Identifier
Created
Classification
Origin
04GUATEMALA1417
2004-06-08 18:52:00
UNCLASSIFIED
Embassy Guatemala
Cable title:  

GUATEMALA'S 2004 REPORT ON INVESTMENT DISPUTES AND

Tags:  EINV EFIN PGOV KIDE CASC OPIC 
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This record is a partial extract of the original cable. The full text of the original cable is not available.
UNCLAS SECTION 01 OF 03 GUATEMALA 001417 

SIPDIS

DEPT FOR EB/IFD/OIA/ATBRUYAN AND L/CID/JNICOL
TREASURY FOR DO/CHRISTOPOLOUS
USDOC FOR ITA/ATAYLOR
USTR FOR FHUELGEL
PASS OPIC FOR O'SULLIVAN

E.O. 12958: N/A
TAGS: EINV EFIN PGOV KIDE CASC OPIC
SUBJECT: GUATEMALA'S 2004 REPORT ON INVESTMENT DISPUTES AND
EXPROPRIATION CLAIMS

REF: A. STATE 78697


B. OLSON/BRYAN/NICOL E-MAILS

UNCLAS SECTION 01 OF 03 GUATEMALA 001417

SIPDIS

DEPT FOR EB/IFD/OIA/ATBRUYAN AND L/CID/JNICOL
TREASURY FOR DO/CHRISTOPOLOUS
USDOC FOR ITA/ATAYLOR
USTR FOR FHUELGEL
PASS OPIC FOR O'SULLIVAN

E.O. 12958: N/A
TAGS: EINV EFIN PGOV KIDE CASC OPIC
SUBJECT: GUATEMALA'S 2004 REPORT ON INVESTMENT DISPUTES AND
EXPROPRIATION CLAIMS

REF: A. STATE 78697


B. OLSON/BRYAN/NICOL E-MAILS


1. Land invasions (squatter takeovers) of large farmlands
are fairly common in Guatemala. Private sector organizations
complained that the squatters sometimes acted with government
complicity during the four-year administration of President
Portillo, who left office in January 2004. The new
administration of President Oscar Berger has declared its
intention to evict squatters where property rights are
clearly established, and it has begun to follow thorough in
several cases. However, the issue is highly politicized,
pitting defense of private property rights against continued
calls for major land reform to address social injustice. In
the process, some groups are blurring the distinction between
complex historical cases, where indigenous groups are
asserting traditional claims and written records are missing
or inadequate, and organized invasions of titled land that
have taken place within the last couple of years. Even in
the seemingly clearest of cases, the justice system is slow
and its rulings are often ignored. Post is not aware of any
new cases involving U.S. citizens over the past year and
updates, below, information reported in 2003.


2. a) Claimant A

b) 2001

c) Claimant A purchased approximately 3,825 hectares of land
near the Honduran border in Izabal Department in 1991,
intending to raise cattle and harvest timber. Claimant
reports that approximately 50 armed peasants invaded the
property on 16 February 2001, taking over 100 hectares of
improved pasture. Per a June 4, 2002 communication from
Claimant, the squatters by that time controlled more than 700
hectares of land. Claimant alleged that the standing
Governor of the State of Izabal, Patricia Quinto, demanded
that Claimant provide land titles to the squatters. Invaders
have allegedly since taken over most of the property,
stealing cattle and timber and destroying improvements. Some

of the invaders allegedly are armed with fully automatic
assault weapons and have fired upon Claimant's administrator.
Claimant has filed numerous complaints with the district
attorney but has had no effective response. A penal court
ordered that a civil court must first determine ownership of
the property based on a claim by the squatters that they have
historical rights to the land, notwithstanding Claimant's
possession of legal title to the property. Claimant and
peasant activists have complained of being threatened by
heavily armed men who they thought were in the employ of each
other, but it appears that the armed groups are more likely
linked to a known and dangerous local narcotics trafficking
organization that is seeking control of the property.

Embassy officials raised this case with the former President
of Guatemala and with several of his cabinet officials. A
member of the inter-agency commission on land disputes told
Embassy officers in March, 2002 that land registry records
from the area had been destroyed during the first half of the
twentieth century, complicating the task of verifying or
rejecting claims of traditional rights to the land asserted
by some of the squatters. The GOG at the time suggested that
Claimant seek a negotiated solution with the squatters, but
Claimant A and Embassy officers responded that the claimant's
title should be respected in the absence of any evidence that
the title was improperly granted. Since the inauguration of
the Berger administration in January 2004, Embassy officers
have raised the matter with the Minister and Vice Minister of
Government, who are responsible for the National Civilian
Police. Most recently, the Ambassador discussed the case on
two occasions with the current Attorney General, who agreed
to meet with Claimant in the near future. The Attorney
General had told an Embassy Officer in May 2004 that he had
ordered his staff to research earlier judicial findings
before deciding what action to take.

Claimant A estimates the value of confiscated land at $7
million, and that lost revenues exceeds $500,000. We are
informed that, for tax purposes, the land has been valued at
$150,000.

a) Claimant B

b) 1998

c) Claimant B received a fifty-year concession in 1997 to
operate and expand Guatemala's state owned and controlled
railroad system, which was badly deteriorated and had fallen
into disuse. The government was obliged to clear the
railroad's right of way of squatters in Guatemala City and
along the route to the Atlantic at the time of the start-up
of privatized railroad service by Claimant in 1998. The
government also removed some squatters along the Pacific
route and the North Coast line to Mexico, which are not yet
in operation. However, the number of squatters along
railroad lines has multiplied since, as squatters return to
areas cleared by the government and newcomers join their
ranks. Claimant has not yet begun operations in the most
affected areas and has largely discontinued efforts to obtain
eviction orders while concentrating on its service between
Guatemala City and the Atlantic ports. Claimant is currently
seeking a consultant to prepare a feasibility study to obtain
financing for the repair and improvement of the tracks on the
North Coast so that it can provide the connection to Mexico
and the Pacific port. The squatter invasions, if not
addressed quickly and effectively at the appropriate moment,
could prevent the North Coast service from being reopened,
which in turn would effectively deny Claimant's rights under
its concession contract.

Claimant B contacted Embassy in May 2002 to provide a
briefing on the problem and to discuss possible future
assistance in resolving it, should the problem not be
resolved by the GOG before work on the route to Mexico
begins. Embassy officers raised the matter with senior
officials of the Ministry of Economy and with the Economic
and Foreign Trade Committee of the Congress. The Embassy is
in periodic contact with Claimant and will continue to
provide advocacy services as needed.

a) Claimants C

b) 2002

c) Claimants C, brothers, inherited land in Alta Verapaz
department acquired by their family in the 1800s and first
half of the 1900s. There are a number of discrepancies in
title documents pertaining to parts of the land that have not
been adequately reconciled, but, with one exception, the
discrepancies relate to historical divisions within what are
now larger farms and do not cast doubt on the claimants'
ownership rights. One entry in the national registry from
the 1800s grants small parcels in the area to local families
from that era, but it appears that the parcels granted and
those actually settled by the local families' descendants are
substantially different. A definitive settlement is under
negotiation.

In 2002, the mayor of a village adjacent to one of claimants'
properties demanded unrestricted access to a road the
claimants had built on their land that greatly improved
access to the village. The claimants have allowed the road
to be used during daylight hours in return for a contribution
toward maintaining the road but have blocked access at night,
citing security concerns.

The situation appeared to deteriorate significantly when a
national peasant organization, CONIC, began organizing
opposition to the nightly road closure and allegedly began
encouraging invasion of several of the claimants' farms,
including environmentally sensitive watershed areas. The
invasions have included the ransacking of claimants'
facilities and have prevented normal operation of the
claimants' coffee growing business. One of the claimants
filed criminal charges against CONIC organizers but agreed to
suspend further action pending the results of further
negotiations. The negotiations include compensation for
damaged property and are sponsored by government land dispute
agency, CONTIERRA. CONTIERRA agreed to put a special
priority on resolving this case at the request of the
Embassy. Embassy officers met on several occasions with
CONTIERRA's national management or with its Alta Verapaz
representatives, as well as with CONIC leaders and attorneys,
to underscore Embassy's concern that the property rights of
U.S. citizens be respected and applicable Guatemalan laws be
enforced.

Claimants note that recurring invasion of duly registered
private property is a felony offense requiring ex oficio
action by state law enforcement authorities. They claim that
the police have failed to evict invaders on their own and
have not enforced court eviction orders. Embassy brought
this to the attention of the Vice Minister of Government
(Interior) in February 2003. A court order was issued in May
2003 to evict occupiers of one farm (the one with the access
road to a neighboring village),and the Claimant received
assurances from the Ministry of Government that 200 policemen
would be sent to execute the order. The evictions did not
take place. Embassy brought the cases to the attention of
the Vice Minister of Government of the newly inaugurated
Berger Administration in February 2004 and two subsequent
occasions. The Vice Minister agreed to receive the
Claimants, but contact has yet to be established.

Embassy has not had direct contact with either Claimant since
April, 2004. The government has recently moved to evict
squatters from other land in Alta Verapaz, which is being
cited as a principal reason for nationwide peasant
demonstrations that have been called for June 8 and 9.
Claimants have chosen not to visit Guatemala City as a
result, according to an associate. A U.S. private voluntary
organization that operates in the region reports that
mediation efforts it is undertaking together with CARE and
CONTIERRA appear to be progressing and that there have no
recent acts of violence. CONIC has been included in the
negotiations. An associate of the Claimants confirms that
the situation has been relatively calm in recent weeks.


3. Claimant A: Margaret Argudo, American Citizen, no Privacy
Act Waiver (PAW).

Claimant B: Ferrovias Guatemala, A local subsidiary of a
U.S. company, no PAW.

Claimants C: Carlos Ardebol and Roger Perez Ardebol,
American Citizens, no PAW.


HAMILTON