The Panama NG Power project is in breach of environmental impact regulations


The Panama NG Power project

A petition for nullity was filed against the resolution that authorized the Environmental Impact Study of the NG Power Panama Project on August 12, 2020, with great importance, because it can establish precedents in the field of environmental law. The lawyer Enrique de Gracia Lezcano based his application for nullity on multiple arguments of order of administrative procedure and of violation of Panamanian legal norms (Diario La Prensa, October 19, 2020).

The fundamental reason for their 32-page demand is that the 2014 resolution was issued 2 years and 11 months after the 2011 resolution. The latter was valid for 2 years, which means that by 2014 the term of authorization had expired and could not be modified, as did the National Environmental Authority (ANAM) at the time. In addition, no new study was prepared with the new mitigation measures, nor was the respective citizens’ consultations undertaken since the degree of involvement became a Category III project.

Another argument of the request for invalidity is the lack of permission to support the NG POWER project with the operations of the Panama Canal Authority (ACP). The company received a compatibility permit in 2011 for the 150 megawatt project; however, by 2014 it did not have the ACP permit for the 670 megawatt project, which was issued six years later, at the end of September 2020 (Diario La Prensa, 19 October 2020).

In March 2011, the then-Channel board approved the NG Power compatibility permit for a 130 MW plant. However, the company intended to extend this permit for a 670 megawatt plant, without having modified the Environmental Impact Study with due process. The Supreme Court of Justice therefore has pending the resolution of a contentious administrative complaint filed in August 2019 against the resolution of the Ministry of Environment of February 21, 2014, which amended the category of the Environmental Impact Study (Diario La Prensa, September 28, 2020) not meeting required legal requirements.

The Panama Canal Authority (ACP) has repeatedly reiterated that the compatibility permit initially approved was for a 130 megawatt plant, and if NG Power builds a higher capacity plant, it would be in breach of the land use rules on the banks of the Canal. The ACP will therefore be obliged to cancel the permit (Diario La Prensa, 15 April 2019).

The compatibility regulation seeks that any project on the riverbanks does not impact the operations of the Canal, does not affect the transit of ships and that water and environmental quality be maintained without any risk. The regulation is therefore not being complied with.

Therefore, from an environmental point of view, and according to the demand before the Supreme Court of Justice, the continuity of the project clearly and ostensibly violates the legality.

The controversial case of the Panama NG Power liquefied natural gas-based power generation project has been dotted with permanent irregularities and suspicions, some of which are:

  • Lack of transparency and legitimacy, in a process of public supply and competitive act, as national and international media showed.
  • Invalid Environmental Compliance and Original Environmental Impact Study.
  • Concealment of documents relating to power and energy contracts by the Public Utilities Authority (ASEP) and its director Armando Fuentes.
  •  Public statements of the company, with data manipulated and without technical basis on cost differentials that the power distributors and that were denied by the Panama Electric Transmission Company (ETESA). Otherwise, the electricity tariff would be overcharged.
  • José Dapelo, the main partner, was banned from entering the country by the National Migration Service and was removed from his residence permit, due to numerous irregularities. He has also been splashed for the payment of bribes in Andorra accounts linked to the Papadimitriu family.