Legal Charges Scuttle Galapagos Liveaboards

In attempting to get to the bottom of the claims, assertions, charges and countercharges made in the Buddy Dive closure in Ecuador, Undercurrent has attempted to get the facts from the parties directly. In this article, Undercurrent quotes the parties and one of their counsels, plus court and arbitration filings, and testimony. Undercurrent does not express any opinion about any of the claims or assertions, but provides the available information for evaluation by readers.

Operating a liveaboard vessel in the waters of a Third World country is not easy, especially if the owner is not a resident of that country. Aside from rules and regulations that may require ownership to be, at least in part, in the hands of a citizen of that country, some governments hassle rich foreigners, if they can get away with it. It's not unusual for payoffs to be required along the way. We have heard stories from dive operators in countries like Ecuador, Mexico and Indonesia about officials with their hands out, and stories from dive operators in Fiji, who must pay the chiefs to dive in their waters.

Ecuador is of particular interest, because for several years, officials seem to be determined to reduce the number of liveaboard dive boats and their freedom to dive the Galapagos Islands. We've heard complaints about official corruption and required payouts. Researchers, journalists and filmmakers have documented scores of long-line fishing boats catching sharks, tuna and marlin in these waters -- where boat captains are all too happy to dish out greenbacks (the U.S. dollar is Ecuador's official currency) so that their poaching in the marine park goes "unnoticed."

All this is backdrop to the latest dive boat drama playing out in the Galapagos, where the Bonairebased Buddy Dive-operated liveaboards, the M.Y. Wolf Buddy and M.Y. Darwin Buddy, were shut down by the Galapagos National Park Service (GNPS) in December, followed by Buddy Dive permanently stopping its Galapagos trips in January (see our February 2014 issue).

When we got word of Buddy's closure, we heard two stories: the boats were being confiscated by the Ecuadorian shipyard that built them for failure to pay, or Buddy was trying to get the boats out of Ecuador to avoid handing them over to the threatening-to-sue shipyard. We contacted Paul Coolen, Buddy Dive's general manager in Bonaire, who confirmed they were rumors, but offered no further explanation. Either way, Buddy is no longer operating in Ecuador, and passengers who had booked future trips were transferred to other boats there.

We called the shipyard, Varadero Maridueña SA, to get their story. Our call was returned by the shipyard's lawyer, Sohar Romero, who claimed Buddy Dive was guilty of more than owing the shipyard money -- he cited coercion, fraud and money laundering as well. Ecuador will only give Galapagos travel and tour-operating credentials to people living in the country. According to Romero and numerous Spanish-translated-into-English documents he sent us, from court orders requesting seizure of the liveaboards to testimony in an Ecuadorean arbitration/mediation court, Buddy Dive apparently got around legal procedures by making two impoverished fishermen the official owners of its liveaboards -- who are now on the hook after things went sour.

According to the arbitration court testimony, Ecuador sponsored a contest in 2008 for fishermen to exchange their jobs for ones as local tour operator, and contestants could partner up with experienced tour operators. Two fishermen named Luis Culqui and Alfredo Bolaños, who both were having a hard time financially, got into conversation with Franklin Romero, a local tour operator (apparently no relation to the lawyer), and the three agreed to enter the contest together.

The two men testified that their group won permission by the government to start a tour operation in the Galapagos, but that Franklin Romero made them sign a series of documents, from operating agreements to mortgages for liveaboards to be built in Ecuador, that he didn't give them time to read, ask about or get a second opinion. Culqui testified that the documents had names of foreign investors on them, and that on their behalf, Franklin Romero would handle their activities in the Galapagos. One of the documents he signed was a marketing agreement, which was co-signed by Martinus Van der Valk, listed as representative of Sapias Holdings B.V. Van der Valk is also the owner of Buddy Dive. Besides Romero and Van der Valk, the other investors' names were the Antillean Finance Company B.V. and the Bonaire-based bank Maduro & Curiel's. Culqui testified that Franklin Romero told him that the mortgage documents were a mere formality as the bank had canceled the debt. "There was no objection on my part for I was confident that he knew all the right procedures," Culqui said. "So I signed the papers."

Now that Buddy Dive had the official Ecuadorian owners of its Galapagos branch in place, it could build its boats. Sohar Romero says Buddy Dive hired the Maridueña shipyard in July 2010 to build two liveaboards, made of aluminum. But after the boats were finished in 2011, Buddy Dive refused to pay $3.9 million of the bill, contesting many matters, including a tax levy of 12 percent.

Romero also alleges documentation approving the purchase and transfer of boats from Maridueña to the ship owners (legally, the two fishermen) was falsified so Buddy Dive could take them without paying in full. Romero says that in April 2012, a judge ordered the liveaboards' seizure, but Buddy Dive's lawyers in Ecuador got the seizure revoked. That didn't deter Maridueña, which filed additional suits against Buddy Dive. However, Romero claims that during the trial, Buddy Dive's lawyers presented two deeds of mortgages on the boats that showed the owners as Culqui and Bolaños.

Besides using the fishermen as owners so it could run its dive operation, Buddy Dive had set up other companies in Ecuador to look legitimate, Romero charges in the timeline letter he wrote to Undercurrent. But he says that all the income generated from them was ultimately sent to the bank Maduro & Curiel's in Bonaire. Romero filed complaints with government agencies and forwarded documents to the boat's official owners, the two fishermen. According to their mediation court testimony, that's when Culqui and Bolaños found out they were named in eight lawsuits, and had multiple bank accounts listed in their names.

Bolaños testified that Buddy Dive's lawyers never told him about any of these trials. Only once had a lawyer approached him for his signature, saying there was nothing to worry about. He said Buddy's lawyers also made him sign a form authorizing them to defend him against a charge for money laundering. But he said he was told "it was a complaint from the Minister for Environment, malicious intentions that had no foundations."

Romero says he presented his complaint to the GNPS about Buddy Dive's illegal appropriation of dive tourism permits and permissions, but that it rejected his complaint. He says the permissive attitude of the GNPS's former director, Edwin Naula, allowed these businesses to thrive. But the GNPS got a new director, Arturo Yzurieta, last year, and he stopped operation of Buddy Dive's liveaboards in December. In a press release, the GNPS stated that the operators had not submitted semiannual reports on their performance regarding their environmental management plan, they had not presented environmental compliance audits, and they had not paid a required annual fee to the park.

That's when Culqui and Bolaños came forward and said they were being used by Romero and Van der Valk. "I have been the object of the abuse and breach of trust," Culqui testified on January 31 of this year. "All I got for the tourism operations was $8,000 to subsist on. Since I was no longer exercising my profession as a fisherman, I had to live on something. They cut all communication with us. Even the boat crew was not paid in December, but their office sent them to collect their salary from us."

Romero says that during his filing process, Van der Valk tried to take the boats out of Ecuador to avoid the lien Maridueña had requested. But afterwards, when the GNPS made the injunction to stop operations, Buddy Dive's boats were stopped by the port captain.

On January 17, Maridueña won its case to have the boats seized and were awarded $3.8 million by the jury. (Buddy Dive announced it was exiting Galapagos 12 days later.) However, because the boat's official owners are Culqui and Bolaños, there is no money to be won. Romero says that on February 10, the chief of Ecuador's fiscal laundering unit went to Maridueña to seize the ships, and that the criminal procedure was initiated when Ecuador's Environment Minister wrote to the Attorney General that there were "international mafias operating in the Galapagos."

Romero says Van der Valk didn't show up for his trial, and that Ecuador is considering arrest charges against him for money laundering, tax evasion and misappropriation. "But the results of the criminal process are unfortunately affecting my client, Maridueña, because the seizure of the ships will cause them to pass to the Ecuadorian state," Romero told Undercurrent. "The two humble fishermen have no assets, and my client will lose money. Remember that Sapias Holdings, Buddy Dive and all those companies have disappeared from Ecuador and cannot be litigated because apparently they did not own the ships. It becomes very unlikely that we can, through legal actions, seize their goods. They changed legal representatives, and there is no place where you can locate the companies because they never had formal ownership or legal vessels."

When we asked Buddy Dive to respond, Paul Coolen e-mailed back, "You are quoting the lawyer of a party in a civil court case against the owners of the mentioned ships, and he is trying to abuse the media to influence public opinion. We are at this moment not able to disclose facts because of several legal actions taken against this party and the lawyer. It seems, however, that we can inform you with a full story later this year." When we then asked for details about the legal actions Buddy Dive was taking, and whether we could see the paperwork it filed in public court, Coolen did not reply.

Whether or not we hear back from Buddy Dive about its side of the story later, what's known is that this is one big legal mess that made scapegoats out of two simple fishermen. And if Ecuador is indeed investigating "international mafias in the Galapagos," any fallout from that will certainly affect divers.

-- Vanessa Richardson