SEPTEMBER 1996 · VOLUME 17 · NUMBER 9

---

G O I N G    B A N A N A S    I N    C E N T R A L    A M E R I C A

---

SAN SALVADOR -- The last large wooded tract near San Salvador is slated to be converted into a shopping center, business park, tourist park and housing development. This project would bring the government in a 16-year circle from land reform to land deform, uprooting 5,000 members of a coffee cooperative and damaging what environmentalists regard as a crucial recharge zone for filthy air and water in El Salvador 's capital.

The plight of El Espino coffee finca (plantation) is tied to the civil war over poorly distributed wealth that El Salvador fought in the 1980s at a cost of more than 70,000 lives. When the government took over the Dueñas family's 800-hectare coffee finca in 1980 and transferred most of it to a peasant cooperative, these oligarchs could not have known that this modest land reform would position them to make a killing of another kind.

Land to the people

Francisco Dueñas, the progenitor of the Dueñas clan, was president of El Salvador five times in the mid-nineteenth century. He adroitly combined affairs of the state with affairs of the estate, becoming the largest landowner in the country. In the 1980s, however, his descendants suffered the indignity of losing this finca and having most of it signed over to their former workers. Furthermore, when the Salvadoran Institute of Agrarian Transformation (ISTA) finalized the purchase of El Espino land in 1986, it had the audacity to pay the former owners the ridiculously low value that they themselves had declared for tax purposes -- a little more than $2.7 million.

The government gave a smaller piece of the finca to the military, which -- with financing from the U.S. Agency for International Development -- used the land to build the Armed Forces Security Academy.

Around the same time in the mid-1980s, the Dueñas family's revenge plans began to gel. In 1986, their lawyers presented ISTA with a complaint demanding that it return 400 hectares of the cooperative's land that they claimed was "urban." The agrarian reform law only applied to land zoned for agricultural uses. Since Dueñas lawyers claimed that a Ministry of Public Works map designated the land in question as urban land, they argued that the agrarian reform law should not have applied to this 400-hectare parcel.

ISTA rejected this complaint, which it received nearly six months after the statute of limitations for such appeals had expired. Dueñas family lawyers appealed to the Supreme Court, which ruled for the family in 1987. Salvadoran investigative journalist Néstor Martínez writes in his book, The Truth About El Espino, that the Court reached this decision even though the plaintiffs had not exhausted all their appeals at ISTA, a routine prerequisite for Supreme Court acceptance of the case, and despite the fact that the Court relied solely on the testimony of two former Ministry of Public Works directors.

Although the Supreme Court ordered the return of one-half of the El Espino finca to the Dueñas family, this legal decision did not squarely address the fact that thousands of cooperative members were living on and from this land. When the Supreme Court spoke, these people did not disappear. Rather, they stood their ground, as they continue to do today. Then, as now, what the Espino conflict seemed to require was a politically brokered solution that would take into account the peasants' interests.

Land to the oligarchs

The next Dueñas windfall was the 1989 election of Alfredo Cristiani. Cristiani belonged to the oligarch- and death-squad-linked National Republican Alliance (ARENA) and had personally lost property in the land reform. Nonetheless, in January 1991 he instructed the Treasury Department to seek a way to preserve El Espino land. His decree said the finca land "runs the risk of being deforested, subdivided and urbanized, which would result in ecological disequilibriums causing considerable damage for the entire country." In a seemingly contradictory act five months later, however, Cristiani revoked an executive decree issued a year before his election that had declared El Espino an ecological conservation zone.

Revoking this decree opened the door to El Espino development and was just the beginning of what Cristiani's government did for the Dueñas family. A September 1991 act of Cristiani's Council of Ministers ordered the return of El Espino to the Dueñas family and recommended the subsequent repurchase of most of this land by the federal government for $12.2 million.

A little more than four weeks transpired between when the Council of Ministers ordered El Espino returned to the Dueñas family and when the government approved funds to repurchase the land. In the meantime, however, the Dueñas family quickly sold an 8.5 hectare parcel of some of the most valuable land to the Robles Group, Salvador's largest financial services and land development company. Robles is controlled by another leading Salvadoran clan, the Poma family.

Several weeks after the Robles deal, the Cristiani government moved to repurchase a little more than 498 hectares of El Espino land on terms that were wildly favorable to the Dueñas family. In 1986, the Duarte-led junta bought the 800-hectare El Espino finca for $2.7 million. Just five years later, the Cristiani government returned the finca to the Dueñas family, only to buy back approximately 500 hectares for $12.2 million. In other words, the Cristiani government bought back 62 percent of the land that the Dueñas family lost under the land reform, paying them more than four times as much money as the family had first received for all of the contested land.

With El Espino, the Cristiani government achieved what had long seemed impossible -- a Salvadoran land reform that the wealthiest landowners could enthusiastically support. To accomplish this feat, the government had only to betray the landless poor who had been portrayed as land reform beneficiaries.

The Dueñas family was well aware of the potential value of the choicest pieces of El Espino land. The family had developed much of the chic San Benito neighborhood south of El Espino and family cousins had made millions of dollars developing the nearby Santa Elena finca -- where the United States built its new embassy. In 1995, prime development land near El Espino sold at rates that were four times those prevailing in 1991, according to Mártinez's book.

Angel Ibarra of Salvadoran Ecological Unity, a leading opponent of the project, predicts that just the 8.5 hectare Robles Investments development will make $460 million for its owners. The Robles Group plans to invest $51 million in its small corner of the finca to build a five-star hotel, a convention center, restaurants, sports facilities, headquarters for corporations and a shopping center. El Diario de Hoy, a pro-business San Salvador daily, reported in December 1995 that the Robles shopping center would boast "prestigious foreign anchor stores such as J.C. Penney, Sears and others."

Spokespeople for Sears and J.C. Penney, however, told Multinational Monitor that their companies have no existing plan to open there. Robles' representatives did not respond to Multinational Monitor's repeated request for comment.

According to press accounts, Robles estimates that construction of the hotel and shopping center alone could create 2,000 jobs. Development plans for other parts of the finca call for luxury homes and a major medical center. Developers plan to invest more than $128 million in the development, which would make it the largest project in El Salvador in 1996. Robles expected to begin construction on its projects in May 1996, but this schedule has been postponed in the face of constitutional challenges filed before the Supreme Court, this time by environmentalists. Although constitutional challenges were filed by 19 individuals, in July 1996 the Court said it would review just three of them, including one by Rosendo Mauricio Sermeño, vice president of Salvadoran Ecological Unity.

One of the most important constitutional issues raised in these challenges is the argument that the development of El Espino violates a 1993 constitutional protection guaranteeing Salvadoran citizens a clean, healthful "ecologically balanced" environment. Since this is the first challenge of its kind, observers do not know how the Court will respond. But environmentalists do consider Domingo Méndez, president of the five-member Supreme Court, to be fair, according to Luís Mata of the Committee of the Defense of El Espino Finca and the Salvadoran Center of Appropriate Technology, one of the country's leading environmental groups.

"If the court respects the laws, the entire finca will be converted into an ecological protection zone," says Jorge Qunitanilla of Ecological Unity. But if the Salvadoran tradition of monied interests running rough shod over laws continues, we will have to continue our struggle."

In September 1996, environmentally friendly legislators are expected to introduce legislation designed to block El Espino development, Mata says. But this initiative is expected to fail since the pro-development ARENA controls a majority of the legislative assembly.

Coopting the cooperative

The government purchase of El Espino land arranged in late 1991 left unsettled the matter of the El Espino coffee cooperative and its 5,000 members. In February 1992, the Cristiani administration convened a meeting between the president, leading cabinet members, then-San Salvador Mayor Armando Calderón Sol (also of ARENA and now president of El Salvador) and the Cooperative's Administrative Council. The administration strongly suggested that the finca's original 800 hectares be distributed in the following manner: approximately 3 percent to the armed forces; 11 percent to the city of San Salvador; 19 percent to the Dueñas family; 29 percent to the federal government and 37 percent to the cooperative. More important than the amount of land allotted, however, was the quality of the tracts. Among the most valuable parcels were those set aside for the Dueñas family (bordering the exclusive San Benito and Escalón neighborhoods) and the armed forces (bordering Masferrer Avenue, the major artery bisecting the finca). In contrast, the large tract slated for the cooperative is the least valuable land, situated on steep slopes ascending San Salvador Volcano that lack roads or any other infrastructure.

The lucrative 1991 land-flip deal arranged between the Dueñas family and the government sparked widespread criticism in El Salvador and abroad. In 1992, the Executive Committee of Salvador's Water Resources Protectorate denounced the proposed Robles development, which it said would have "a negative environmental impact, not only on the quantity but also on the quality of surface and subterranean water resources in the area." Representatives of the main federal agencies concerned with water quality sit on this committee. Denouncing the Cristiani government's role in reversing the land reform's accomplishments as an "outrage," U.S. Representative David Obey, D-Wisconsin, threatened in 1992 to freeze U.S. aid to El Salvador.

Three years later, in November 1995, El Espino cooperative's Governing Council entered into an agreement with the government to cede much of the cooperative's land to the Dueñas family. In exchange, the cooperative was promised title to 388 hectares of land. Council President José Ricardo Orellana said the cooperative's leaders agreed to the deal because they calculated that they would lose even more land if they fought the system. Orellana said no one would move from the land that the cooperative has agreed to surrender to the Dueñas family until the other parties to the agreement fulfill their promises to the cooperative. The cooperative was promised that facilities it has at its current site, including schools, a health clinic and soccer fields, would be built at the new location before they move.

In meetings in early July 1996, both sides accused the other of violating the terms of the earlier agreement. After this blow out, cooperative leaders, who some members had accused of selling out to the government, pledged not to leave the contested finca land. Meanwhile, as rumors circulate that the cooperative will be forcefully evicted, the government and landowners floated a new strategy: offering to give small land parcels up the slopes of the volcano to individual cooperative members -- rather than a large piece of land to the cooperative as a whole. This offer amounts to an attempt to divide and conquer cooperative membership, Mata says. During this stand off, a court order prohibits any development activities at the finca.

Parakeet parking lot

While there is no doubt that the urbanization of El Espino would be far more profitable than the land's current use as a coffee finca, environmentalists say that many unquantifiable benefits of the finca would be sacrificed. El Salvador is the smallest country in Central America, with the highest population density. Its 5.6 million people are crowded in at an average rate of 268 people per square kilometer; Guatemala, the regional runner up, has a comparatively spacious 95 people per square kilometer. El Salvador is also the most deforested country in the region, with woods covering just 5 percent of its territory; 27 percent of Nicaragua, the runner up in this category, is forested. Finally, El Salvador's Environmental Secretariat (SEMA) estimates that 75 percent of the country's agricultural land is severely eroded.

So many people on such a small amount of damaged land leaves little breathing room for the environment. Every river in El Salvador is badly polluted. San Salvador's air and water are so polluted that the principal causes of death of its children are respiratory ailments and gastrointestinal illnesses, according to Ricardo Navarro, vice president of Friends of the Earth International and president of the Salvadoran Center of Appropriate Technology.

This dismal picture has focused attention on El Espino, a large forested coffee plantation on the western edge of the city. Environmentalists regard this finca as the capital's last lung and only significant water recharge zone. El Espino coffee bushes thrive in the shade of more than 50 species of trees and shrubs, which shelter 70 species of birds. Some of these species are not found elsewhere in El Salvador. Visitors to El Espino in early 1996 encountered thousands of pink impatiens blossoms and a variety of butterflies and birds fluttering through this undergrowth.

Current development plans for El Espino would not level all of this forest for shopping centers, corporate headquarters, homes and roads. San Salvador Mayor Mario Valiente is promoting a plan to set aside the city's portion of El Espino for Parakeet Park, which derives its name from the colorful birds that flutter through the finca's treetops. While Parakeet Park is presented by proponents as proof that part of El Espino's forest will be preserved, conservation does not appear to be the park's first priority. Attractions that the park's designers plan to nestle among the trees and parakeets include bicycle and horse paths, an artificial lake, roads, bus routes, parking lots, restaurants, a ferris wheel, a campground and an amphitheater.