TED Case Studies

Pier Construction and Coral

Case Number: 407

Case Mnemonic: COZUMEL

Case Name: Cozumel Pier Controversy

• IDENTIFICATION
• LEGAL CLUSTERS
• GEOGRAPHIC CLUSTERS
• TRADE CLUSTERS
• ENVIRONMENT CLUSTERS
• OTHER FACTORS

CASE NUMBER: 407
CASE MNEMONIC: COZUMEL
CASE NAME: Pier Construction and Coral

I. Identification

1. The Issue

2. Description

Current project plans include the construction of a terminal building for passengers, pier terminal access, parking facilities, a golf course, a shopping center, and a Club Resort. The estimated cost for the tourist complex is $230 million (latino.link.com/travel/0316coz.html, Nancy Nusser, August 1996).

Paradise Reef used to extend much farther than its present encompassing state. The first pier was built off the Northern tip of the reef, and as a likely result, the coral below it died. In order to prevent this from reoccurring, Consorcio H. has already spent $2 million on environmental measures, as well as hired biologists to replant any coral that might be damaged. A study conducted by the firm estimated that pier construction would only damage 3% of Paradise Reef (latinolink.com/travel/0316coz.html, Nancy Nusser, August 1996).

Initial approval to start pier construction in late 1994, in fact, was due to an environmental impact study conducted by the INE (National Institute of Ecology, the Mexican government's ecology organization) which defined Paradise Reef as "dead", and therefore, construction could have no damaging effects. However, contradicting the study set forth by the INE was a study undertaken by ReefKeeper (a reef protection organization based in Miami) in November, 1994 which found that running directly through the planned site for pier construction was, indeed, a "thriving inshore fringing reef 5 meters from shore" and a "nearshore fringing reef and gorgonian zone 60 meters from shore" (Underwater USA, March 1995). The ruling of the INE not only stood in opposition with that of the ReefKeeper organization but with its own findings in 1990 when it placed the reef under federal protection due to the obvious threat of silt storms caused by cruise propellers, as well as the battery of coral by cruise anchors, and chains.

By March, 1995, moorings were placed on the reef, warehouses and concrete mixing plants were well under construction on the island, and reef mangroves were being filled with concrete sediment. Pier construction had begun.

The dive community wants the INE to reverse their findings and authorization for the pier project. Although originally scheduled for 1994, pier construction has become a slow and tedious process as many groups mobilize in opposition against the construction, and rally to save the reef. Even Quintana Roo Governor Mario Villanueva Madrid has voiced his decision to cancel the project; but because permits for construction are issued by the federal government, he has no power to override the continuance of the pier project, which is now set to be completed in 1997.

In a final effort to stop construction proceedings, ecologists and divers, under the organization of three nongovernmental groups: The Group of 100 (el Grupo de los Cien Internacional A.C.), the Mexican Center for Environmental Law (el Centro Mexicano de Derecho Ambiental A.C.), and the Committee for the Protection of Natural Resources (Comité para la protección de los Recursos Naturales A.C.), presented their case (under Article 14) on January 18, 1996 to the NAFTA Commission for Environmental Cooperation (CEC; a commission newly appointed to monitor ecological protection and help to make environmental standards compatible amongst its member nations, Canada, Mexico, and the United States). They alleged that the Mexican government issued permits for pier construction without abiding by federal requirements for the presentation of an Environmental Impact Assessment (EIA) of the pier project in totality. They successfully convinced the Secretariat to recommend that the council of the CEC prepare a factual record (which the Secretariat of the CEC agreed to on June 2, 1996). The factual record discussed the enforcement of environmental laws, and an initiative to begin investigation, early August, 1996, into Mexico's implementation of (or failure to act in accordance with) environmental law as it applies to the pier, passenger terminal, and other construction near Paradise Reef.

Those laws which are allegedly thought to have been ignored and neglected by the Mexican government are as follows: (Planet ENN: Sept. 2, 1996)

• a Presidential Decree designating Cozumel's reefs part of a Marine Flora and Fauna Reserve;
• the requirement of the Federal Environmental Law that an Environmental Impact Study be filed;
• a Municipal Zoning and Land Use Plan;
• a decision of the Cozumel City Council against the pier.

The CEC has asked Mexico to review the case. Mexico has agreed to the investigation with great disinclination. Those who make up the Council of the CEC include Canadian Environment Minister Sergio Marchi, Carol Browner of the US Environmental Protection Agency, and Secretary Julie Carabias for Mexico's Environment, Natural Resources and Fisheries. Julie Carabias also headed the INE when approval for the pier construction was first authorized. During several press conferences she has made statements chastising the allegations against Mexico, claiming that NAFTA was only intact after the arrangements for the Consorcio H. Pier were underway. Mexico thereby maintains its position of accordance with its environmental laws, and sent in their written response March 27, 1996 (prior to the completion of the factual record).

A plan to transport sections of endangered reef to a safer locale was put into action April, 1996. Unfortunately, shipping companies were not informed of this effort, and as a result destroyed the unmarked reefs. In June, 1996, a renewed effort to protect certain reefs off the shore of Cozumel was announced declaring an "underwater national park" to be in place (excluding Paradise Reef).

The Mexican government has continued with pier construction at Paradise Reef. Regardless of the CEC findings which observe that Mexico is in violation of its own law, the CEC has little power to enforce its rulings, and may at best be considered by its defendant as a recommendation for change. (The US and/or Canada may file a trade complaint that may/may not result in eventual sanctions against Mexico if they do so wish.) The findings have, nonetheless, alerted attention towards the crux of debate between trade and the environment.

The struggle of conservationists and ecologists is but one angle of the ensuing debate; underpinning this case is the deeper dilemma and difficulty of developing tourism (which brings in capital) while maintaining a balanced environment of healthy coral reefs (that which affords tourism in the first place). A healthy reef serves as a principal source of economic income, employment, and food for many islanders: dive operators, restaurant owners, jewelry makers, as well as many shop owners thrive off the multitude of tourists (who spend tourist dollars on souvenirs, hotels, etc.) that coral reefs attract. The construction of a second pier will allow for a greater influx of tourists, which means more money for the local shop owner, but at the expense of the reef, itself (which inevitably will stifle tourism to the island). On the other hand, pier construction will provide temporary employment for Mexicans, which is much needed after the 1994 peso crisis; it will also bring in many US citizens (who have money) that will also be working on the pier project (an estimated 9,000-10,000 persons) (latinolink.com/travel/0316coz.html, Nancy Nusser, August 1996). Still, the conservation of natural resources must not be overlooked in shortsighted attempts of economic gain.

3. Related Cases

Key Word Clusters

1. Trade Product = TOURism
2. Bio-geography = TROPical
3. Environmental Problem = CORAL Loss

4. Draft Author:

Date:

II. Legal Clusters

5. Discourse and Status:

DISagreement and INPROGress

The disagreement lies between federal government authorities of Mexico supported by the INE, who not only question the decision made by the Secretariat of the CEC to accept the case submission and the requested response from Mexico but steadfastly refute all allegations against them as well, and the Commission for Environmental Cooperation (CEC) under NAFTA that finds Mexico to be in violation of the environmental regulations of their law as they fall under the NAAEC.

6. Forum and Scope:

Any of the rulings/findings of the CEC may only be taken as recommendations and have no enforcing mechanism behind them; therefore, any change in the authorization for the pier construction off the coast of Cozumel must come from a change within Mexican domestic legislation or power. Obviously, Mexico has no intention of discontinuing pier construction in Cozumel. The CEC's recommendations will most likely, therefore, be ignored.

7. Decision Breadth:

As the first investigation of the NAAEC the decision and outcome will set the precedence of future cases affecting any one of the member nations Mexico, Canada, or the US. Clearly, the legitimacy of the NAAEC, as a governing institution, is at stake; not to mention the future consideration that may or may not be given to the environment as a serious discourse on trade activity. However, the Secretariat contends that, despite the problematic issue at hand, further examination of this case would, in fact, promote, at the very least, NAAEC objectives (not undermine them).

8. Legal Standing:

III. Geographic Clusters

9. Geographic Locations

a. Geographic Domain: North America [NAMER]

b. Geographic Site: Southern North America [SNAMER]

c. Geographic Impact: MEXico (Cozumel)

10. Sub-National Factors:

11. Type of Habitat:

IV. Trade Clusters

12. Type of Measure:

13. Direct v. Indirect Impacts:

14. Relation of Trade Measure to Environmental Impact

a. Directly Related to Product:

c. Not Related to Product:

d. Related to Process:

15. Trade Product Identification:

16. Economic Data

17. Impact of Trade Restriction:

18. Industry Sector:

19. Exporters and Importers:

V. Environment Clusters

20. Environmental Problem Type:

CORAL Loss

Coral reefs are formed by "colonies of tiny, single-celled animals that secrete calcium carbonate to form a hard outer skeleton. New colonies grow on the skeletons of dead corals in a process that builds vast reef structures over thousands of years."

Coral reef destruction alerts a wave of concern because of the essential role corals play in supporting ocean life. One quarter of all marine fish species inhabit coral reefs--an astonishing quantity given the fact that coral reefs cober less than one percent of the earth's surface. The loss of coral reefs may result in many disastrous scenarios: perhaps the collapse of local fisheries (due to the disappearance of their "feeding grounds") along with the rapid decline in tourism.

Direct damage by humans and cruise liners stir up sedimentation and release pollutants into sea water sometimes causing heavy build-up of algae growth. This, in turn, blocks out sunlight and depletes oxygen supplies necessary for corals to survive and flourish. Marine ecologists estimate that over two- thirds of the world's coral reefs are "unstable or in decline"--the principle reason for 1997 to be crowned the International Year of the Reef. (The Washington Post, February 9, 1997)

21. Name, Type, and Diversity of Species

The following is a list of marine life at risk with the destruction of Paradise Reef:

• spotted eels
• toadfish
• lobsters
• Atlantic Octopus
• filefish
• angels

22. Resource Impact and Effect:

MEDIUM

While the problem of cruise liner pollution, chemical waste, sedimentation, bilge, and silt storms caused by ship propellers all contribute to the continuous deterioration of coral reefs, there is still no accurate estimation of how much of Paradise Reef will be damaged due to the construction of the second pier, nor at what rate the reef, itself, will reach its own demise. (A study by Consorcio H. deemed the damage to be at 3%, which is questionable due to the position of the firm within the case).

23. Urgency of Problem:

24. Substitutes:

VI. Other Factors

25. Culture:

NO

26. Trans-Boundary Issues:

NO

27. Rights:

NO

28. Relevant Literature

Cousteau, Jean Michel. "Cousteau Watch: Paradise reef tests traders' ecological scruples," Planet ENN, Sept. 2, 1996. http://www.enn.com/planetenn/090296/fe

Humphrey, Betsey. "They Paved Paradise...Cruise Ship Pier Construction Starts in Paradise," Underwater USA, March 1995. http://www.glaci.com/~nanner/paving.paradise

Warrick, Joby. "Coral Reef off Florida Keys Caught in Wave of Deadly Disease," The Washington Post, February 9, 1997.

"Divers Unite to Protect Paradise," November 1995. http://www.coral.org/Text/Paradise.HTML

"GreenPeace Activists Halt the Construction of a Pier on Protected Reef of Playa Paraiso," April 1996. http://www.greenpeace.org.au/~comms/mexico/cozumel.html

"Cozumel's Paradise Reef." http://www.blacktop.com/coralforest/mapmexico.html "The International Year of the Reef (IYOR) 1997," IYOR: A Bulletin of Activities. http://www.coral.org/IYOR/activities.html

"Coral-What is it? Benefits, Threats, and Solutions." http://www.blacktop.com/coralforest/reef.html

"Construction of Pier over Coral Reef Angers Environmentalists." http://www.latinolink.com/travel/0316coz.html

"NAFTA CEC Secretariat Recommends Investigation Into Allegations About Mexican Port Facility," Daily Environment Report, June 11, 1996, No112. http://www.bna.com/newsstand/den/127a

"Commission for Environmental Cooperation-Secretariat." http://cec.org/english/Citizen/96

http://www.envirolink.org/pubs/IATP/nafta/vol3no5.html

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