Hondurans Fight Private Cities Run by U.S. Companies as Gov’t Sued for Outlawing “Neocolonial Project” - Democracy Now!

[In Honduras,] communities are fighting back against privatization and foreign exploitation. The Honduran President Xiomara Castro and Congress repealed a law enacted by the previous right-wing administration that established what are known as Economic Development and Employment Zones, or ZEDEs. The law also allowed the private cities and special economic zones to have functional and administrative autonomy from the national government, which opponents say is a threat to Honduran sovereignty and livelihood of local communities.

Now a Delaware-based corporation called Próspera has launched a case to challenge the repeal of the law under the Dominican Republic-Central America Free Trade Agreement [(CAFTA-DR)]. The company established one of the zones on the island of Roatán and is now seeking almost $11 billion, which amounts to nearly two-thirds of Honduras’s entire 2022 budget.

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[Director of Public Citizen’s Global Trade Watch Melinda St. Louis: “In] Honduras, after the coup in 2009, there was this radical project to create these ZEDEs, as you mentioned, private cities, that U.S. corporations could come in and control the territory. The territory was removed from municipal jurisdictions, and then, they had then the power, as a corporation, to set their own regulatory standards, tax policy, monetary policy, security forces, have their own separate court system and, basically, run their own government.

[In the case of the island of Roatán, the company Próspera] came in and established this private zone where the governance structure does not allow for representative democracy from the people of the community. And at first, the people in the community didn’t even know that this was happening. It’s happening in such an opaque format. And once people understood what this meant in terms of taking away Honduran sovereignty and taking away land from communities, there was massive uprising. Indigenous people, community organizations, even the largest business association in Honduras opposed this corrupt law.

[…The Xiomara Castro administration ran on repealing this law, and delivered on this promise once in office.…]

[The lawsuit brought by Próspera will be handled by neither a U.S. court nor a Honduran court, but will instead be handled by a] private tribunal of private sector lawyers, three arbitrators ransack the treasury of the tiny country of Honduras to the tune of $11 billion…which…would bankrupt the country. So, the company is using this as an additional tool to try to bully the government to not implement the democratic will of the people.[”]

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[Leader of the community council of Crawfish Rock where the Próspera ZEDE is located, Venessa Cárdenas: “First] we need to know that this ZEDE, especially ZEDE Próspera, is not like the rest of the autonomous or independent zones. This is a state within a state, which will have its own Indigenous system. It is run by a technical secretary through the ZEDE CAMP. And the CAMP itself is in the shadow. No one knows who the members of the CAMPs are. And, of course, the link that it has to the narco state of Juan Orlando is very concerning to us, and their lack of transparency. They have not been transparent in anything they have done.[”]

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[…ZEDE Próspera was imposed by the former Honduran President] Juan Orlando Hernández, who was extradited to the United States for drug trafficking [and] corruption…

[Venessa Cárdenas: “ZEDE] Próspera had a very negative impact on our community. It has had a psychological impact, as well a physical impact.…We don’t know…when our home will be taken from us. And we have old people. We have single mothers. We have widows. And, you know, it’s a problem to be stressing and worried all the time when we will have to leave our community. [All of this causes a significant amount of mental stress.]

And then, physically because…the community was stuck in a limbo. No one wanted to do anything with it. There was no development. After the law was abolished in last year, anyone that is from here can see that there have been numerous construction [projects. All of this has culminated in] constant stress, as well as the environmental destruction…in our community.[”]

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[Melinda St. Louis: “In] CAFTA, there are these extreme investor rights that corporations can sue governments outside of the court system to demand…millions or billions in taxpayer compensation. And this is a very radical element of our past trading system, so much so that it is no longer considered to be a viable thing to include in trade agreements. The Biden administration is no longer seeking to include these extreme corporate rights in agreements. And yet it exists in CAFTA, and so this company is utilizing it.[”]

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