Due to a group of demonstrators who have taken over the Chixoy hydroelectric facility, there is a risk that in Guatemala electricity service rates will increase by up to 10%.
Since September 25th, a group of people claiming the payment of a complementary compensation has taken over the hydroelectric plant Chixoy, one of the most important in the country, and threatens to set it on fire.
Adverse court decisions against companies, social and political conflicts and fiscal issues are some of the factors that are impeding the development of productive projects in Central American countries.
One of the latest court decisions affecting companies with investments in the region was that of Minera Petaquilla, in Panama. The contract that this company had signed with the Panamanian State was declared unconstitutional last week.
Due to social conflicts and various legal processes, 16 hydroelectric projects have been halted in Guatemala, which together amount to an investment of close to $1.5 billion.
The Association of Generators of Renewable Energy (Ager) reported that power generation projects have been suspended because of conflicts with communities in the zones, consultation processes with indigenous peoples, and orders issued by the Constitutional Court, many of which which have been in response to claims raised by environmental organizations.These projects, for which no light can yet be seen at the end of the tunnel, represent an installed capacity of 460 MW.
At last the Constitutional Court of Guatemala has spoken about the operation of Minera San Rafael, which has been paralyzed for more than a year, ordering a community consultation as a requirement to resume operations.
The project has been halted since mid-2017, when the environmental organization Calas filed an application for a declaration of fundamental rights against the mine, arguing that the Ministry of Energy and Mines had not carried out the community consultations before authorizing the operation licenses.
In Guatemala, the company Minera San Rafael, whose operations remain paralyzed pending a final decision by the Constitutional Court, announced the dismissal of another 200 employees.
The delay on the part of Constitutional Court of Guatemala continues to take its toll on the mining company, which has been unable to operate for more than 400 days.
One year after the suspension of operations at the El Escobal mining project in Guatemala, the company is still waiting for a definitive judicial decision from the Constitutional Court.
In May 2018, the Legal, Environmental and Social Action Center of Guatemala (Calas) filed an appeal for legal protection, arguing that the Ministry of Energy and Mines had not carried out the necessary community consultations before authorizing the licenses.
In El Salvador every week at least two companies report that they intend to close down due to the impact of extortion, a problem that, far from being resolved, seems to be getting worse every year.
Representatives from the Chamber of Commerce and Industry of El Salvador (Camarasal), said that the country's employers do not see any significant improvement in the security climate, following the six month extension last April of the extraordinary measures of the Sánchez Cerén administration to try to control crime and insecurity.
For the third consecutive year, in 2017, foreign investment received by Guatemala fell compared to 2016, explained by a lack of legal certainty, particularly in the mining industry.
Even though no one expected great results at the end of 2017, the 3% fall with respect to foreign investment received in 2016 has worried the business sector, as it reinforces the downward trend seen since 2015, when the FDI received by the country was 12% lower than the amount reported the previous year.
Industrialists are demanding that the Constitutional Court rule on the request for legal protection that was granted in favor of an environmental group and which is keeping the mine's operations in a state of paralysis.
The project has been paralyzed since an environmental organization filed an request for legal protection against the mine, arguing that the Ministry of Energy and Mines did not carry out the necessary community consultations before authorizing the licenses.
The Panamanian Supreme Court of Justice has revoked the resolution that had approved the environmental impact study to build an oil pipeline that would supply fuel to Tocumen airport.
The ruling by the Supreme Court of Justice comes just a few days after the same institution received aninjunction against a project to build a port terminal on Isla Margarita, Colón, with an estimated investment of $600 million. Also annulled by the Court, in mid-January, was an EIA to set up a150 MW wind farm, which was to be built in the Fortuna forest reserve.
Financial executives point out that in order to regain confidence in the economy, the country is urging improvements in legal certainty and a reduction in political instability.
Sergio Recinos, president of the Bank of Guatemala (Banguat), told Prensalibre.com that "... this year we must improve matters related to legal certainty for investors andpolitical stability.These same business people have expressed in indices that measure the climate of confidence their concern that there should be 'clear rules'."
After seven months of suspended operations, the company that operates the Escobal mine in Guatemala has announced that it is making 250 workers redundant.
In Panama, the Supreme Court of Justice has annulled an environmental impact study for a wind farm with 75 wind turbines, which was planned to be built in the Fortuna forest reserve.
Arguing that the Environmental Impact Study (EIA) should have been category III, instead of II, because it is within a protected area, the Third Chamber of the Court for contentious administrative proceedings decided to declare the resolution of 2014, "null for being illegal", a resolution which had approved the EIA submitted by the company Luz Eólica de Panamá.
The union of Guatemalan industrialists will propose a development agenda, with the aim of improving economic conditions and recovering some of the investment lost in recent years.
The union of Panamanian businessmen indicates that a great deal of uncertainty has been caused due to the handling of high-profile investigations and judicial processes such as that of Odebrecht.
From a statement issued by the Chamber of Commerce, Industries and Agriculture of Panama (CCIAP):
Last week our nation was shocked again by another Judicial Body ruling and statements by the Attorney General of the Nation related to the Odebrecht case, which once again created a lot of uncertainty about the handling of high profile investigations and processes.This accentuates the lack of credibility in our justice administrators. In that sense, the Chamber of Commerce, Industries and Agriculture of Panama (CCIAP) wants to make clear its position: "NO TO IMPUNITY. WE ARE NOT GOING TO TOLERATE IT."