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Research Summary
Last Updated: 11/04/2008
Resolving the Boruca dam conflict in Costa Rica
Jurgen Carls and Warren Haffar

This article summarizes the findings of a jont research project by UPEACE and Arcadia University. A full discussion of the project and findings will appear in the upcoming book Conlfict Resolution of the Boruca Hydro-Energy Project: Renewable Energy Production in a Costa Rica published by The Continuum International Publishing Group in New York.

Since the mid-1990s, growth in electricity consumption in Latin America has averaged about 5 percent per year, one of the highest and most sustained growth rates in the world and one that is expected to continue at least to 2015.  To meet this demand, governments and, increasingly, the private sector and multinational financing institutions are developing new power projects throughout the region.

In Central America, electricity from new and existing plants is being transmitted from countries that have excess capacity to countries in need of electricity.  This situation has made the region one of the world’s hotbeds for the development of hydroelectric projects.  This has occurred alongside growth in ecotourism and the region’s identity as being a leader in sustainable development.

Currently, there are as many as 120 hydroelectric projects under construction in Latin America.  Collectively, these plants are estimated to produce 22.000 MW of new electrical capacity during the next years from 2003 onwards.

Many national and international researchers and activists have argued that the costs, social, financial and environmental of large dams outweigh the benefits. “The World Commission on Dams” has concluded that, “on balance, the ecosystems impacts of large dams are more negative than positive and they led, in many cases, to significant and irreversible loss of species and ecosystems.  In Costa Rica they are particularly controversial, especially the Boruca Project on both environmental and social justice concerns”.

Research problem

In 2002 The Ombudsman Center for Environment and Development (OmCED) was asked by the Government of Costa Rica to mediate between the national and local interests of the Government of Costa Rica, the interests of the main stakeholder group, the Indigenous Peoples, and the interests of potential financing institutions such as the World Bank and others, in regards to the construction of the Boruca Hydroelectric Dam, located in southern Costa Rica.

On behalf of OmCED, a working group was established comprised of an independent international finance expert, a representative of the Government of Costa Rica and an external consultant responsible for development issues and international cooperation. The main objective of this working group was to promote a dialogue between the national institutions involved and the Indigenous Reserves in the Buenos Aires region who are potentially affected by the Boruca Dam.

In 2003, the International Peace and Conflict Resolution Program at Arcadia University (IPCR) and the United Nations mandated University for Peace (UPEACE) embarked on a cooperative examination of the conflict surrounding the proposed construction of the Boruca Hydroelectric Dam, located in southern Costa Rica. This project-based learning experience was developed to bring together theory and practice, illuminating for students the inexorable link between peace and conflict resolution and sustainable development. Through partnerships with the Kan Tan Ecological Project and the Indigenous communities in the region, along with field visits to the Inter-American Court of Human Rights and local Civil Society organizations, faculty and students utilized the mediation framework to identify the underlying needs and interests of the primary conflict stakeholders.

With the financial support of the IDRC, the Boruca - Project has been analyzed as a case study whereby a mediation approach has been put into place by ICE as a means to secure increased electrical capacity in Costa Rica.

Specifically, this analysis assesses the value of this approach, how it has been put into practice and its utility in securing agreement for energy policy in Costa Rica.  Using the “mediation framework” as a new paradigm for identifying differing positions and underlying interests of all stakeholders involved, as well as a method for achieving or moving closer to sustainable development, an additional component of this analysis explores what the transferable lessons of this approach are and if they serve as a useful model for other countries in the region.

This manuscript represents the outcomes of the OmCED working group and the field research results of Arcadia University.

Research findings

The hypotheses outlined were:

a) “Energy needs and production is increasing in the region”

b) “Conflict resolution of the Boruca Hydroelectric Project is possible”

c) “Alternative energy options are feasible in Costa Rica”

d) “Regional Indigenous development opportunities in the south of Costa Rica exist”

a) Energy Needs and Production is increasing in the Region

Electricity consumption in Latin America has averaged 5% per year since the 1990s. For this reason, the area has become one of the world’s hotspots for hydroelectric development projects. One hundred and twenty hydroelectric projects are being constructed in Latin America.

Energy demand and production is increasing in the region; however, there are limitations due to the conditions of each country as well as restrictions based on local situations. In this context, demand reduction and energy saving tactics are also necessary to meet electricity demand.

A renewable market development agreement must include energy delivery according to needs, price stability, increases in local job opportunities and development goals, as well as decreased carbon generation, improved green image and financial support for the achievement of these objectives. This situation requires not only rethinking the design of electricity projects but also the public process by which the designs are conceived and implemented.  

Costa Rica generated 98% of its electricity from renewables: 80% hydroelectric, 15% geothermal, 3% wind and 2% from fossil fuel combustion, making Costa Rica by far one of the most clean electricity sectors in the world. Unfortunately, Costa Rica is losing its leading role in clean power. According to the latest operational plan (2002), by the year 2020, hydroelectricity will decrease to 67% and fossil fuel will increase to 29%, while other sources will only account for 4%. None of the expansion scenarios include a significant role for other alternative energies such as solar or biomass.

The Costa Rican electricity sector faces a number of pressures from changing global and regional regulatory trends. The Central American Free Trade Agreement (CAFTA) requires liberalizing energy markets and the Central American Wholesale Electricity Market will also go into effect. This greater cross-border grid connection will open up Costa Rica’s electricity sector to competition from neighboring countries.

Hydro-energy production is an option for producing energy but on balance, the potential impacts of large dams such as the Boruca Dam are more negative than positive on both environmental and social terms.

b) Conflict Resolution of the Boruca Hydroelectricity Dam is possible

The Boruca Project has been chosen for this analysis as a case study because of the speculation generated by this project, the potential negative impacts of the dam, insecurities, fears and hopes of the main stakeholders involved in the project region.

The dimension of environmental impacts outlined in detail such as loss of natural resources, particularly biodiversity, sedimentation of downstream areas and erosion of soils due to deforestation, reveal the potential environmental impacts of the Boruca Dam.

Resistance of civil society groups and in particular from Indigenous communities and environmentalists, was evident during the long term planning process of the project.

Human rights, particularly those of the Indigenous Peoples, enshrined in both international and national laws and instruments have been violated and would have been further violated if the project was constructed.

A stakeholder mediation analysis has been used for identifying different positions and underlying interests of the parties involved.

The mediation concept of positions versus interests can be used when thinking about how to design and implement projects. Taking into account each stakeholder’s position, it becomes evident that these positions may not reflect their desired outcome. Knowing stakeholders’ desires and tolerance allows for flexibility in planning and implementation. It is crucial to discover and understand each position’s interests, and why they hold the position they are presenting. The early involvement of all stakeholders invites dialogue and frames the argument around the positions, interests and needs of stakeholders.

Listening carefully to stakeholder positions, interests, fears and needs in an atmosphere of confidence was successful in the Boruca Dam Case. Listening was the essential element of confidence building. The conflict could have been resolved earlier and easier had the forum for an adequate discussion been available to the stakeholders right from the beginning of the planning process.

The analysis assists in preparing the necessary arguments to either support the Boruca Dam Project or to rule against the project. It helps the parties to underline their positions and needs while the parties themselves will have to be ready to sacrifice some of their positions to facilitate an agreement. It was through these dialogues that the authors of this manuscript understood the reasons behind the positions of the stakeholders and also the goals of the project. 

Finally, after a thirty years process of planning and discussing the pros and cons of the Boruca Dam, the interventions discussed in this document, underlined by increasing national and international resistance and pressure against the dam, the idea to build the dam was dropped by the Government of Costa Rica and a smaller dam will be constructed in the region.

The design of the smaller project El Diquis offers many advantages in comparison to the Boruca option as far as the size of the area flooded, relocation of people, environmental impacts, number of archaeological sites affected and finally the costs involved.

The Boruca Dam example cannot serve as a model for other projects in the region because it has taken 30 years to decide not to construct the dam. Yes the conflict resolution of the Boruca Dam was possible. The stakeholder analysis and mediation framework applied during the last five years can be used for comparable project situations in the region.

c) Alternative Energy Options are feasible in Costa Rica 

A number of factors are driving the current global renewable energy boom, for example, the passage of the Kyoto Protocol, growing awareness of global carbon constraints and the high prices, security risks and international conflicts associated with fossil fuel energy. The most important driver may be the falling costs of renewable energy. The economics of alternative energies are improving rapidly as the technologies mature, the industry grows and the costs of conventional fuels increase.

Due to strong policy support renewable energy is growing very fast. A series of countries including 14 so called developing countries have some type of renewable energy promotion policy programme. Europe plans to make 22% of its electricity with renewables by 2010. Sweden plans to be oil free by 2020 and in Germany the alternative technology energy market is booming.

Developing countries receive about US $ 500 million each year in development assistance for renewable energy projects, training, and market support. The World Bank Group is committed to a target of at least 20% of average growth annually in both renewable energy and efficiency lending over the next five years.

Costa Rica needs to rethink the energy project design by taking into account not only the financial viability of a project but also the environmental and social costs of power production. Full–cost accounting taking into consideration externalities are therefore essential to promote optimal economic efficiency of alternative energy production.

Committing to a fossil fuel free generation plan would create a more dependable, secure and less expensive electricity system in Costa Rica then the current   national generation plan.  A clean power plan is well within the proven resource potential of the country and the capabilities of the energy sector.

The cheapest source of non-conventional energy is most often conservation, through efficiency and demand management programs which so far cannot be observed in practice. An 11% reduction in power demand by 2025 through demand management programs is a realistic approach. There are a series of options available such as public campaign to save energy, load management, real time pricing, industrial and appliance standards. Focusing on reducing peak load can significantly reduce utility spending on new capacity.

New efficient technologies would increase these savings. New metering technologies also allow for real-time pricing which can significantly lower peak energy demand.

The Costa Rican electricity system is well structured to enact efficiency measures because ICE does not struggle with split incentives. The mandate of this public company is to provide the public service of electricity as cheaply and efficiently as possible, not to make a profit. With the CAFTA agreement, however, this of course will change.

Alternative energy technologies, namely solar, wind, biomass, and geothermal, are under-utilized in Costa Rica’s energy sector. All of them are economically viable when life-cycle social and environmental costs are considered.

Today, Costa Rica is doing very well and generates 98% of its electricity with renewable resources. However, if the country follows ICE’s present expansion plan, the country will move to 17% fossil fuel generation which will cause environmental, security, and price crises in the future.

It is recommended to make use of the alternative energy potentials of the country and revise the current expansion plan.

The emerging global carbon markets represent a very important financing opportunity for renewable energy in Costa Rica. The country has already proven that it is very capable of handling these types of projects. It was the first developing country to build “Joint Implementation Projects” under the Kyoto Protocol.

The overarching barrier to the increase implementation of alternative energy in Costa Rica is a lack of strategic vision and coordination within the electricity sector. The primary players in the country must define a coordinated national level “Sustainable Energy Strategy”. The strategy must include a strong monitoring system and frequent evaluations to ensure implementation. With such a strategic vision proper legal, regulatory, institutional, financial and technical infrastructure can be created or reinforced to encourage large scale and sustainable energy in Costa Rica.

d) Regional Indigenous Development Opportunities in the south of Costa Rica exist

The situation of the Indigenous Peoples of Costa Rica is definitely precarious, and it is unacceptable that these communities continue to live under systems of marginalization and absolute poverty. The Costa Rican government must take steps to clarify the legal structure and position of the Indigenous Peoples within the country and its reserves. An Indigenous Commission in the Legislative Assembly will be established and will lead the task of reviewing the existing legislation.

This could include the change of the legal status of the communities and the integration of the reserves into regional development plans. Such an initiative would encourage cultural and ecotourism, mining opportunities, agriculture and forestry systems. The practice of conservationist agriculture, cattle ranching as well as measures such as “Payment of Environmental Services” for the protection of natural resources such as water, flora and fauna, scenic beauty and carbon fixation, are of great importance for the development of the reserves.

The Payment of Environmental Services in particular is vital for the protection of natural resources and constitutes an important element of development for the Indigenous communities in Costa Rica.

Social organization constitutes one oft the most dynamic factors for the development of the reserves. It is understood that the banding together of different sectors of the Indigenous population under aims and defined objectives should be economic, social, environmental and political in scope. This includes having up-to-date legal certificates, legal capacities and accounting, as well as development experience with community projects.

The lack of intended capacity and of local management on the part of existing organizations is a worrisome aspect. Therefore the strengthening of local organizations is seen by the authors of this manuscript as the prime motor for change towards more horizontal processes of planning and implementation of projects. By means of training, organizational support and assistance to establish local services an “Integrated Pilot Project for the Development of the Indigenous Reserves” is recommended.

An integral development focus must approach a new relationship towards the non-indigenous population of the country, putting aside discrimination, paternalism, clientelism, institutional authoritarianism and other ill-advised methods. On the contrary, a dialogical relationship of shared responsibilities between Indigenous and non-indigenous organizations must be established as an indispensable condition, in order to maintain a process of sustainable development of the reserves in the region.

In summary, the pilot development project should emphasis the following areas:

(a) Legal framework and human rights of the Indigenous Population,

(b) Social organization,

(c) Training and job creation,

(d) Program of production projects, and

(e) Local services.

Jurgen Carls is a research fellow at the UN mandated University for Peace, in the department of Environment, Peace and Security. Warren Haffar works with Arcadia University in the United States.