Work at Ralco suspended indefinitely

23 September, 1999

Appeal To Higher Court Could Take Months

Santiago judge Mario Carroza upheld a Sept. 8 decision halting construction at the US$540 million Ralco Dam on the Bio Bio River late Tuesday afternoon, ruling that if the work were allowed to proceed before courts had a chance to investigate the merits of a case brought by two Pehuenche indigenous opponents of the dam, "the environmental damage would be irreversible and create numerous difficulties for the residents of the area."

The rejection of the appeal made by state environmental authorities and energy company Endesa España (EE) has the effect of indefinitely postponing construction of the 570 MW hydroelectric project because the appeals court which will review the ruling has no prescribed time in which it must act. The two Pehuenche opponents of the dam, Berta and Nicolasa Quintreman, filed their lawsuit in June 1997, asking the courts to set aside a National Environmental Council (Conama) determination that the Ralco Dam project was "environmentally viable" and, as a precautionary measure, that all work at the dam site be stopped until the case was adjudicated on its merits. It was this second part of the Pehuenche's petition that was ruled on favorably by Judge Carroza.

The controversial dam is the second of a series of dams proposed for construction on the Bio Bio River in southern Region VIII to assure Chile's energy requirements into the next century. Opponents of the project, however, say the arrival of inexpensive natural gas from Argentina changes the economic need and viability of additional hydroelectric power. They further argue that local indigenous cultures will be destroyed as a result of the dam's construction, as will eco-tourism development possibilities.

The Bio Bio is renowned in sporting circles as one of the world's top kayak and float-trip rivers. Further complicating the issue were statements made by EE executives in early September that it was re-evaluating the Ralco Dam's viability. On Sept. 17, however, executives reconfirmed EE's commitment to the project, saying there had never been any serious doubt about their desire to see it completed. US$130 million has already been spent on the dam's construction. While Ralco's construction has generated temporary jobs for 1,500 locals, including 240 Pehuenche indigenous people, not all of the 100 indigenous families that would be displaced by the dam's reservoir have agreed to property swap proposals made by the energy company.

Chile's indigenous peoples law, passed in the early 1990s and designed to respect community land arrangements unique to the indigenous culture, requires that all Pehuenche community members unanimously agree to the sale or swap of commonly held property before the land transaction may go forward.

EE's efforts to secure approval for their project sparked tremendous controversy in the National Indigenous Peoples Board (Conadi), ultimately leading to the removal of two successive Conadi executive directors who sided with the Pehuenche after finding that the company had over-reached in its effort to secure the community- wide backing. Que Pasa magazine in its Sept. 18 edition said EE had never seriously considered abandoning Ralco, suggesting instead that such hints were really a veiled threat aimed at Chile's energy regulation authorities, who are currently reviewing the tax structure for energy companies for the November 1999 to April 2000 time period.

By threatening a delay in the project, and thus continuing Chile's vulnerability to energy shortfalls, EE hopes to force regulators to go lightly with proposed tax hikes on energy. Que Pasa suggested the gambit has been successful, although regulators have yet to officially announce the new tariffs.

In related news, environmentalists, Pehuenche activists and "green bloc" national legislators traveled last week to Spain to lobby against the dam's construction and to file a lawsuit against EE, alleging that the dam's construction amounts to "genocide" for the Pehuenche culture.

Chip News

Source: El Mercurio


Monti Aguirre
Latin American Campaigns
International Rivers Network
1847 Berkeley Way
Berkeley, CA. 94703 USA
Phone: 510 . 848.11.55 and 707 . 591 .91.49
Fax: 510 . 848.10.08
e-mail: monti @irn.org

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