The Bio-Bio river flows from the Cordillera of the Andes all the way to the Pacific Ocean. Over one million people use the resources of the Bio-Bio for drinking and irrigation water, recreation, and fisheries. ENDESA, the largest private company in Chile, is planning to construct six hydroelectric dams on the Bio-Bio. The first of these, Pangue, is already 70% completed. ENDESA now says it will move ahead with construction of the largest of the dams, called Ralco. Ralco would be a 155 meter-high dam with a 3,400 hectare reservoir, which would displace 700 Pehuenche Indians. The upper Bio-Bio where the Ralco dam is planned, is home to the Pehuenche group of the Mapuche Indians, the last group of Mapuche who continue their traditional lifestyle. The dam would flood over 70 km of the river valley, inundating the richly diverse forest and its wildlife. Environmental and Indigenous rights groups oppose the project not only because of the wide scale destruction it would cause, but also because projections of Chile's future energy requirements indicate that the energy it would produce will not be needed. Critics of Ralco say that construction would violate the new Chilean Environmental and Indigenous Peoples Laws and prior agreements between ENDESA and the World Bank. The Pehuenche of Chile and environmentalists are struggling against a dam project on the Bio-Bio river that will force the Pehuenche off their ancestral land and flood 9,000 acres of farmland and rare temperate rainforest in Southern Chile. On June 6, 1997 the $600 million Ralco dam project was approved by the Chilean government's environmental office. ENDESA, the private public utility company claims that this dam, and 10 more dams its size between now and 2013 are needed to satisfy the energy demands of the Chilean economy.
This project is seen by the Pehuenche and environmentalists as a violation of the new Environmental and Indigenous laws. According to the Indigenous Law, Pehuenches cannot be forced to relocate from their land. On June 10, 1997 a group of Pehuenches occupied Chile's Indigenous Affairs Bureau and Environmental Protection Board to protest the licensing of the Ralco Dam saying "The Chilean government has once again shown its colonizing mentality by not respecting our people or the law." ENDESA, the powerful utility company that has expanded to Brazil, Argentina, Colombia, and Peru, says that it can challenge the law in court.
2. Description Since ENDESA, Chile's biggest and most powerful electrical company, began planning the construction of six interdependent hydroelectric power plants on the Biobio River in the 1960's, the Ralco power plant has been considered the "key component" of this ambitious hydroelectric project.
In 1992, ENDESA begin construction on the Pangue Dam, the first major dam built on the Bio-Bio. Pangue is now 70% completed. The arm of the World Bank which funds private sector projects, the International Finance Corporation (IFC), provided a $70 million loan for the dam. The IFC brokered an additional $28 million from the Swedish board for Industrial and Technical Cooperation (BITS), $14 million from the Norwegian Agency for Development Co-operation (NORAD), and $100 million from ten European banks. In response to concerns voiced by these agencies regarding the environmental impacts of a series of dams the IFC asserted that Pangue was the only dam planned for the river despite information that Pangue was designed to work in conjunction with a large reservoir dam upstream, Ralco.
As part of their loan agreement with ENDESA, the IFC received a 2.5% share of Pangue, S.A., the ENDESA subsidiary which is constructing Pangue and plans to construct Ralco. The IFC has been criticized not only for misleading investors regarding plans to build Ralco, but also for failing to enforce World Bank policies of transparency and regulations in its handling of the Pangue loan.
Although the claim was rejected by the Inspection Panel on the grounds that the IFC is exempt from the Panel's jurisdiction, President James D. Wolfensohn of the World Bank, (Letter from James Wolfensohn) , responding to concerns from the Bank's Executive directors, promised an impartial, internal review of the Pangue loan. Wolfensohn also insisted that the IFC has no plans to provide financial support for Ralco.
On June 10, 1997 a group of Pehuenches occupied the Chile's Indigenous Affairs Bureau and Environmental Protection Board to protest the licensing of the Ralco Dam saying "The Chilean government has once again shown its colonizing mentality by not respecting our people or the law."
Environmentalist claim that The Ralco dam, upstream from Pangue, would have a devastating impact on the the residents of this area. Because of Ralco's negative impact on the Pehuenche communities and the environment, it would seem that Chile's Indigenous Law and the Environmental Bases Law should be able to stop its construction. The Indigenous Law (No. 19,253) establishes norms for the protection, promotion and development of ethnic communities. It states that Indigenous land cannot be "annexed, mortgaged, levied or repossessed except for Indigenous communities or persons . . ."(Art. 13).
During construction of Pangue, the IFC urged ENDESA to create the Fundacion Pehuen (Pehuen Foundation -FP) , ostensibly to mitigate the social and cultural impacts of Pangue dam on the Pehuenche. However, the FP has been implicated in various irregularities, including disregarding the letter of the Chilean Indigenous Peoples Law and the authority of CONADI (Department of Indian Affairs). The FP is controlled almost entirely by ENDESA representatives, and is apparently being used as a tool to create support for the dam projects.
Under the New Chilean Indigenous Peoples Law, the Pehuenche have autonomy over their lands and the right to refuse any deal offered them by ENDESA. However, the FP has misinformed the Pehuenche, telling them that Ralco is inevitable, and encouraging them to settle for what they can. Pehuenche leaders and support groups are working to organize the Pehuenche communities to resist relocation.
One major change in the Upper Bio-Bio would be the proposed creation of a stagnant lake in the middle of a fast-flowing mountain river which travels from the Andes to the Pacific. Even before the dam is completed, construction would introduce additional sediments into the river flow. The aquatic life would be severely affected by the disruption of the water flow, and the quality of drinking water for nearly one million people downstream would be impaired.
Retention of nutrients in the reservoir would affect the food chain in the coastal ecosystems downstream, affecting the productivity of the Gulf of Arauco, a major Chilean fishery. Freed of its sediments, water released below the dam would cause increased erosion. Of the five volcanoes located in the area of the proposed dam, at least three are currently active. There is a risk of generating seismic tremors during dam construction, operation, or failure. Economic activities dependent on the naturally flowing river including eco-tourism based on river rafting would no longer be viable.
The Bio Bío Daily:
Grupo de Acción por el Biobío,
Ernesto Pinto Lagarrigue 112,
Recoleta, Santiago de Chile.
For more on the Pehuenche people:
Jose Antolin Curriao Pinchulef
Mapuche-Pehuenche Center of the Alto Biobio
Snail-mail: Antonia Lope de Bello 075, Santiago, Chile. Voice 56-
2-7375251, FAX 56-2-7776414