ACP, MEF Move To Evict Diablo Boat Shed Folks

23 Jul 2013

On April 18 eviction notices were served on the occupants and residents of the Diablo boat shed area. It is part of a 21-hectare parcel that the government says that it needs for Panama's maritime industrial development.


The owners and in some cases residents of the Diablo boat sheds have received 30-day eviction notices from the Canal De Panama (CDP), or in some cases the Ministry of Economy and Finance (MEF). They are putting up a public fuss and have brought lawyers into the dispute, but none of those in possession have title to those properties. The people with the northernmost dozen sheds have rights of possession granted by the MEF, while the rest are renters from the CDP. The land is to be given to Panama Ports in compensation for the Port of Balboa's Pier 6, which the CDP says must be demolished as part of the Panama Canal expansion.

Diablo Spinning Club Entrance

The Diablo Spinning Club - it's hard to see how it is not endangered.

The CDP's intention to demolish Pier 6 has been known to Panama Ports for years. They were told that they would have to move to where the Diablo Spinning Club is --- and then the CDP evicted one adjacent marina but gave the property to the Spinning Club, which has a fairly wealthy and influential membership and invested a substantial sum to build on the premises. Panama Ports has been waiting to see what the inconsistent CDP does before it dismantles Pier 6.

The costs of moving Pier 6 are among the "off the contract" canal expansion costs that were concealed from the voters by the CDP and the state-financed "Yes" campaign in the 2006 canal expansion referendum. Also left off of that price tag were the reconnection of Colon province by way of a new bridge, the dredging of the approaches and waiting areas just outside the canal channel to accommodate the larger post-Panamax ships, the moving of water plant intakes for most of the Panama City metro area and much of the city of Colon and the replacement of the Bridge of the Americas.

The company that formulated the CDP's original canal expansion plan, Parsons Brinckerhoff, pulled that banal low ball bid technique on the city of Boston and the state of Massachusetts in its infamous Boston Big Dig project, of which the CDP was fully aware before the referendum campaign.

The Panama News has been cut off from press access by the CDP ever since pointing these things out in 2006. The CDP has published nothing about the Diablo boat shed issue on its website or in its monthly El Faro newspaper, but instead has made its case through reporters in the corporate mainstream media who appear to have been carefully selected not to pose difficult questions.

If one looks at a map or visits the area, it is hard to see how the Pier 6 container moving operations can be moved to the Diablo boat shed area while leaving the townsite of Diablo, the Spinning Club, the public boat launch ramp and the Canal Area police station where they are. It might be possible to leave the Spinning Club, police post and public boat ramp tucked in between two parts of the Port of Balboa, but the use of these would either have to be severely restricted or would be a traffic hazard for the port and canal. It is also hard to imagine Panama Ports willing to move part of its operation to an area in which there is a residential neighborhood between its docks and cranes and the container railroad system that is run by another company but is an important factor in its operations. It would also be difficult to imagine that the people who live in Diablo relish the thought of being hemmed in by industrial areas, although that is something that has been seen coming for a long time. The ordinary procedure would be to pay the residents to move, with that and probably demolition and container area construction costs to be added to the hidden "off the contract" costs of the canal expansion.

And what about compensation for the people in the boat sheds? Some of them have lofts that been converted, some at the cost of hundreds of thousands of dollars, into very nice homes. There are businesses being run out of some of these. These are more often factors with the 12 sheds that are not owned by the CDP but to which the MEF has given right of possession. Panama does have a lawless government but it is difficult to see how the ministry would get away with evicting the people from those boat sheds held by right of possession without paying compensation for the improvements.

The CDP-owned boat sheds legally a different story. The occupants of those are more explicitly renters and knowing this most of them have not made expensive improvements. The CDP is complaining that rental agreements have been violated by subleases or by people running businesses out of rented sheds, but on the other hand the authority has known about this for a long time and if it chooses to use these as pretexts those first do not apply to all of their renters and moreover their knowing tolerance for years would be argued by lawyers to be a waiver of objections.

On legal argument that is being made on the shed occupants' behalf is a cryptic provision in the 1977 Panama Canal Treaty about Canal Zone clubs, social organizations, churches and other civic groups being able to purchase the premises on which they operated for nominal sums. In practice, a large part of the Zonian community left en masse when the treaty went into effect in 1979 and many of their organizations went defunct in that first exodus. Others survived, and eventually a succession of Panamanian governments held that they could buy their buildings for nominal sums but had to pay something around market value for the land on which they were situated to stay. Most of the clubs and Masonic lodges moved, sometimes selling the buildings to buyers who could afford to buy the land underneath. A few bought the land. Some of the religious denominations have had better luck, but there are churches that still operate in legal limbo over the land on which their houses of worship stand. The CDP and MEF argue that any interpretation of the Panama Canal Treaty is moot because according to its terms it expired on the last day of 1999. The boat shed area's fate, arguably like the clean-up of the old US military firing ranges, was one of the issues that was unresolved when the treaty period ended. Nowadays neither the Panamanian nor the US governments appear disposed to reopening old treaty issues.

To the extent that the end of the Panama Canal Treaty's term did not extinguish all rights protected under that agreement, the relevant sections would be found in its Article IX:

5. With respect to buildings and other improvements to real property located in areas of the former Canal Zone to which the aforesaid licensing procedure is not applicable, or may cease to be applicable during the lifetime or upon termination of this Treaty, the owners may continue to use the land upon which their property is located, subject to the payment of a reasonable charge to the Republic of Panama. Should the Republic of Panama decide to sell such land, the owners of the buildings or other improvements located thereon shall be offered a first option to purchase such land at a reasonable cost. In the case of non-profit enterprises, such as churches and fraternal organizations, the cost of purchase will be nominal in accordance with the prevailing practice in the rest of the territory of the Republic of Panama.

6. If any of the aforementioned persons are required by the Republic of Panama to discontinue their activities or vacate their property for public purposes, they shall be compensated at fair market value by the Republic of Panama.

7. The provisions of paragraphs 2-6 above shall apply to natural or juridical persons who have been engaged in business or non- profit activities at locations in the former Canal Zone for at least six months prior to the date of signature of this Treaty.

In the long run the country's economic need is so great and the Diablo boat shed occupants' legal rights to their properties are so tenuous that they will almost surely be forced to vacate and all of the legal maneuvering will be about how much, if anything, the CDP and MEF will be obliged to pay those whom they displace. A similar dynamic would likely apply to Diablo residents, the Spinning Club and so on, but it is geographically and historically possible that a new container storage and moving area could be built behind the housing area to connect the port and railroad, in which case the homeowners and club would be left surrounded by noisy industrial areas and heavy traffic, such that most of them would want to leave and be unable to sell at prices they consider commensurate with what they had. In Panamanian law the notion that severely reducing the value of one person's property by the placement of an incompatible activity on an adjacent property is tantamount to a taking of the former person's property is generally not recognized.

A cultural casualty of the move will be the Ocean-to-Ocean Cayuco Race as it is now known. The area is the finish line for the race and the CDP has announced that next year's race will be the last. Certainly if the port has moved there it would not be a viable place to finish the race. The competition, which was started by the Canal Zone chapter of the Boy Scouts of America, can be denigrated as a vestige of Zonian culture, although nowadays it is predominantly a sport of wealthier Panamanian youth from the expensive private schools. While lately the Martinelistas have, despite the presence of several US citizens in high positions in the government including Minister of Economy and Finance Frank De Lima, been taking the opportunity to gringo-bait some of their critics, the current government's attitudes and maybe even some of its appointees on the CDP board may not survive the 2014 elections. Thus the cayuco race may yet survive, but with a different finish line.

It is not expected, absent a political sea change, a massive election fraud or a coup d'etat, that the Martinelli crowd will hold onto power after the middle of 2014. An arrangement to continue the cayuco races, which attract occasional international media attention and influxes of participants and spectators from abroad that are good for the national tourism industry, would not be an impossible or radical change for the next government to make. But no new government is likely to interfere with port development by saving the boat sheds. Those, and very likely the Spinning Club and the townsite of Diablo, are doomed.

Read the original article


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