The Whole Story ..
Struggle for Existance
of the Pedro Miguel Boat Club

The story is a long one, and the Pedro Miguel Boat Club  (PMBC) is the victim in this story, though it could be any of the old Canal Zone, non profit organizations that survived the Panama Canal Treaty; the losers are the cruisers of the world.

Some 65 years ago a group of employees of the Panama Canal Company founded a boat club on the shores of Miraflores Lake, in the Panama Canal for the purpose of providing a social area for the construction, repair and maintenance of boats, as well as a club house for the use of its members and visitors. The members of the PMBC built the facilities; buildings, piers and solid land fills using their funds and labor over a period of many years.

During the ensuing years the PMBC operated, providing a home port for its members and visiting yachts of the world, particularly those needing a repair facility for long term work. With enactment of the Panama Canal Treaty, the PMBC applied for, and became a non profit organization in the Republic of Panamá so as to continue its existence under the terms of the Carter~Torrijos Treaty.

The PMBC received recognition as a non profit social organization, in the Republic of Panamá, with the same operating goals as always. The structural improvements of the PMBC were recognized as the club’s by the Panama Canal Company, and later the ownership of the improvements were ratified by the Panama Canal Commission and the Government of Panamá’s Ministry of Hacienda y Tesoro in the body of the Administración de Bienes Area Canalera. The Ministry of Hacienda y Tesoro also completed, with the PMBC, a rental agreement based on the terms and intentions of the Panama Canal Treaty. The effective date of the agreement dating from 1986.

 Until 1996 the PMBC continued its work, providing a facility for national and international yachts and improving its facilities for its members. During this time the PMBC was treated fairly by the Panama Canal Commission and the Government of Panamá (GOP) as regarded the terms and intentions of the Panama Canal Treaty.

Then in 1996 the Panama Canal Commission “required” the area of the PMBC for purposes of its own, and informed the GOP. In accordance with the terms of the Panama Canal Treaty, the GOP was obligated to terminate the license/rental agreement of the PMBC for its operating site of 60 plus years.

The PMBC, then applied for compensation from the GOP for its improvements under the terms and norms of the Panama Canal Treaty, and the laws of Panamá. The GOP replied it was not their “taking” of the facility, but that of the Panama Canal Commission  and therefore the responsibility of the payment was with the Panama Canal Commission and/or the US Government.

The Panama Canal Commission immediately took the position that they had no responsibility for compensation, basing their decision on the old Panama Canal Company land license issued to the PMBC. However by other clauses of the same land license, the license was “non assignable, non transferable” so the old Panama Canal Government license became void on 1 October, 1979, or possibly, valid until the end of the 30 month “transition” time (1983) in which the GOP agreed to accept/enforce the issues of the former Panama Canal Company, but in no case after October, 1983.

However the GOP and the Panama Canal Commission maintained their position of no compensation. This position is one that flies in the face of all property rights in Panamá and the United States when a government “takes” the property of its “citizens” and causes them to loose their existence.

The PMBC submitted the case to the US Court of Claims, placing a claim for compensation against the Panama Canal Commission. The Court received the case, and the case moved slowly until the middle of December, 1999 when the Department of Justice of the United States approached the PMBC with the proposition that it would withdraw its claim for the removal of the PMBC and its licenses in exchange for the PMBC withdrawing its case against the Panama Canal Commission; an agreement was struck.

The PMBC withdrew its complaint in good faith, and the Panama Canal Commission issued a note to the GOP stating its cancellation of the requirement for the area of the PMBC on the 20th of December, 1999. Therefore the GOP was obligated to return to PMBC their rights of use of the facility, as though the Panama Canal Commission had never ask for the removal of those rights. Supposedly if the GOP failed to comply with the reversal of action it would become liable for the removal action, as the US Government no longer required the area under the terms of the Panama Canal Treaty.

Early January, 2000 the PMBC approached the Authoridad de la Región Interoceánica requesting the reinstatement of the rental and land agreements as per the diplomatic note issued by the Panama Canal Commission via the United States Lands Committee for the Panama Canal Treaty. The PMBC was informed that this land area was no longer an area responsibility for the ARI, but now the responsibility of the newly formed Authoridad del Canal de Panamá (ACP) (successor of the Panama Canal Commission) as stated in the Organic Law of the Panama Canal.

The PMBC sent a letter to the ACP requesting renewal of the license as per the terms of the settlement in the US courts; as of this writing (May 2003), the ACP has not responded to this request or letter.

The PMBC continued its operations without interference from the ACP, or correspondence with the ACP, until May of 2002, when the ACP decided that all vessels stopping at the PMBC would have to pay a “pilot delay fee” of $440. This fee is normally charged to a vessel that fails to complete its transit, due to failure of the vessel. Historically the PMBC has been exempt from that charge, since the PMBC is a destination, not a failure of transit.

By November of 2002 the ACP realized that the vessels coming to the PMBC would pay the $440 delay fee, and consequently the number of vessels coming to the PMBC did not stop as the ACP planned. As a result the ACP started an administrative legal action against the PMBC for eviction for simple trespass (intruso).

Simple intrusion in Panamá is a concept that is based on a person finding another within their property, without permission, and without any former relationship, like lease, contracts, etc. The land owner then asks the civil authorities to remove the intruder as that intruder has no right of claim for dislocation.

Clearly this was not the case with the PMBC, as the PMBC has had a long term relationship with various governments, and agencies, during its 65 years of occupation of the area on the shores of Miraflores Lake. The Corregidor (1st step eviction authority) agreed with the PMBC and negated the claim of the ACP for the removal of the PMBC as the PMBC had a clear, long term relationship in the area of occupation.

The ACP claimed that it did not have a relationship with the PMBC, as evidenced by the lack of an “area of compatibility” agreement with the ACP, nor a lease issued by them. A legal representative ACP further stated that all contracts or agreements issued by other governmental agencies prior to noon on 31 December, 1999 had no validity as far as they were concerned. A statement that flies in the face of legal norms.

How is it that a “company” changes owners, that is, the Panama Canal Company is transferred from the Government of the United States to the Government of Panama and the administration of the company is changed from the Panama Canal Commission to the ACP, and suddenly all old contracts and obligations are forfeit?

This seems the case in the issue of the PMBC. The new “administrators” can hardly state they have no knowledge of the agreement between the Panama Canal Commission and the PMBC, as the majority of the officials of the Panama Canal Commission continue to work for the ACP after the canal turnover.

The next action of the ACP, having failed to accomplish a simple intruder eviction, was to appeal the decision to the next level of the administrative judicial system. That appeal is still pending decision by the Alcalde of Panamá City. Decision either way by the Alcalde leaves open a sequence of appeal courts in the Republic of Panamá for review of the issue, before the issue of intrusion and removal is finalized. This process could take years.

At the 1st step denial of the ACP’s request for removal for intrusion, the ACP decided take internal action to economically “strangle” the PMBC by administratively ordering a “stop transit” of all vessels to the PMBC. This action appears to be a violation of the Panama Canal Neutrality Treaty and complaints have been filed with various agencies. Legal proceedings have been started against the ACP to negate this action, and are still pending.

When the ACP was ask to provide written directives, rules, or orders, to the effect of denying transit to its canal users, the ACP refused. Instead a copy of an unsigned email from the Marine Director of the Canal, to the Port Captain of the Canal and to the Canal Admeasurers, denying transit of vessels to the PMBC as the PMBC is an “intruder” in the area of the canal. Cryptic references were made in the email as to the source of the email authority. Those sources being “AD”, supposedly the Administrator of the ACP, and “GC”, supposedly the General Consul of the ACP. This is clearly an attempt to hide the actual person(s) responsible for the directive.

This action is completely in disregard of the goals of ISO 9001 to which the ACP claims certification and adherence of its operational processes. The ISO 9001 standard requires transparency to the user/customer. Obviously the ACP’s failure to issue clear written directives in this action, and their failure to notify Panama Canal users of this action, are very much in conflict with goals and ideals of ISO 9001.

A meeting was requested with Administrator of the ACP to discuss the issues and to find a good faith solution. The Administrator refused to meet with the representatives of the PMBC, and set a meeting with the Director of the Marine Bureau for the officers of the PMBC.

Two officers attended the meeting to find that several lawyers of the ACP were there to speak for the ACP, and it rapidly became clear, they did not intend to speak of the issues, or to be receptive to any ideas or suggestions. The same lawyers continually interrupted any meaningful conversation with the Marine Director by the officers of the PMBC.

The Legislative Assembly (Congress) of Panamá, in establishing the laws concerning the leasing of reverted canal areas, recognized its responsibilities to holders of pre treaty licenses, as covered in the Panama Canal Treaty. They included mechanisms within the contracts of the leases for compensation of organizations required to vacate their sites within the areas newly leased. This shows that the GOP recognizes a responsibility to those affected by the Panama Canal Treaty.

The larger question is why does the ACP feel that it can “take” the facility of the PMBC without compensation for its facility? The  ACP is declared a for profit entity of the GOP, so what makes it different from the commercial lease holders in respect to compensation for “taking”.

Is the concept of compensation one only to be forced on private for profit companies, and ignored by the GOP and/or the ACP?

In this time of economic crisis in Panamá, the PMBC provides a place for folks with their boats needing a safe, secure port for large maintenance projects on their vessels. These vessels typically spend $1500 per month in provisions, and incidentals while in Panamá … they provide employment for 10’s of independent workers … they fly in and out of Panamá increasing tourism … they bring visitors to Panamá, increasing tourism … they buy supplies from vendors, providing sales and tax revenue … they pay navigation and immigration permits ….all good for the county.

The PMBC attracts 200 long term visitors to the Republic of Panamá annually. These visitors provide a significant foreign capital influx into Panamá that goes directly to the lowest levels of the economy, where it can do the most good.

If the PMBC is forced out of existence, the country and the people of Panamá will be the big losers. The PMBC is not a “rich” in money organization … it does not “profiteer” on its members and visitors, rather it puts its money back into the local community through local support projects, local purchases and local employment.

If the ACP, or the GOP, does not step forward and accept their responsibility to compensate, and/or relocate, the PMBC so that the PMBC may continue its existence in Panamá … everyone loses; the local yachters, the international yachters, the workers of Panamá and largely the perception of Panamá in the eyes of the world as a fair and just country.


Commodore …. Pedro Miguel Boat Club