nicaragua canal law 800

8/9/2019 Nicaragua Canal Law 800

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LA GACETA OFFICIAL GOVERNMENT DAILYNICARAGUA Translation128

Copyrighted Material [email protected] Translated by Rolando Ernesto Tellez

NATIONAL LEGISLATIVE ASSEMBLY LAW

No. 800

The President of the Republic of Nicaragua informs the peoplethat the NATIONAL LEGISLATIVE ASSEMBLY has ordered the

following:

LAW OR LEGAL SYSTEM OF THE INTEROCEANICNICARAGUA CANAL AND CREATION OF THE ENTITYKNOWN AS THE NICARAGUA CANAL AUTHORITY.

Chapter 1Purpose, Public Order, and Nature

Article 1. Purpose

The purpose of this Law is to develop the legal system for theInteroceanic Canal of Nicaragua and create an entity called

Authority of the Nicaragua Canal. This entity will represent the

Government of the Republic of Nicaragua when incorporating

and constituting a Company for construction and operations of

the Nicaragua Canal.

Art. 2. Public Order and Supreme NationalInterest

For all legal purposes, the Nicaragua Canal project is declared a

priority and supreme national interest, including the

corresponding research, design, construction, and operations.

Nicaragua owns this Interoceanic Canal, whose nature or

purpose will be to operate continually, on a neutral basis,

serving the international community. This law contains general

rules which will be used as the legal framework for the

regulations to be issued, as may be needed, so that this

Interoceanic Nicaragua Canal always provides a continuous,

efficient, and safe service.

Art. 3. Nature

Such Nicaragua Canal Authority is organically, operationally,

administratively, and financially independent, having perpetualduration. In consequence, this entity shall freely receive, keep,

and assign financial resources, and it may deposit its funds in

banks, as deemed appropriate.

This authorizing entity will be responsible for defining the legal

system and rules of the Nicaraguan Company known as theNicaragua Canal Company (Empresa Gran Nacional de El Gran

Canal de Nicaragua) and its corporate structure, by virtue of itsrepresentation and authority; it will negotiate the terms of

reference, operations, and management of the new entity,

including regulations and supervision of rational and sustainableuse of natural resources, environment protection, andbiodiversity in the geographic and influence area in which the

interoceanic canal will be built, within the framework ofinternational treaties and agreements and national laws.

The Nicaragua Canal Authority will not pay (national ormunicipal) taxes, duties, rates, charges, contributions, except forobligations in labor matters and rates for public services. TheNicaraguan State or Government will have fifty one percent(51%) of the Nicaragua Canal Companys full profits received bythe Nicaragua Canal Authority.

Chapter IIDefinitions

Art. 4 Definitions

For the purposes of this Law, here are the meanings of the term

a) Geographic Area: This will be described cartographically

the project, specifying sources of surface and ground waters

the project area and waters moving toward the East or flowin

into the Interoceanic Nicaragua Canal, including its reservo

and lakes.

Management of the geographic area and its natural resource

will be regulated particularly as stated in the regulations to b

enacted for such purpose.

b) Area of Influence: The geographic area in the land plannin

including the lands, forests, and waters described and delimite

in the project, in which only non-polluting-activities may b

developed. Such activities should be compatible with operationin the Nicaragua Canal.

c) Authority of the Interoceanic Nicaragua Canal: This is a

entity or level representing the Nicaraguan Government or Stat

and it is in charge of overseeing the conservation, maintenanc

improvement, and modernization of the Nicaragua Canal. Th

entity is a body incorporated and organized under this Law, wi

its own net assets and indefinite duration. This entity has fu

capacity to acquire rights and make contracts, and it will b

responsible for promoting, coordinating, overseeing, regulatin

and governing all related matters in the geographic area f

construction and operations of the Nicaragua Canal.

d) The Interoceanic Nicaragua Canal, which in this Law m

also be called The Nicaragua Canal, will be built as a

interoceanic transit route or waterways for ships in differe

sizes. This Canal includes waterways with docks, anchorage

moorings, and approach waterways; lands and maritime wate

lake and river waters, islands, the continental shelf, and maritim

space to be used by the Nicaragua Canal, including floodgate

auxiliary dams, power-generation plants, dikes, and structures

control waters and auxiliary vessel or related facilities f

operations in the Nicaragua Canal. This includes all tho

activities and areas required to protect the environment in t

area of influenceof the Nicaragua Canaland all the economactivities and related services provided in such economic zon

and the Canal.

e) Nicaragua Canal Company (Empresa Gran Nacional de Gran Canal de Nicaragua): It is a commercial Compa

organized under national or international legal provisions in forc

with the necessary capacity to acquire rights and bind itself. Th

may be called the Great Nicaraguan Company (Empresa Gr

Nacional de Nicaragua), which builds and operates T

Nicaragua Canal, having permits and under the regulation of t

Interoceanic Nicaragua Canal Authority.

f) Related Services: Shipsor boats are provided with services

navigation through the Nicaragua Canal. There is a safe transafeguarding the marine environment and other operation-rela


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128LA GACETA OFFICIAL GOVERNMENT DAILYNICARAGUA Translation

services, for example, international business involving economic,banking, financial activities, insurance, tourism, cruisers,submarine communications, and selling or provision of services toships in transit, the transshipment cargo to terminal and adjacentports, as well as repairs and maintenance of ships, set-up andoperation of a Duty-Free Zone and all derived activities involved.

g) Indigenous and Ethnic Territory: The geographic space

including the habitat of indigenous or ethnic communities whichmake up a society in which they develop, according to their habitsand traditions.

h) Economic Zone:The area around the Canal in which every

infrastructure and economic activity may only be implemented

provided that there is a permit and under the regulations of the

Nicaragua Canal Authority.

Chapter IIINicaragua Canal Authority

Art. 5. Incorporation, name, domicile, and duration. Thus,

create the Nicaragua Canal Authority, with legal capacity, itsown net assets, for indefinite duration, and with full capacity to

acquire rights and bind itself and enter into agreement; thisauthority is organized in accordance with this Law, withregistered office in the city of Managua; and it may be set upand have operations anywhere in the national territory.

The net assets of the Nicaragua Canal Authority will include allthe contributions received of the concession granted by theNicaraguan Government, including cooperation and donations.

To fulfill its duties, this Institution known as the Nicaragua CanalAuthority will enjoy functional, organic, financial, andadministrative autonomy, setting the standards for organizationand operations that will enable efficient promotion, supervision,and financial management of the net assets of the Republic ofNicaragua in the Nicaragua Canal Company, including relatedactivities and services in accordance with the constitutional lawsand rules in force.

Before the Nicaragua Canal Company is incorporated, theNicaragua Canal Authority originally will get funds fromdonations or creditcharging pre-investment expenses. Such

Authority will negotiate with the Nicaragua Canal so that thelatter covers such expenses later. This will also apply for itsbudget purposes while the Nicaragua Canal is underconstruction. After this, a percentage fee will be set, it will comefrom income on account of services to be provided. This will benegotiated with the company in charge of canal operations.

Art. 6. Objectives of the Nicaragua Canal Authority

The Interoceanic Nicaragua Canal will have the followingobjectives:

a) To promote and create the Nicaragua Canal Company;

b) To manage and try to get investment required to incorporatesuch Company;

c) To supervise every phase of study, construction, andoperation of the Nicaragua Canal, setting standards andregulations in order to oversee and supervise everythingconcerning this project;

d) To watch over, on a permanent basis, particularly the

conservation and protection of Lake Nicaragua (Gran Lagowhich is one of the countrys invaluable assets. This will be doby implementing the technical and environmental measures prevent pollution, keeping its water clean in a sustainabmanner;

e) To fulfill the provisions in this Law and other provisioapplicable to operations of the Nicaragua Canal.

Likewise, this will ensure that the Nicaragua Canal is alwaopen for peaceful and uninterrupted traffic of ships of evecountry, without any discrimination whatsoever, according to tconditions and requirements stated in the Political Constitutionthe Republic of Nicaragua, international treaties, this Law anRegulations. This is an international service provided by tNicaragua Canal, and its operations may not be interrupted fany reason.

Art. 7. Appointment

The citizens, who on behalf of and representing the State Nicaragua play a role in the Management of the Nicaragua Can

Authority, will be appointed by the President of the Republic.

Regarding the appointment of the Chairperson of the NicaraguCanal Authority, such appointment shall be ratified by thNational Legislative Assembly, before holding such position.

For the first time the Board of Directors in this entity will bappointed for the period including the construction workprovided that such construction takes less than ten years lasts.

Art. 8 Performing Legal Acts and Making Agreements

To achieve objectives and purposes, the Nicaragua CanAuthority, as an institution, may acquire rights, carry out aformalize all legal acts and civil or commercial agreements, may be required, appropriate, causal or incidental.

The Interoceanic Nicaragua Canal Authority must have aadequate technical-administrative organization that will fulduties. To this end, its own bylaws will be drafted, beinconsistent with the Regulations to this Law.

Art. 9. Functions or Duties

The Nicaragua Canal Authority will fulfill duties, as follows:

a) To check and oversee the construction and operations of the

Nicaragua Canal and related services;

b) To use in a sustainable manner the natural resources in area of influence of the Nicaragua Canal; to develop and provservices as planned in a sustained and orderly manner;

c) To supervise and check, regularly and systematically, tfacilities and structures of the Nicaragua Canal, and Nicaragua Canal Company must write reports regarding fulfillmof obligations, as required by such Authority;

d) To protect the supreme national interests of the State Nicaragua, representing the Government in every matconcerning the Nicaragua Canal;

e) To participate in drafting up the regulation or required technistandards relating to maritime protection, navigation, preventiand fight against pollution of the marine environment, health, aprevention of infectious-communicable diseases, and responseemergency situations;


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f) To set the standards and requirements, along with theNicaragua Canal Company, for security regarding proper

protection and surveillance of the Nicaragua Canal facilities,having coordination with the Nicaraguan Army, National Police,

and other institutions, and competent government officials,who should help as required;

g) To participate in planning, generation, use, and

conservation of water resources, soil, flora and fauna species

in the water basin of the Nicaragua Canal, overseeing

management and maintenance;

h) To participate in managing the geographic area and the

area of influence; to authorize permissible activities; and forbid

or restrict incompatible activities;

i) Based on specialized studies, to determine the properties

that will be affected by building the Nicaragua Canal; this will

be done in accordance with the Political Constitution of the

Republic of Nicaragua and laws in force; and

j) To create the conditions required for technical and

professional training of staff that will build and operate theNicaragua Canal, in coordination with universities and the

Ministry of Education.

All of this applies without prejudice to the other duties, as

provided in the Regulations to this Law.

Chapter IV Management

and Administration

Art. 10. Management

The Management of the Nicaragua Canal Authority will includea Board of Directors made up of members and presided by a

President, as a Minister of State; the Vice-President will be theMinister of the Environment and Natural Resources; theSecretary will be the Minister of Finance; and three Directorswill be: The Delegate of the Presidency of the Republic in theCommission for Development of Ro San Juan; the PresidentialDelegate for Foreign Trade Investment Promotion, and theSecretary for the Atlantic Coast Development of thePresidency of the Republic.

The first Board of Directors will be set up in accordance withthis Law, and it shall represent the stocks or shares of theNicaraguan Government in the Nicaragua Canal Company.

The Board of Directors of the Nicaragua Canal Authority will be

responsible for approving and promoting the representations ofthe Authority in national or international partnerships orcorporations, which may be private, state-owned, or mixedones, in which the Authority, as a member or partner, is holdingstocks.

Art. 11. Powers of the Board PresidentThe Board President of the Interoceanic Nicaragua Canal

Authority will have the following powers:

a) To call regular or special meetings, as may be needed, or ifany of its members asks for such meetings;

b) To preside over sessions, leading and moderating in thedebates; and

c) If there is a tie, the Board President will have acasting vote.

When the Board President is absent, the Board Vice-Presidentwill perform the Presidents duties in meetings; this will alsoapply in the case of the Presidents inability or lack of capacity.

Art. 12. Duties of Board Directors.These are the duties of the Members in the Board of Directors:

a) To exercise the right to vote and justify its particular voting, bystating the sense and reason for explanation purposes or

justification;

b) To ask questions and get the exact information required tofulfill the duties assigned; and

c) Other duties concomitant to his position, including other duties

as stated in the Regulations to this Law.

Art. l3. Sessions or MeetingsThe meetings will be notified in writing seven days before theytake place. Holding meetings will require a quorum including fourof its members. Resolutions or decisions will require a favorablevote of a simple majority of those present.

Art. 14. Executive Duties of the Board President

The President will have the following executive duties:

a) With power of attorney for management, to act legallyrepresenting such institution in accordance with the restraintsstated in the Law, concerning judicial, out-of-court, andadministrative matters;

b) To represent, nationally and internationally, the InteroceanicNicaragua Canal Authority;

c) He/she may make proposals for standards to Board. Once

proposals have been approved, standards will be implemented in

the area of influence and economic zone of the Nicaragua Canal;

d) To manage, coordinate, and supervise operations of thisInstitution;

e) To set the service rates provided, as approved by the Board of

Directors;

f) To grant judicial and special powers, approved by the Board;

g) To determine the administrative structure of the NicaraguaCanal Authority; and

h) To keep the Board of Directors informed about relevant

matters, suggesting applicable measures and resolutions for the

Board to carry out his duties.

All of the above without prejudice to the other duties as stated in

the Regulations to this Law.


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Chapter V Obligations of the Nicaragua Canal Authority

Art. 15. Purpose

The Nicaragua Canal Authority must create, organize,

structure, and incorporate a mixedpublic and private

Company, offering and promoting in its investment project a

number of stocks to be issued, the amount of each stock or

share and the total cost of the Nicaragua Canal construction

project. This lets the Nicaraguan Government, as owner, keep

fifty one percent (51%) of the shares of the Nicaragua CanalCompany, fulfilling the regulations set forth in this Law and the

legal system of Nicaragua, ensuring fulfillment of national and

international standards in force.

Art. 16. Shares

Specific characteristics and rights of both these shares andothers offer to potential partners shall be subject to the

Regulations to this Law, by the President of the Republic and

according to the negotiations with the Nicaragua Canal

Authority and partners.

VI ChapterGovernment Permits, Design, Construction, and

Operations of the Interoceanic Nicaragua Canal

Art. 17. Authorization

The Nicaragua Canal Authority representing the Nicaraguan

Government is hereby authorized, in accordance with the

conditions set forth in this Law, to give the permits required to

conduct studies, design, construction, and operations of the

Nicaragua Canal, in coordination with the competent

authorities.

Art. 18. PermitsPermits may only be granted to a person with legal capacity,

public or private, commercial, national, international, or mixed

capital with the required capacity to acquire rights and bind

itself, and with eligibility, management, and financial capacityas required by this project.

Art. 19. Exclusivity Rights

Permits may confer exclusive rights on the construction and

operations of the Nicaragua Canal, including research on

technical, financial, environmental viability concerning its

design, construction, management, equipment, operations,

maintenance, andimprovement.

Chapter VIIEnvironmental

Management

Art. 20. Environmental Impact Study

Before starting the Nicaragua Canal Project, the Authority

created as stated in this Law must ensure an environmental

impact study, fulfilling the provisions and environmental

protection standards set forth in the applicable national laws

and international standards.

Care must be taken, particularly for the fulfillment of national

provisions and international agreements on traffic of hazardous

waste and toxic substances and the Agreement on Affairs of

Indigenous Peoples and Tribes in Independent Countries,

approved by Decree. No. 5934 of the Legislature, published in

La Gaceta, Official Government Daily, No. 105 dated May 6,

2010. This is required to obtain the corresponding permits.

Art. 21. EnvironmentalProtection

The development and operations of the Nicaragua Canal project

must be subject to the main principles of environmental

protection, observing mainly conservation and precautionary

criteria. This means adoption of necessary and preventive

measures in every activity that may affect the environment, for

instance, reforestation, conservation of the basin, preservation,

conservation, and management of flora and fauna, etc.

Art. 22. EnvironmentalManagement

Proper management in operations the Nicaragua Canal must

contribute to conservation, restoration, and improvement of the

environment in Nicaragua, including development and

environmental control programs according to national and

international Laws, Standards, Treaties, and Agreement ratified

by Nicaragua.

Art. 23. Risk ManagementConstruction and operations of the Nicaragua Canal must take

place by following strict procedures to identify, assess, analyze,

prevent, minimize, and eliminate or reduce the risks that may

arise as a consequence of natural threats and vulnerability.

Art. 24. Climate Change and Climatic Variability

The Nicaragua Canal Authority shall, during such study,construction and operations, develop capacities to adapt to risks

posed by future climate change, including those risks derived byclimatic variability. Also, this Authority will ensure fulfillment of

national, regional, and international agreements to climate

change, in regard to the emission of greenhouse gases relating

to traffic by sea.

Art. 25.Special Conservation System

The Nicaragua Canal, its basins, and surrounding territories

because of the water in such places contribute to the water

supply, they will be subject to an especial conservation system for

their management. This means that the countrys authorities will

keep track and oversee such specially protected area, by

following the applicable regulation.

Art. 26. Land Planning and Sustainable ManagementThe Company will ensure the investments required for

organization and sustainable management of the territory, forexample, changes in the use of the soil, forestry recovery, soilprotection, construction works, and facilities that ensure refill ofthe currents and aquifers or water-bearing areas in the NicaraguaCanal.

Art. 27. Environmental Impact

An environmental impact caused by nature may be prevented,

and it must be compensated or mitigated by means of permanent

conservation programs, developing ecosystems in the areas near

the Nicaragua Canal, insuring restoration of the ecosystems that

were affected.


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Art. 28. Obligations Stated in Environmental Permit

The obligations contained in an environmental permit must be

fulfilled by people who get such environmental permit.

In case of environmental permits on Indigenous Territories

being affected, there will be a prior free consultation where

people are informed, in accordance with Agreement on Affairsof Indigenous Peoples and Tribes in Independent Countries.

Chapter VIIIProperty of the Route and Procedures for

Acquisitions of Private and Communalareas

Art. 29. Public Property

The Nicaragua Canal and neighboring areas required for its

operations shall be declared property owned by the

Nicaraguan Government or State.

Art. 30. Nations Natural Heritage or Resources

The areas around the Nicaragua Canal will be natural heritage

of this Country, and they are unseizable. Such lands may not

be sold; there is no land tax and the use of such lands may notprevent, hinder, or restrict operations of the Nicaragua Canal.

Art. 31. Declared in the Public Interest

In accordance with this Law, the Nicaraguan Political

Constitution, and for the purposes of expropriation, real estate

or rights concerning the aforementioned private or communal

propertyas described in the geographic zone of the

Nicaragua Canal constructionare declared in the public

interest.

Art. 32. Compensations

As for the areas to be expropriated, compensations will be paid

by the Nicaragua Government. The amount to be paid will be

according to the Political Constitution of the Republic ofNicaragua and the applicable law, within the terms agreed by

the parties, in each case. The maximum term is ten years.

Art. 33. Declaration or Ruling

The Interoceanic Nicaragua Canal Authority will be the onlyauthorized public entity in charge of declaring areas in thepublic interest, specifying the affected areas.

Art. 34. Agreements

The Nicaragua Canal Authority may summon the owners withaffected properties to reach an agreement. Consequently,

there will be a Public Document and the corresponding

Certificate or Affidavit that will be registered in the Book of

Registry Deeds.

In case of affected territories of indigenous population,

procedures will be followed accordingly to old customs and in

coordination with the Governments of the respective

Indigenous Territories.

Art. 35. Judicial ProcedureIf there is no settlement or arrangement, the NicaraguaCanal Authority will proceed to start a lawsuitaccording to the applicable law in this respect.

Art. 36. Benefits

In this space, area of influence, and economic zone of

Nicaragua, the Nicaragua Canal Authority will implementdevelopment and civil works, social improvements favorable to

the communities in these areas. There will be free consultation,informing indigenous and ethnic authorities in the regions and

territories to be affected.

Art. 37. Authorization to Conduct Studies

Owners or those holding properties along the possible routes

or ways will be required to allow for preliminary works to collect

needed data or earlier studies before expropriation, as stated

in the laws in this respect.

Chapter IX

Security and Defense

Art. 38. Security

In the drawings or plans for construction and equipment, proper

facilities shall be included to fulfill the missions of the NicaraguanArmy and the National Police. These facilities will include units,

port captain's office, docking stations, police stations, and others,

which will be defined together. These facilities or institutions willhave the necessary means for their operations.

Art. 39. Defense

The Nicaraguan Government, through the Nicaraguan Army, will

be exclusively responsible for the maritime protection, defense,

and security of the Nicaragua Canal, including physical facilities,

waterways, and maritime areas, as well as security when

navigating without interference.

The Nicaraguan Government, through the National Police,

ensures exclusively the internal public order, citizen security,

crime prevention and prosecution of criminals everywhere in the

Nicaragua Canal.

Art. 40. Protection and Surveillance (Security)

The Nicaragua Canal Authority is primarily responsible forsupplying whatever is needed to assure proper protection and

security in the facilities of the Nicaragua Canal, ensuring safenavigation without interference. It will set rules for access at the

facilities in the canal, its waters and banks; it will pointrestrictions in the use of lands and waters for operational or

administrative purposes; and on the whole, it will ensure securityof people, ships, and goods under its responsibility. Everything is

done in coordination with the countrys competent authorities.

Chapter XSpecial Economic Zone

Art. 41. Special Economic Zone

Because of this international public service, the Nicaragua Canal

route and the neighboring zones to be determined, will be

considered economic zones and under special regulations, inorder to provide an expeditious transit service, without ships

delayed in the national territory and operations of the NicaraguaCanal.

Art. 42. Exemptions

Ships, cargo, passengers, and crews going through the


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Nicaragua Canal will be exempt from paying Nicaraguan taxes,

duties or burden. Likewise, passengers and crew will not followregulations and migration control procedures, unless they want

to enter this countryNicaragua.

Art. 43. Economic Activities

The Nicaragua Canal Authority will determine the economic

activities that may be carried out in the special economic zone,

as well as the applicable regulations to every activity. This

shall be done in coordination with the competent authorities as

the case may be.

Chapter XI Transitional and Final Provisions

Art. 44. Exemption

The natural resources in the geographic area of the Nicaragua

Canal and its area of influence, as a specially protected area,will not be ruled by the current system governing the rest of the

country.

Art. 45. Expired concessions

Where there are incompatible processes involved in theoperations of the Nicaragua Canal, the concessions granted

for exploration or exploitation of natural resources or thosegranted earlier by special or local laws, which overlap or

coincide superficially in regard to areas defined in this Canalproject, may be revoked by means of the applicable procedure

herein this law, in whole or in part or restricted in itsapplication.

Art. 46. Derogations or Repealing the Following

The following provisions are repealed:

1) Presidential Agreement No. 68-98, published in La Gaceta,

Official Government Daily, No. 63 of April 1, 1998.

2) Presidential Agreement No. 436-99, published in La Gaceta,

Official Government Daily, No. 9 of January 13, 2000.

3) Presidential Agreement No. 160-2002, published in La

Gaceta, Official Government Daily, No. 57 of March 22, 2002.

4) Appendix 1 of Record No. 6, published in La Gaceta,Official Government Daily, No. 231 of December 5, 2001.

5) Decree No. 2878 of the Legislature, published in LaGaceta, Official Government Daily, No. 91 of May 16, 2001.

6) Decree No. 2879 of the Legislature, published in LaGaceta, Official Government Daily, No. 91 of May 16, 200 l.

Since this is a Nicaraguan Law concerning the nations publicinterest; any other Law or provision that, expressly or tacitly,

contravenes or modifies this documentLaw 800shall be

revoked or modified.

Art. 47. Regulations

The Executive Power will enact Regulations to this Law; this

will be done as stated in number 10) of Article 150 in the

Political Constitution of the Republic of Nicaragua.

Art. 48. Law in Force

This Law shall come into force upon its publication in LaGaceta. Official government daily.

Issued the city of Managua, in the meeting hall of the NationalLegislative Assembly of the Republic of Nicaragua, on this 3

rd

day of July, 2012. Ing. Rene Nez Tllez, President ofNational Legislative Assembly (Legislature). Lic. Alba Palacios

Benavidez, Secretary of the National Legislative Assembly.

Thus, this is hereby a Law of the Republic. Publish and

execute it. Managua, July 6, 2012. Daniel Ortega Saavedra,

President of the Republic of Nicaragua.

END OF DOCUMENT--------------------------------

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