A plan to build a series of 'model cities' designed to cater to foreign investors through the privatization of development, municipal services and legal systems within autonomous zones was struck down in Honduras' Supreme Court on Wednesday.
Legislation that had approved the privatized cities was passed in January 2011 in a bid to draw foreign investors into the country. The move was championed by Honduran President Porfirio Lobo—who came to power in a military coup in 2009.
The legislation faced immediate opposition from civil rights and indigenous groups, saying the "charter cities" would allow unprecedented civil rights abuses through exempting foreign corporations from government control and regulation in the territories. The law also empowered the private companies to take over indigenous land, sign their own international trade and investment agreements, and set their own immigration policies within the cities.
In the subsequent Supreme Court hearing the justices voted 13-2, stating that the legislation was unconstitutional because it exempted the privatized cities from Honduran law.
Prior to the ruling a US investment group was poised to dump $15 million into the infrastructure of the first model city near Puerto Castilla.