The reservoir of the dam will flood 6.7 hectares of the indigenous territory (Annex to the Comarca) of the Ngäbe-Buglé people, Panama's largest indigenous group. The villages of Nuevo Palomar, Quebrada Caña and Kiad, with approximately 538 people, will be directly affected. Six houses, including a school, will be flooded and their inhabitants are being forcefully resettled.

The Ngäbe depend on the river for their physical and spiritual survival. They use the water for drinking and washing as well as for swimming and leisure activities. The river beds supply fertile lands which are used for agriculture, as well as for the collection of medicinal plants. Along the river cementaries and traditional sacred places, including three petroglyphes, will be flooded.

The dam will convert the Tabasará River from a running river to a stagnant lake ecosystem, resulting in significant changes to the Ngäbe’s diet and their landscape. Forced relocation of some indigenous families is expected.

There is a long-standing conflict between the Ngäbe people and the government concerning mining and the construction of dams for hydropower generation in or near their territory. The Changuinola Dam (223 MW) in the neighboring province of Bocas del Toro was completed in 2011 and resulted in numerous Ngäbe villages being flooded, with no compensation provided. Another large dam, Tabarasá 2, is planned further downstream on the Tabarasá River.

In August 2016 the testing continued and the water reached its maximum level (103m above sea level). People living in the communities at the shore of the river were again not informed of this. This means that literally from one day to the other their land and several houses were inundated. This had severe impactse: less food, no houses, more mosquitos, for a while the river was inaccessible so no drinking water, no fishing, no washing etc.

In January and February 2017 the testing was stopped and the water levels came down again. Leaving a destroyed, dirty mud surface: meaning to access to the river, destroyed land and houses.

The Environmental Impact Assessment failed to include the Ngäbe-Buglé Comarca and did not properly consult the Ngäbe communities that will be directly affected by the dam. Let alone ask for their consent. When the Ngäbe protested and requested to be heard by the president, they were instead received with bullets from the police.

As such, the State of Panama has not fulfilled its national and international obligations with respect to (i) free, prior and informed consent of indigenous communities who will be affected by development projects; (ii) protection of indigenous lands, territories, and natural resources; and (iii) protection from state-sponsored violence. Panama’s human rights failure to act include the rights to culture, physical security and integrity, land, health, subsistence, and freedom of movement and residence, as well as access to information, public participation, and justice.

The environmental impact study made a very superficial analysis of the impacts on biodiversity. It failed to include the endemic Blue Tabasara rain frog, as well as several other CITES listed species, whose habitat will be flooded by the dam. The dam will also be a barrier to migrating fish and shrimps. The capacity of the plant and the surface of the lake were increased after the EIA was released, and no further studies were done to evaluate the impact of this. This project resorts under CDM, the Clean Development Mechanism, claiming a CO2 reduction of 66,750 ton equivalent. It was approved without attending to the letters of concern of the Ngäbe.

The construction of this dam will cause the flooding of petroglyphs and three ancestral cemeteries.