The recent ruling by the Supreme Court of Justice declaring the Economic Development and Employment Zones (ZEDEs) unconstitutional in Honduras has generated a complex debate. This ruling not only questions the legal framework that allowed their creation, but also raises doubts about legal security in the country and the impact on foreign investments. In this article, the key points of the implications of this ruling will be addressed from the perspectives of Joaquín Mejía, Lawyer and Doctor in Human Rights, and Jorge Colindres, Lawyer and Technical Secretary of Prospera ZEDE, who have discussed the most important aspects of this ruling.

1. Creation of ZEDEs and the Legislative Process

One of the key points of the debate revolves around whether the Zones of Employment and Economic Development (ZEDEs) were created in accordance with the provisions of the Constitution and the laws of Honduras.

Decree No. 283-2013 establishes that "The creation of a zone subject to a special regime is the exclusive responsibility of the National Congress, by a qualified majority, after a plebiscite approved by two-thirds, in accordance with the provisions of Article 5 of the Constitution. This requirement is not necessary for special regimes created in areas with low population density. Low population density zones are understood to be those where the number of permanent inhabitants per square kilometer is lower than the average for rural areas calculated by the National Institute of Statistics (INE), which must issue the corresponding opinion."

In that sense, the ZEDEs was approved in 2013 by the National Congress of Honduras through a constitutional reform and the Organic Law of ZEDEs (Decree No. 120-2013). This decree was approved by a qualified majority in the National Congress, complying with the provisions of Article 329 of the Constitution of the Republic. In addition, Article 294 of the Constitution was amended to establish that the country can be divided into zones subject to special regimes, which provided the constitutional basis for the creation of ZEDEs.

These reforms were designed to promote economic development in areas of low population density, through a special regime that grants administrative, fiscal and legal autonomy to ZEDEs. These zones would function as autonomous municipalities, but with greater powers to attract foreign investment and generate employment in disadvantaged areas of the country.

The National Institute of Statistics (INE) also issued opinions confirming that the areas where the ZEDEs were established met the requirements of low population density, as required by law. In short, from a procedural point of view, the ZEDEs were created in accordance with the law, with the approval of the National Congress and other state institutions, including the Supreme Court of Justice, which validated their constitutionality on several occasions.

2. Retroactivity as the Central Point of the Debate

The Justification of Retroactivity
One of the key points of the ruling is its retroactive application, which means that the legal effects of the ZEDEs would be annulled from the moment of their creation. Retroactivity is an exceptional measure in constitutional law, but Joaquín Mejía argues that it is justified when it comes to restoring the constitutional order.
Mejía refers to article 316 of the Constitution, which establishes that the rulings of the Supreme Court of Justice are of immediate execution and with general effects. Although this article does not specifically mention the possibility of retroactivity, Mejía points out that it does not explicitly prohibit it either. For him, this means that the Court has the power to issue retroactive rulings when it comes to serious violations of the fundamental principles of the Constitution.
Furthermore, Mejía distinguishes between the repeal of a law and the declaration of unconstitutionality. Repeal affects the validity of a law in the future, while the declaration of unconstitutionality implies that the law was never valid. In the case of the ZEDEs, Mejía maintains that they were unconstitutional from the start, since they violated essential articles of the Constitution, such as Article 9, which protects the territorial integrity of the Republic.
Violation of Legal Security
From Jorge Colindres' perspective, retroactivity is deeply problematic, since it destroys legal security and seriously affects the credibility of Honduras as a destination for foreign investment. Colindres cites Article 94 of the Law of Constitutional Justice, which establishes that rulings of unconstitutionality should not affect legal situations that have already been definitively resolved or executed.
In addition, the Supreme Court, by applying the ruling retroactively, has ignored international treaties and its own jurisprudence, which have historically applied rulings effects into the future. The Court has always ruled with prospective effects, respecting acquired rights and legal situations that have been already resolved. Now, with the retroactivity applied in the ruling against the ZEDEs, investors and companies that acted in good faith under a legal framework in force at the time are being affected, which goes against previous and international treaties for investment protection.
Colindres points out that the ZEDEs, with more than 150 million dollars in foreign investment and the creation of more than 3,000 jobs, were established under a legal framework approved by the National Congress and validated by State institutions. The Supreme Court's decision to retroactively annul all these investments and contracts is not only an attack on legal security, but also generates a devastating impact on the local and national economy.

3. The Distinction between Repeal and Unconstitutionality

Constitutional Validity and Retroactive Impact
In his argument, Joaquín Mejía delves into the difference between repeal and unconstitutionality, clarifying that when a law is repealed, it ceases to have effects from the moment of its repeal, but the acts carried out under that law remain valid. On the other hand, when a norm is declared unconstitutional, it was never valid, since it did not comply with the formal and material conditions required by the Constitution.
Mejía argues that, in the case of the ZEDEs, the unconstitutionality comes from a constitutional reform that violated stony articles, specifically article 9 (on territorial integrity) and other articles related to sovereignty and the form of government. Therefore, the norm that allowed the creation of the ZEDEs was never valid, and all acts carried out under its protection must be considered null from the beginning.
Mejía argues that allowing the ZEDEs to continue operating, despite having been declared unconstitutional, would be equivalent to recognizing the validity of a norm that was always contrary to the fundamental values of the Honduran constitutional order.
Impact on Confidence and the Economy
For his part, Jorge Colindres emphasizes that the principle of legal certainty must prevail in a State of Law. While he recognizes that the Supreme Court has the power to declare a law unconstitutional, he argues that this should not retroactively annul acts carried out under a regulation in force at the time. The exercise of legislative power is subject to a fundamental guarantee of human rights, specifically the due process and the principle of non-retroactivity of the law.
For Colindres, the investments and contracts that were signed under the ZEDE regime were completely legal and valid, and their retroactive annulment causes a total loss of confidence in the Honduran legal system. All the actions were protected by the constitution, by international treaties, by law and when all the three branches of the state protects them, it seems inconceivable that in a state of law, overnight, everything is illegal and retroactive.
Colindres highlights that more than 235 companies have established operations in Prospera ZEDE, attracted by the special conditions offered by the regime. These companies, which have invested millions of dollars, now face the uncertainty of not knowing whether their operations will remain legal. According to Colindres, it cannot be that the outcome of justice is the destruction of more than 3,000 jobs, the loss of over $150 million in investments, a total violation of property rights and due process. This not only affects investors, but also thousands of workers and their families who depend on the jobs generated in the ZEDEs.

4. Political and Economic Implications of the Ruling

The Principle of Constitutional Supremacy
From Joaquín Mejía's perspective, the Supreme Court's ruling is based on the principle of constitutional supremacy, which establishes that the Constitution is the supreme law of the country, and any norm that contravenes it must be annulled. Mejía points out that Article 320 of the Constitution establishes that, in the event of a conflict between a constitutional norm and a secondary law, the constitutional norm must prevail.
The ruling, therefore, is not just a technical issue, but has a profound significance for the protection of the fundamental principles of the Honduran State. Mejía argues that allowing the ZEDEs to continue operating would be accepting that the National Congress has the power to modify stone articles of the Constitution, which would endanger the territorial integrity and sovereignty of the country.
Economic Consequences and Capital Flight
On the other hand, Jorge Colindres warns that the ruling has devastating political and economic implications. In his opinion, the Supreme Court's decision is motivated by political interests, specifically the current government's desire to dismantle the ZEDE regime for ideological reasons. Colindres argues that this has generated a crisis of confidence in Honduras as an investment destination, which could lead to capital flight and economic collapse in the regions that depend on the ZEDEs.
Furthermore, Colindres points out that the government has politicized the issue by ordering the persecution of those who participated in the creation of the ZEDEs, accusing them of treason. For him, this is not only unfair, but also a sign that Honduras is moving away from the principles of a rule of law and a system that protects private property rights.

What's next for the ZEDEs and the future of Honduras?

The Supreme Court ruling declaring the ZEDEs unconstitutional has sparked a fundamental debate about legal security and the economic future of Honduras. While one party defends the retroactivity of the ruling as a necessary measure to restore constitutional order, the other warns of the catastrophic economic consequences and the loss of confidence that this will generate for the country.

What is clear is that the implications of this ruling go far beyond a simple legal debate. The decision to retroactively annul the ZEDEs threatens to seriously affect Honduras' ability to attract foreign investment, generate jobs and sustain its economic development.