Patagonia Dams: HidroAysén Chile

HidroAysén - owned by European company Endesa and Chilean company Colbun - plans to dam two of Chile's most powerful and pristine rivers, the Baker and Pascua Rivers. Electricity from these dams would be sent 2,000 kilometers north to serve Chile's biggest cities and its mammoth copper industry. The transmission lines for the project would require one of the world's longest clearcuts – much of it through untouched temperate rainforests of a type found nowhere else on the planet outside Patagonia.

The five dams (two on the Baker and three on the Pascua) would displace families, disrupt livelihoods and spoil tourism that brings local income. Transmission lines and reservoirs would destroy temperate rainforests unique to Patagonia. Victims of these dams would include critically endangered species such as the huemul deer, a Chilean national symbol. In response to the dam plans, Chilean and international NGOs have teamed up to wage the biggest environmental campaign in Chile's history: a campaign to keep Patagonia free of dams.

HidroAysén submitted its Environmental Impact Assessment (EIA) in 2008. Chilean public agencies provided more than 3,000 comments that the company was asked to address. In response, in October 2009 the company submitted an Addendum to their EIA. With just 15 days to review the 5,000 page Addendum, 29 of the 32 public agencies again found it insufficient, with 14 of the agencies making highly critical comments. As a result, in January 2010 the Chilean regulatory authority provided another 1,000 observations on the Addendum, and asked HidroAysén to respond.

In early 2010, BBVA announced that they are not considering financing the HidroAysen project due to its high social and environmental risks.

In June 2010, HidroAysén requested and was granted another suspension in the review of the project’s EIA; they had until the end of October 2010 to finish preparing their responses to the more than one thousand comments made on the second addendum.

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According to an IPSOS opinion poll in April 2011, 61% of Chileans oppose the construction of dams in the Aysén region. In a 2009 referendum held by the community of Caleta Tortel – who live at the mouth of the Baker River – 78% of voters said they did not agree with the project.

After a flurry of activity in late November 2010, HidroAysén was required to address another round of government agency comments with a third addendum. This was turned in on April 11; the government agency comments were due on April 25, making April 26, 2011 the first possible day that the decision could be made on the EIA. Knowing this, Chileans took to the streets across the country to show their rejection of this unnecessary, expensive, and risky project. 3,500 people protested in front of the presidential building La Moneda, with demonstrations in at least nine other cities, including Valdiva, Sanitago, Coyhaique, Valparaíso, Chillán, Curacautín, Puerto Montt, Temuco, Cochrane, and Concepción.

On May 9th, the Environmental Impact Assessment for the HidroAysén project was approved, despite flaws and irregularities in the entire process. Much controversy surrounded the vote, as several commissioners excused themselves due to conflicts of interest, while others should have excused themselves but refused to do so.

The conflict of interest goes even deeper. President Piñera's brother-in-law is not only the Assistant Director of HidroAysén, but is also the Manager of Engineering and Electric Projects for Colbún, which controls 49% of the HidroAysén consortium. Laurence Golborne, Minister of Mines and Energy, was offered the position of Director of HidroAysén before he became Minister. Several of the regional ministers involved in approving the project worked as contractors for HidroAysén in the past. And the foundation headed by President Piñera's wife received a donation of €100 million from the Endesa Foundation in late April 2011, just weeks before the EIA was approved; Endesa controls 51% of HidroAysén.

Even with the additional three addenda, outstanding issues with the EIA remain. These include unanswered questions submitted by citizens and the illegal shortening of the public comment period – now the topic of an investigation by the Congressional Commission of Human Rights. Other outstanding questions include the lack of settlement agreements with affected people; and the absence of critical information such as correct baseline data, a full assessment of the areas that would be affected by the dams, the effects on local flora and fauna such as the endangered huemul deer, and the use of incorrect data and assumptions to measure and assess river sedimentation and glacial hazards such as Glacial Lake Outburst Floods (GLOFs).

Upon approval of the EIA, Chileans immediately took to the streets to show their opposition to this destructive and unnecessary project. That night, thousands of people protested in Santiago and other cities across the country. The police violence began that day, with several protestors being beaten and arrested.

The HidroAysén project has since become a countrywide issue, sparking a massive call for electricity regulation and true energy planning, an end to the monopoly control of Chile’s electricity system, and investment in truly renewable and sustainable energy. Protests continued to grow throughout May 2011, with 40,000 people out in the streets of Santiago the day before President Sebastian Piñera’s State of the Union address; 35,000 turned out to meet the president the next day for his speech in Valparaíso. That weekend, events were held in nearly every city in Chile, plus locations around the world: London, Berlin, Mexico City, Paris, Montreal, Buenos Aires, Melbourne, Rome, San Francisco, Barcelona, New York, Stockholm, and Hamburg. But protests didn’t stop there; on May 28th, between 50,000-90,000 people peacefully demonstrated in the streets of Santiago for a Patagonia Sin Represas. This was the largest protest the country had seen since the end of the dictatorship of Augusto Pinochet in 1990.

The HidroAysén issue has also become a serious political burden for President Piñera and other government officials. In early June 2011, Piñera’s approval rating fell to an all-time low of 36%. Minister Golborne – among others – also lost popularity over the HidroAysén controversy, which could seriously damage his expected run for the presidency in 2013.

People throughout the entire country and the world have come to realize that HidroAysén is more than just another development project. HidroAysén represents much of what is wrong with Chile’s energy sector, and is part of a legacy of centralized corporate control over the Chilean economy. The gift of the water rights for the Baker and Pascua rivers was one of General Pinochet's last acts before he left power; the water rights were given away to government entities, which were soon privatized. These corporations are now hoping to directly benefit from the dictatorship that has left this country politically divided still today.

Internationally, HidroAysén's plans have garnered considerable media coverage. The New York Times has published two blunt editorials critical of the project. There has also been negative coverage of HidroAysén by National Public Radio, Time Magazine, the Associated Press, the LA Times, the Washington Post, and the San Francisco Chronicle.

Several documentaries have been made about the campaign to stop HidroAysén. They are showing around the world and helping to garner more international attention for the Patagonia Sin Represas movement.

Banks approached to provide loans directly to the project or corporate loans to Endesa Chile and Colbún should refrain from support. Banks that are shareholders of HidroAysen's owners should encourage Endesa Chile and Colbun to withdraw from the project and seek alternative and more sustainable energy options for the country. Administrators of Chilean pension funds should withdraw all funds from Endesa Chile to reflect Chilean citizens' opposition to the project.

Financial institutions are advised to take into account potential cost overruns and construction delays, and the reputational risks of being involved in financing such a controversial project. Citibank, as depository of Endesa Chile's American Depository Receipts, should reconsider its role in contributing to the market capitalisation of Endesa Chile.

The Baker dams will flood ranching and agricultural lands, displacing communities. The Baker river basin brings sustainable income to Patagonia's local communities through the rapidly growing tourism industry (much of it Chilean). This would be drastically reduced, as eco-tourists do not visit artificial lakes and power-line crossed vistas. Over half of Chile's residents oppose the project due to the environmental impacts. A coalition of at least 40 national and international groups is fighting the dams because of the significant threats to wildlife and local livelihoods.

The Baker River has the highest flow of all Chilean rivers. Its ecosystem supports a high degree of biodiversity, including documented populations of the endangered huemul deer. Chilean environmental authorities have characterized the river's entire basin as a biological corridor and have said that the Baker River's conservation should be prioritized. The two dams on the Baker River would create artificial lakes flooding more than 4,300 hectares (10,700 acres). Flooded lands would include some of the best agricultural and ranching lands of the region.

The Pascua River has the third highest flow of all Chilean rivers, and is extremely remote. Especially in its upper reaches, the Pascua river ecosystem includes some of Chile's largest remaining populations of the endangered huemul deer. Chilean environmental authorities have recognized the Pascua for high aquatic biodiversity, have characterized most of the river's basin as a biological corridor and have said that this river's conservation should be prioritized. The three dams on the Pascua River would create artificial lakes flooding more than 1,600 hectares (4,000 acres). Flooded lands would include some of the world's rarest forest types, including the critically endangered guaiteca cipres. Other rare species that would be harmed by the Pascua dams include the huillin river otter and the torrent duck.

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The construction activities would bring over 5000 workers into a sparsely populated and ecologically sensitive area, increasing pressure on existing resources and threatening the way of life of the traditional populations of Aysen. New roads would be built and existing ones expanded, opening access to fragile-and previously undisturbed-ecosystems.

The 2450-km transmission line for the project would cut through half of Chile. Thousands of acres of old growth forest would be felled, and the line would cut a 120-meter wide corridor through people's homes and land and numerous protected areas. The risks of the transmission line failing due to an earthquake, volcanic eruption or other natural disaster are high. It could take months to repair the line, particularly if a volcanic eruption necessitates a change in route. Given that around a fifth of Chile's central grid would depend on power from HidroAysen, this could lead to blackouts and power shortages on a grand scale, threatening the stability of the entire grid.

The World Commission on Dams found that women and ethnic minorities were disproportionately affected by dam projects. As women are often responsible for ensuring the sustainable livelihoods of their families, impacts on these livelihoods through destruction of fisheries, flooding of agricultural land and forests, and displacement often result in women bearing a disproportionate share of the costs. It is women who are often left with the burden of caring for their families, finding alternative land and water sources and alternative livelihoods when these are taken away through the development of destructive dam projects.

There is evidence that women are not provided the training that the companies promise to local people in order to have the employment opportunities that the companies contend would come with this development. As well, there is anecdotal evidence that the company is not hiring women in order to avoid having to pay benefits to employees who later get pregnant.