The BíoBío Dam Construction Project in Chile, the ENDESA and the impending fusion with the German energy corporation, E.ONThe BíoBío Dam Construction Project in Chile, the ENDESA and the impending fusion with the German energy corporation, E.ONThe BíoBío Dam Construction Project in Chile, the ENDESA and the impending fusion with the German energy corporation, E.ONThe BíoBío Dam Construction Project in Chile, the ENDESA and the impending fusion with the German energy corporation, E.ON

     |    Wednesday, der 24. June 2009

Text:  Anika Stowasser: Society for Threatened Peoples, Göttingen and Yvonne Bangert in September 2006

The BíoBío river has great symbolic meaning to the Mapuche people living in Chile. Before Spanish colonialists ultimately completely subjugated the Mapuche people, the river represented the border separating free Mapuche territory from the lands already under colonial rule. Today, the river is the site of six reservoir dams planned to become Chile’s largest source of electrical power. Two of these dams, the Pangue and Ralco, have already been built. The Ralco was finished in 2004 and is the world’s third largest dam. To create its reservoir, most of the ancestral lands belonging to the Pehuenche-Mapuche were flooded, spelling the demise of this ancient culture. The dam’s project initiator and manager is the Spanish utilities company ENDESA who is currently negotiating a merger with the German energy giant, E.ON. The film SWITCH OFF – APAGA Y VÁMONOS (Spain 2005/Director Manel Mayol) explores the tragedy facing the Pehuenche-Mapuche.  Representatives of this indigenous people mince no words in their clear analysis of the state of affairs involving the IWF, the World Bank, and the country’s post-colonial infrastructures, which they feel validates acts of civil resistance to this dam project. This film was shown at the Aktion Mensch “ueber arbeiten” (“about work/overwork“) film festival, which was sponsored by the Gesellschaft für bedrohte Völker (Society for Threatened Peoples).

The Reservoir Dam System

The BíoBío runs diagonally across Chile, about 500 kilometers south of Santiago, the capital city. It originates in the Andes Mountains and flows nearly 380 kilometers before emptying into the Gulf of Aracu on the Pacific Ocean. The Spanish utilities company ENDESA plans to make the BíoBío Chile’s largest supplier of electricity, by building a system of 6 dams along its course. ENDESA already operates two power plants coupled to two dams. The German energy corporation E.ON also soon stands to profit from this controversial project; its merger with ENDESA is nearly sealed.  The dams’ reservoirs were created by flooding large tracts of ancestral Pehuenche land. In the process, sacred spiritual sites, fishing grounds, and access to clean drinking water were destroyed. To make the Ralco reservoir, ceremonial sites used for the culturally important Nguillatun ceremony, as well as the Stone of the Machi (a traditional female shamanic figure), and a number of Pehuenche burial grounds were submerged. This cut off these indigenous peoples from their ancestral ties, which play an essential role in their culture and spiritual lives, leaving them in a state of cultural displacement.

It was estimated in 2003 that the entire power plant project would mean that 10,000 people, would have to be resettled, the majority of them Mapuche. For the Ralco and Pangue dams, about 600 Mapuche were resettled and nearly 4,000 hectars of land were flooded. The lives of at least a million people are directly dependent on the waters of the BíoBío, including the fishermen on the Gulf of Arauco. The dam walls themselves are also in no way safe. The Central Pangue power plant, completed in 1997, made headlines in 2003 when unexpectedly high waters surprised the Arauco, Concepción and Bío Bío provinces in the VIII Region of Chile, which is mainly populated by indigenous peoples. Eighty people had to be evacuated and hundreds of other homes were damaged by water and storms.  The inhabitants of Hualqui, who had to evacuate their homes on the river’s shores, consider the power plant operators partly responsible for the catastrophe, which occurred after four sluice gates were opened. The president of Chile at the time, the Christian Democrat Eduardo Frei, profited financially from the building of the dam; his construction company was one of the dam’s main contractors.

The Land Rights Question

The Mapuche successfully resisted both Incan and Spanish colonialists and were able to hold on to their independence until the founding of the Chilean and Argentinean states in the early 19th century. Today, most Mapuche are concentrated in Chile, representing, at 1.3 million, the country’s largest group of indigenous peoples. Yet over time, the Mapuche have slowly relinquished their territories. A land reform implemented under president Salvador Allende (elected in 1970) was repealed after the junta led by General Augusto Pinochet in September, 1973.  By October 1974, 80% of the lands involved in the land reform were already back in the hands of large land owners.

The Mapuche territory loss continued when in 1979 a law was passed (No. 2.568) whose first article states that “… from the time (an indigenous community) has been dissolved, the properties will no longer be considered property of the indigenous populations and the land owners will no longer be considered indigenous peoples.” This law made it possible to take away land from the indigenous community, divide it up, and transfer these lots into private hands. These properties could then be sold off.  If just one single member of a Mapuche community asked to have the group dissolved, the resolution could be put into effect . A vote by the community itself was not required.

Of the countries 2,060 small farming in the1970’s, only 665 were still in existence by the late 1980’s. The Mapuche then began a struggle to retain the lands they still occupied, and to get back the territories that had been taken from them. They held rallies, squatted land, and used other forms of civil disobedience. To defeat the squatter’s movement, the government continued to use an anti-terrorism law (statute no. 18.314) even after the end of the Pinochet era (1989), as well as the Domestic Safety Act (statute no. 12.927). This criminalized the Mapuche and branding them as terrorists. It wasn’t until the spring of 2006, after a two-month long hunger strike by four Mapuche political prisoners,  that the (then) Interior Minister Andrés Zaldivar Larrain announced that the anti-terrorism law in question would no longer be used in legal proceedings against the Mapuche. However, retroactive examination of existing legal decisions and prisoner rehabilitation has not yet been undertaken. Continuing domestic unrest among the Mapuche, and especially among students protesting unfair educational practices, resulted in the replacement of Interior Minister Larrain by the new Interior Minister, Belisario Velasco. Despite this measure, demonstrations resumed in September 2006.

The Pehuenche of the BíoBío River

The United Nations Special Rapporteur on the interests of indigenous peoples, Rodolfo Stavenhagen, stressed in a 2003 report made after a trip to Chile that violence resulting from altercations with Chile’s indigenous people has been largely instigated by the state. In his estimation, the use of the term ‘human rights violations’ is justified in this context and he considers land disputes as the core area of conflict. In his opinion, the disputed territories should be returned to the Mapuche and reparations should be paid.

Parceling Mapuche community land made it easier to divide the community itself. ENDESA  could negotiate with single families and play them off each other to a certain degree. As for the first dam, the Pangue, the government had agreed to its construction without even asking the  Pehuenche-Mapuche. This was an infringement of numerous articles of the Indigenous Act  (”Ley Indígena”) of 1993, which stipulates that any project executed on indigenous land requires prior approval by the community, and that indigenous lands can only be exchanged voluntarily. Those Mapuche who were willing to negotiate their property for the building of the dam, were promised in exchange new homes and land, and free electricity and water. The free utilities never materialized and no one knows if the Pehuenche will still be in their homes in ten years’ time since the land they are living on doesn’t belong to them.

Many Pehuenche-Mapuche were possibly unaware of the dam project ramifications. Spanish is not their native tongue and many don’t speak the language at all, yet the land use contracts were available in Spanish only. It was probably very difficult for most residents to fully grasp the contracts’ contents. Many Pehuenche-Mapuche are illiterate (most of the contracts were signed with a thumb print), and this fact made it easy for ENDESA  to deliberately spread disinformation. For example, when the Pangue Dam was being built, many residents didn’t realize that it was merely the first of six planned dams. The magnitude of the project was thus almost impossible to fully comprehend. ENDESA promised to the Pehuenche-Mapuche jobs in exchange for their land, but these were either temporary, or ENDESA employed their own workers. So the Pehuenche were never given job training, let alone permanent jobs. During dam construction, huge roads traversing the region were built, but they don’t accommodate the needs of the local residents. They were built instead with the intention of servicing harbors and urban centers and to facilitate the transportation of building materials and miscellaneous goods. The Lafquenche-Mapuche were hit hardest by the road construction; their land was either suddenly gone, divided up, or turned into roads. Chilean project development isn’t geared toward equitable distribution – public services are generally only available in cities and not in the areas most Mapuche inhabit. In the event of conflicts of interest, the government typically argues that national development projects take priority over local interests or needs. Alternative suggestions are ignored and critics get denounced as being unpatriotic.

The Pehuenche were divided by the dam project and this internal division continued to affect the negotiations that followed for the land that ENDESA needed for the next reservoir dam project, the Ralco.  By 2003, nearly all of the Pehuenche had accepted compensation packages offered by ENDESA, and had left the area. Only four families had continued  to resist the relocation efforts. In May 2003 a court in Santiago upheld a complaint against the dam that had been filed six years earlier by two sisters, Nicolasa and Berta Quintreman, who had become symbols of indigenous resistance. The environmental impact assessment, which was the basis of and a prerequisite for the construction permits, was revoked (International Rivers Network, May 23, 2003). But in June of that same year, the civil court judge in Santiago, Hadolff Ascencio, lifted the building ban with the only stipulation being that that the negotiations between ENDESA and the Pehuenche be concluded before the land was flooded to form the reservoir (International Rivers Network, June 12, 2003).

On September 16,  2003, tired out by the long struggle, the last four Peheunche families, including the Quintreman sisters, gave up their resistance to the dam. At the government palace in Santiago, they signed a contract promising every family monetary reimbursements of 274,914 EUR, and between 77 to 100 hectars of land. In June of 2002, the head of state at the time, Ricardo Lagos, began a hugely concerted effort to guarantee the paying of reparations. ENDESA was required to create an additional fund of  412,371 EUR for possible future damages. The Pehuenche relocation area lies next to the Pangue Lake, which was created when the first dam, the Pangue was built.

The  ENDESA and E.ON Merger


On February 21, 2006 the German utilities company E.ON announced its intention to merge with the Spanish energy provider ENDESA, the largest energy provider in Spain. ENDESA produces 47% of the country’s electricity. In Latin America, they supply 10% of the market and are the leading provider in Chile. The general trend is upward; it is assumed that energy prices along with the demand for energy will increase.  ENDESA was founded in 1944 by the Spanish state, and has undergone a gradual process of privatization (fully privatized by 1998). It has yearly turnover of 18 billion EUR.  According to its own estimation, E.ON would become the world’s largest energy provider, with 107,000 employees servicing 50 million customers, and 75 billion EUR in sales in 30 countries. The operational positions of both companies is considered so favorable that the stocks of both companies rose when E.ON’s offer was made.

In late July, 2006 the Spanish Utilities Authority CNE accepted the merger under the condition that E.ON – should the merger take place – be required to sell off one third of ENDESA’s assets, mainly nuclear power stations and conventional coal plants. CNE based their decision on the protection of national energy supplies grounds.  E.ON and ENDESA appealed the decision. The EU, which had already approved the merger in April of 2006,  accused CNE of violating anti-discrimination and equal opportunity laws ( EU Commissioner Kroes). If CNE doesn’t approve the merger, it can expect E.ON and ENDESA  to sue for damages and for the EU to stop payments to Spain.

Chile is one of Latin America’s most financially successful countries. Economic expansion and  free-market-friendly financial policies (which, for example, are in accordance with the EU Free Trade Agreement)  have led to projects that favor growth at the cost of the environment. Projects which in turn have endangered the Mapuche culture. Anyone who criticizes, let alone actively opposes such policies or projects, such as the hydroelectric power stations, is denounced as unpatriotic. Taking the BíoBío River as an example, one can see how hundreds of animal and plant species (which give that particular habitat inestimable value) have been systematically depleted and destroyed. Chile is especially attractive to energy companies because its rivers have strong and steady currents and because the valleys that the waters pass through are easily accessible.

There are Alternatives

Scientists and environmental agencies have attempted to support Chile’s indigenous populations, which include the 1.3 million Mapuche who can be further subdivided into the Pehuenche, Huilliche, Lafquenche, Nagche and the Huenteche. Other indigenous populations in Chile include the Aymara (approx. 48,000), the Rapanui (approx. 3,000 on Easter Island), the Cunsa /. Atacameño (approx. 3,000), the Coya (approx. 100), the Kawéskar (approx.100) and the Yámana (approx. 70). The Mapuche had long ago realized that the available resources could always be used, as long this use was sustainable. Environmentally friendly micro-power plants are now considered the preferred option for supplying energy to the Ralco Dam affected Pehuneche areas. The Mapuche need an external power supply because they do not receive any of the electricity that the power plant produces! The micro-dam project was agreed upon in a seminar to investigate environmentally friendly electricity which took place on September 7 and 8, 2004, in Santiago de Chile, which was initiated by the Institute for Environmental Strategies. The project involves the development and use of small dam, wind and solar energy strategies as well as thermo and biomass energy sources. These plants should supply approximately 15,000 people in the rural areas of Santa Bárbara BíoBío with electricity. The project  receives support from the GTZ (German Technical Cooperation), the European Green Electricity Network (EUGENE), the Bolivariana University  and the Charrúa Electricity Cooperative in Charrúa, South Chile. The national energy commission has also planned to build three thermal energy power plants in 2007.

The Society for Threatened Peoples has supported the Mapuche territory rights movement for many years. Numerous articles can be found in our online publications. In the Memoranda and Press Release sections you can find documentation about the resistance to the BíoBío power plants; the continuing encroachment upon and dispossession of indigenous land; documentation of the use of laws from the time of dictatorship. We have also  supported the Mapuche with our lobbying campaigns. In 2003, we enabled various Mapuche peoples to participate in in a conference in Concepcion. We are currently opening in Chile an affiliate bureau: the Society for Threatened Peoples – International. For more information please visit or write us at the Gesellschaft für bedrohte Völker, Postfach 2024, D- 37073 Göttingen, Referat Indigene Völker, Tel. 0551 – 49906 14, mail