Authors: María Elvira Ríos, Janny Figueroa Ayala & Andrea Freites (2023)
Abstract: This study examines the case of the Rucalhue Hydroelectric Plant, located in the Biobío region of Chile. Initially operated by Atiaia Energía Spa, a Brazilian company, the project was later acquired in 2018 by Rucalhue Energía Spa, owned by China International Water & Electric (CWE), a subsidiary of the multinational China Three Gorges Corporation.
In the context of studies on China's impact in Latin America, this case is significant for three reasons. First, it represents CWE's first project in Chile, following the winning of the bid by the 14th Hydropower Energy Office in China, which opens up possibilities for its expansion in the region. Second, CWE’s project has been highlighted in a report by the Collective on Chinese Financing and Investments, Human Rights, and the Environment (CICDHA, 2022) as an initiative affecting environmental rights, indigenous peoples, and civil and political situations, negatively impacting fragile ecosystems.
This analysis focuses on a detailed observation of the case, paying special attention to the sociocultural impact generated by the historical conflict in the area where the hydroelectric plant is installed. Despite aligning with the country's energy policies and being backed by an Environmental Qualification Resolution (RCA) granted in 2016, the Chinese company has faced significant obstacles, including legal actions and complaints that have complicated the project’s implementation.
A third important consideration is that the Rucalhue Hydroelectric Plant case reveals the lack of adequate environmental governance in Chilean municipalities. This is largely because Chilean electricity law grants water property rights to hydroelectric plant owners, taking precedence over water law and affecting the sustainability and governance of this resource (Bauer, 2009). Furthermore, the neoliberal policy of a subsidiary state turns social policy into a fragmented and assistive exercise, assuming that private actors will provide for the population (Codoceo and Muñoz, 2017).
Thus, the approach to addressing the ecosystem damage caused by these projects, especially in rural areas considered within the poverty range, lacks a comprehensive perspective. Assistive practices, where productive agents are seen more as passive beneficiaries than as rights holders and participants in decision-making (Correa and Dini, 2019: 57), have become the common response to mitigate the negative impacts of these developments. This assistive approach often extends to the involved business sectors, without fully considering their potential active role in seeking more sustainable and equitable solutions.
Despite the modifications made by Rucalhue Energía Spa of CWE, including improvements in environmental damage and a net gain in biodiversity, the weight of the historical conflict surrounding the Biobío River basin, the Pehuenche communities, and the defense of the basin suggests that the undertaken actions will increase the ecosystem's vulnerability and generate new uncertainties in the territory.