Honduras Fights Back Against Corporate Colonialism 

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By LatAm Reports Editor

In Honduras, a significant legal battle is underway as the country confronts what many describe as “corporate colonialism” through the Investor-State Dispute Settlement (ISDS) system. This legal framework allows private corporations to sue governments for passing laws that affect their profits. Honduras is currently embroiled in a case involving Honduras Próspera, a U.S. company backed by billionaire Peter Thiel and former World Bank chief economist Paul Romer, which is suing the Honduran government for $11 billion over the repeal of laws that allowed the creation of a private libertarian city-state on the island of Roatan.

The ISDS system, embedded in numerous bilateral investment treaties, often favors wealthy states and multinational corporations, leading to controversial cases like Chevron vs. Ecuador and Philip Morris vs. Australia. This system has been particularly detrimental to countries in the global South, enforcing regressive elements like stringent intellectual property rights and limiting states’ ability to regulate financial flows.

Special Economic Zones (SEZs) like the ones in Honduras, known as ZEDEs (Zonas de Empleo y Desarrollo Económico), have sparked outrage for breaching national sovereignty. These zones, created with their own political and judicial systems, low taxes, and business-friendly regulations, are seen as tools to promote neoliberal policies.

Honduras’ struggle intensified with the election of Xiomara Castro, the country’s first female president from the left-wing LIBRE party, who repealed the ZEDE laws. Her government’s actions led to the massive ISDS case filed by Honduras Próspera, which has drawn international condemnation but limited media attention.

In response to this situation, the global political network Progressive International (PI) launched the Honduras Resiste campaign to support the Honduran government. PI’s delegation in Honduras, consulting with the government, experts, citizens, and civil society organizations, has denounced the ZEDEs as a form of corporate colonialism and condemned the ISDS case.

This situation echoes the concerns of Ghana’s independence leader Kwame Nkrumah, who warned of “neocolonialism,” where countries, despite being theoretically independent, have their economic systems and policies controlled externally. PI and other international supporters argue that only through global solidarity can countries like Honduras resist such neocolonialism and protect their economic and political rights. The struggle in Honduras highlights a broader global challenge against neoliberalism and corporate dominance, with many urging international support for the country’s fight.