Development & Aid, Environment, Headlines, Latin America & the Caribbean

ENVIRONMENT-CHILE: Troubled Waters Ahead for Projected Dams

Daniela Estrada

SANTIAGO, Apr 19 2006 (IPS) - Protests by Chilean civil society organisations are mounting against the Spanish corporation Endesa and its plans to build four hydroelectric stations in the southern Patagonia region, which will result in the flooding of 10,000 hectares.

“It’s a highly polarised conflict. At first, social and environmental organisations basically wanted to inform themselves and study the Endesa project. But as the company, in a rather haphazard way, released more concrete information, we have moved from questioning the nature of the project to opposing it outright,” Juan Pablo Orrego, head of the non-governmental organisation Ecosistemas, told IPS.

The controversy is focused on the region of Aysén, in Patagonia, 2,000 kilometres south of Santiago, where Endesa Chile, a subsidiary of the Spanish corporation, plans to invest three billion dollars in the four power stations.

A local electric company, Colbún, owned by the powerful Matte family, may participate in building the dams.

The Aysén hydroelectric project would involve the Baker River, which carries the highest volume of water of any river in Chile, and the Pascua River, flooding some 10,000 hectares of pristine wilderness, destroying a number of wetlands and affecting the habitats of endangered species.

The coalition opposing the Endesa project, which is active in Santiago as well as in the south of the country, includes the Group of Defenders of the Spirit of Patagonia, the National Committee for the Defence of Flora and Fauna (CODEFF), the Private Corporation for the Development of Aysén (CODESA) and Ecosistemas.

It is estimated that the four hydroelectric stations will generate a total of 2,400 megawatts for the Central Grid System (SIC), which supplies the most populated part of Chile, covering nine of its 13 regions.

Endesa is due to begin construction of the first hydroelectric station in 2008 and bring it on-stream in 2012. The fourth station is scheduled for 2018.

“We are concerned about the impact they will have on the social, cultural and economic life of the indigenous people and long-time settlers in the region of Aysén,” Marco Díaz told IPS. Díaz is the president and founder of the Group of Defenders of the Spirit of Patagonia, a group of about 500 people, mainly small farmers whose lands are to be flooded.

“This is a peaceful area, free of crime, alcoholism or drug addiction. Two thousand eight hundred people live in the town of Cochrane, and Endesa is planning to bring in 4,000 workers who have other cultures and customs. The other day, just 50 of them created a disturbance at a discothèque,” Díaz added.

As for Orrego, he already has experience battling Endesa, as he spent 11 years participating in the resistance to the Ralco project, a hydroelectric station constructed by Endesa on the Bío-Bío River, some 500 kilometres south of Santiago.

The Ralco station has an output of 570 megawatts. It came on-stream in September, 2004, after a lengthy conflict with environmentalists and indigenous people, in which 92 Pehuenche families, a branch of the Mapuche people, lost their land.

“As new mining projects are incorporated into the SIC, energy demand will grow by around 6.8 percent annually in the period 2008-2017. Over the next 10 years, demand will double, and in 20 years’ time it will be three times what it is today,” according to a document in which Endesa explained the Patagonia project.

Chile faces a possible energy crisis, caused by cuts in the supply of natural gas from Argentina due to increased demand in Argentina itself, lack of investment to boost production, poor rainfall and soaring oil prices.

Minister of Mining and Energy Karen Poniachik has stated that there will be no power cuts in 2006, but there will be an increase in electricity tariffs.

According to Endesa, however, the advantages of the project are obvious. As well as satisfying the country’s energy demand, the company says that it will help develop the local economy, create 4,000 new jobs, provide cheaper electricity to the local area, invest in schools and hospitals, and upgrade roads and telecommunications.

Although Chile’s energy regulator, the Superintendency of Electricity and Fuels (SEC), has not yet approved the two-year concession for prospecting studies requested by Endesa, the company has already begun exploration operations where permission has been granted by some local residents. But according to environmentalists, their consent has been obtained in an irregular manner.

“Endesa has visited 140 properties to make soundings, and it has already completed more than half the studies it needs. At first, they would turn up and say this was a government project, and permission should be given free of charge. But we have been informing people, and at least the company is paying now,” Díaz explained.

However, he complained about trespassing on the property of a family who refused to give the company’s workers permission.

“When the family left their property to vote in the presidential elections in December, Endesa helicopters invaded the place without permission. A complaint was lodged, and the company had to pay a large sum of money to avoid going to trial. That is Endesa’s ‘modus operandi.’

Environmentalists and residents have registered 120 objections to Endesa’s exploration of river basins in the region. The SEC is to respond to these next June.

Among the activists are salmon farmer Víctor Hugo Puchi and a millionaire environmentalist from the United States, Douglas Tompkins, and his wife Kristin McDivitt, who stated that they will not allow the power lines needed to transport electricity from the four hydroelectric stations to the rest of the country to cross Parque Pumalín, the property they own in the region of Los Lagos, north of Aysén.

Similarly, Glenn Switkes, Latin America programme director for the International Rivers Network, which is concerned about damage to rivers and other water resources, came to Aysén last February and also presented objections to the SEC.

Meanwhile, Endesa declined an interview with IPS to discuss the accusations by local residents and environmental organisations.

According to Orrego, Endesa wants the project to be approved quickly, in order to avoid paying fees for not using its water rights over the Baker and Pascua rivers.

The General Directorate of Water in the Ministry of Public Works confirmed to IPS that if Endesa fails to use its water rights before 2012, it will have to start paying license fees, in accordance with the Water Code, modified in 2005.

During the conflict over the Ralco project, Orrego bought nine shares in Endesa in order to participate in shareholders’ meetings and express his opposition from within the company. Now he is using the same strategy.

According to Orrego, at the last meeting, the company’s executives admitted to mistakes in handling the debate over the hydroelectric stations, and said they were afraid it would turn into “another Alumysa.” They were referring to a failed project of the Canadian mining company Noranda to build an aluminium plant in Aysén, including three hydroelectric stations.

The Senate Environment Committee met with Rafael Mateo, chief executive of Endesa Chile, for a briefing on the project and to make suggestions to reduce its environmental impact. The recommendation is to replace the hydroelectric station that would cause the greatest flooding with a smaller one on a nearby river.

Díaz trusts neither the government nor the local authorities, who in his opinion have not informed the local population properly. Nor does he have much confidence in the significant institutional changes taking place with regard to the environment, such as the creation of a ministry and superintendency for the Environment.

“I think it will be a very fierce struggle, because Patagonia is at stake. Personally, it’s a privilege and an honour to oppose the building of these hydroelectric stations, because we feel that we’re trying to help this country correct the direction taken by its model of development and its energy policy,” Orrego concluded.