Profiting from the Destruction of the Environment

Profiting from the Destruction of the Environment

By Ricardo Cifuentes Villarroel

In two highly polluting projects, the first cracks are visible in a strategy that until now has given good results to corporations. It is a cellulose plant of the Angelini group and International Paper and the Pascua Lama gold mine of Barrick Gold Corporation.

Strategies to Profit from Destruction of the Environment

In two highly polluting projects that have been questioned in recent months in Chile, the first fissures are visible in a strategy that until now has given good results to the corporations. It is a cellulose plant of the Angelini and International Paper group, which operates in the Valdivia river area, and the Pascua Lama gold mine of Barrick Gold Corporation that is installed in the Andes Mountains, on the Chilean international limit. Argentinian.

To achieve their economic consolidation in the country, both companies have made the most of the conditions provided by the transnationalizing neoliberal model imposed by force by the past military dictatorship and which they have then continued to administer and improve by civilian governments. Within this scheme, the state offers a variety of advantages to the investor, including the low price of the workforce and the possibilities of making use of a varied deregulation in labor, financial and control terms.

To facilitate forest exploitation, the military dictatorship issued Decree Law 701 in 1974, which modified the Forest Law 4,363 of 1931. With the support of these new provisions, the six state-owned companies in the forestry sector were privatized in 1974: Celulosa Arauco, Celulosa Constitución, Forestal Arauco, Inforsa, Masisa and the Compañía Manufacturera de Papeles y Cartones (CMPC). To complement the above, according to the slogan, José Araya, in his work "The invasion of forest plantations in Chile", "the land tenure and use was modified between the VIII and X regions where the Mapuche population lives today. in communities. Large forestry companies that lead the market and whose owners are two of the most important economic groups in the country emerged from the old large estates and state lands. The Angelini group controls the largest forestry investment through Forestal Arauco and Celulosa Arauco, and the Matte group that controls forestry Mininco and Celulosa CMPC. Both groups control more than 60% of forestry activity and lead exports. " (1)

Subsidies and other financial mechanisms were added to the privatizations that facilitated the expansion of forest properties and contributed to making the business more profitable. This is how Celulosa Arauco y Constitución (Celco) became the largest company in the sector in the country. Celco is in turn a subsidiary of COPEC, the former state oil company also privatized by the dictatorship and which today is one of the largest business conglomerates operating from Chile. The ownership of COPEC is shared by the Angelini group with the forestry giant International Paper, which was included in the list of the 100 main criminal corporations of the 90s, having to pay US $ 2.2 million in fines for environmental damage (2).

At the same time, in terms of mining, the dictatorship decreed a set of provisions that civil governments recognized as legal. The main ones are Decree Law 600, of 1974, which provides facilities in general to foreign investors; Mining Law 18.097, of 1892 and the Mining Code of 1983, which in practice give corporations wide freedoms to take the country's mineral resources. Such facilities go so far that corporations just need to declare that they have losses in order not to pay any tax to the country. When presenting his book "Cobre NO, es de Chile", Senator Jorge Lavandero said: "Chile is a paradise for those who do not pay their contributions", referring to the "legal" fraud carried out by large mining companies with impunity. As an example, he pointed to the case of Barrick Gold's El Indio mining operation, which for sixteen years declared losses in order not to pay taxes. According to him, this tax trick is used by 44 of the 47 mining companies that operate in Chile. To formalize his complaint, the parliamentarian delivered to the Internal Revenue Service a documented report on the methods used by mining corporations to evade taxation. (3). For the rest, the history of Barrick Gold is associated from its origins to the use of situations like these that have affected peoples from different parts of the planet (4).

Contempt for affected communities

In both situations, the companies have acted with total disregard for local communities, which they know in advance will be severely harmed by their activities. Both the existing legislation and the actions of the authorities provide these companies with a kind of immunity, since the projects are located in two of the most important sectors -mining and forestry- of a national economy oriented to the export of resources to as of place. It is, as indicated before, laws decreed by the dictatorship and that civil governments apply for the benefit of large companies, before which the affected communities are in a disproportionate situation.

Despite the fact that in both situations the aforementioned projects endanger existing productive activities, the communities of the two affected areas were not duly informed about the harmful effects of the processes applied by these companies, nor did they participate in the decisions for their approval of operation, they were not even consulted. On the contrary, these companies subject citizens to disinformation campaigns mounted on the real needs of the neighbors to promote the supposed benefits of their projects. The two firms resort to the intensive use of propaganda in the media and other methods to threaten protesters or to attract supporters. Barrick Gold added to these practices the offer to create a fund of US $ 20 million, which it would distribute equally for social works between the Argentine province of San Juan and the Chilean region of Atacama, in the event that its project is finally approved. (5). When observing the development of these campaigns, one can see the complicit and complicit role played by government authorities and the political elite. For the rest, the corporations know that it has been thanks to state facilities such as those already mentioned, typical of the so-called "pollution paradises", that their previous experiences have resulted.

Use of polluting processes rejected internationally

It is clear that before starting each destructive project, both corporations know precisely the damage caused by their processes given that they have similar prior experiences and possess the technical knowledge to measure them in detail. In both cases, highly polluting and environmentally destructive technologies are used, although both companies proclaim in every tone that this is not the case. The processes used to bleach cellulose in the Angelini group plants are prohibited in developed countries. Much less harmful procedures exist and are being used in those countries. In the same way, the open-pit mining system that Pascua Lama uses is being banned in more and more countries due to the serious damage and dangers it represents.

The raw material for the pulp mills comes from vast monoculture plantations of pine and eucalyptus, fast-growing invasive species. The development of these plantations has involved the destruction of thousands of hectares of native forest, along with the extermination of numerous species of native fauna. According to Ernesto Carmona in his book Los proprietors de Chile, "Angelini's foresters appear with the greatest responsibility in cutting down 7 thousand hectares of native forest that are lost annually in Chile. In 1999 they accumulated 43 infractions (20 by Celco, 15 of Forestal Valdivia and 8 of Bosques Arauco) On April 16, 2001, Celulosa Arauco announced that it will not continue planting in Chile, where it already has 956,000 planted hectares, 1.5% of the entire territory, 12,000 km2, 50% more of surface than the 609,364 of Eliodoro Matte Larraín, who only has 320,000 planted with pines and 71,000 with eucalyptus. To 'diversify the geographical risk' he decided to expand his forests by 50,000 hectares, ... in Argentina " (6).

In the cellulose bleaching process, the Valdivia plant uses a system called ECF (which uses chlorine dioxide), which releases toxic fumes into the atmosphere and water, which is prohibited in developed countries. Together with the Valdivia plant, the Angelini group owns other cellulose factories with the same polluting technology in Chile (Licantén, Constitución, Itata, Arauco) and in Argentina (Alto Paraná, in Misiones). In each of these places the company has had to confront the communities due to the effects of the contamination of its plants (7).

Similarly, the volume of material that an open pit gold mine needs to mine is so enormous that thousands of tons of rock have to be destroyed and millions of liters of water used each day, which are then rendered useless. Tons of explosives are needed daily for this immense destruction, along with tons of other equally dangerous substances such as sodium cyanide, sulfur, hydrochloric acid and caustic soda. (8).

To this must be added the additional damage caused by the huge deposits of waste generated by farms of this nature. This slag, known as mining environmental liabilities, will continue to deteriorate the environment until many decades after the mine closes. Barrick Gold exploits gold mines with this highly destructive open pit system in different parts of the planet (Argentina, Australia, Kyrgyzstan, Peru, Tanzania).

It is illustrative in this regard to take a look at a study carried out in 2001 on the impact of mining in Kyrgyzstan, in an area with characteristics very similar to those of the Pascua Lama site. Kyrgyzstan is located in a mountain area where rivers are born that flow down through the territories of neighboring countries. According to the authors of the report, as mining companies settle at the top of stream headwaters, their impact goes beyond the borders of the country, so that slag dumps are rapidly becoming an international problem that currently it has no solution. They add that neither governments nor communities in affected countries can monitor slag dumps in Kyrgyzstan, despite concerns about the potential threat of contamination to their territories. On the place where the mining companies associated with Barrick Gold operate, they note: "At Kumtor, which is located 4,000 meters above sea level in the Alpine glaciation zone, you see dust clouds with residual nitrates following each blast. Scientists have expressed concerns that the deposition of this dust could cause an acceleration of the melting of the glacier. The transport network and geological prospecting also cause important impacts. " (9)

Breakdown of economies, environmental heritage and local cultures

Before the arrival of these companies, the affected sectors had a level of economic development based on agriculture, commerce and tourism, which could be improved without the need for these projects. It should be noted that both areas have been inhabited long before the Spanish invasion by indigenous communities that have known how to maintain a non-destructive relationship with the environment. In the vicinity of the Valdivia plant of the Angelini group, Mapuche communities have seen their tourism projects collapse and their agricultural and fishing activities are endangered due to discharges and emissions from the industry.

To further aggravate the situation, the Angelini group's pulp mill proceeded to dump its waste in the direction of the Carlos Anwandter Nature Sanctuary on the Cruces River, which is a site that Chile incorporated as a Wetland of International Importance when it joined the the Ramsar Convention (1981 Act). The massive death of black-necked swans and other birds and fish in this sanctuary was the most shocking result of the plant's actions and, at the same time, the wake-up call of nature that ended up mobilizing vast sectors of the public.

Barrick Gold, for its part, without having approved the start of the works, began the destruction of millenary glaciers that constitute true natural ponds that provide water to the Huasco Valley, a productive sector in the middle of the desert. In the official presentation of his project, he had not even mentioned the glaciers, under which the gold is found. The mining company is also facing lawsuits for usurpation of lands of Diaguita communities in the vicinity of its project, in addition to endangering places of high archaeological value. The Pascua Lama project also constitutes a serious threat to the San Guillermo Biosphere Reserve, located in Argentine territory and declared for the protection of the ecosystem in 1981 by UNESCO. The sector has the highest concentration of wild vicuñas on the continent and a good number of guanacos, rheas and red foxes can also be seen.

Image wash operation

The death of the swans and the destruction of the glaciers made more evident the real procedures that both projects tried to hide. Both companies had to redouble the intensity of their campaigns and actions aimed at imposing their projects at any cost. (10). In their eagerness to appear with respectable profiles, the two companies did not hesitate to resort to disseminating unfounded statements and even falsifying documents.

The procedure acquired characteristics of scandal when the Supreme Court of Justice ruled in favor of the operation of the Valdivia plant based on a false technical report that Celulosa Arauco gave it, attributing it to an institute of the University of Concepción that immediately denounced the fraud. The Supreme Court is now facing a constitutional indictment before Congress for having based its judgment on a false report provided by the Angelini group.

Similarly, Barrick Gold officials declared to the Chilean media that they had vast experience in the management of glaciers, in the face of protests over their destruction of the ancient ice of the mountain range. A study by the Latin American Observatory of Environmental Conflicts (OLCA) proved the corporation's claims to be false. It was discovered that glaciers do not exist in some of the countries given as examples by the miner and that where they do exist, such as in Kumtor, Kyrgyzstan, the extractive activity of the miners is destroying these valuable ice masses.

Also as part of its campaign, Barrick Gold hired millionaire advertising space on Televisión Nacional de Chile (TVN), thus managing to put the largest network in the country at its service. Thus TVN, although it is a state company, does not report on the opposition to Pascua Lama by the affected communities and the environmental groups that support them. The situation prompted protests to the authorities when the latest massive demonstrations against the mining project in Vallenar and Santiago were simply ignored by the state broadcaster.

The maneuvers of the Angelini group and Barrick Gold to impose their projects have so far not had the effects expected by their authors but they have served to show once again the wrong environmental policy of the government and implicated other state institutions such as the Supreme Court of Justice and the television. Now comes a new phase in the effort to make these projects appear acceptable. Of course, all this work is part of the business and its realization is carried out by "strategic communication" companies specialized in public relations and lobbying, an activity on which it has been delayed to legislate in Chile (11).

The companies hired for this image laundering, along with putting pressure on the relevant authorities, use a propaganda strategy called "perception management" to manipulate or control the way in which the affected community views the environmental damage generated by Your clients. This technique to guide the perception of chosen sectors of the population is also known as "public diplomacy" and has been perfected by experts in psychological warfare from the US secret services after their defeat in Vietnam, based on the teachings of Edward Bernays, considered by some as the "father" of corporate public relations (12). The Dictionary of Military Terms of the United States Department of Defense defines "perception management" as the "actions to transmit and / or deny selected information and indicators to foreign audiences to influence their emotions, motives and objective reasoning, as well as to intelligence systems and leaders at all levels to influence official estimates, ultimately producing foreign official behaviors and actions favorable to the author's objectives. In various ways, perception management combines truth projection, security of operations, concealment and deception, and psychological operations " (13).

The manipulation of scientific reports to carry out environmentally questioned activities is not something new in the country. In his study of the Boise Cascade lumber company, George Draffan reminds us that "The public relations firm Burson Marsteller, hired by Boise Cascade, tried to distort the results of a technical study done by the forestry department of the University of Concepción, but two days later the university foresters revealed the manipulation of their technical report, and declared that the project was unsustainable " (14)

This time, it was a project to build a wood chip and board complex (OBS) for $ 180 million dollars in Bahía Ilque, Chile. The plan was formalized in 1997, between Boise Cascade and the Chilean company Maderas Cóndor S.A. (Forestal Cóndor, whose lawyer was Miguel Aylwin, son of former President Patricio Aylwin) in a joint operation called Cascada Chile (later called Compañía Industrial Puerto Montt, or CIPM). Draffan also mentions in his work that "An environmental impact study of the project prepared by Dames & Moore (the same consulting firm that prepared a study for Trillium's wood project proposal in Chile) analyzed only the impacts of building the factory and the port, and not the impacts of cutting thousands of acres of wood to feed the factory. Cascada Chile published advertisements distorting citizen opposition, and the local newspaper Llanquihue published an editorial supporting 'Ilque and the chicken that lays the golden eggs' and attacking opponents as 'eco-terrorists.' " (15).

Of course, similar operations usually occur in other countries. According to the World Rainforest Movement (WRM), pulp and paper interests in Indonesia and other countries have resorted to repression and abuse at the local level while hiring public relations firms like Burson Marsteller to present a more pleasant picture. to clients and legislators in the West, as well as to infiltrate, undermine and supervise Western environmental groups. The public relations companies hired by the industry are also in charge of stigmatizing as "radical" or "irresponsible" the movements that are for the reduction of paper consumption in the West (16). In Ecuador, the government paid $ 180,000 to the lobbying department of Burson-Marsteller (Black Kelly Scruggs and Healey) for advice to deal with environmental and indigenous community protests over a planned pipeline (17).

The strategy

None of the above, on the part of forestry and mining companies, would have been possible without an opening carried out in concert with the companies by the state and the political system. This materialized in forestry and mining laws implemented by the Military Government and accepted by the civil governments, which gave it even greater extension.

All this has implied, almost naturally, spaces of corruption that companies have consulted in their investment budgets. An important achievement has been to obtain at all costs the reduction of the defense of any national, social or environmental interest in the short or long term. This, for example, has been reflected in the extent and character of the concessions, in the assumption that the concessions implied an absolute property right (use, enjoyment, disposition), and an almost complete tax exemption.

Then, this strategy has adhered to principles that have their starting point in the globalizing neoliberal dogmatics that assumes that where there is a resource, it must be exploited. That is an end that justifies all means. In this plan, all conservation limitations of natural forests, or the maintenance of arable lands, and the elimination of populations were jettisoned. In the mining case, "productivist" work was encouraged regardless of environmental costs, or if you like, work that increased profit and productivity at a high environmental cost.

This strategy, which can be represented as sustaining the goal of increasing appropriation and high production, can thus also be seen as a consensual strategy of environmental destruction. And in fact this is the end that is reached, regardless of the Angelini chips or the Barrick Gold bars.

None of this strategy, of course, is exposed in the companies' image campaigns, but that is another cost that companies are forced to assume, a little to lower a pressure that would turn against its supporter: the state.

1. José Araya Cornejo. The invasion of forest plantations in Chile: Effects of forestry activity on the indigenous Mapuche population, OLCA, 2003. Version in pdf - (800 Kb.)
2. Russell Mokhiber and Robert Weissman, Top 100 Corporate Criminals of the 1990s, Mother Jones. September 7, 1999
See also: Luna Moth, International Paper’s plantation monoculture chokes biodiversity
3. Primera Lí, August 30, 2002
4. Greg Palast, The Best Democracy Money Can Buy, London: Pluto Press, 2002
See also:
Part of chapter 2 translated into Spanish by Punto Final at:
Also in: OLCA, Pascualama Mining Project
Julián Alcayaga, Diego Luna and César Padilla, The exile of the condor: Transnational hegemony on the border, Santiago de Chile, OLCA, 2004. Version in pdf - (2.08 Mb.)
5. Investment with seduction included. Clarín, Buenos Aires, May 21, 2005.
6. Ernesto Carmona, The owners of Chile, Editions La Huella, Santiago, 2002, p. 151. See the chapter on Grupo Angelini at:
7. On Celco's harmful activities, see the following articles:
OLCA, Pulp Industry in the Itata River basin
OLCA, Mataquito River Pollution
Lanalhue Noticias, Fishermen of Arauco confirm filing of complaint against Celco
Guayubira, They accuse the Arauco group of causing ecological damage and health in Misiones and Chile
OLCA, Mass death of black-necked swans in the "Carlos Anwandter" Nature Sanctuary
Lucio Cuenca Berger, Celulosa Arauco: Something Smells Bad in Southern Chile, WRM, July 2004.
8. This type of mining has already been banned in places like Turkey, since 1997; State of Montana, United States, since 1998; Czech Republic, since 2000; New South Wales, Australia, since 2000; Cotacachi, Ecuador, since 2000; Gunnison, Colorado, United States since 2001; Costa Rica, since 2002; Costilla, Colorado, United States, since 2002; Germany, since 2002, Chubut, Argentina, since 2003; Summit, Colorado, United States, since 2004. (Humberto Kadomoto, The Forbidden Gold, )
9. Valentin Bogdetsky (editor), Vitaliy Stavinskiy, Emil Shukurov and Murat Suyunbaev, Mining Industry and Sustainable Development in Kyrgyzstan, Mining, Minerals and Sustainable Development, No. 110 November 2001, p. 61.
See also:
Jozsef Feiler, Kumtor - the Poisoned Gold, In: Heavy Footprint. The World Bank and Environment In Europe and Central Asia, CEE Bankwatch Network, Budapest, 2000.
CEE Bankwatch Network, Mountains of Gold: Kumtor Gold Mine in Kyrgyz Republic, May 2002.
10. What we affirm is an opinion that even The Economist itself recognizes in its article "Public opinion drives a shift in environmental policy", of June 23, 2005. Only that it remains to be seen how far the Chilean government's capacity for maneuvering to circumvent popular claims and continue serving business.
11. According to the dictionary of the Royal Spanish Academy, Lobbying: "By council. Manage with activity and skill to win wills in a collegiate body". In Chile the English word "lobby" is officially used to refer to this management of private interests in the public sphere. In fact, in November 2003 the Chilean Legislative Power began to process a bill to try to regulate the "lobby". In Results of Commissions from July 19 to 22, 2004, of the Chamber of Deputies, Secretariat of Commissions, Constitution, Legislation and Justice, it reads: "Message, which regulates the lobby (Bulletin N ° 3407-07). First Procedure constitutional and first regulatory The following persons were received: -The Manager of Burson-Marsteller Santiago, Mr. Felipe del Solar Agüero, accompanied by the Manager, Mrs. Claudia Adriasola Matas -The Researcher of the Institutional Political Program of the Instituto Libertad y Desarrollo, Mr. José Francisco García García -To the lawyer of the Ministry General Secretary of the Presidency, Mr. José Matías Larraín Valenzuela. "
12. John Stauber and Sheldon Rampton, Toxic Sludge Is Good For You. Lies, Damn Lies and the Public Relations Industry, Common Courage Press, Monroe, Maine, 1995 (A review in Spanish of this book can be viewed at: )
13. US Department of Defense. Dictionary of Military and Associated Terms
14. George Draffan. Global Timber Titan: Boise Cascade, June 1999,
15. Go
16. WRM Bulletin # 83, June 2004.
17. Jack O'Dwyer, Ecuador Hires Burson-Marsteller, Email Newsletter, August 8, 2001, Center for Media and Democracy

* Ricardo Cifuentes Villarroel
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