Posted on 11-9-2003

WTO Should Take A Look In Cancun's Back Yard
by Jane Kelsey, 10 September 2003

Ed. note: PlaNet TV's latest programme (see PTV at this site for screening
times and for online video stream) features Jane Kelsey talking about the
WTO history and hopefully futureless.


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 and the
World Development Movement, alongside the local organizers of the Mexican
Space in Cancun. Snr Aguillon apologized that "there are few people around
today, because they 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, 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.