Chilean Supreme Court's Split Ruling Favors HidroAysén, but also Shows that Tides are Turning

Chile’s Supreme Court made a landmark decision today, voting 3-2 in favor of HidroAysén and against appeals filed by opponents to the large hydroelectric project in Patagonia. This much anticipated and ultimately disappointing ruling shows that big business—particularly in the energy sector—still trumps environmental, social and even legal concerns in Chile. Yet the two dissenting votes also represent hope that these concerns are gaining importance inside the government. Fortunately, HidroAysén is still far from a done deal, with several administrative recourses remaining for opponents of the $10 billion project to continue their appeals. Also, the project’s 1200 mile-long transmission line still has to start the environmental impact review process, which will likely take years. That’s plenty of time for Chile’s government to realize that a better energy future for Chile lies in its remarkable renewable resources and efficiency potential, and not in continued reliance on large hydro power and other conventional energy sources.

Today’s decision, while unfortunate, is not entirely a surprise. HidroAysén is a private venture formed by two of Chile’s largest and most powerful energy companies, Colbún and Endesa Chile. Decades of a highly-privatized and market-oriented energy sector has led to a growing amount of power in just a few companies, unstable grids, high electricity prices for Chileans, and an institutuional disregard for the environment in the face of “development.” HidroAysén’s environmental approval, granted in 2011 and the subject of today's appeals ruling, is an alpha product of that system.

The company first presented the environmental impact assessment for its five mega-dams to Chile’s authorities to review in 2008. Despite the woefully deficient document’s factual errors, mishandled analyses, and blatantly ignored issues, all evidenced by the thousands and thousands of comments filed against the document during the public participation period of the review process, HidroAysén’s dams received their environmental approval in May 2011. A diverse group of environmental organizations, local mayors, members of Parliament and residents almost immediately filed a number of appeals detailing an array of legal irregularities in the review process. The Appeals Tribunal in Puerto Montt, which heard the case, ultimately ruled 2-1 in favor of HidroAysén – sending the case to the Supreme Court. (Also immediately after the approval, a national poll showed that 74 percent of Chileans were against large hydroelectric development in Patagonia and massive protests throughout the country.)

The split decisions in both courts (first the Appeals Court and then the Supreme Court) are signs that perhaps things are starting to change, and that authorities are beginning to take seriously the legal appeals made against proposed energy projects. This is particularly relevant in the ruling today, given President Piñera’s explicit support for HidroAysén. The Supreme Court will soon be tested again, in the upcoming case that could overturn the environmental approval of the massive 2,100 MW coal-fired power plant called Castilla, proposed in Chile’s north.

Other avenues to stop HidroAysén are still open to Patagonia’s defenders. “The interpretation that they are making now, that the Supreme Court gave a green light to the project, is just not so,” stated Patricio Rodrigo, Executive Secretary of the Patagonia Defense Council. Marcelo Castillo, one of the lawyers who presented the appeals case, averred that “This is the beginning of the judicial battle. There still are civil and criminal courts to stop HidroAysén.” The project’s proponents still have yet to submit the environmental impact assessment for the technically and legally challenging transmission line. The review process for the line will likely last for at least two years. And without that transmission line to carry the five dams’ energy output to the demand center 1200 miles north near Santiago, HidroAysén’s dams serve no purpose.

In the meantime, the case for better energy options to HidroAysén only gets better and better. Companies announce new renewables projects almost weekly (like this $1.2 billion solar project, announced last week), far outstripping any official projections made in 2008, when HidroAysén officially entered the scene. And energy efficiency is finally starting to get its due in this administration, evidenced by its Number One position on the list of priority areas in the new National Energy Strategy. The argument that HidroAysén is necessary to meet Chile’s future energy demand is simply not true.

So regardless of today’s judicial setback and the longstanding institutional prejudices for big business and project development, HidroAysén is far from being a certainty. The longer the project takes to get its permits all finalized, and the more progress that better energy alternatives --renewables and efficiency-- make, the more obsolete this $10 billion dinosaur of a project will become.