After the Enron scandal in 2001, when it was revealed that Enron’s reported financial condition was sustained mostly by institutionalised, systematic, and creatively planned accounting fraud, the world awoke to corporate greed. Enron has since become a popular symbol of wilful corporate fraud and corruption. Did this awakening to corporate greed arise because it involved leaders of the world’s ‘most powerful’ nation? Or was it because it involved enormous amounts of money? Or because many ordinary citizens had been duped of their lifesavings and their jobs? In any case, the Enron scandal was far from unique in being an exemplary case of capitalism gone wrong. The greed for more and more capital accumulation has had far-reaching and negative impacts throughout the world. More and more activists are keen on exposing wrongfully acquired capital or capitalist interests that fuelled the destruction of societies and the environment.
Such a case that was exposed was the construction of the Ralco dam in Chile, for which an indigenous group was relocated and a protest ensued, supported by international human rights and environmental organisations. Unfortunately, the protests were not strong enough to overcome the power of the wealthy elite, and the building of the dam continued relentlessly. Chile is often named one of the most democratic countries in Latin America. How can a democratic government allow for this to happen?
In the early nineties, a land conflict developed in Chile, between the Mapuche-Pehuenche and the Spanish energy consortium ENDESA, as it had plans for an industrial mega-project consisting of six hydroelectric dams on the Upper Bío Bío River (Keijzer et 1992: 69; Wilson and Allaway 2001: 4). The conflict was at its height during the construction of the second dam, the Ralco dam, from 1997-2002, and received worldwide attention due to protests by environmental and human rights activists, and therefore is the most famous land conflict in Chile (Skjævestad 2006: 14).
The first dam, Pangue, was constructed from 1992-1997. This project had been approved by President Aylwin, before his administration had formed the National Corporation for Indigenous Development, (CONADI) and the National Environmental Commission (CONAMA). Both these institutions had declared the Ralco dam as illegal, initially, according to their respective laws (Haughney 2006: 125; Wilson and Allaway 2001: 6; Aylwin 2002: 15). Construction on the Ralco dam commenced in 1997, although a plan for the relocation of the Mapuche-Pehuenche living in the area was not even considered when ENDESA first announced that they would construct another dam (Wilson and Allaway 2001: 6). The reservoir on the Bío Bío River created by ENDESA’s dams covers an area of approximately 3,467 hectares in the VIIIth region (Nixon 2003). It has inundated the communities Wupuca-Ralco and Ralco-Lepoy and lands of approximately 600 people, amounting to 92 Mapuche-Pehuenche extended families, who were relocated higher up in the Andes to make way for ‘progress’ (Haughney 2006: 125; Palacios and Du Roy 2003: 24).
ENDESA, named “one of the most powerful Chilean private companies” saw the Bío Bío river as a means to produce cheap energy (Palacios and Du Roy 2003: 25). ENDESA is the former national energy enterprise, and now a privatised energy company from Spain who monopolises the energy sector in Chile (Haughney 2006; Malmborg 1999). Since the Pangue dam had negative impacts, protests were instigated upon its completion in order to stop the building of Ralco, the second and largest dam. Despite the highly controversial and highly profiled conflict, ENDESA continued construction until its completion in 2004 (Palacios and Du Roy 2003: 24).
The Concertación de Partidos por la Democracia is a coalition of democratic parties formed in the 1990s, and under President Eduardo Frei, promoted the projects as a matter of national security (so that they are not dependent on gas imports from Argentina) and national development (in terms of GDP). Yet the privatisation of ENDESA, and thus the President’s, members of his family and other political elites’ shares in the company raises questions about the legitimacy of this claim (Wilson and Allaway 2001: 6; Palacios and Du Roy 2003: 35; and Aylwin 2003: 15). The Frei administration played an enormous role in ensuring that the Ralco project would be approved. The approximately 20 independent assessments and reports by CONADI, CONAMA, human rights groups and anthropologists all denounced the project for its disregard for the environment and the lack of consultation with those Pehuenche that were to be displaced. The indigenous law not only requires informed consent, but also equivalent compensation for their lands, neither of which CONADI deemed sufficient in the permutas (relocation contracts). These reports were repressed by ENDESA, and the government fired two consecutive indigenous leaders of CONADI who did not support the project, after which he appointed a non-indigenous leader whose political affiliations supported the project, as well as forcing CONAMA to re-write their assessment of the Ralco dam so that they would approve it (Aylwin 2003: 14-15; Haughney 2006: 110 and Johnston and Garcia-Downing 2003: 4-5). Furthermore, an aggressive media campaign was launched to sway Chilean public opinion in favour of the dam, focussed on the “need for Ralco’s power to support industrial development” in a period of economic recession (Aylwin 2002: 10). This would further promote the invisibility of the Mapuche-Pehuenche, the ‘Chileans’ whose lives were to be directly, completely and irrevocably affected by the construction of the dam.
“The Mapuche population of 1.2 million accounts for approximately ten per cent of Chile’s total population and together with the 200 000 living in Argentina, Mapuche constitute the third largest indigenous people in South-America” (Nesti 2002: 2). In the Mapuche language, Mapudungun, ‘Mapu’ means earth, or land, and ‘che’ means people; they are the people of the land. Pehuenche, in turn, means people of the Pehuen, the pine tree which provided nuts for their subsistence (Haughney 2006: 102; Nesti 2002). This linguistic symbolism signals the historic importance of land and its resources to the Mapuche people, and it is an integral and significant part of their existence to this day. Yet, it has also been the cause of most of their grief and strife. Most anthropologists and observers recognise the integral role the land and the environment play in the Pehuenche culture (Malmborg 1999; Palacios and Du Roy 2003; Nesti 2002). Due to their relative isolation before 1992, when the construction of the Pangue dam commenced, their culture and society evolved and revolved around subsistence, and this isolation, in turn, allowed for a preservation of their culture and livelihood (Keijzer et al. 1992). It is argued that their world view is based on their relationship with the earth and nature, as they have always used medicinal plants from the area and invoked the ancestors for their religious and medicinal ceremonies (Malmborg 1999; Nesti 2002; Wilson and Allaway 2001). The lands which were flooded contained ancient and modern burial sites, sacred sites, as well as over 70 archaeological sites, not to mention, it formed the habitat for over 70 endangered species. The Alto Bío Bío area is estimated to have been occupied by the Pehuenche since the year 1200, and their historical settlements, burial sites and religious sites are now underwater in the reservoir created by the Ralco dam (Nixon 2003 and Estrada 2004).
Neoliberalism consumed the continent of Latin America in the 1980s and 1990s like a fever. Especially Chile, under the military dictatorship of Pinochet, was praised for its far-reaching privatisation and liberalisation of services, such as energy. Thus, neoliberal reforms and privatisation policies implemented during the Pinochet regime allowed for ENDESA’s monopoly over Chile’s energy production and distribution, which is echoed by the fact that ENDESA’s owners held “strong liaisons to the Pinochet regime” (Nordbø 2001: 5-6; Haughney 2006: 101).
Liberalisation also allowed for Foreign Direct Investment (FDI), so that powerful actors outside of Chile also had control over the project, although the Chilean government had to camp with the internal conflict and protests. The World Bank and the International Finance Corporation (IFC) funded the Pangue dam, along with Canada’s Export Development Corporation, the Swedish Agency for International Technical and Economic Co-operation and the Norwegian Agency for Development Cooperation (Wilson and Allaway 2001; Nordbø 2001; and Aylwin 2002). They were initially to fund the Ralco dam, but when international attention was drawn to the conflict, public opinion and litigations persuaded them to withdraw their support, and thus their funding (Skjævestad 2006). ENDESA was able to secure other sources, however, and the project continued.
The usurpation of Mapuche lands has created conflicts between the Mapuche and the state for several hundred years; however, the laws that allowed for this have historically favoured the interests of the Chilean state and its mestizo population (Keijzer et al. 1992: 4 and 7; Azócar et al. 2005). Land reform policies installed during the Pinochet period had reduced the Pehuenche land and organised them in a number of reserves and communities, and required the registration of individual land titles, contrary to the collective practices of the Pehuenche in the past (Haughney 2006). Due to the individual property titles, construction of the dam was possible. If the indigenous law recognised customary law in terms of collective land rights, ENDESA would not have been able to buy the land, for it allowed ENDESA to make individual contracts with the Pehuenche for their relocation, so that they did not legally need the consent of the entire community.
The Ley Indígena of 1993, however, requires that the entire community be consulted, and that they give their consent before a project is approved that will impact their lands, homes and subsistence (Malmborg 1999 and Haughney 2006: 135). The Environmental law of 1997 requires an Environmental Impact Assessment (EIA) to be conducted before such projects are approved. The Electricity law of 1982 does, however, allows the sale of indigenous land if it is to benefit the Chilean society as a whole, in terms of energy supply. The courts have ruled in favour of Pinochet’s electricity law in all cases, subsuming the later laws, which were meant to be a priority of the government since 1993 (Haughney 2006: 131 and Aylwin 1998). However, Nancy Yáñez, a Chilean Lawyer, demonstrates the two-way tension between the laws:
The electricity law…stipulates that industrial projects for the generation and transmission of energy benefit the entire society and therefore should have priority over the rights of individual property owners. Article 24 of the Constitution also allows the state to expropriate private property for reasons of national interest or public good. Yet…the indigenous law declares that indigenous lands should be protected for “reasons of national interest”…The courts should apply the following criteria to decide: the more recent law has precedence over earlier law, and a special law takes precedence over a general law…the indigenous law took precedence by virtue of being both a special law and the more recent one (Haughney 2006: 128).
Simultaneously, Pinochet’s Counter-Terrorism Act of 1973 provides for the prosecution of illicit acts intended to terrorise the population. The provisions of the Act modify some aspects of criminal procedure, permitting some elements of secrecy in the pre-trial investigation phase, eliminating preventative measures other than pre-trial detention, and increasing sentences (Parra-Jerez 1999: 3; Skjævestad 2006: 49; Haughney 2006: 151; and Stavenhagen 2003). Unfortunately, the activists protesting against the dam have been detained without trial on account of the Act, and thus portrayed as ‘terrorists’ in the media as well. Furthermore, protests and demonstrations have been met with military and police violence, arrests and the deportation of foreigners, as Chilean law stipulates that foreigners may not interfere with internal politics (Haughney 2006: 130; Stavenhagen 2003). After the protests, however, the Pehuenche continually endured harassment in their homes by their neighbours who supported the project and wanted to relocate, and by the military police. The Pehuenche who refused to leave their lands were threatened, blackmailed and terrorised into doing so, and different uses of force were inflicted: physical, economic, and psychological (Haughney 2006: 121).
Since 1997, especially the Pehuenche women protested against the Ralco dam, organised under the banner Mapu Domuche Newen (Women with the Strength of the Earth), and headed by the now famous sisters Nicolasa and Berta Quintreman, who formed a protest and claimed they would not leave their lands behind alive. They received several international human rights prizes for their struggle against the dam. This has, in turn, spurred on popular support for their cause in Chile. However, this occurred at a time when construction was nearly completed (Fletcher 2001: 40).
The Pehuenche and other contesters of the projects went to the courts to fight for their rights, but after long trials and delays, the claims were finally overthrown by congress. The protests conducted by the Pehuenche who refused to be relocated, or whom wanted to reverse the permutas because they had signed them without knowing the extent of their contents, were supported by international environmental and human rights groups. During all the protests, legal battles and international outcry, the construction of the dam continued almost relentlessly, albeit a short period when the hearing of the Quintremann sisters made the courts rule a halt to construction, but a higher appeal by ENDESA in congress reversed the process (Haughney 2006).
ENDESA persuaded some of the Pehuenche families to sign the permutas by offering them jobs in the construction of the dam, and alternative land elsewhere, as well as monetary compensation. However, there has been criticism that these measures were not sufficiently executed. ENDESA representatives only offered these packages for a short period of time, letting the Pehuenche believe that they would be relocated either way, by saying that the government had already approved the project, which was not true at the time. Therefore, those that accepted the offers did so under false pretences, and felt pressured to do so (Nixon 2003).
This process led to tensions within the communities, between those choosing to relocate and those protesting against the dam. Eventually, most of the families signed the permutas, and left the remaining eight resisting families in conflict with their neighbours and family members. Thus, the Ralco communities were divided and fragmented during the course of the conflict (Malmborg 1999). Some Pehuenche chose to relocate in order to receive jobs offered in the construction of the dam. Others were adamant never to leave their lands, due to its cultural, spiritual and economic significance. Still others were uncertain, and thought they had no choice, their insecurity motivating them to sign the permutas, without actually knowing its stipulations, nor what their rights actually were or how to defend them (Malmborg 1999).
Environmental activists lamented the loss of an ecosystem, its biodiversity, and the endangered species. Led by the Grupo de Accion del Bío Bío (GABB), a coalition of individuals and organisations protested the construction of the dam, and wanted to protect the ecosystem of the river and the surrounding forests, as the reservoir would create irreversible damage (Aylwin 2002 and Nixon 2003). The Chilean Mapuche movement was brought together for the marches and demonstrations, but thereafter they returned to their respective regions and protests. However, Mapuche “organisations disagreed among themselves over tactics, strategies, and goals. These divisions continued throughout the protest campaign, preventing the Mapuche movement form uniting to demand collective rights and allowing the government to dictate the terms of the conflict” (Haughney 2006: 131). Observers have suggested that ENDESA and the government exploited this phenomenon as a “Divide and Rule” strategy (Malmborg 1999).
Unfortunately, one can only conclude that the Ralco dam was constructed for the economic interests of the powerful elite, and that this process was far from democratic. Not only are those whose lives are most affected the ones that are the most excluded, but it is derived from a one-track development teleology that does not have any consideration for what people on the ground really want and need. The reality of a ‘minority group’ is thus the opposite pole to the reality of a technocratic, powerful elite, and the tensions between these poles result in conflicts such as the one surrounding Ralco in Chile.
This conflict is another example of the way in which global changes have local effects. The neoliberal model often generates negative consequences for small or marginal groups in Latin America. This is why it is important that macro policy is informed by micro reality. How a state treats its ‘minorities’ reveals how democratic that state truly is. Democracy is overridden when pressure, blackmail and corrupt practices force interest groups and institutions – such as CONADI and CONAMA – to adhere to the higher hand (the President and the National government, because their interests were represented by ENDESA).
Land conflicts mainly arise due to a conflict in laws, and in the case of indigenous rights, there is a conflict between the imposed laws of the dominant system and the customary law of the original population. Individual rights can contradict collective rights and vice versa. In the case of Ralco, individual property titles were exploited, which negate collective land titles of the indigenous population. These property titles were thus manipulated by ENDESA so that the Pehuenche could only fight for their collective rights via the legal system. However, the legal system favoured individual titles and did not recognise their customary law, which is based on collective rights. The Chilean legal system was thus foreign to the Pehuenche way of life, and therefore the individual land titles were the legal crux through which ENDESA was able to rob them of their livelihoods.
The livelihood consequences for the Mapuche-Pehuenche when they were relocated from the Ralco valley were not considered by ENDESA in the planning stage, which resulted in the conflict. The environment and their lands were not just of material value to the Pehuenche, it was of cultural and spiritual importance as well. Furthermore, the weaknesses in their five forms of capital and their lack of access allowed ENDESA to manipulate them so that they would agree to relocate. The strategies employed by ENDESA to coerce the Pehuenche to move forced them to be individually strategic instead of recognising their collective way of life. This way of life was by no means strategic, they lived with relatively little interference from the outside world until ENDESA began construction of the dams. They were not prepared to negotiate nor were they aware of their rights when ENDESA came with many empty promises so that they would leave their lands behind. The Pehuenche who signed the agreements did not seem to know that they had any other choice. The Pehuenche lacked access to the five forms of capital when they were induced into Chilean society, which turned them into five dimensions of poverty and dependence after their relocation.
Thus, the Ralco conflict is a classic example of how macro policies produce undesired and negative effects in the micro context, and how the tension between the macro and the micro level is induced by capitalist greed. There was a hegemonic attitude that said “you can’t stop progress”, so that you may as well accept things as they are; for the ‘greater good’. The Mapuche were seen as ‘externalities’ of economic development, as obstructions for development, although this type of large-scale industrial development actually had detrimental effects on their livelihood.
Therefore, the Ralco project decreased the possibility of achieving sustainable development for Chile, as a balance in the three dimensions – social, economic and ecological – were not taken into account in the plans. In the case of Ralco, among many, macro policies favoured the economic benefits over the ecological and social impacts on the micro level, which makes the Ralco dam unsustainable within this three-dimensional framework. Furthermore, considering that the Pehuenche were not consulted before the construction of the dam began, the dam is most likely not conducive to their cultural worldview, if they had been informed of all the negative impacts it would bring to their environment and their livelihood. Thus, the use of energy is a prime example of the gap between macro and micro, between ‘development’ and sustainability, between ‘progress’ and ‘livelihood’.
To achieve the ideal of balance between the three pillars, (economic, social and ecological) (of sustainable development would require a compromise. A compromise in their values, as one may not be more valuable than the other. Therefore, the actors involved must compromise their own interests on the basis of equality with the other parties involved. The present development model itself is unsustainable, and therefore sustainability is not possible in the current system. Sustainability must represent an alternative approach altogether, not one that takes place within the development paradigm.