The corporate profile of the aid-financed hydropower investor SN Power as a socially and environmentally responsible company is being put to the test in Chile, where the company plans to invest some USD 600 million in the Trayenko project, four separate hydropower dams.
Though SN Power owns the water rights, indigenous Mapuche people lay territorial claim to the affected areas and some are vigorously opposed to having dams on their land.
SN Power has the ambition of being a different kind of dam builder, an international pioneer in dealing with environmental impacts properly and ensuring that local communities are better off after the project.
“The fact that we own the [Chilean] projects enables us to lead the way. We want to apply best practice. That is why we initiated a dialogue with the Mapuche from Day 1," says Nils Huseby, Executive Vice President for Latin America at SNP.
But Huseby says that the company is in a difficult position. In spite of its efforts at dialogue, it is viewed with scepticism because of the violent history of relations between the Mapuche and the Chilean state, and due to negative impacts of dams built on the Biobío river - Pangue and Ralco - a decade ago.
Mapuche leader Pedro Antimilla, who was in Oslo recently to lobby against the projects, paints a different picture of SN Power; one of a company that has contacted affected people selectively, seeking out those who are willing to make deals.
Speaking at a recent seminar organised by the Norwegian NGOs FIVAS and Latin American Groups, Antimilla says: “Our decision is clear from the beginning. We don’t want this kind of project. We are convinced that it will not be good for the commun-ities. We are afraid of the negative environmental consequences. We don’t want to be forced into this. We have the right to say ‘no’."
Part of the concern is related to problems created by the Biobío dams. He points to widespread alcoholism in the area and the fact that many people have been forced to migrate away. “We are afraid that the same thing will happen to us," he says to Development Today.
Antimilla says he has been in contact with Mapuche leaders who engaged in dialogue with the Chilean company Endesa, the firms that built the Biobío dams, and accepted their compensation. “They say that it was not worth it, the cost was too high. Today they are suffering," he says.
If Biobío is the Mapuche’s reference for the Trayenko dams, SN Power’s is its four-year arbitration process in India in relation to the company’s first greenfield project, the Allain Duhangan hydroelectric dam. (See DT 20/04) In that case, affected villagers opposed the project and lodged a complaint with the ombudsman of the International Finance Corporation, a co-financier. The Compliance Advisor Ombudsman (CAO) has since 2004 mediated between the owners and the affected communities, and continues to monitor the company’s follow up of agreed mitigation measures.
Huseby points to lessons learned from the long process with the CAO at Allain Duhangan. He mentions specifically that Nadia Sood, Executive Vice President for CSR, who has followed the India project, is on the Trayenko Board.
Nils Huseby admits that the situation surrounding the Trayenko projects is much more complicated than initially anticipated. Establishing a meaningful dialogue has been a challenge, he says, because there are different opinions among the communities. He fully acknowledges the extreme poverty and political marginalisation of the Mapuche communities, and the innate imbalance of any dialogue where one party has so much more power than the other.
But he insists that he is of a new generation, and distances himself from the “old school" of Norwegian dam builders. Asked to comment on the recent Norad evaluation of 25 years of Norwegian hydropower aid, Huseby says he has not seen the report. Its conclusion, however, that the donor and the companies tended to overlook environmental consequences, does not surprise him. (See DT 18/07)
He also emphasises that the Trayenko projects will be completely different from Ralco, which he refers to as a project that was “terrible for the Mapuche". “We know that. It is difficult for us due to the distrust that exists," he says.
During the seminar, a proposal was discussed for the establishment of an independent body, perhaps financed by Norwegian aid, which would assist in setting the terms for a more balanced dialogue between the parties. Both SN Power and the Mapuche see a need for such a mechanism.
“SN Power is very positive to this. I am open for an independent third party to ratify the process. We need a validator to establish neutral ground," says Huseby.
He says a final investment decision will not be taken before environmental impacts studies are complete. This will take another two years. “I can promise you one thing though: we will not use force to push this project through. That is not our way of doing business."
At the end of two years, SN Power could very well decide to pull out, he says, adding that there are other companies that are ready to carry out the projects without taking indigenous rights into account.
The veiled threat is not lost on Pedro Antimilla.
“Huseby is saying to us that if we push too hard, another company will just come in and build it. That may be the reality," he comments. “But it is strange to hear. It sounds very paternalistic for him to recommend to us to accept [SN Power] instead of another company, as if he wants what is best for indigenous people. He just wants to build his project."
DT 20/2007 December 20, 2007
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