The WTO Should Take A Look In Cancun's Back Yard.

8 September, 2003
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9 September 2003
Media Bulletin # 1


Puerto Juarez is the oldest settlement in Cancun. Past the local fishing boats moored on the stunning white beach, you can see the profile of the Hotel Zone where the WTO ministerial meeting is about to begin. The contrast is breathtaking.

Cancun was created just 33 years ago. Fishers and their families have been in Puerto Juarez for about 70 years. Many of the traditional families are now being displaced. According to the locals, people have no rights and some have no water because powerful developers are intent on expelling them from the beach so they can build new hotels in a mirror image of the Hotel Zone.

Jose Aguillon owns a small beachfront restaurant and fishing boat. His was the first stop on the tour of ‘real’ Cancun organized for journalists by a number of groups including Friends of the Earth International and the Polaris Institute of Canada, alongside the local organizers of the Comite de Bienvenida de Cancun.

Snr Aguillon apologized that “there are few people around today, because they are afraid.” A few days ago, he had a visit from the local council. They told him that his restaurant license would not be renewed. Plain clothed officials came to watch over the media tour.

There were two likely reasons. First, the authorities want to close his restaurant down because poor people gather there. They will be unsightly in the proposed new luxury hotel zone. Second, Jose Aguillon was prepared to talk to the international media about the harsh realities of life for local people in Cancun – a truth that would contradict the claim that foreign direct investment is essential to create development and jobs in poor countries. It would also tarnish the image of golden sands, wealth and first world services being lapped up by the WTO delegates, journalists and lobbyists who now occupy Cancun’s Hotel Zone.

Snr Aguillon’s message was simple: “They promised tourist development that would help indigenous people, help the local people and help the poor people. And we noticed at the beginning of the process that that was lies, that wasn’t the way it was going to be.” The cruise ships and hotel chains are all foreign controlled. Tourists buy an all inclusive package, including arts, crafts, restaurants and fishing excursions.. Foreign investors now control all development in Cancun. Small businesses simply cannot survive.

“All the money stays in the hands of the same people. That’s what creates the poverty, alcohol, vandalism and lack of services. We live day to day. Our livelihoods depend on the weather. If the weather is good, we work. If not, we can’t. The permits we need to purchase to run a business here are too expensive for us and they are turned down for reasons we don’t understand and aren’t told to us. The point seems to make sure we can’t continue to exist.”

“Paradoxically, it has become easier to get permits to run the little restaurant and fishing boat than it used to be. But it is impossible to compete with the transnational companies that are all backed with foreign money.”

“All this started with NAFTA. In 10 years”, he said, “there has been no widespread development for the people. Foreign investors take all the money back home. Some 600 families live in this community. Soon they will have no choice but to work for the foreign companies for a pittance, putting on white suits, being people’s servants and taking orders, or set up small tourist stands.”

“People used to be happy”, he said. “Here by the shore on the water there used to be thousands of lobsters, shrimps and clams. People could live from the sea. Just recently a friend was arrested, had his boat confiscated and sent to jail because he took seven kilogrammes of shrimp. The people of Cancun do not have any part of Cancun for themselves.”

Down the road at the port this perverse form of ‘development’ was also making its mark. A new facility was under construction, designed to cater for 200-300 boats. The small operators and cooperatives that ran the old port would shortly be redundant. The new port building also had an OXXO convenience store and a McDonalds, which based on similar experience elsewhere would soon displace the small stores in the town.

What has this got to do with this week’s WTO ministerial meeting? A great deal has been invested in the argument made by the IMF, World Bank and WTO that poor countries need foreign direct investment. Negotiations on a new agreement to promote and protect foreign direct investment are top on the list of ‘new issues’ ministers are required to decide on. This would see the failed negotiations on a Multilateral Agreement on Investment reborn.

Already, foreign investors in services such as tourism, fishing, restaurants, food stores, hotels, leisure services and ports can secure guaranteed rights to set up business and be treated at least as favourably as locals under the General Agreement on Trade in Services (GATS). The right to regulate can also be restricted, if governments have committed those services to the GATS rules. New negotiations launched in 2000 require governments to make commitments of further services. The European Union has asked Mexico for extensive new openings in tourism, retail services and environment, including water. The Cancun ministerial is expected to set new deadlines for governments to table their offers in response to such requests.

The water issue is especially sensitive. Numerous World Bank loans to Mexico have contained conditions mandating water privatization and cost recovery. In 2003 the World Bank approved another loan for Mexico to provide infrastructure services, including water, for eligible states. Conditions for eligibility include economically efficient pricing, self-sufficiency through cost recovery, appropriate competition and regulatory frameworks, and enhancing the participation of the private sector.

The local water company in Cancun, Ondeo, is 50 per cent owned by Suez of France, the world’s largest water company. Suez is a cornerstone member of the European Forum on Services that drives the EU’s position in the GATS negotiations. In 2002 it secured the contract for Cancun’s water from Azurix, a subsidiary of Enron. Suez claimed that this and other Mexican water contracts would earn it US$70 million in annual revenue.

The real meaning of water privatisation was soon evident down the road from Snr Aguillon’s restaurant. A pumping station provides a relatively clean and reliable water supply to local residents. But not to all of them. A stone’s throw away from the pumping station lives the family of Snr Faustino Gaspar Trinidad. Their house has no water. To have it connected they need papers that show they are legal tenants. They’ve lived on the land in their own house for many years. But they don’t have the paperwork. It got lost at the Council. Each time they try to secure new documentation, that gets lost too. Sometimes, they say, the tanker drivers given them water, out of solidarity.

The landowner is billionaire Carlos Hank Gonzales, former Minister of Agriculture and Minister of Tourism, and one of Mexico’s most influential businessmen implicated in the corruption scandals that surrounded former President Salinas. His local corporate vehicle Trivasa has been linked to an Enron-style corruption scandal. Another of his firms is a co-partner with French water company Suez.

Snr Hank has flagged the land where the Gaspar family lives as the site of a new hotel zone. They were offered 6000 peso to move. When they refused, the local authority and landowner came with machines to destroy the house. The municipal government documented their complaint. But those papers were never served and disappeared too. They commented that “Developers have big pockets”.

Some of their neighbours have moved. Three years ago 17 fishing families were successfully evicted to make way for a hotel development and relocated to a remote but beautiful lagoon at Rio Manati. This was presented as an opportunity to develop their own tourism venture. Accepting the challenge, the families have been developing eco-tourism with fresh fish restaurant, bird watching, fishing and exploring the rich natural environment fed by mangroves. They have invested heavily in equipment for tourism and sustainable aquaculture.

Access is a problem - the dirt road would deter all but the most determined tourist. So is the absence of electricity, although they are working on innovative solar energy strategies. Two other threats may spell the death knell for the project, and force them to search for another new livelihood.

The first is a rubbish dump two kilometers up the road, right next to the mangroves. The dump receives all the refuse from Cancun, even though it’s in the separate municipality of Mujeres. The 24,000 hotel rooms in Cancun generate as much rubbish as the 400,000 people who live in Cancun. The toxins from decomposing rubbish leach into the mangroves, polluting the lagoon. This, in turn, kills the fish larvae that spawn in the lagoon. As guardians for the environment, they explained they had been trying to get environmental regulation and restrictions on fishing to safeguard an irreplaceable heritage, to no avail. That’s not surprising. The dump is owned by the same Carlos Hank Gonzales. As vultures circle the tip, our guide quips that “we’d would rather have these vultures than the ones at the WTO”.

Developers are now eyeing up the site at Rio Manati as a commercialised tourist venture, displacing the families’ livelihoods yet again. In a familiar story, they don’t have the formal paperwork to support their ownership of the land. It disappeared long ago within the offices of the local council. The families are trying to regularize the situation so they can’t be removed. Without those documents, developers can lay claim to the site. Presumably, if they succeed Snr Hank will be involved, and discover a profitable way to resolve the pollution threat to the lucrative tourist venture, as well as fixing the road and laying on electricity.

To a large extent the North American Free Trade Agreement, which covers both services and investment, has already locked open the doors of Cancun and its surrounds to foreign capital from the US and Canada. Their transnational corporations are ‘free’ to operate in a largely unfettered regulatory environment. The people whose communities they destroy, whose environments they despoil, whose livelihoods they terminate, whose self-determination they negate and whose dignity they leave in tatters, have no legal right to keep them out. Nor, any longer, does the Mexican government.

Extending this ‘free trade zone’ to the world through the WTO agreements on investment and GATS reduces Mexico, and places like Cancun, to a mere playground for those transnational corporations and foreign investors that want to profit from this stunning location. The contrast between a development model designed to promote the profits of the world’s transnationals, and one that protects the basic rights of people to clean drinking water, fish from their oceans, a clean environment, a secure income and protection from intimidation, eviction and repression could hardly be more stark.

From Jane Kelsey in Cancun: email; cellphone 52 998 937 7436

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