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Why Small Hydro May Pose a Threat to Chile's Indigenous Communities

In the absence of prior consultation, Chile's indigenous communities are furious over the construction of small-scale dams.
Fernando Acuña

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Small-scale dams cast doubt on Chile's commitment to indigenous groups.
Chile should return ancestral water rights to indigenous communities, activists say.

Eight years after Chile agreed to take the concerns of its indigenous peoples into account before implementing new mining, forestry and hydropower projects through a process of prior consultation known as consulta previa, skeptics wonder whether the government really meant what it promised.

Case in point: At least three small-scale dams have sprouted in the same region where construction of a 690-megawatt dam a decade ago displaced a small village of indigenous Pehuenche living on the Chilean side of the Andes, fueling protests at home and abroad.

The smaller dams are often considered less controversial than larger projects because they cause comparatively less erosion and deforestation while providing enough electricity for the immediate surrounding area. As a result, they have become an easy choice for entrepreneurial, non-indigenous Chileans and Europeans who see southern Chile as a source of untapped hydroelectric power.

The new projects were built despite opposition from local activists and politicians and, above all, without consulta previa. Although these so-called mini-hydro projects actually failed their environmental impact evaluations, at 1 to 2 megawatts per project they were considered “too small” to require consultation with the Pehuenche, Pedro Matthei, a board member of Chile’s Small Hydropower Association, said.

The fact that — according to community leaders — the displaced Pehuenche villagers are still waiting for the reparations they were promised in 2004 hasn’t inspired confidence in the Chilean government’s promises, either.

“There were definitely problems negotiating 10, 15 years back,” said Nivaldo Llaulen, the indigenous Pehuenche mayor of Ralco, the closest town to the dam site. “And now we’re paying for it.”

But the problem goes well beyond the Pehuenche. According to Chile’s Ministry of Energy, some 60 other mini-hydro projects are currently underway across the country. Many of them have triggered similar concerns among indigenous communities who question whether the consulta previa process Chile adopted is sufficient to protect such a large and diverse portion of the country’s population.

The 2008 agreement by President Michelle Bachelet’s first administration to incorporate consulta previa into its infrastructure development planning was considered a significant step in reversing Chile’s historic mistreatment of the nation’s nearly 2 million indigenous citizens based in nine officially recognized pueblos in the far north and south of the country.

The consulta previa law made explicit a pueblo’s right to actively participate in assessing a project’s impact on its culture, land and traditions. It also established a set of loose regulations that require a three-way dialogue between an investor or corporation looking to build on indigenous land, the pueblo, and the Chilean government.

For its part, the government says it is not backtracking on those commitments.

“The state realizes there are challenges,” said a spokesperson at Santiago’s National Council for Indigenous Development, who noted they are still working to improve the process. “The state is doing everything in its power to balance (the interests of) investors with indigenous people.”

Under Chile’s current consulta previa law, a company looking to build on or near indigenous land must first, in theory, get approval from every member of the community. This can take the form of negotiating directly with community representatives to develop a timeline for the project, discuss how the pueblo could be at risk, and what reparations residents might receive in return.

Some local observers argue that the process is a potential brake on Chile’s future economic growth.

“It paralyzes projects,” said Olivia Igor, professor of political science at the University of Pompeu Fabra. “People have certain fears of investing. They don’t have the same desires to invest in big projects that they used to.”

Critics point to a number of cases they believe prove the government isn’t sidestepping its consulta previa commitments. For instance, in the northern province of Arica, two miles from the border of Peru, a $77 million dam to improve the condition of the Lluta Valley’s irrigation system took over 180 days and 23 consultations before the Aymara community agreed to the project in exchange for paved roads, footpaths and jobs operating the dam.

And negotiations can take far longer than that — sometimes up to five years, according to Sebastían Donoso, a lawyer who has represented both sides of the consulta previa process.

Some companies may try to find loopholes to speed things up, he said, like decreasing the size of the project’s impact area so there are less people to legally negotiate with.

Indigenous leaders counter such arguments by pointing out that pueblos often don’t know the regulations well enough to avoid being taken advantage of. According to Mapuche Chief Samuel Melinao, often their only recourse is to file a complaint with the Chilean government in hopes of starting the whole process over again.

That was the experience of Easter Island’s Rapa Nui people in April of this year. Chile’s Congress voted to re-start the consideration of a marine park project because Pew Trusts, the NGO sponsoring the park, was operating under regulations that predated the implementation of the consulta previa law, and therefore had not spoken with everyone on the island.

But perhaps the most glaring problem some indigenous people see with consulta previa is that the regulations, even when implemented properly, still don’t put enough power into the hands of the pueblos themselves. Once the dialogue and negotiations are complete, the final decision about whether a project can move forward rests solely with the Chilean government.

Chief Melinao believes the only way to make absolutely certain that negotiations are fair is to involve an unbiased third party — like the International Labor Organization — in the process.

Other indigenous people see a simpler solution, one that doesn’t involve regulations or consultations. Why not return ancestral water rights to indigenous communities and allow those communities to control the fate of their own cultural heritage?

“We want to ... make sure there is no more damage done ecologically or psychologically,” said Rosa Marijuan Acanau, a Pehuenche activist. “We need to defend our territory.”

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Max Radwin is a freelance journalist based in Santiago, Chile.

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