- The Washington Times - Tuesday, February 11, 2003

RALCO-LEPOY, Chile For the indigenous Pehuenches, the Bio-Bio River is sacred. According to their traditions, if the river is not respected, Mother Earth will get angry, nearby volcanoes will erupt and the land will tremble with earthquakes.
But for the government and Chilean energy company Endesa, owned by the Spanish-controlled Enersis Group, the river is a way to meet Chile's energy needs and foster regional economic growth.
Despite the opposition of many Pehuenches, the company wants to dam the river and build a giant hydroelectric-generating facility, flooding much of their ancestral lands in the process. It's a conflict that has been simmering for more than six years. The company has persuaded 84 Pehuenche families to accept land elsewhere in exchange for their property, but seven families refuse to leave.
In May, the Chilean Supreme Court refused to hear a case concerning government plans to expropriate their lands. Recently, a so-called good-men commission appointed by the Economy Ministry visited their properties to determine how much Endesa must pay them to move. Any week now, the Pehuenche families fear they will be forced off their land by police.
"When they come, I will say, 'Why are you here?'" said holdout Nicolasa Quintreman, 63. "I am filled with anger when I think what our children and grandchildren will lose. If we don't have this land, we are nothing."
Endesa plans to finish building the 570-megawatt Ralco dam by September. It is the second of six dams planned for the river the Pangue dam, downstream, was the first. Endesa says the Ralco dam could supply 18 percent of the energy for central Chile and the capital, Santiago.
But the $600 million project will also flood 9,000 acres of temperate rain forest along 42 miles of the river valley, once one of the world's best white-water rafting spots, and home to numerous rare plant and animal species. Some specialists say the dam will also destroy the unique Pehuenche culture because of their deep economic and ancestral ties to the river.
"This is a form of genocide," said Roberto Celedon, the attorney for Mr. Quintreman and other Pehuenche families.
This month, at the urging of Mr. Celedon, who said that all legal avenues in Chile had been exhausted, the Washington-based Inter-American Court on Human Rights asked the Chilean government to freeze development that would modify the status of the river and Indian land "until the organs of the inter-American system of human rights has adopted a definitive decision."
"The Chilean courts and government have decided not to respect indigenous rights. The only way to justice is at the international level," Mr. Celedon said.
Under Chile's 1993 Indigenous Law, the land of native people cannot be sold, only traded for land of equal value, and only with the consent of all owners.
But the government and Endesa, whose executives refused to be interviewed for this article, insist the country's 1982 Electricity Law allows expropriation of private property to provide energy for the public good, regardless of whether it is indigenous land.
"The indigenous question is for the courts to resolve," said Enrique Sepulveda, director of the Economy Ministry's legal department.
Mr. Celedon filed a lawsuit on behalf of Pehuenche families, arguing that expropriation violates a 1997 ruling by Conama, Chile's environment agency, that gave the project an environmental permit on the condition that the indigenous families were relocated under the terms of the indigenous law.
Vivianne Blanot, executive director of Chile's National Energy Commission, who was director of Conama when the environmental permit was issued, also disagrees with the Economy Ministry. "If these people were not Pehuenches, then we could expropriate," she said. "But because they are Pehuenches, Endesa must negotiate so that these people leave voluntarily."
Chile's high court sidestepped the issue on procedural grounds, ruling that the case should have been filed immediately after Endesa was awarded the electricity concession in March 2000.
"It's absurd," Mr. Celedon said. "We were appealing the expropriation action of April 2002."
Critics have said in interviews that environmental, indigenous, water rights and other laws have been repeatedly violated to speed construction of the Ralco project, and they put much of the blame on influence peddling, common in Chile. They point, for example, to Endesa's campaign contributions to many Chilean politicians.
Indigenous groups, environmentalists, politicians and others said an independent, high-level international or national investigation is needed
"There are signs of corruption everywhere. Even the World Bank pulled out financing because of environmental and indigenous problems," said Hernan Echaurren, a Santiago businessman whose family owned much of the land surrounding the river a century ago.
Former President Eduardo Frei, in office from 1994 to 2000, is accused of a conflict of interest because he had worked as a partner with Sigdo Koppers consulting firm, which helped build the Pangue dam, the first Endesa built on the Bio-Bio.
As president, Mr. Frei often personally intervened to get Ralco approved. Twice, he openly fired the heads of Chile's indigenous development agency, Conadi, because they considered Ralco a threat to the sustainability of Pehuenche culture and refused to sanction relocating Pehuenche families.
A former high official in the Frei government, Jorge Rosenblut, is accused of favoritism toward the project. In 1996, Mr. Rosenblut ordered Conama to pave the way for Ralco by allowing Endesa to file an addendum to its environmental-impact study after the environment agency's technical committee recommended rejecting the project. The addendum was without precedent under Chilean law, experts say.
Conama also gave the project a temporary construction permit, even though it had yet to receive environmental approval.
Four years later, Mr. Rosenblut was named president of Chilectra, the power distributor and a subsidiary of Enersis, which is also the parent company of Endesa.
"The influence of this company in the politics of Spain is well known," said Jose Aylwin, son of former Chilean President Patricio Aylwin and an expert on indigenous rights at Chile's Frontera University. "The pressure they have employed through the use of political, economic and media influence, on the administrations of both President Frei and President [Ricardo] Lagos for completion of Ralco, has been enormous."
Maria Isabel Gonzalez, director of the government's energy commission under Mr. Frei, said Ralco was intended for the commission's 2005 work plan, as the energy commission had determined that natural-gas pipelines from Argentina were more cost effective.
"Chile doesn't need Ralco till 2020 with all the other energy sources available," she said.
Mrs. Gonzalez charges that Endesa speeded up plans for Ralco so it could control Chile's energy market.
"After Ralco was approved, 16 serious investors disappeared. Today, because construction is two years late, consumers are actually paying 8 percent more on their bills and thus giving Endesa an extra $100 million a year to subsidize Ralco," she said.
Rosario Huenteau, 59, a Pehuenche woman who lives with a son along the Bio-Bio, said that when Mr. Lagos visited them in August 2000, she was hopeful when he promised that Chile would respect indigenous law.
Now, she said, her faith is shattered. "We don't know where to turn to for help."

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