World Bank to examine Pehuenche criticisms

Chip News / La Nacion
September 2, 2002

Envoys to investigate Ralco dam project. EDC provided Quebec’s ABB Alstom with US$17-million in financing for generating equipment.

The World Bank will send investigators next October to assess the complaints made by the Pehuenche indigenous groups about the construction of the controversial Pangue and Ralco dams.

The team will determine whether the Spanish-Chilean energy giant, Endesa, and its affiliates have fulfilled legal conditions to build the dams on the Bio Bio River in Region VIII. The envoys will come from the Bank’s Office of the Ombudsman and will look into the controversy over the construction of the dam – planned to meet future growth in the country’s electricity needs Cristian Opazo, a representative of the Bio Bio Action Group, said the World Bank envoys are responding to complaints filed by 43 Pehuenche and 33 other locals at the start of July. The group wants to prevent Endesa or any of its affiliates from receiving funds from the International Finance Corporation (IFC), a subsidiary of the World Bank.

The Bio Bio Action Group justified its complaint on the grounds that Endesa had failed its contracts with the indigenous communities in the region, and that building the dam would work against the culture and way of life of the Pehuenches. The Bank Ombudsman will assess the Pehuenches’ complaints so that the bank can respond in a “just, objective and constructive manner”.

The Pehuenche have taken part in extensive court battles over the dam, arguing that their forced relocation would disrupt their seasonal migration between higher altitudes in the summer and the riverside’s warmer climate in the winter.

They also claim the dams will lead to the destruction of tribal burial grounds and impede the natural flow of the river, itself holding cultural and spiritual significance for the Pehuenche.

But recent court rulings went against the Pehuenche, and work on the US$500 million dam has continued. The campaigners then turned to the World Bank.

The IFC has intervened in construction of the Bio Bio dams in the past. In May 1996 the World Bank submitted a report comparing the company’s activities with the agreement drawn up between the IFC and Pangue that strongly criticized the Pehuen Foundation, a body created by Endesa after building the Pangue dam. The IFC then refused to guarantee further loans to the dam.

The campaign against the dam has taken many forms over the last two years. In June, a bomb exploded in Santiago outside an office of Endesa subsidiary Chilectra, scattering pamphlets with the message “Enersis get out of Pehuenche territories” across the area.

A number of law suits have also slowed the dam’s construction. A suit presented by the indigenous rights activists Berta and Nicolasa Quintreman, aimed at halting construction of the Ralco hydroelectric plant, was ultimately rejected by the Supreme Court and the issue has received extensive coverage in both the print and television media.

The Quintreman sisters filed a suit in January 2000 claiming they would be adversely affected by the dam’s construction and operation. The lawsuit alleged that former Economy Minister Jorge Leiva illegally granted the Endesa electricity company the rights to build the Ralco dam. Leiva’s decree was based on the 1982 General Law on Electric Services.

A team from the International Human Rights Federation (FIDH) also visited the region in 1997 to study the situation of Pehuenche who face displacement by the Ralco hydroelectric plant.

And so the controversy continues. Chile’s national media has granted special attention to the protests, although many activists say they misrepresent the indigenous peoples, portraying them as violent terrorists.


Categories: EDC, Export Credit, News

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