NICARAGUA FACES CANADIAN LAWSUIT

Hemp Company Wants Millions In Damages After Crop Destroyed And Grower Jailed

Paul Wylie, a self-taught horticulturalist from Guelph, Ont., spent more
than 11 months in a Nicaraguan prison after officials burned his industrial
hemp crop and accused him of growing marijuana.

He blames U.S. antidrug efforts, which make no distinction between hemp and
marijuana, and U.S.-Nicaraguan politics, but he is setting out to make the
Nicaraguan government pay. The situation is complicated by the fact that
one of his bosses is a former drug trafficker who helped to spread the
crack-cocaine plague in Southern California.

Mr. Wylie, who works for a Canadian-controlled company, Hemp AgroNicaragua
S.A., was arrested on Christmas Eve, 1998, and says he might have died in
prison had a friend not taken him food and medicine.

A Nicaraguan appeal court threw out all charges in December, 1999.

This month, he and his employers launched a lawsuit against the Nicaraguan
government for more than they think it can pay: $189-million (U.S.). They
are prepared to take such things as mineral concessions instead of cash, he
said in an interview from Managua, where the suit was filed.

The claim includes $2-million in personal damages for him and millions more
for the company's owners -- most of them Vancouver-area businessmen -- but
the bulk of it relates to lost crops. Mr. Wylie said the company hoped to
have thousands of hectares of hemp under cultivation by now but was shut
down when its first 71-hectare crop was destroyed.

He said he believes the government is ready to negotiate a settlement, an
idea that remains unconfirmed. A Managua newspaper quoted the Finance
Minister as calling the claim "absurd and unpayable." The Central American
nation has five million people and annual economic output of less than $500
a head.

Mr. Wylie, 48, said Hemp Agro met all Nicaraguan requirements for growing
hemp, a routine crop in many countries, although not in the United States.

Grown for oil, fibre, flour and other uses, it is the same plant as
marijuana, Cannabis sativa, but bred for minimal drug content. Canada
legalized it in 1998 with a limit of 0.3-per-cent tetrahydrocannabinol, a
level at which one could inhale indefinitely without getting high.

Mr. Wylie said he was questioned for six hours by U.S. Drug Enforcement
Agency officials and Nicaraguan police a few days before his arrest, "and I
showed all documentation of our legality, of why this crop was not
marijuana, it was in fact industrial hemp, but it was just to deaf ears."

He is pretty sure the Americans had him jailed, he said. "They said to me
at the time that they had no jurisdiction in a foreign country; however,
they were there to advise. So I can't really go out and say, 'Yes, the DEA
said to charge these guys,' but I can assume that it was through their
influence that all this came about."

U.S. influence is a major theme in the history of Nicaragua, where a
left-wing guerrilla movement, the Sandinistas, overthrew a U.S.-backed
dictator in 1979 and then fought a civil war with U.S.-sponsored right-wing
guerrillas, the contras. The Sandinistas lost power at the ballot box in
1990 and failed in a second comeback bid this month when the right-leaning
Liberals, favoured by U.S. officials, held onto the presidency.

If the Americans were not the cause of his troubles, Mr. Wylie thinks it
could have been Sandinista sympathizers in the police settling scores with
Hemp Agro's only non-Canadian owner, Oscar Danilo Blandon. He is sometimes
described as a former contra leader, although there is debate about the
importance of his role.

"He was a staunch supporter of the contras, who now mostly comprise the
Liberals, and so it was through his influence that [we] gained our
political favours here," Mr. Wylie said. "So he was actually very important
at the start in order to get this operation up and running here in Nicaragua."

Mr. Blandon's background is not all political. He was a large-scale cocaine
broker in the United States in the 1980s, part of a pipeline that flooded
south central Los Angeles with the drug. Caught and imprisoned in 1992, he
bargained his way back onto the street in 28 months as an undercover
informer for the DEA, which rewarded him with a green card, among other things.

Mr. Wylie said he does not know whether being associated with a former
narcotraficante had anything to do with his troubles. "I can tell you that
it didn't help," he said. Then again, Mr. Blandon's DEA contacts were no
help either, he said. Reached in Managua, Mr. Blandon declined to discuss
the possibility of a political vendetta and offered no theory as to why the
DEA might have thought the crop was marijuana.

"They knew that I was growing hemp. I told them."

As he saw it, the case has nothing to do with his past. "We are thinking
that we are in a good position to win this case because we are innocent and
somebody has to pay everything, you know? Somebody has to pay whatever we
lost."