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I. Identification
The US corporation Trillium has invested in a large-scale project to harvest
timber from the lenga forests of the Mallaganes Region (XII) of Chile. The
project, named Rio Condor, plans to harvest both lenga and the coigue de Magallanes
(N. betuloides) on the Island of Tierra del Fuego. A complete environmental impact statement
was prepared in 1995 to explain the project and demonstrate that it was being conducted
sustainably. Harvesting began last year, 1996. The $12.5 million project (US 1995) will
cover a total of 257,929 hectares., of which less than half is initially targeted for timber harvest.The project has come under fire as not being
environmentally sustainable . Consequently, a great deal of effort has been expended
by Trillium to show that the project is in fact "sustainable" . Trillium defines
sustainable production as "Forest activities which are applied to ensure that the harvest
of forest products simultaneously complies with biologic, legal and economic needs
(ecological and economic sustainability); all of which are indispensable
conditions to ensure a sustainable operation.".Trillium's idea of a sustainable harvest is one in which "the average annual
rate of harvest during any ten year period will not exceed levels that support an
indefinitely sustainable harvest." Though Trillium
has demonstrated that it is interested in environmentally responsible production, many
insist that the company's efforts do not suffice.
This web-page examines the conflict which has arisen between those who support theTrillium project and those who oppose it.
TRC has its headquarters in Bellingham, Washington. It was founded by David and Kay Syre in 1975.
Its primary business is in real estate and construction. In the 1980's they entered the logging business.The Trillium's Rio
Condor project was proposed in 1995 and was financed by capital from Bayside Limited (60%) and Goldman Sachs (40%),
both from the USA. The Rio Condor project, representing an investment
of US$1.2 billion, intends to cut native forests and export wood products. Approximately 30-60% of the wood will be
used for the production of wood chips and sawn wood principally for export to Europe. Trillium purchased 258,000
hectares (637,260 acres) in the island of Tierra del Fuego in the extreme South of Chile and plans to exploit the
old growth Subantartic Cold Rainforest comprised of 85% Lenga (Nothofagus pumilio) and of 15% Coigue (Nothofagus
betuliodes). Chilean scientists estimate that approximately half of Trillium's land has not been touched by
man in the past. Trilliam proposes to build a $150 million plant which would include a sawmill, a wood drying plant,
an energy regenerating plant an aerodrome and a port. The plan also includes the construction of a 1,600 km. road.
Trillium Corporation has received enormous support from the Chilean government to facilitate its investment. First, Trillium was able to purchase the land at a price significantly lower than the market value (between US$ 1.70 and US$ 117 per hectare). Secondly, Trillium may utilize government subsidies in the form of tax rebates and exemptions according to the following laws: the Navarino Law which grants tax exemption for 50 years, Decree Law 15 which rebates investments made in the area, decree 889 which grants rebates for the contracting of man power in the region, and exportation tax rebates.
The Chilean economy has experienced significant growth in the past few decades, especially in the export
of raw materials. One of the aspects that has contributed to this growth has been the changing and improving
of legal statutes which promote foreign investment through tax allowances and exemptions. Chief among
them is the Navarino Law, that grants tax exemption status to companies for up to 50 years (Decreto Ley #15).
This law also has other benefits for foreign investors. It specifically gives investment allowances for investing
in the southern region of Chile.
Trillium Corporation has received enormous support from the Chilean government to make its investment lucrative.
First, Trillium was able to purchase the land at a price significantly lower than the market value (between US$ 1.70 and US$ 117
per hectare).
Secondly, Trillium may utilize government subsidies in the form of tax rebates and exemptions according to the
following laws: the Navarino Law which grants tax exemption for 50 years, Decree Law 15 which rebates
investments made in the area, decree 889 which grants rebates for the contracting of man power in the region,
and exportation tax rebates. It also grants an allowance to companies that hire a local labor force (Decreto Ley 889).
Another benefit is the debt-for-investment swaps, in other words the Chilean government allows companies to build
plants and factories on Chilean soil, and in return reduce its debt.
The lost of, or damage to, t
he thin soils of the region what they cite as potential damage arising from Trillium's project.
Opponents also call into question the scientific validity of the Rio Condor project. A silvicultural treatment requires an
understanding of theautecology, floristics, and community dynamics of a system. In Tierra del Fuego this understanding is new, if it exists at all. Trillium could defend
their operation by pointing to the millions of dollars they have invested in scientific research on the area. Opponents note that
as of 1994, research was being extrapolated from small samples in a region with great variability.
Also Trillium research lacks an ecosystem approach which would integrate different
impacts on the forest. Even where studies have been done, opponents point to what look like over estimates. For example, as pointed
out above, the low bound growth rate Trillium suggests is still greater than previous estimates of annual growth rates. To counter the
economic argument for harvesting in Tierra del Fuego, opponents point to other values such as the scenic or cultural value, or
the value of the forest as a last refuge for the guanaco (Lama guanicoe ) . The incompatibility of shade intolerant lenga and the
shelterwood method appears to be another problematic silvicultural element of the project. 
The Magallanes Ministry of Agriculture announced that it would not support investment projects which were geared toward the overexploitation of the forests and production of
wood chips. The opposition also cites the following: Trilliam has been prevented from conducting forestry exploration of neighboring
Argentina's Ushuaia Region. When faced with TRC's threat to cut down the forests, the citizens of Ushuaia rallied against
the company and obtained a modification of the Argentinean forestry laws. As of December 12, 1994 the production
of wood chips made from the Ushuaia Region's native forests was prohibited. In Chile there is no national land registry
of natural forests which could serve to demonstrate the status and dimensions of the Lenga forest. Another factor contributing
to the opposition of Chilean ecological groups is the fact that
the extensive transport network that the Trilliam Corporation plans to construct will, without a doubt, have a tremendous
ecological impact.
In 1993, Forestal Trillium Ltd., bought 285,000 hectares of native timber lands in Lenga, an area in Chile's most southern territory, the XII Region of Magallanes, whose capital is Punta Arenas. The Rio Condor project, representing an investment of US$1.2 billion, intends to cut native forests and export wood products. Approximately 30-60% of the wood will be used for the production of wood chips and sawn wood principally for export to Europe. Trillium also purchased 258,000 hectares (637,260 acres) in the island of Tierra del Fuego in the extreme South of Chile and plans to exploit the old growth Subantartic Cold Rainforest comprised of 85% Lenga (Nothofagus pumilio) and of 15% Coigue (Nothofagus betuliodes). Chilean scientists estimate that approximately half of Trillium's land has not been touched by man. In the Chilean summer of 1994-1995 (December, January and February), the Trillium company sent a group of scientists to conduct the studies that the Chilean government requires by law before a company's request for a forestry project of this magnitude receives approval. Applicant companies must meet specific criteria that Chilean law stipulates. Companies must issue an Environmental Impact Study (EIS) as part of the application process . Based on the results of the EIS, Trillium was advised to create a long-term "sustainable management plan" which outlined the company's intentions to "selectively harvest" and replant the forest "in an effort to ensure the project's sustainability and support". In their plan, the Trillium company set aside 25 percent of the land it purcased as a biological preserve so that the level of sustainable development and ecological management within the commercially used land could be monitored by relating its condition to the constant provided by the preserved unit.
In 1995, the Punta Arenas Regional Environmental Commission (COREMA) approved the Trillium plan and granted them permission to proceed with their projects. However, in May of 1996, the Punta Arenas Court of Appeals temporarily halted the project after the Pro-Defense of the Environment Movement, supported by a list of other environment groups, filed a protective action against the coompany. The action filed was based on the claim that the initial EIS study was fraudulent.
The Pro-Defense of the Environment Movement, a group made up of many smaller environmental and citizens organizations, claimed that the EIS study was fraudulent because it was in turn based on antiquated and inaccurate research studies conducted in the 1970's by Harold Schmidt, a forestry engineer. According to the Pro-Defense of the Environment Movement, Schmidt had not taken into consideration important factors in the formulation of his findings. His studies did not take into consideration the Lenga ecosystem which supported unknown or little known species of trees such as the Coigue Magallanico (Magellan Coigue). Another factor that motivated environmentalists to oppose the Trillium plan was that the government had approved the project despite recommendations to the contrary by the COREMA Region XII Technical Committee, which verified the unsustainability of the project in its document of March 27, 1996. The Technical Committee is comprised of 14 government professionals representing different agencies and differing areas of expertise. The 26 page report was written by the Technical Committee together with the local appointees from the National Environmental Commission. CONAMA. While the report contained six and a half pages related to "positive environmental aspects" of a very general nature, it also contained 18 pages of criticism concerning technical shortcomings of the project over a variety of subjects related to planned lenga (Nothofagus pumilio) exploitation. It stated that the Environmental Impact Statement (EIS) provided by Trillium included an insufficient inventory of the existing trees "which is the basis for an environmental evaluation of a project."
The CONAMA report also found serious problems with Trillium's EIS' harvest simulation model, demonstrating among many other things that: it does not specify how the original forest biodiversity will be conserved, and that the data on tree growth within regeneration cycles is lacking because it is based on limited trials only and thus lacks relevance to an extensive forestry project such as Rio Condor. It continues, stating that "data concerning inventory, classifying the forest resource and a definition of forestry practices are necessary to issue a clear statement about the ecological feasibility of the harvest model."
At the same time, environmental groups' criticism of the exploitation model also focused on extraction data. "There is more of an emphasis on the supply needs of the industrial compound than on guaranteeing the sustainability of the forestry resource and on controlling the environmental impacts." The report adds that "the EIS does not establish a system to weigh the extraction impacts nor does it allow for impact mitigation. It is outstandingly relevant to have such information, because oversizing the industrial complex could lead to an overexploitation of the resource."
The CONAMA Committee's conclusions on the project reaffirmed these points, stating, "restoration, mitigation and monitoring measures are not sufficient, or cannot be clearly defined, in that the company does not take charge of the adverse impacts on the quantity and quality of natural resources that may result." The report concludes that there do not exist " sufficient elements to approve the viability of the Rˇo Condor project." The Committee's report outlining the projects' deficiencies was diffused by the newspaper, La Nación, and proved to be a key document for those opposing the approval by COREMA XII Region of the Environmental Impact Statement for Chile's largest proposed forestry operation. Moreover, according to Chilean forestry engineers, the Lenga forests should be managed carefully. The Trilliam forestry experts analyzed the Lenga tree but did not take into account the ecosystem. The Lenga is a regenerating tree which if damaged is able to recover. However, the ecosystem itself does not recover from the loss of the trees. According to experts in the field, preservation of the forest would call for a costly method of extraction which would not only assure the regeneration of the Lenga forest but would also ensure the biological equilibrium of the ecosystem. Understanding the lenga regeneration process is imperative to the formulation of environmentally sustainable forestry. The following section reviews the lenga regeneration process and surrounding conditions.
Lenga is a Mapuche (the Mapuche are the indigenous peoples of the south of Chile) name for the Nothofagus Pumilio tree
(Nothafagus is a south beech tree, while Pumilio means dwarf). This tree is also known as the Magallanes Oak. This tree
grows in thin soil, between 2-10 centimeters (or approximately 1-7 inches). In Chile and Argentina, the Lenga tree can survive
between 350 and 500 years. The forests in which these trees grow tend to be homogeneously composed, in other words the trees
are usually all Lenga, although in some cases the Lenga tree does have Monkey-Puzzle Trees, Rauli and Coigue neighbors.
Lenga trees tend to stand 30-40 meters high (approximately 70 feet high). The soil of the Lenga forest is shallow as noted, and
also important is the fact that less than half of the nutrients in these wooded ecosystems are found in the soil. Their resistance
when facing the subantartic conditions, winds which blow at around 90 miles/hr is due largely to the fact that the trees' trunks
and tops are very close together, sometimes entwining. Between the roots of the trees it is possible to observe a thin layer of
organic soil that does not exceed 12-14 inches. When a tree falls, it protects and shelters surrounding flora for 2-3 times longer
than its original lifespan.
More generally, lenga seems to favor sites where its seed can germinate in bare mineral soil. In the far south, the wind and cold
stunt the lenga and it often reproduces under the roots of another lenga, as some of their roots are above soil. As its branches
become pushed into the ground by snow and become buried, they sprout to produce new roots. The size of mature lenga trees
varies as its regeneration method does. In the low lands and planes of the XIand XII region, lenga can grow up to 60cm in DBH
and 20m high at an annual increment of 4 to 5 m3 per hectare .The shelter that the fallen tree provides helps replace the necessary elements in the ecosystem. This is called "the trofica chain." Almost nothing is known about the cycle of nutrients, water, energy, sedimentation, structural and population dynamics. In addition, very little is known about microbial life that could influence plant regeneration. A quote from Adriana Hoffmann, a Chilean environmentalist, best explains the exquisite uniqueness of the Lenga ecosystem:
"These wooded ecosystems are extremely fragile, they are very new systems. The ice age ended about 7,000-8,000 years ago in this area, and only if one really examines those forests is it possible to see how fragile they are, and how thin the soil really is. It's like the first population, the first settlement of species of trees after the glaciers melted. The soil is barely a few centimeters thick which indicates that it is a very new system, one for which there is no historical pattern of recycling."
These are endangered forests despite the fact that over 70% of the original forests in Chile have been set-aside for non-commercial use. Companies that wish to harvest native Chilean trees, must abide by a series of regulations devised by the national and regional environmental commissions.
CONAF, Chile's national forestry corporation, has made enforcement in the expanding forestry industry very difficult. "In 1985 for instance, a non-governmental conservation organization denounced a case in which a landowner burned down a large stretch of native forest and later collected the reimbursement for planting. The offender was fined an amount far less than his profits, proving to many that CONAF lacked both the means and the will to enforce such laws."
Since 1990, CONFAF has made serious attempts to enforce and implement its laws. However, this is difficult considering that forestry has become Chile's most important export "crop", second only to copper. "Wood is Chile's new copper. Indeed, one of the areas of dramatic growth during the Pinochet years, with exports increasing from $39 million in 1973 to $760 million in 1990." "Even when natural resources are factored in as assets, to be sustained and renewed, one must still considered other values which are not quantifiable. How to place a value on the beauty of an ancient forest." President Aylwin provided the answer to this complexity: "Even when the transformation [of native woods to plantations] makes sense in economic terms, there are other interests expressed by a great part of society that make the maintenance and management of that resource recommendable."
* It is important to note that Chile has one of the world's highest rates of native forest preservation. Over 18% of Chilean territory is protected as national parks, reserves, or monuments. Within these areas lie large areas of native forests.
Between 1975 and 1994, the Chilean forestry sector was a key growth area, expanding at an average rate of 6.4% a year, increasing the size of the industry by a total of 57%. During the same period, the mining industry and agricultural sector, traditionally the backbone of the Chilean economy, grew at only 3% a year, compared to GDP growth averaging 4%.
The forestry industry employs almost 2.5% of Chile's labor force or 102,009 people. In the southernmost regions of the country, where most forestry operations are located, this percentage is much higher. The rapid development of the forestry industry has in this way played a significant role in the Chilean economy.
The sector has been the scene of high levels of investment both from within the country and from outside. It is estimated that over the last twelve years, investments in the forestry industry have exceeded US$2.5 billion. The pulp and saw wood sectors received the majority of this amount with the smaller but more dynamic finished wood sector receiving the smaller share.
Due to growing public environmental awareness that it is not possible to continue cutting down national forests to fulfill increasing demands, transnational companies have turned to other foreign forests in countries where laws are less restrictive.The thriving Chilean economy of the last 20 years has developed an ideal market for rent seeking international companies. The forest industry in Chile has developed into one of its largest industries, second only to mining. Twelve percent of Chile's 75.7 million hectares is managed as commercial timberland. On an international scale, Chile is now recognized as a major producer of forest products, including 2% of the world's pulp in an industry in which no one country produces more than 6%. "Between 1975 and 1994, the Chilean forestry sector expanded at an average rate of 6.4% annually, increasing the size of the industry by a total of 57%."
Saw wood and pulp are Chile's leading forest products. "In 1995, these two industries accounted for 65% of total production in the industry (33.5% and 32.0% respectively)." The rest came from the manufacture of wood chips, paper, boarders, and the finished wood products such as doors, window frames, and furniture. The forestry industry employs almost 2.5% of Chile's labor force or 102,009 people. The rapid development of the forestry industry has in this way played a significant role in the decentralization of the Chilean economy. The forestry sector has also been the scene of high levels of investment both from within the country and from outside. It is estimated that over the last twelve years, investment in the forest industry have exceeded US$2.5 billion. The pulp and saw wood sectors received the majority of this amount, with the smaller but more dynamic finished wood sector receiving the smaller share. Though Chile's timber industries revolve primarily around the production of pulp and saw wood, they also involve other industries .
Since 1989 ,the chip export market has been one of the highest growing
markets in Chile's forestry industry. In 1995, export of wood chips ranked 3rd out
of all forest products exported.
II. Legal
Clusters III. Geographic
Clustersa. Geographic Domain: South America
b. Geographic Site: 12th Region
c. Geographic Impact: Chile
IV. Trade
Clustersa. Directly Related to Product: Yes
b. Indirectly Related to Product: No
c. Not Related to Product: No
d. Related to Process: Biodiversity
V. Environment
ClustersName: Lenga
Type: Nothafagus Pumilio
Diversity:
VI. Other
Factors