(Bloomberg) — Two years ago, an SUV carrying four men screeched to a halt in front of the house of German Valdivieso Diaz, where he still lives with his parents and two nephews. They demanded to know how to find Valdivieso. And then they threatened to kill him.
When the men left, Valdivieso said his terrified mother called, urging him to stay in Mexico City where he was taking a course—more than 700 kilometers (435 miles) northwest of their rural home in La Ventosa near the Pacific coastline.
La Ventosa means “Suction Cup” in Spanish—aptly named given it’s home to some of the most powerful wind gusts in the world. That also explains why the spot caught the attention of energy giant Electricite de France SA, which chose the location for its first wind power project in Mexico. The Valdiviesos are among the families who leased land to EDF and now find themselves at odds with both other residents and the company over the giant towers and turbines it’s proposing to build on their properties. Disputes about the project help explain why the men showed up at his home that day, Valdivieso said.
“The death threats left my mom in a very bad state,” said Valdivieso, now 29. “After the incident, no one felt safe to go out.”
To be clear, nobody is accusing EDF of paying the men who threatened Valdivieso, not even Valdivieso himself. What he and others in the community do blame EDF for is failing to act on and foresee that their wind projects would drive some local residents—desperate for money from land leases—to the brink of violence. For them, it’s emblematic of how renewable energy developers are creating rifts between those trying to preserve their ancestral lands and those who will do almost anything for much-needed cash.
EDF officials said the company hasn’t made threats against anyone and added that it strongly condemns such practices. The French state-controlled utility said in a statement that it has “scrupulously complied” with Mexican laws and said it recognizes a United Nations-supported position that indigenous people have the right to give or withhold their consent to projects that may affect them or their land.
Since EDF erected its first wind turbine in 2009 in southern Mexico, the company has been sued by indigenous and human rights groups and accused by residents of taking over their land with no warning. In 2018, Valdivieso’s family joined forces with local activists to seek an injunction against the company, and a judge suspended operations at EDF’s Gunaa Sicaru site in La Ventosa due to incomplete community consultations. For farmers in the region, the turbines are just as invasive as the mines that have sprung up in La Ventosa’s mineral-rich hills. And perhaps it’s no coincidence that, according to Valdivieso, the men who pressured his family over Gunaa Sicaru also requested that he abandon opposition to local mining concessions.
EDF said the future of the project will depend on the outcome of these deliberations. The company said it has collaborated with Mexican authorities who are in charge of carrying out the consultations and also developed “a relationship of trust and proximity with the local communities.” EDF said it has been involved in initiatives such as repairing roads and upgrading sanitation facilities at schools in La Ventosa and surrounding towns on the Isthmus of Tehuantepec—a narrow strip of land between the Gulf of Mexico and the Pacific where two mountain ranges channel a constant and fierce air current.
Gunaa Sicaru would be EDF’s fourth wind park in the area, almost doubling its installed local capacity if completed. Valdivieso and other residents said the company assured them the projects would bring jobs and investment. Instead, the wind parks have splintered the community that descends from pre-Columbian tribes. Some opponents like Valdivieso said they have been criticized at public meetings for being “anti-wind” by other residents who are supportive of the industry.
What’s happening in La Ventosa is part of a broader trend where wind, solar and hydroelectric companies have pursued projects that have led to land grabs in underdeveloped rural communities. The International Energy Agency, an independent group focused on energy security, is calling for $1 trillion a year in clean energy investments for developing countries by 2030, up from less than $150 billion last year, to achieve net-zero emissions by 2050.
To get to that emissions goal, businesses and governments will need to become better at cooperating with local communities, and that isn’t happening in Mexico and other parts of the world. In Chile’s Atacama desert, for example, the mining of lithium and copper is drying up pastures and depleting drinking wells. In Myanmar, operations at a $3.6 billion hydroelectric dam have been stalled since 2011 because of the lack of a proper environmental assessment.
“There’s no difference to the way extractive industries operate: taking land belonging to populations, destroying their crops,” said Michel Forst, who traveled across Mexico in 2017 to write a report for the UN on human rights. “For those who are living there, who want to live like their ancestors did, their way of life is destroyed all of a sudden.”
The Business and Human Rights Resource Centre, a London-based nonprofit that tracks rights abuses globally, ranks EDF among the companies with the most alleged incidents of rights abuses among international renewable energy companies in Latin America. Honduras was singled out as the country where the most offenses are occurring, followed by Mexico and Colombia.
Globally, Latin America accounted for almost two thirds of the allegations of rights abuses in the renewable energy industry, according to the Business and Human Rights Resource Centre, which has funding from groups including the Ford Foundation and billionaire George Soros’s Open Society Foundation. Wind energy ranked second after hydroelectric in terms of alleged human rights abuses, with 87 cases.
The Business and Human Rights reporting emerges as publicly traded companies, like EDF, have been burnishing their environmental and social credentials to attract investors. While the wind farms in southern Mexico represent 3% of the Paris-based utility’s installed wind capacity, asset managers such as BlackRock Inc., the world’s largest investment firm, have indicated they won’t stand by idly when human-rights abuses are occurring at companies they invest in.
BlackRock is EDF’s largest shareholder after the French government, with an almost 0.5% stake in the company. Without identifying any companies, BlackRock said in March that it will vote against corporate directors who fail to effectively address “material human rights-related risks.” The New York-based firm declined to discuss its position on EDF.
“Companies can no longer afford to sweep these issues under the rug,” said Kristin Hull, founder of Nia Impact Capital, a $400 million sustainability investor in Oakland, California, who invests in renewable energy. “Justice issues have to be part of due diligence. It may look to a western businessman that no one is pushing back, but now there are lawsuits.”
Dial back the clock to more than a decade ago and EDF was part of a rush of wind companies, including Enel SpA and Spain’s Iberdrola SA, pushing into Mexico. Just like the international oil companies that arrived in the country a century earlier and went straight to oil seeps along the Gulf Coast to drill gushers, EDF and other wind producers made a beeline for the wind money on the Isthmus of Tehuantepec.
The area is so windy that trucks are known to have been blown off the road near La Ventosa, where row after row of wind turbines sprout from the town and the surrounding countryside. In the first half of 2021, Mexico ranked as having the fifth-cheapest costs for onshore wind producers of 27 countries reviewed by BloombergNEF, and the Isthmus of Tehuantepec in the state of Oaxaca is the most attractive spot in the country to set up shop.
Renewable power companies are directly responsible for creating societal strains, said Juan Antonio Lopez, a coordinator at Mexico City-based human rights group ProDESC, which has led legal challenges against wind projects in Oaxaca state, including EDF’s Gunaa Sicaru. A common mode of operation is converting communal land into private property to sidestep lengthy negotiations with the indigenous communities known as ejidos, he said. The result is local residents are often surprised when they see wind towers go up on their ancestral lands, and then get little to nothing in the way of compensation.
“The land belongs to everyone,” Lopez said. “They needed to negotiate with the whole community.”
For its land, the Valdivieso family receives 15,000 pesos ($750) a year from EDF for leasing 10 hectares, equal to roughly 16% of what the household earns each year from selling cheese and mutton from their farm.
“What happened initially is that the farmers immediately signed papers to rent their lands to the wind parks without realizing that it was almost like selling their land,” said Delfino Morales Felipe, municipal secretary for the city council of Juchitan de Zaragoza, which comprises several communities including La Ventosa. “Once it was rented, they couldn’t use it.”
Additionally, the municipality hasn’t received taxes from the wind companies for the past three years, funds that could be used to put electricity in homes, build schools and parks, and repair roads and drainage systems damaged by an earthquake in 2017, Morales said. “They said they’d build a library, donate computers to schools, and they haven’t,” he said.
He said, even now, farmers continue to be threatened for opposing the wind parks. “The city council is raising the voices of the people who have been disassociated, because we would like the wind parks to generate a lot of resources,” Morales said.