The possibility of operation and functioning of this project openly violates the spiritual and written contents of the following: Environmental Standards, published by INA as the Regulatory Organization, Decree 33-95 “Dispositions to Control the Contamination Resulting from the Disposal of Domestic, Industrial, and Agricultural Residual Water”, Nicaraguan Environmental Plan 2001-2005, Strategy for Biodiversity, DGRN Concession PA001-2000 Ministerial Agreement of the MIFIC, the Declaration of the Island of Ometepe (Law 302) as a Natural Reservation and Cultural Patrimony of the Country, and international commitments subscribed by Nicaragua, such as the one with Rio de Janeiro, and, soon to come, the evaluation of our fulfillment in Rio + 10, among others. The project involves the operation of floating cages crowded with farm fish in the natural waters of Lake Cocibolca. Its logistics and design make it impossible for such a project to reconcile with Nicaraguan law, and this is why it should be rejected.

Specifically, the design of intensive fish breeding located in the open waters of natural lakes eliminates every technical possibility to control or mitigate the environmental harm and impact resulting from the risk that these animals can escape into the natural environment, as well as from the impossibility of treating the huge contaminating discharge released from the cages into the receiving body. This contaminating discharge, forty thousand kilograms per day, coming from five million kilograms of live fish crowded in cages, cannot be collected, treated or disinfected to comply with the law for every agricultural project. It would be released in its natural state into Lake Cocibolca daily, causing severe damage. This can be compared to the discharge of the untreated water wastes of a city of 83 333 average weight people directly into a vulnerable body of water, on which socially developmental, economical, and environmental expectations lie.

No matter how profitable it may seem, no business should cause irreparable damage to the national natural patrimony or endanger other initiatives for the future of the country that depend on the same essential resources.

I think that the responsibilities of the institution at your charge enable you to intervene so as to avoid the authorization of an increase in the environmental degradation of the most important natural resource for the future of our country. This is why your attention and action on this serious issue are impelling.

I am aware that the information needed by our authorities to form an opinion and make the right decisions is limited. So, as a contribution from our university, I am pleased to offer you our professional experience and facilities specialized on the generation of information about hydro resources, through the use of tools and scientific research, organized in the CIRA/UNAN. Our purpose is to offer you outstandingly qualified professional assessment or assistance on the issue.

Hoping to help with the enforcement of the law, and so contributing to sustain the use and protection of our national natural patrimony, I

cordially and respectfully greet you.

A copy of this letter has been sent to the following sections due to their relation to this case: National University Council
Prof. GUZMAN PASOS,
Chairman City Hall Association Cuenca del Gran Lago – Member Mayors

National Procurement of the Environment
Dr. MARIANELLA ROCHA

AMUNIC
Dr. ALEJANDRO BRAVO
Executive Director

CONADES Engineer
EDUARDO URCUYO LLANES,
Director

CONPES
Mr. JUAN JOSE MARTINEZ
Coordinator

DANIDA
Mr. ANDERS SERUP RASMUSSEN
Ambassador

World Bank
Dr. ULRICH LACHLER
Representative

BID
Mr. EDUARDO BALTARCARCEL
Representative

PNUD
Mr. JORGE CHEDIEK
Resident Representative

OEA
Lic. SERGIO CARAMAGNA
Representative

OPS
Dr. PATRICIO ROJAS LARA
Representative

NORAD
Mr. IDAR JOHANSEN

Salvador Montenegro Guillen
Director – Founder CIRA/UNAN

Attachments: Copy of the Comments of CIRA/UNAN about the project “Tilapia
Culture in Floating Cages on the Island of Ometepe”, submitted to MARENA on
deadline.

Comments of the CIRA/UNAN at the Assembly on the Document about the Environmental Impact of the Project “Tilapia Culture in Floating Cages on
the Island of Ometepe”

Since every citizen has the right to know and give his or her opinion about the project mentioned above, on Tuesday, October 23, I went to the
Documentation Center at MARENA. I went as a regular person, but also as Director of the Hydro Resource Research Center of Nicaragua, responding to the convocation announced in a local newspaper about the availability of the
document of the environmental impact. On Wednesday, October 24, the Heads of the Scientific Departments in our institution, Master in Science Lorena Pacheco, Licenciada Argentina Zelaya, Master in Science Ninoska Chow,
Licenciada Silvia Fuentes, Doctor Jorge Pitty, and Licenciado Armando López went there too. But the Document of Environmental Impact was not available on either of the two days, even though they were part of the consultation period. The only document available in the Documentation Center of MARENA was the Addendum No. 1. This document is just the answer of the proposing
company NICANOR to a letter dated May 9, 2001, sent by the Board of Directors of Environmental Quality of MARENA to Mr. Patrick Bolaños, one of the directors of NICANOR. Such letter contains 27 issues that NICANOR immediately answered through the Addendum No. 1. Although it contains
information about the project in the answers, it is NOT the Document of the Convocation. Therefore, having the right to demand fulfillment of the
corresponding legal procedure, we hereby present the official comment of our institution about the project, on the understanding that it is based on
incomplete information and, therefore, preliminary. We regret that the absence of the Document of Environmental Impact should hinder our right to
be informed according to the law.

GENERAL COMMENTS
In the last months, much has been said and written in favor and against the possibility of breeding this exotic fish generically called “tilapia”, by using suspended cages in Lake Nicaragua. Psciculturists only see the
advantages of the multiplication and commercialization of the fish, while critics only see the risk and the environmental toll it can convey. Are these two positions reconcilable? What are the actual risks for the country?
Every psciculturist’s dream, the same as every cattleman’s, is to raise the best animals at minimum cost, not only to make more profit, but also to fulfill social functions. This is valid because it means satisfying needs and producing welfare. But one thing is breeding fish in cages in ponds,
and another thing is breeding them in natural lakes. The reasoning of the psciculturist is that if the lake, pond or dam is already there, there is no
point in spending money building one or cleaning it. They take the resources present in the ecosystem and dump the wastes back into it. Great economy! There is a simple transfer of costs to the environment and the society that subsidizes.

The problem is that Lake Cocibolca, the main hydro resource in the country, is already an ecosystem undergoing severe environmental strain. We have seen that deforestation and erosion are elements of degradation, along with
municipal solid sewage, industrial wastes, sewage, agrochemical wastes, especially pesticides, coming from a deteriorated basin with an area of about forty one thousand square kilometers. All of this reaches the most important body of water of Central America in size and potential. The perspectives of social and economical development are linked to the capacity of the Cocibolca to contribute tap water to the increasing population of the Pacific cities, to contribute irrigation water even to the fertile
Chinandega lands, to intensively promote consumption and sport fishing, to allow the development of tourism which contributes financial resources, and other evident benefits of immediate application. There are other aspects that are not so evident, but they are not less important, such as the fact that Lake Cocibolca is a biodiversity reservoir. We Nicaraguans still do not understand this majestic lake, so we have not granted it the correct place. World history is full of cases of ecosystems that were destroyed before being understood. They could have been profitable, but they were wasted because of simple ignorant greed.

Luckily, the citizens and the government of the basin are aware of the magnitude of the risks to confront. That is why they have formed the
Municipal Association of the Basin of the Great Lake of Nicaragua, AMUGRAN. This association is presided by the Municipality of Granada, which has requested UNESCO to designate the Lake of Nicaragua Patrimony of the Human Race, considering its importance in the country.

By looking at the symptoms in nature, we can see that Lake Cocibolca is already sick. The idea of breeding African tilapia fish in suspended
cages in Lake Cocibolca, just because “it is a good deal and it will render profit”, will probably be another big mistake with serious consequences, if
it is allowed.

It is evident that these fish are wonderful as breeding fish. They grow fast, they waste little food, they are full of energy, they do not require
much attention, they are highly accepted, and enterprises throughout the world are interested in improving the prices, which are now the same as
those of trout. These are positive aspects of this kind of industry. Notwithstanding all the enthusiasm, the breeding of aggressive species such as tilapia is not allowed in cages in natural waters in civilized countries because the risk of harm is big and unpredictable.

The cages were designed to be used in artificial ponds or in manmade lakes, not in natural water. Tilapias are similar to rats in their ability to adapt, resist, and take advantage of whatever they find to feed on. That is why they are so dangerous to the balance of natural ecosystems. The tragedy caused by rats in the country is equivalent to what tilapias do to natural water. There is a document, accepted worldwide by the signing countries of the United Nations Food and Agricultural Organization (FAO) called Behavior Code for Responsible Fishing (which includes aquaculture).
All member countries have to follow it, and it states that the use of inserted species is a big risk of contrary effects.

Nicaragua, as well as Norway, is a signing member of FAO. Furthermore, it has officially stated its determination to rationally use and protect natural resources and the ecological environment, according to the Constitution and the Environment General Law. So, the government is
responsible for the enforcement of these principles through the Ministry of Agriculture, the Ministry of the Environment, and the National Procurement
of Justice, through its Environment Management.

There is a lot of evidence about the effects that “tilapias” (Oreochromis mossambicus, O. Niloticus, O. Aureus, Tilapia rendalli, T. Zillii and
others) living in bodies of water throughout the world have on lake ecosystems.

A well-known case is Lake Victoria (third largest in the world). The fishing of 177 native species went from 61.000 annual tons to 30.000 after
introducing foreign fish that simply escaped from ponds and cages or were directly planted in the lake using the best African criteria. Besides the
decrease in the amount of fish caught, half of it is the species called “perch of the Nile” (Lates niloticus), another invasive and undesirable
foreign kind of fish.

The disappearance of native fish could have undesirable consequences on the expectations of tourist development. This is already happening in Nicaragua with guapotes laguneros, which are very appreciated in sport fishing.

TOO EFFICIENT FISH INTRODUCED
Wild native fish are not displaced because aggressive tilapias eat them, but because tilapias are much more efficient finding food in a poor lake, and food is everything to them. The fact is that tilapias are amazingly active and full of energy, and they have few adversaries when competing for space and food.

It is not altogether true that tilapias are not dangerous because they “are herbivorous”. Tilapias are omnivorous. They are eager fondo eaters when they are adults, and they consume insect larvae, fondo organisms, and any
other thing that fits into their mouth. They do not despise small fish or tadpoles; anything goes. If there is any doubt, check their teeth, which
enable them to do so. Because of their wide acceptance of any kind of food, they are even able to accept artificial food, something that not all fish
do. Precisely, this lack of selectivity and their enormous appetite render other fish foodless. So the other species decrease in number, not because they are eaten by tilapias, but because they are left with no options. The food capacity of Lake Cocibolca is limited, and there is not enough for all of them. Some say that there were tilapias in Lake Cocibolca before because they had accidentally come from Las Canoas Dam and other places where young tilapias had been planted years earlier. This is not a precedent to
legalize new mistakes. It is important to mark that the tilapias that arrived have already broken the natural balance. They are responsible for one of the greatest disarrays in the ecological behavior of Lake Cocibolca. Among others, an example of this is overpopulation of chayules.

We Nicaraguans have to decide if we want to use our Great Lake Cocibolca to produce tilapia, with benefits and happiness for only a few (or maybe we just want it to dump municipal and industrial sewage), or if we want an integral tourist development to help with the sustainable exploitation and protection of the most important natural resource and patrimony we still have. Sport fishermen do not seem interested in tilapias because they do not bite. On the other hand, the organization and mobilization that take place to fish a simple ten kilogram guapote in a fish contest can render the country a lot more money than all the tilapia meat in a farm, if it is well
organized, of course.

INTENSIVE AQUACULTURE
It is important to note that the breeding in cages was designed with the idea of minimizing weight loss in the pond fish due to an increase in number
because of reproduction. The eggs fall through the cage, and they are lost. They are not fertilized. Cages are not designed to be used in natural
waters, but in controlled ponds. The problem is that these naughty fish escape, and no cage operator can guarantee perfect control. It is simply
too expensive. Precisely, the idea of putting the cages in Lake Cocibolca was meant to lower expenses.

The breeding of fish that do not belong to the ecosystem should not be done in natural water. The fact that tilapias are already in the lake does not mean that this body of water should be considered available. This is the same as burning a forest and then justifying the cutting down of everything that was left because it was useless. The environmental plunder policy should be considered ransack to the country.

If this fish were planted in Lake Moyua or in the crater lakes Tiscapa, Masaya or Acahualinca, the problem would not be greater because, although
these are natural small bodies of water, they have been highly tampered with. They already have no ichthyic fauna of their own, and they are
relatively isolated, with no rivers to flow into or out of them, whence fish could escape. A properly designed management plan combined with other
compatible applications would bring economical development to these areas.

There are no sharks or sawfish left in Lake Cocibolca. Pollution and greed (private initiative without state control) have given more importance to other options. What will disappear next? There are no surprises in the behavior of sick nature. They are just symptoms of the consequences of the degradation inflicted.

To end with, it is important to note the following criteria:

1. The risk of the consequences on the ecosystem of the inevitable escape of
individuals, whether fertile or not, has been stated. There is recorded international evidence of the strong impact caused by introduced ichthyic species, especially tilapias, on the economy and ecology of many countries. The risk of handling exotic species in confinement is acceptable according to international standards, such as those in the FAO Responsible Fishing Behavior Code, which Nicaragua has adopted, according to its Environmental Policy and Plan 2000-2005. However, the breeding of these alien creatures
in natural water contradicts the effort to achieve Integral Management of Highly Vulnerable Ecosystems. This is the case of Lake Cocibolca, and it specifically transgresses the Behavior Code because it is an international commitment acquired by Nicaragua. This fish, or any other, could not be cultivated this way in Norway without transgressing the laws of the country,
but they are trying to do it in Nicaragua. Article 60, in the Political Constitution, bestows on Nicaraguans the right to live in a healthy
environment, forcing the State to preserve, conserve, and rescue the environment and natural resources. Let us have in mind that Article 44
subjects the rights of private property to the limitations and obligations of social function imposed by law, on account of public profit or social interest.

2. The lakes of Nicaragua are the last habitats for native fauna with fresh water habits because advancing pollution and sedimentation in rivers have significantly reduced (and in some rivers caused to disappear) the original population of
those species. For this cause, Nicaragua has made an effort and serious commitments to preserve national biodiversity. This project completely opposes this effort.

3. Being the largest tropical lake of the continent, since it formed half a million years ago, the Cocibolca has favored the evolution of a good
number of fish species, even modifying the habits of some foreign sea species. Besides being native of the lake basin, some of these species
exist only in this lake. They cannot compete with the aggressive habits of tilapias, which are African guapotes that belong to the family of our native
ciclidos (guapotes, mojarras, etc.), but have evolved under different conditions. Tilapias eliminate the local species by displacing them from their habitat through deprivation of food. Tilapias’ strategy for success consists of excellent parental care of the breed, quick assimilation of any kind of food, with which they displace other species, and high reproductive
rate. The escape of individuals to the natural environment is very likely to happen. There is no guarantee whatsoever that an accident like this
cannot happen, especially during storms, common in the area and able to break the cages, even though, according to the proposing company, the installations are state of the art.

4. The island of Ometepe offers great potential to the development of ecotourism. So, in addition to the ecological inconveniences exposed, the artificial breeding of tilapia transgresses the declaration of the island (Law No. 302) as
Natural Reservation and Cultural Patrimony of the Nation. This includes adjacent places, coastal areas and islands. It also contradicts Article 8
of the same law, which clearly “forbids any activity that can destroy or threaten to destroy the natural and cultural resources of the island”.

5. The accumulation of animals of the same species favors the spreading of diseases.
These diseases can be spread among the fish in the culture and also be passed on to fish attracted to a place where plenty of food slips through
the cages. While the veterinarians in charge of the project attend and heal their tilapias, possible epidemic diseases could affect natural ichthyic
communities in disadvantage. The document referred to does not mention the way in which the natural environment will be protected from bacteria and parasites coming from the stressed animals of the farm.

6. The proponents affirm that the establishment and installment of these huge facilities will not affect biodiversity, but this statement is not
sustained with evidence. For example, the baseline of existing biodiversity, although basic, was not furnished because the proposing
company did not do that research. Some results of previous examinations were presented, but they are in no way a professional biodiversity research
because they are limited, isolated, and incomplete. They are also self-disqualifying when analyzed professionally by competent specialists.
The main part of the research of environmental impact for this case simply consists of establishing the community structure of nekton, plankton, and benthos species, showing their interaction and demonstrating that the
physical, chemical and biological conditions in which these communities developed before the project will not be changed by the fish farm to the
point that they can transform their environment. The document explicitly admits that food residuals from the cages will be available for wild fish.
The amount of residuals foreseen by the proposing company is 15% of the total amount of food, which would be five metric tons. The result is that, every 241 days, 750,000 kilograms of food will slip out of the cages. This amount of additional energy is neither an advantage nor a benefit; on the contrary, it is a means of bacterial culture. Although the word “monitoring” is mentioned, it has no meaning if there is no reference to present conditions or the changes that will take place in time as a consequence of the project. Moreover, it does not say if the project
provides the necessary mechanisms to keep the original ecosystem homeostasis. The main objective of this Environmental Impact Research in
particular, according to the law, is to prevent unwanted changes in this body of water in which they pretend to put five million kilograms of highly
contaminating fish crowded in floating cages. This OMISSION violates the spirit and meaning of every provision on biological diversity that the
Republic of Nicaragua has made an effort on establishing through legislation and current regulations.

It is a serious omission that the natural limn logical metabolism of Lake Cocibolca has been ignored in the environmental impact research, reducing the lake to a waste dump from where the cages float on to the rest of the lake. There is no reference to a foreseen way in which the lake would change responding to the massive floating farm, according to the documents available in Addendum 1, so the changes could be foreseen, eliminated or mitigated. AND THIS IS THE ESSENCE AND THE REASON OF THE ENVIRONMENTAL IMPACT EVALUATION. This sensitive omission unluckily shows the proposing
company’s complete ignorance about how the vulnerable ecosystem of Lake Cocibolca works and their absolute lack of interest for the degradation that this project of intensive breeding of animals may cause on its ecology.

7. Even if the system to keep the fish in the cages is absolutely safe (which is unlikely) and there is never an escape of adult fish or a risk of
multiplication from their eggs due to their limited reproductive habits in the cages, there is a serious and extremely harming impact, resulting from THREE THOUSAND TO FIVE THOUSAND METRIC TONS of live fish crowded in a space
of 21,000 m3 (the size of a cage). This amount of fish constantly produces wastes equivalent to the raw sewage of a growing population. (Those five
million kilograms are equivalent to 125,000 pigs forty kilograms each, in the same place, at the same time). All animals kept on a farm, be it yard
birds, sheep, goats, horses, or cows, produce organic wastes, such as excrement and urine, proportional to their body mass. Fish also eat and
produce wastes. The document referred to DOES NOT present any provision for a way to treat the resulting residual water and its indicators DBO, DQO, oils, phosphorus, nitrogen, and soluble proteins. It openly refers to the dissolving properties of Lake Cocibolca to eliminate these wastes. Authorizing this project would be equivalent to installing a chicken pen with five million kilograms of live chickens (about three million seven hundred thousand birds) in cages suspended in the water, whose raw wastes
would fall directly into the water for the flow to drag. In other words, the waste elimination system of this gigantic project is the water of Lake Cocibolca, the same water the Government of Nicaragua has declared to be used for drinking and for ecotourism.

If this biological mass of five million kilograms or eleven million pounds of fish locked in cages floating in the waters of the Cocibolca were yard
birds, they would be 3,700,000 chickens whose wastes would go into the water with no treatment whatsoever. This mass is equivalent to 125,000 pigs or to a human settlement at the edge of the lake of 83,333 people 60- kg each. This settlement would produce approximately 41,666 kilograms of excrement and urine daily (more than 40 tons per day of feces and waste, without
counting food residuals and other material). This depicts the magnitude of the impact caused by these water animals’ metabolic wastes. We are sure that no governmental institution would accept the responsibility of authorizing the creation of an industry with an environmental impact of such
dimensions and the aggravations mentioned.

The design of floating cages to be used in natural water is unacceptable because the animals are directly in contact with the natural water, and
there is no way of purifying it after it is polluted. They are not isolated ponds in which systems of mitigation and purification can be installed.
This is the water of Lake Cocibolca we are talking about, the most important natural resource in the country.

Because of the technical reasons we have exposed, it is impossible for the project developers to comply with Decree 33-95 “Standards to Control Contamination from Domestic, Industrial, and Agricultural Sewage” (published in the Gaceta No. 118, June 26,1995) as they should. It is also impossible for the Government, which is responsible for the enforcement of the law, to verify that the massive effluence produced by intense concentrations of fish organic waste (feces and ammonia from the urine), food residue, and toxic cleaning substances do not mix and become part of the natural water of Lake Cocibolca. The cages are in the water, and it is precisely the simple logistics of the design of the project to let the natural water of the Cocibolca take the waste. There is nowhere in the world, and there could never be, a residual water treatment system for this kind of intensive
culture, unless it is carried out in ponds connected to purification plants, and that is a totally different design. There will only be one septic tank for the sewage of the few workers on land, but no facility for the purification of the waste of 5,000,000 kilograms of live tilapias on each
one of the 241 days of their growth cycle, at the end of which, others are planted and cultivated. As a result, this project will never be able to
comply with the law of the Republic of Nicaragua. There is no way to mitigate the harm caused to the environment but forbidding this project the
way it is presented, which consists of high contamination levels and a true risk for biological diversity.

8. The DGRN Concession PA001-2000 Ministerial Agreement by the Ministry of Development, Industry, and Commerce, published in the Gaceta 98, June 25,2000, first grants concession of the use of waters to cultivate and exploit tilapia to Nicanorwegian Seas. Second, it establishes that, once the holder of the concession granted accepts the terms on which it is granted by this ministerial agreement, it has to fulfill the following
obligations: ....7) To comply with the rules dictated about work security and environmental protection, specifically those of....b) Do not dump solid organic or inorganic waste into the water of the lake.

It is evident that the proponents cannot, and never will, comply with the command in this Ministerial Agreement. They cannot comply with what Decree 33-95 establishes either, because of the nature of this project which transforms the affected area into an intensive contamination focus, among other serious disadvantages already mentioned.

It is essential for MARENA to act according to the laws of the Republic. On behalf of the rights of the citizens, MARENA should reject and impede the
realization of this project which has an expensive environmental toll, and is contrary to the social, environmental, and economic interests of Nicaragua.

Managua, Thursday, October 25, 2001

Salvador Montenegro Guillen
Director-Founder
Hydro Resource Research Center of Nicaragua (CIRA/UNAN)

Make comments directly to the Ministry of Natural Resourses of
Nicaragua MARENA

Ingeniero Jorge Salazar - Ministro del MARENA
Telephone (505) 263-1273
Fax (505) 263-1274
e-mail mins_mar@sdnnic.org.ni
Address: Ministerio de Recursos Naturales y del Ambiente (Marena) Km.12 1/2 Carretera Norte, Managua - Nicaragua

Licenciado Milton Camacho - SINAP - MARENA
Sistema Nacional de Areas Protegidas
Telephone (505) 263-2617
Fax (505) 263-2618
e-amil sinap@ibw.com.ni
Address: Ministerio de Recursos Naturales y del Ambiente (Marena) Km.12 1/2, Carretera Norte, Managua - Nicaragua

The comments can be sent also to the president of Nicaragua Don EnriqueBolanos e-mail
Ingeniero Enrrique Bolaños Gayer - Presidente de Nicaragua
Telephone (505) 228-9222
Fax (505) 228-9298
e-mail ebolaños@presidencia.gob.ni
P.O. Box 2398
Casa Presidencial Managua, Nicaragua.