for agricultural purposes and fishing. Today, the lake is estimated to provide water for 26% of Nicaragua's bean crop production as well as 16% of corn and sugar production, according to the World Health Organization (WHO). Local agriculture will be affected if water becomes contaminated as a result of this project. Isla de Ometepe, an island in the middle of the lake, is currently in the process of applying to become a UNESCO biosphere reserve, providing a sanctuary for important flora and fauna and offering ecotourism opportunities for local communities.

The Canal also lies in the middle of a hurricane belt, meaning any major hurricane, like that one time in 1998 when Hurricane Mitch killed about 3,800 Nicaraguans, would risk flooding the Canal and increasing risks to communities. Without natural barriers and vegetation, a hurricane post-Canal would trigger mudslides - causing massive destruction to communities and to essential infrastructure like roads and power lines.    


Cost to Communities & Resistance   

Indigenous land and communities are facing the most stark choices, with the International Federation for Human Rights estimating that up to 120,000 impoverished people situated along the Canal’s planned route would be left with no way of relocating. These potentially displaced communities would lose their farming and fishing livelihoods due to new activity and pollution the Canal will bring to Lake Nicaragua, as well as pollution and environmental impacts to waterways along and connected to the Canal's route. Not to mention, the health costs related to contaminated drinking water.

The project has been met with local resistance. In 2016, a coalition of Nicaraguan farmers gave their government a petition signed by 28,000 compatriots in opposition to the Canal. This past September, a joint report from a local and an international human rights group, the Centro Nicaragüense de Derechos Humanos (Cenidh) and the Paris-based International Federation for Human Rights (FIDH), underscored the grave impacts the Canal will have on over 100,000+ Nicaraguans. Particularly, the report found that the Canal may go against Nicaragua’s Constitution regarding protections to public lands and for Nicaraguans themselves, effectively giving investors a carte blanche on activities and their impacts on the local environment; not to mention the potential corruption surrounding the financing of the Canal.

The joint FIDH and Cenidh report found that prospects of the Canal have led many to sell their lands and relocate elsewhere in Nicaragua or to neighbouring Costa Rica before being forced out of their homes. Many local Council Leaders have spoken out against the Canal, only to be met by persecution and violence. The Government has since instituted a ‘state of emergency’ to conduct raids, make arrests, and detain those who are standing against the project. A rural social movement was borne out of these abuses of power, called the ‘National Council for the Defense of Lake, Land and Sovereignty’. This movement has led demonstrations and marches against the Canal, with hundreds of thousands of rural Nicaraguans standing against a project that would deprive them of their way of life, land, and livelihood resources - their very survival.

A Grand’ol Idea, Why Now?

The idea of a canal connecting the two oceans is no novel concept. Over the last 500 years there have been many documented proposals from everyone under the sun, including the Spanish conquistadors and Theodore Roosevelt, the big difference is the timing. Globally, we are facing a climate crisis. In December 2015, the global community came together and crafted arguably the most successful international agreement – the Paris Agreement on Climate Change. So far, 136 out of the 197 nations of the world are signatories to the Agreement, making their nations a part of stopping the worst effects of climate change.

Noticeably absent is Nicaragua. Right now, Nicaragua is ranked fourth among the nation’s most impacted by climate change. As recently as 2014, Nicaragua suffered a four month long drought during their normally wet season, thought to be the worst drought in 44 years. This and other droughts have caused widespread crop failures, particularly for beans, which in turn led to massive price hikes across the country - making even basic food staples unaffordable for many people. 

As Central America's poorest country, with an average 2015 per capita GNI of (USD) $1,940, the Nicaraguan government appears keen to put aside environmental concerns and push ahead with the project in the hope of enjoying double digit year-on-year GDP growth, following in the footsteps of Panama. By 2013, the Panama Canal helped push Panama’s per capita income above $11,000 (USD).

Despite the documented human and environmental rights issues, local resistance, and environmental impacts, Chinese officials visited the planned Pacific Ocean entry point this past November, signaling that the project is very much still alive and likely to go forward with the Nicaraguan Government’s consent. Projects like the Nicaraguan Canal could become increasingly common in the years and decades ahead. Increasingly, nations like China are seeking lucrative investments and joint ventures around the world, but particularly in developing countries. In these cases, the promise of increased wealth may well supersede human and environmental rights, justice, and basic livelihood needs like food and clean water.



Photo by: Graeme Walker, of Isla de Ometepe in Lake Nicaragua