Identifier
Created
Classification
Origin
05TEGUCIGALPA1967
2005-09-26 17:17:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Embassy Tegucigalpa
Cable title:  

U.S. Owned Firm Agregados Maya Claims Conspiracy

Tags:  EMIN EINV ETRD ECON SENV HO 
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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 02 TEGUCIGALPA 001967 

SIPDIS

SENSITIVE

E.O. 12958: N/A
TAGS: EMIN EINV ETRD ECON SENV HO
SUBJECT: U.S. Owned Firm Agregados Maya Claims Conspiracy
Against Its Mining Operations


UNCLAS SECTION 01 OF 02 TEGUCIGALPA 001967

SIPDIS

SENSITIVE

E.O. 12958: N/A
TAGS: EMIN EINV ETRD ECON SENV HO
SUBJECT: U.S. Owned Firm Agregados Maya Claims Conspiracy
Against Its Mining Operations



1. (SBU) Summary: Citing intransigence and possible
misconduct by Government of Honduras municipal, mining, and
environmental officials, Agregados Maya, a construction
aggregates (sand and gravel) mining company owned by
American citizen Kevin Ericsson Yohn, claims they have been
unable to protect their current mining concession, operate
legally as a subcontractor, or secure new concessions in
Honduras' Sula valley. The company's primary complaint is
that the District Attorney assigned to investigate reports
of illegal mining operations by other companies on Agregados
Maya's concession has failed to do his job, and that their
complaints against him have gone unanswered in the
prosecutor's office of the GOH Public Ministry. The company
also alleges possible misconduct in the local environmental
regulator's refusal to issue environmental permits, which is
preventing them from working as legal subcontractors or
securing new concessions of their own. Post has met with
company officials and offered assistance in securing
meetings and raising the issues with GOH officials, and is
continuing to monitor the situation. End summary.


2. (SBU) On July 21, Amcit Kevin Ericcson Yohn, his wife
Dunia Alvarez, and their attorney Elio Viara met with CDA,
ADCM, EconChief, and EconOff to discuss problems his
construction aggregates mining company, Agregados Maya, has
had in conducting business in the Sula Valley, in northern
Honduras. Mr. Yohn said that he and his wife, who owns a
separate mining company called Materiales y Equipos, have
filed for 27 aggregates mining concessions totaling 18,000
hectares over the past three years, although at present they
have only one concession (operated by Agregados Maya).
Among a variety of complaints against GOH authorities, Mr.
Yohn claims that he has received no help in his struggle
against other mining companies that have illegally extracted
sand and gravel from his concession. According to Mr. Yohn,
he has documented evidence of the illegal mining activities;
however, although he has followed prescribed legal
procedures in filing complaints against the offending
companies, the matter has not been followed up by

prosecutors in the GOH Public Ministry. Mr. Yohn is seeking
to have the District Attorney assigned to his case removed,
due to his apparent resistance to pursuing Agregados Maya's
charges. The District Attorney in question, Juan Francisco
Gonzales, is the sole prosecutor responsible for
investigating and prosecuting all environmental complaints
for San Pedro Sula and the surrounding area. Although Mr.
Yohn has filed official complaints against Gonzales for his
inactivity, these too have gone unanswered.


3. (SBU) Agregados Maya also claims to be the victim of
irregularities with environmental licensing procedures
within the GOH. The company reports that local
environmental authorities have told them to secure a
separate environmental permit to operate as a subcontractor
within another company's already licensed concession; this
despite current mining regulations that allow subcontractors
operating wholly within a previously licensed concession to
be covered by that concession's environmental permit.
Agregados Maya also claims that another of their
environmental permit applications is being held up by the
local environmental authority's requirement that they hire a
specified company to conduct an environmental study of the
proposed site at a set fee (280,000 lempiras, or
approximately 15,500 USD). Agregados Maya is balking at
paying this price, which is significantly higher than other
companies would charge. A representative of the national
mining authority DEFOMIN confirmed to EconOff that although
permit applicants must conduct environmental impact studies,
they are not required to use any one particular company to
carry them out. (Note: Such practices -- a regulator
requiring that a particular contractor be used, which
contractor then overbills and shares the proceeds with the
regulator -- is a tactic that has reportedly been used in
the past to create a paper trail for what is, in reality, a
bribe. End note.)


4. (SBU) Mr. Yohn believes that influential Hondurans --
including Arturo Kilgore, the brother of San Pedro Sula's
mayor and owner of a heavy construction company, and Jorge
Canahuati Larach, owner of the Honduran newspaper La Prensa
-- are conspiring to prevent Agregados Maya from conducting
business. He attributes the conspiracy to the Hondurans'
own mining and development interests in the area, and
particularly to their desire to secure their own aggregate
concessions to supply material for upcoming construction
projects, including the Millennium Challenge Corporation's
"Canal Seco" (a major highway expansion project from El
Salvador to Honduras' Puerto Cortes). As evidence of the
conspiracy, Mr. Yohn cites the intensive barrage of negative
publicity that was directed by La Prensa both at Agregados
Maya and at Mr. Yohn personally in June and July 2005. On
an almost daily basis, national newspapers, and particularly
La Prensa, featured full-page articles accusing Mr. Yohn of
unsavory business practices, including the intention to
obtain a monopoly on mining in the Sula Valley and to evict
homeowners in order to mine beneath residential
neighborhoods. (Comment: Press attacks during this time on
Mr. Yohn were indeed severe and sensational in nature;
however, there have been no further articles in the press
since mid-July. End comment.)


5. (SBU) Post has been in regular contact with Agregados
Maya's attorneys concerning their complaints of unfair
treatment, and has offered assistance in requesting
meetings, but the company has preferred to work through
their own contacts. However, in the past week Agregados
Maya attorney Elio Viara informed EconOff that although they
had secured a verbal promise from the District Attorney's
office to have a new prosecutor assigned to their case, no
action has yet been taken. The company then accepted
EconOff's offer to meet with the District Attorney's office
to discuss the case. Post will report further as events
warrant.

Williard