Fortis Inc. and The Chalillo Dam
Case Study Group Project
Submitted to Michael Green
Jacob McLean 201024718
Zijun Xu 201216769
Xiaohui Liu 201106218
Yao Li 201217031
Fortis Inc., a company with interests in various North American electric utilities, is proposing to build the Chalillo dam on the Macal River in Belize, Central America. The dam would contribute to the economic development of the country by meeting the increasing demand from industry and consumers for electricity. The company believes that the dam is the most feasible, reliable, and cheap supply of electricity. Environmental non-governmental organizations (ENGOs) oppose the project because of the destruction of wild animal and plant life and the adverse downstream impact, and allege that there are more viable and cost-effective sources. Through a strategic analysis of the issues surrounding the case, we will analyze each alternative to present the best possible recommendation to Fortis Inc.
The most prominent issue faced by Fortis Inc. with respect to the Chalillo project is the potential environmental effects. A number of groups are opposed to the project due to the location, on a river where a rare ecosystem exists. The project would build a dam on the river, regulating the flow of the river, preventing flooding and providing a more consistent source of water. While this certainly is a benefit to the individuals residing downstream of the proposed site, it does cause a disruption in the natural environmental cycle. The area that would be impacted was host to a rare and discrete floral floodplain habitat. The system relied on the seasonal flooding and heavy rain in order to be sustained. The habitat is biologically rich and diverse, and is home to many different species of animals.
This environmental issue was worsened by the threat of negative publicity, which it had already fell a victim to. Many organizations, including Probe International (PI) and Natural Resources Defense Council (NRDC), among others, have aggressively targeted the Chalillo project. Common means of attacking Fortis Inc. were legal action, web publications, political lobbying, and celebrity spokespersons.
The project had been assessed twice for its feasibility and impacts. The first assessment, conducted by the Natural History Museum found that it would be too environmentally destructive to continue with the project. On the other hand, the project was assessed by the Belizean government’s National Environmental Appraisal Committee and found that the economic benefits that would be a result of the project far outweighed the environmental effects. The committee also felt that there were ways of mitigating the environmental effects and reducing them to a minimum.
While the project was approved by the Belizean government and its committee, the issue remained that Fortis Inc. would have to learn to deal with the negative publicity if it chose to proceed with the project, even if the effects were, in actuality, brought to a minimum.
Essentially, there are three options for Fortis to choose. The first option is to give up building the Chalillo dam on the Macal River. It is the best way to protect aquatic and terrestrial wildlife. The location of the dam contains rare and discrete floral flood habitat, which relied on the flow of oxygenated water and seasonal flooding. The Chalillo dam project would have negative impacts on biologically rich land and many animals inhabiting the area. As a result, stopping to build the Chalillo dam is the best option to avoid the effect on wildlife. By choosing this alternative, Fortis will reduce the amount of negativity that many ENGOs and other organizations are currently showing them. They could retain their good reputation if they decide to not build the Chalillo dam. On the contrary, there are some disadvantages for stopping the project. First, Belize will not solve