PBI-Honduras accompanies ARCAH at Crawfish Rock meeting as Honduras exits World Bank investment dispute body

Published by Brent Patterson on

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PBI-Honduras has posted:

“We accompany ARCAH [the Honduran Alternative for Community and Environmental Vindication] in the second meeting of the National Movement Against ZEDE [Zone for Employment and Economic Development] and in Defense of Sovereignty in the community of Crawfish Rock (Roatan, Bay Islands).

We stand in solidarity with the Crawfish Rock community, OFRANEH [the Black Fraternal Organization of Honduras] and ARCAH in their advocacy work against ZEDE and show concern for the risks they face.”

The National Movement also posted:

“On February 24, we held the Second Meeting of Resistance Against ZEDE, in the community of Crawfish Rock, This day of agreement, solidarity and denunciation, brought together organizations from 13 departments of the country.

We continue denouncing the advances of ZEDE Prospera, as a neocolonial invasion project that today bets to experiment genetically with our corporealities.”

What is a ZEDE and Prospera?

In July 2022, The Guardian reported:

The controversy dates back roughly a decade, when the Honduran government reformed the constitution and passed a law that paved the way for the creation of Employment and Economic Development Zones (ZEDE). The idea was ripped from economist Paul Romer’s proposal of charter cities, which the Nobel-prize winner theorized could promote development in areas plagued by poor governance.

Romer proposed that a foreign nation act as a guarantor for the governance of charter cities. But the Honduran law instead allowed corporations to build a private city.

The issue fell into the background until 2020, when word spread that the first charter city had been established in Crawfish Rock – to the surprise of the village’s residents.

Roatán, located about 65 kilometers (40 miles) north of the mainland, is one of the Caribbean’s top tourist destinations and an expat haven, renowned for its white-sand beaches and world-class diving. Up and down the beach, there are vacation homes and resorts owned by foreigners.

Representatives of Próspera have said that they informed the community of their intentions in June 2019, citing a document that was signed by 49 residents. The ‘community resolution’ document refers to the Próspera ZEDE as a ‘real estate and community development project’, but does not go into further detail.

As the controversy spread across the nation, a movement was born that demanded the protection of land rights and decried the concession of sovereign territory to foreigners and corporations.

President Xiomara Castro, who was elected in a landslide in November [2021], made the ZEDE a signature issue of her campaign. When Castro sanctioned the repeal in April [2022], she called it the most important day in her presidency thus far.

But the elation was short-lived. Just before the repeal, Próspera announced a new round of investments totaling $60m and the adoption of the cryptocurrency bitcoin as legal tender. In the weeks and months since, the company has continued to operate as if nothing has changed, moving ahead with construction projects.

Government officials said that any ZEDE currently operating has one year to conform to another kind of legal framework. But investors cite a sunset clause in the ZEDE law that gives them a term of at least 10 years, as well as other international trade agreements that they claim grants them decades more.

Investment protections in trade agreements

The Próspera Group has stated: “Honduras Próspera, Inc., the Promoter & Organizer of Prospera ZEDE, is a U.S. company with rights under the Central American Free Trade Agreement (CAFTA-DR) and the U.S.-HN Bilateral Investment Treaty, which extend to investments made in Próspera ZEDE the highest degree of legal protection in Honduras. Many other investors from other countries likewise enjoy powerful treaty rights.”

Ryan C. Berg, a senior fellow at the Center for Strategic and International Studies, had also cautioned: “If the Honduran government insists on moving forward with abolishing the ZEDE law, investors have a number of legal mechanisms at their disposal [including] Chapter 10 of the CAFTA-DR to seek interim injunctive relief to preserve the status quo, as well as damages for any lost investment and future profits.”

The latest

Last year, the Bretton Woods Project reported: “Honduras is threatening to withdraw from the World Bank’s International Centre for Settlement of Investment Disputes [ICSID] over an $11 billion claim by Honduras Prospera, a US company.”

Now, BNN reports: “On February 24, 2024, a pivotal development unfolded as the Republic of Honduras formally announced its withdrawal from the [ICSID Convention], signaling a significant shift in the global investment arbitration framework. This move, set to become effective on August 25, 2024, has sparked discussions on the future of international investment disputes and the broader implications for global economic relations.”


The Honduran Alternative for Community and Environmental Vindication (ARCAH) is a space for community articulation and an anti-capitalist, anti-racist, anti-patriarchal, anti-colonialist and anti-classist social movement that seeks to defend territories and common goods from any project that threatens the peace and cosmovision of communities.

PBI-Honduras has accompanied ARCAH since September 2022.

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