WikiLeaks cables detail:FORBES ENERGY CITES CORRUPTION IN ETHANOL PROJECT DELAYS


SUBJECT: FORBES ENERGY CITES CORRUPTION IN ETHANOL PROJECT
DELAYS

REF: A. STATE 85047
B. SANTO DOMINGO 1353

Classified By: Ambassador PRFannin for Reasons 1.4 (b) and (d)

1. (C) SUMMARY. Executives with Forbes Energy met with the
Ambassador regarding the company,s planned USD 700 million
sugarcane ethanol project straddling the Dominican
Republic-Haiti border. They said that while they have
already obtained all needed permits for the project, which
will be based in Manzanillo, Montecristi, Dominican Republic,
they continue to face unnecessary delays and moving goalposts
that they interpret as prompts for bribes from government
officials. They also described two overt solicitations from
high-level officials for cash payments. The project is
currently held up due to delays in finalizing a negotiated
land swap with a state entity; the Ambassador has sent a
letter to the top official of this entity requesting a status
update. END SUMMARY.

2. (U) On August 28, the Ambassador met with Forbes Group CEO
Lucien Forbes, Director of External Relations Josh Fenton,
and Chief Legal Counsel D. Edward Wilson . Also present were
DCM Bullen, EconChief, PAO, EconOff and FCSO. The meeting
followed a July 31, 2008 meeting between the company and WHA
Assistant Secretary Shannon (ref A).

3. (U) The Forbes executives said that the company has been
working since 2006 to establish operations in the northern
border region to produce ethanol from sugarcane stock
primarily for export to the U.S. market. Initially, the
plant would denature Brazilian &wet8 ethanol for the United
States. Subsequently, the company will produce ethanol from
locally-grown sugarcane stock for the domestic and export
markets as well as generate 50 MW of electricity from bagasse
(sugarcane waste) for sale to the Dominican electricity grid.
The major part of the project will operate under the Special
Duty-Free Zone tax incentive regime. The local affiliate of
the company, Forbes Energy Dominicana, S.A., has already
received a 20-year renewable permit for a duty-free zone.
The executives said that this will be one of the largest
private investments ever in the country and the largest
commercial venture of its kind in the world.

4. (U) The project would also impact Haiti. While the ethanol
and electricity production will all take place in the
Dominican Republic, Forbes plans to either cultivate land
that it buys or else buy feedstock from Haitian producers
directly across the border from its Dominican assets. Forbes
said he aims to make the project fully operable with an
entirely Haitian-Dominican workforce within five years of
launch.
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