CSR or the Price of Wills in Patagonia? (Part 2)

The following is the second half of an award-nominated article written by guest author Patricio Segura, journalist and head of the Citizen's Coalition for Aysen's Life Reserve in Chile.  The first part was published yesterday, Wednesday, October 13th and is available at http://switchboard.nrdc.org/blogs/amaxwell/csr_or_the_price_of_wills.html.  You can read his Spanish blogs on NRDC's Pulso Verde: http://pulsoverde.nrdc.org/psegura/

The Corporate Social Responsibility Policies of HidroAysén and Energía Austral

CSR or the Price of Wills in Patagonia?

  • The complex interference of transnational corporations within the communities and municipalities charged with the environmental impact statements of their projects

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In Chile, Environmental Impact Assessments (EIA)must be sent for evaluation to the public services and municipalities affected by a given project’s implementation.  The municipalities of Coyhaique, Río Ibáñez, Chile Chico, Cochrane, O’Higgins and Tortel have been evaluating HidroAysén (which has an estimated investment of US$3.2 billion) since August of 2008.  The Municipality of Aysén has been evaluating Energía Austral (with a project that exceeds US$600 million) since August 2009.

In September of 2009, the author of this report requested that the Regional Comptroller of Aysén investigate the legality of a number of covenants between the municipal governments and the companies under evaluation.

As evidence, he submitted a January 2009 contract between the Municipality of Cochrane (which has an approximate population of 3000 inhabitants) and HidroAysén, in which $21 million pesos (US$ 43,950) were assigned to the promotion of cultural, sports and recreation activities, as well as varying types of contracts and covenants subscribed with the same company to the tune of $100 million pesos (US$ 209,000).

He also made available the pacts between the same company and the Municipality of O’Higgins (with some 500 inhabitants) with regard to scholarships, internet connection, veterinary services and financing for small business entrepreneurs.  Furthermore, in a February 2009 Municipal Council session, the chief of the municipality’s Social Department responded to a question regarding benefits to local students, stating that “we are waiting for HidroAysén’s contribution”.

This joint venture was tarnished in September 2009 in the context of the “Let’s Talk About Energy” program which the electric company put on in a number of educational establishments throughout the Region.

“We talked it over with the Director and let her know that it was not pertinent for a company to promote a project that was in the midst of its environmental impact assessment with many unresolved issues.  We also checked further and discovered that HidroAysén’s program had not been authorized by the Ministry of Education, and we do not accept that they come to alter our children’s curriculum”, stated local resident and ex-councilman Hans Silva.  In light of this, it was decided that the activity would be held in the gymnasium and only for those children whose parents authorized their participation (“only 14 went, out of close to 90 from the school”), with the understanding that the company would not undergo any self-promotion.  This agreement was not respected, as “flashlights bearing the HidroAysén logo were given out as gifts to the children” at the end of the exposition.

In spite of the fact that the Municipality of Coyhaique (with a population of some 55 thousand inhabitants) should have submitted observations to HidroAysén’s EIA, it did not fulfill its responsibility during the first stage.  Only after the company edited its first addendum (in response to the observations of the other public services) did the municipality deliver its report.  However, as it had not participated from the beginning, it lost the opportunity to submit its own observations and was only able to second those expressed by other public services.

Even so, the municipality signed a $40 million pesos (US$ 83,700) agreement with HidroAysén in November of 2009 to improve a public green space in the Clotario Blest neighborhood.  During the same month, it also launched the institutional magazine “Vive Coyhaique”, which was financed in large part by HidroAysén.

Energía Austral has also signed covenants with the Municipality of Aysén (with some 25 thousand inhabitants) to provide educational funds and small grants.  According to the report on its sustainability, as of December 2007 the company had donated around $10 million pesos (US$20,900), not including further subsequent contributions.

On March 5th, 2010, the Comptroller concluded, in light of the request entered in September 2009, that “it can be concluded that the designated municipalities must take relevant measures to abstain from subscribing covenants or receiving contributions from persons or companies that have, or may have, an interest in affairs that should be analyzed, recognized or resolved by the governing entity involved, circumstance that shall be verified by this comptroller in future audits applied to those in question.


The interference of companies in the midst of the evaluation process today is in a no man’s land.  In light of a legal draft by the government of ex-President Michelle Bachelet, which sought to regularize these contributions and established them by law (they  would be deductible from business taxes), the executive director of Fundación Terram, Flavia Liberona stated, “the worst thing is that with a proposal such as this, community and local government participation in the environmental assessment of these projects is inhibited and/or co-opted, which further diminishes their capacity to defend themselves from the large-scale energy projects.”  Today, this initiative lies dormant in Congress.

In 2009, the Observatorio Ciudadano e Interculturalidad (Citizen and Inter-cultural Observatory) presented observations to the New Environmental Insitutionality project (a legal reform that proposed a complete change in the public sector administrative structure concerning environmental affairs), requesting that it prohibit “as a case of incompatible negotiation, contracts signed between companies and affected parties, as well as all of the associated practices destined to obtain citizen approval of a project through the payment of compensations outside the bounds of the SEIA.”  This indication was not considered in the enacting Law.

Company interference (primarily large-scale corporations) in the communities in which they seek to undertake their initiatives is currently in a grey area.  They frequently take advantage of deficiencies in the State’s provision of basic population needs (whether at the national, regional or local level of government) to supply such services as health care, education, housing or employment.

A grey area in which the grand mechanism for resolving environmental controversies will continue to be money, under the auspice of the conception that everything, and everyone, has its price.  And no one, nor anything, value.

And Patagonia, even less.

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See the original report in complete form, with content citations and sources, at this link: http://bit.ly/cZsaDB

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