Chilean Supreme Court Rules in Favor of HidroAysén

Berklee Lowrey-Evans

Last week, the Supreme Court of Chile made a disappointing – yet not unexpected – ruling. A company called HidroAysén hopes to build 5 large dams in Patagonia on the Baker and Pascua rivers, and a nearly 2,000-km-long transmission line to carry the hydroelectricity to the central grid (SIC) near the capital of Santiago. But Chile is an interesting country.

The headwaters of the beautiful Baker River.
The headwaters of the beautiful Baker River.
Photo by Berklee Lowrey-Evans/International Rivers

Due to the legacy of extreme free-market capitalism imposed during the Pinochet dictatorship, the Chilean government doesn't engage in any sort of centralized energy planning. Yes, they produce studies with expected – often inflated – energy needs, but they don't themselves have any sort of plan as to how to meet the needs. Any company in Chile can submit plans for an energy generation plant, and as long is it's approved through the Environmental Impact Assessment (EIA) process, it can be built. This is why HidroAysén wants to build dams in the far south of the country and pipe the electricity north, instead of finding a way to generate electricity closer to where it's actually needed, in the capitol and the northern part of the country, home to Chile's mammoth copper mining industry. An options assessment – best practice in most developed countries – is not required, in order to assess where, what type, and if a project should be built at all.

So, back to the Supreme Court. In a 3-2 verdict in favor of HidroAysén, the Court denied seven appeals for protection (recursos de protección) filed by various parties, including Chilean NGOs, residents of Patagonia, members of Congress and a woman whose family would be forcibly relocated because her land would be flooded by one of the reservoirs.

There are two alarming points in this Supreme Court ruling. First, there is no comparison between the quality of arguments of either faction of the ruling judges. The three judges ruled that the approval of HidroAysén did not threaten constitutional guarantees. The two judges in the minority, however, had extremely strong arguments as to why this case clearly endangered the constitution and the right to participation in the EIA process by Chilean citizens. Judge Hernán Crisosto signaled that "some parts of the project threaten the legal rights to life and physical integrity, such as equality before the law and the right to live in an environment free of contamination." Judge So then it becomes a numbers game, in more ways than one.

As one of my Chilean colleagues put it, this Court ruling was like a futbol match – nothing mattered besides the sheer number of votes of the judges. So then we must look at another figure – money. Here in the US, a Supreme Court Justice is required to reveal any conflicts of interest in a case, and recuse themselves from involvement. This includes holding stock in a company. But in Chile, this isn't so. After the ruling was announced last Wednesday, we also found out that one of the judges in the majority – Pedro Pierry – owns over 100,000 shares of Endesa stock. And it just so happens that Endesa is 51% owner of HidroAysén. What typically happens when a court case is ruled in favor of a company? It's stock price increases. What happened to the price of Endesa stock after Judge Pierry and two other Justices ruled in favor of HidroAysén, and, therefor, in favor of Endesa? It's stock price increased.

In fantastic Chilean fashion, people were already taking to the streets on Wednesday night, holding cacerolazos and protests, and organizing on Facebook and Twitter for protests in the coming days and weeks. While the court's ruling is disappointing, the fight for Patagonia is sure to continue, especially in the realm of the upcoming EIA process for the transmission line necessary to get the electricity from the far south to the center of Chile.