GAB’ s latest post on compensating victims of corruption is below. Authored by Naomi Roht-Arriaza, Distinguished Professor of Law at UC Hastings Law and President of the Board of the Due Process of Law Foundation, it recounts the harm those living along the Gualcarque river in Western Honduras suffered from the corrupt award of a contract for a hydroelectric dam and the community’s efforts to recover damages for their injuries.  While a trial court has recognized the community is entitled to relief as corruption victims, on specious reasoning an appellate court denied them victim status.  As Professor Roht-Arriaza explains, the case is now before the Constitutional Chamber of the Honduran Supreme Court. It can either reverse the appellate court decision or affirm its denial of an effective remedy for the enormous harm corruption has wreaked on the community.     Leer en español.

Who are the victims of grand corruption?  The answer used to be “no one” or, at best, the state itself.  But especially with the advent of a human rights approach to corruption in the Inter-American and United Nations human rights systems, that perception is slowly changing.  Grand corruption affects the full range of human rights of individuals and groups.  When rights are violated, states have an obligation under international law to investigate, prosecute, and provide redress.  The UN Convention Against Corruption mirrors this requirement in Article 35. 

And yet national courts have been reluctant to recognize the rights of those who have suffered damage — either to participate in proceedings involving grand corruption or to recognize them as victims due compensation.  In part, the reluctance stems from difficulties legal doctrine creates for establishing the causal link between a specific act of corruption and harm to a specific person or group.   To create the same “justice cascade” as in human rights cases, corruption victims should be able to seek relief through either a criminal or civil action and as either individuals or communities or through representative organizations.  Where a state prosecutor has brought charges, victims should be able, as they can in  France and Spain, to be full participants in the prosecution.      

The corruption in the bidding, contracting and construction of the Agua Zarca hydroelectric dam on the Gualcarque River in Honduras would seem to be the poster child for victims’ compensation.  In an atmosphere of widespread corruption from the top down, a well-known elite family won a contract to generate and sell electricity to the state: without being on the list of approved bidders, without a valid environmental impact statement, and with a design apparently aimed at maximizing the haul from government coffers. 

The community of Rio Negro, represented by the indigenous rights NGO Civic Council of Popular and Indigenous Organizations (COPINH), brought an action under Honduran law requiring the prosecutor to open a criminal investigation.  The community argued that the corrupt dam construction contract given to DESA, the elite family’s firm, directly affected the communal land, environment, livelihoods, health and culture of nearby indigenous communities, creating pollution, water quantity and quality issues, and distress over the spiritual implications of damming a sacred object.  In addition, leaders of the community had been murdered due to their vocal opposition to the project — on orders of dam construction executives and their security chiefs acting with the connivance of public authorities to keep the project on track and avoid bad publicity.  The victims included well-known Goldman Environmental Prize winner Berta Cáceres, shot in her home five years ago, in March 2016, on the orders of DESA higher-ups. 

The causal link seems about as strong as you can get, with a court decision and extensive evidence linking the murders to the dam builders, and the construction of the dam only possible due to corruption.  The community members were directly harmed, whether as whistleblowers or as indigenous peoples with a collective property right over the land involved.  Moreover, as is often the case in dealing with grand corruption, community members and civil society organizations were skeptical that the Honduran prosecutor’s and public ombudsman’s offices, facing strong pressures to go easy on the powerful, would necessarily adequately represent the public interest. 

So what happened?  COPINH’s complaint was originally investigated by the OAS-backed international prosecutors’ office MACCIH together with the local prosecutor’s office special fraud unit.  A case was filed against DESA and its corporate officers along with the state officials who were responsible for approving the deals.  It was alleged that the bidding process, environmental impact report, and other licensing processes had been irregular, unlawful, and fraudulent.  Charges were filed on March 4, 2019 against sixteen defendants and included fraud, abuse of authority, violations of the duties of state officials, negotiations incompatible with the exercise of public functions, and document falsification.

COPINH was initially accepted as a civil party to the case as Honduran law permits, but shortly after the case was lodged, the defendants moved to exclude it.  On March 25, 2019, the trial court (Juzgado de Letras de lo Penal con Competencia Nacional en Materia de Corrupción) denied the motion and affirmed COPINH’s right to be a civil party in the corruption case, thus giving its lawyers access to documents and hearings.  The judge applied the United Nations definition of victim,  “the individual or collective persons who have suffered harm due to actions or omissions that violate the applicable law.”  She also referred to ILO Convention 169 on Indigenous Peoples which requires free, prior, and informed consent before actions are taken that could affect the rights of indigenous people.  COPINH, the judge found, was an indirect victim.  Defendants appealed.

In an August 28, 2019, decision the Court of Appeals overturned the ruling, agreeing with the defendants that COPINH was not a proper civil party.  The judges based the decision on two procedural provisions in national law.  First, article 17 of the Criminal Procedure Code defines victims as those directly affected, including the state and public and private entities; the family member of someone who has been killed; and the members of a commercial or civic organization with regard to the crimes that affect it or common owners of property with respect to their indivisible interests.  The court assumed that only the civic organization provision applied, and then read it narrowly to refer only to commercial or property disputes, which according to the court were not implicated here.   Moreover, ILO 169 had already been interpreted as merely a “programmatic” obligation by the Supreme Court and so didn’t change the outcome. 

Second, the court noted that this was not a human rights violations case, where the victim would have standing to intervene.  Thus, neither the murder of Berta Cáceres or other COPINH leaders, nor the violations of the right to water or to free, prior, and informed consent were sufficient to allow the organization to participate in the corruption case.  The court held that the only victim was the State, saying that the protected interest at stake is public faith and public administration.   Nor was the environmental harm to the common property of riparian communities enough since it was not the subject of the prosecution.  The only way to intervene to protect what the court admitted were legitimate concerns, it concluded, was through a civil suit – a notoriously long, expensive, and uncertain proposition – and thus no remedy at all. 

The victims filed a constitutional challenge (amparo) with the Constitutional Chamber of the Supreme Court on November 4, 2019.  The Court agreed on September 24, 2020, that the amparo was admissible but at the time refused to stay the criminal case to consider the merits.  The case has continued without victim participation during which cases against ten of the 16 defendants were dismissed. The full trial of the remaining defendants was scheduled to begin on March 8 but was postponed last week pending resolution of a separate amparo filed by the defendants.  There is no guarantee that it will include the victims when it finally starts.

 Let’s hope the Honduran Constitutional Chamber can find the political will needed to overturn the appellate decision.  In addition to the human rights arguments, there is a strong argument that the community and its members, as property owners, had a direct interest in unwinding a corrupt contract and remedying the harm caused, and that COPINH had interests akin to that of a whistleblower.  These arguments are increasingly gaining purchase elsewhere, as noted in this blog.  If the Constitutional Chamber rules against the complainants, they will almost surely take the case to the Inter-American human rights system. 

Alternatively, the U.S. Congress might consider attaching conditions to further aid to Honduras that included the ability of victims to participate in corruption cases and receive proven damages.

The role of the Honduran legal system in timely resolving disputes and pushing corruption cases forward has been dismal.  Recognizing the rights of victims in this case, where the harm and causality are both clear, might help to strengthen the reputation, now in tatters, of the Honduran state as capable of upholding the rule of law and doing justice.  And it might also advance the interest of victims of corruption more generally in having a voice.