MANAGUA – Anyone who has either invested or considered investing in Nicaragua in the past couple of years has undoubtedly heard a grisly campfire tale about the dreaded Coastal Law.
Like rural cattle farmers recalling a terrifying encounter with the chupacabra – the legendary, nocturnal, flying kangaroo-dog that sucks the blood out of livestock – investors’ tales of the Coastal Law are often based more on fear than on fact.
Indeed, some of the original trepidation was warranted; the first version of the bill was – by virtually all accounts – a confiscatory law that would have put private property at risk.
But after a great uproar from the business chambers and the Nicaraguan Tourism Institute (INTUR), that version of the law was sent back to the legislative drawing board late last year for a complete overhaul (NT, Dec. 23, 2005).
The most updated version of the Coastal Law, now under consideration by the legislative National Assembly, protects private property. It’s expected to pass and become law by the beginning of 2007.
“This has to become law by next year because right now it’s blocking a lot of investment,” said Juan Iván Bugna, president of the Nicaraguan Chamber of Small and Medium Tourism Industries (CANTUR).
Bugna and CANTUR, which represents 5,000 members of the tourism-business sector, are at the center of the fight to reform and pass a comprehensive and protective Coastal Law.
The Coastal Law aims to regulate Nicaragua’s coastal development and establish clear norms for the environment, builders, landowners and the public in general.
The legal initiative has existed in various forms for years in the National Assembly, but only last year became a priority in response to Nicaragua’s coastal-development boom (NT, April 22, 2005).
Failed First Try
When the first version of the bill came out of congressional commission last November and was sent to the legislature floor for vote, the private sector decried its wording as ambiguous and a potential “serious problem for Nicaragua’s economic development” (NT, Nov. 11, 2005).
In addition to unclear zoning specifications, the proposed Coastal Law challenged private property ownership by empowering municipal governments to grant concessions to coastal properties in their jurisdictions. “Concession is the same thing as confiscation,” Bugna charged.
The CANTUR president says that under the first draft of the law there would be nothing to stop the municipal government from granting a weekend concession to a beer company to set up a tent and have a huge beach party with loudspeakers in the “backyard” of a homeowner who is paying taxes for that land.
Others had voiced similar concerns, arguing that attempts to make the beach all things to all people would eventually ruin it for everyone.
Put simply, Bugna said, the concession law threatened private property and opened the door wide to potential corruption at the municipal level.
As a result, the bill was stopped dead in its tracks at the end of last year, and CANTUR on April 3 introduced to the National Assembly a new draft of the bill that eliminates the concession model.
The New Bill
The CANTUR initiative is the third version of the Coastal Law bill in study in three different congressional commissions. But Bugna, who has been lobbying politicians to see CANTUR’s version of things, claims its bill has the best chance of becoming law.
He says that even the left-wing Sandinistas, who initially championed a 70-meter swath of public beach domain, are now looking at the situation through different lenses.
“Some of the Sandinistas are big landowners on the coast; it’s also in their interest to have a law to protect private property,” Bugna said.
Under the terms of the new proposed law, all ownership of coastal property would be 100% private, and the law would not pertain to rivers, lagoons and lakes (as it did in the first draft).
However, private owners would have to respect new regulations to protect the environment.
For example, no building, no campfires, no vehicles, no nothing other than people and their bathing suits would be allowed inside the 30-meter mark from the high-tide line. The 30-meter zone will be privately owned, but subject to strict conservation laws and open to the general public – similar to a private nature reserve.
The next 150 meters would be designated for restricted building with the approval of the Ministry of the Environment and Natural Resources (MARENA), and under the supervision of the local municipal government.
Inside the 150-meter zone, building would be restricted to two stories, although there is no actual height specification in the law (nothing to prevent a builder from constructing a 40-meter-tall, two-story building). All construction permits granted before implementation of the law would be grandfathered.
No Public-Access Requirements
Although the 30-meter zone bordering the ocean would be open to the general public, there is no provision in the current bill that requires landowners to provide the public with open access to the beach.
For example, if a private developer owned a large stretch of beach buttressed by two rock cliffs, the developer could technically put a walled gate around his or her entire property, provided it doesn’t go within the 30-meter mark of the water. Then, if someone else wanted to access that beach, they would have to either go around the walled property and climb up and down the cliff, or get to the beach by boat.
Landowners would not be required to provide the public with a path or road through their property to the beach. However, this is still a bill, and that provision could later be subject to negotiation or change.
Details in the Reglamentos
Bugna says that even more important than the forthcoming Coastal Law are the subsequent reglamentos, specific implementation procedures for the law.
The reglamentos, not necessarily the law itself, will determine what types of activities are permitted inside the 30-meter zone of general-access beach, and what the procedures are for undertaking such activities. For example, the reglamentos will determine whether loud music will be allowed on the beach after 8 p.m., whether horses will be allowed on the beach, whether backpackers can camp there or whether beachgoers will have to ask permission from the landowner to have a picnic.
The reglamentos will also determine whether private security guards will be able to patrol the beach and enforce public laws.
“Investors shouldn’t be concerned as much about the Coastal Law as they should about the reglamentos that follow,” Bugna stressed.
Bugna, who owns the César Hotel on Big Corn Island, encourages all developers and other interested parties to stay abreast of what is going on and demand participation in the process of creating the reglamentos, when the time comes.