Costa Rica’s High Court Orders Immediate Moratorium on Papagayo Gulf Hotel Project Amid Environmental Legal Challenge

The Constitutional Chamber has suspended all permits for a hotel development in Papagayo, citing a lack of environmental reviews and carrying capacity studies.

By: AXL Media

Published: Apr 20, 2026, 10:19 AM EDT

Source: The Tico Times

Precautionary Moratorium Issued by Constitutional Chamber

In a significant legal intervention, the Constitutional Chamber has ordered a total halt to all developmental activities within the Papagayo Gulf Tourist Complex associated with a specific hotel project. Investigating magistrate Fernando Cruz highlighted that the suspension is necessary to prevent "irreparable harm" while the court assesses whether the project undermines the fundamental right to a healthy and ecologically balanced environment. This move effectively freezes all density modifications and logging authorizations previously granted by the Ministry of Environment and Energy (MINAE) and the Costa Rican Tourism Board (ICT).

The Technical Basis of the Legal Challenge

The lawsuit, filed by attorney Juan Pablo Xatruch Ovares, targets a specific regulation that allows for the transfer of building rights between different plots of land. Critics argue that this mechanism—often used to bypass density restrictions—was approved without a strategic environmental assessment or a comprehensive analysis of the "environmental carrying capacity" of the Papagayo hub. The petitioner claims that the current model shifts the Gulf away from its original low-density planning, potentially leading to overdevelopment in a fragile coastal ecosystem.

MINAE’s Defense of the Permitting Process

In response to the court-ordered suspension, MINAE has maintained that the initial authorizations were technically sound. Ministry officials argue that the area slated for development does not meet the legal criteria for a "protected forest" under Costa Rican forestry law. According to MINAE, the permits were based on a "technical field inspection and a cartographic review" and represented a controlled removal of individual trees rather than "indiscriminate logging." This defense emphasizes that the permits were rooted in a duly reviewed forest inventory and phytosanitary status.