AYSEN, CHILE — The Patagonian region of southern Chile is considered one of the world's last, great wildernesses, dubbed an "eco-gem" for its rare fauna, ice-sculptured fjords and almost total absence of industrial development.
But development is threatening this pristine wilderness, driven in part by money from two of Canada's largest public-sector retirement funds.
The CPP Investment Board and British Columbia Investment Management Corp. have stakes in a vast electricity project planned for this natural area, putting the organizations on a collision course with Chilean and North American environmentalists, and into the middle of a heated national debate over energy development in the Latin American country.
The two funds, along with Toronto conglomerate Brookfield Asset Management Inc., are the controlling shareholders of Transelec Chile SA, a power-grid operator considering a 2,300-kilometre transmission line that would require one of the world's longest clear-cuts, a logged corridor 80 metres wide, much of it set to slice through temperate forests of a type found nowhere outside Patagonia.
The line would take electricity from the remote region to Chile's biggest cities and copper industry in the north from a new hydro power development, known as HidroAysen, planned by companies from Chile, Italy and Spain. The project involves construction of five large dams on two rivers and would boost Chile's power supply by 20 per cent.
Until now, the sparsely populated region has been almost untouched by industrial development, and conservationists are arguing it should be left that way.
They also say the 17 million beneficiaries and contributors to the CPP and the B.C. pension organization will share some of the responsibility for the harm caused by the project.
"I think a lot of Canadian pensioners would be very upset to realize that part of their legacy was destroying one of the most beautiful and pristine places left on the planet," said Jacob Scherr, director of the international program at the Natural Resources Defence Council, a New York-based conservation group.
He contends that the land, in a world that is now short of true wilderness, would have more value for Chileans over the longer term if it were left unspoiled.
The power companies expect construction to begin in 2009, pending Chilean government approval, with the first hydroelectric station to be inaugurated in 2013 and subsequent plants scheduled to go online by 2019. The lines and dams are expected to cost about $4-billion.
The rivers to be dammed include the Pascua, which runs through an uninhabited area of southern Chile's Aysen province, taking meltwater from the Southern Patagonian Ice Field, the largest expanse of permanent ice outside Antarctica and Greenland, through steep granite valleys to one of the many seawater fjords that serrate Chile's southern coastline.
The better-known Rio Baker arises from Lake Bertrand and flows to Pacific waters at Caleta Tortel, a scenic hamlet built entirely on stilts and connected by catwalks that descend to a peak-encircled bay.
Ecologists reel off a lengthy rap sheet of the damage the dam project is likely to cause, including the flooding of 60 square kilometres in the river basins, fertility loss in downstream soil and habitat destruction of endemic plant and animal species, including the huemul, an Andean deer so rare that its population has dropped below 3,000.
But activists believe the power lines, which could have an impact on 14 national parks or nature reserves, could prove even more damaging to Patagonia's fragile ecosystems.
"The transmission line will have a bigger impact than the dams themselves," said Peter Hartmann, Aysen-based director of Chile's National Committee for the Defence of Flora and Fauna. "Whatever route they take, it's simply not possible to avoid a great many national parks, nature reserves and conservation areas."
Residents of the region remain divided over the project. Many believe it will bring much-needed work and investment to one of Chile's least developed regions. "Most of those in favour of the dams prefer to remain silent, but plenty of my neighbours believe it will be good for the region," said Alfredo Runin, a land surveyor in Villa O'Higgins, one of the province's most inaccessible villages. "Some are only too happy to sell their small holdings to the power companies."
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