World Rainforest Movement

Chile: A disastrous forestry model with new “branches” in Latin America

What the big forestry companies have done with our territories in Chile is so devastating, so sad and so irreversible that it brings to the mind the “shock doctrine” described by Canadian author and activist Naomi Klein in her book of the same name (1). Using the same line of reasoning, we can state that in less than 30 years, our native forests have been steadily and systematically replaced by monoculture tree plantations under a model promoted during the Chilean military dictatorship and sustained over the following years by a predatory and unjust economic system which is so difficult to combat that today, now that is a fait accompli and continues to be upheld by surreptitious violence, we are simply in a state of shock.

The Chilean forestry sector is dominated by two business groups: CMPC, run by the Matte family, and Arauco, owned by the Angelini family. The assets and economic power of both families grow in size year by year. And this is not a minor detail; it is important to stress, because the huge profits made by these companies that control the entire export circuit (with more than 600 million dollars in revenues each according to their 2010 annual reports) have not been obtained through extraordinary entrepreneurial talent. Rather, they have been earned at the expense of enormous damage, most of it irreparable, to the natural ecosystems and the local communities who have lived since ancestral times (the Mapuche people) or for more than a century (peasant farmer communities and settlers) in the territories where tree plantations are concentrated (Regions VII to X).

Moreover, companies like Arauco acquired many of their industries and landholdings during the military dictatorship through privatization processes imposed on every sector in the national economy, leading to heavy losses for the national treasury (the total losses incurred by the Chilean state through the sale of state-owned companies are estimated at 7.8 billion dollars at today’s prices). And if this were not enough, the big forestry companies have received millions in government subsidies to establish hundreds of thousands of hectares of monoculture pine and eucalyptus plantations, which have frequently been created by replacing native forests.

The “dance of the millions” we describe here is danced by only a small few: these hefty profits are not shared by the 133,000 workers in the forestry industry. According to a study from the Department of Labour of the Bio Bio Region (Region VIII), only 25% to 30% of forestry workers have permanent contracts and 82% live below the poverty line, as the predominance of sub-contracting has made it difficult to obtain collective bargaining rights.

While all of this is happening, the millions of hectares of tree plantations are feeding a forestry industry geared to export, which generated 5.4 billion dollars in revenues in 2008, raising the forestry sector’s share of the country’s total exports to 13%. In the meantime, in the same rural areas where tree plantations and the forestry industry prosper – Regions VIII, IX and X – UNDP human development index scores (based on income, health and education statistics) are the lowest in the country.

On top of all this: around 17.7% of Chile’s national territory is covered with native forest, which represents, according to studies, less than half of the native forest cover before the arrival of the Spanish, and which continues to be destroyed today. Recent studies indicate that in the Los Ríos region, more than 20,000 hectares of native forest have been replaced by tree plantations in the last decade. Among its most recent scandals, Arauco was sentenced to making reparations for the environmental damage caused by the death of 33 specimens of araucaria, a native tree, to establish a plantation of exotic trees in the Bio Bio region. We should also mention the destruction of the Río Cruces Nature Sanctuary in southern Chile, for which the company was publicly sentenced and fined.

By way of example, we could cite the independent expert reports commissioned by Judge Gloria Hidalgo of the 1st Civil Court of Valdivia as part of the legal proceedings initiated six years ago by the government of Chile against CELCO-Arauco. Six independent experts – including a geographer, ecologist, biologist and chemical engineer – concluded that there is a direct link between the company’s pulp mill waste discharges and the destruction of the Sanctuary. According to the experts, CELCO-Arauco has caused the ecological collapse of the wetlands, the “sudden and total death” of aquatic plants, the death of huge numbers of swans and other bird species, the loss of biodiversity, and a drastic increase in the contamination of the Sanctuary’s waterways and sediments. (2)

Nevertheless, as if none of this had happened and was merely the figment of the imagination of a few individuals, the big forestry companies have continued to find endless means to further expand their influence. Arauco, the most powerful forestry company in Chile, has extended its tentacles to every single sector of society. One of the strategies it has used is to insert itself into the academic life of universities that train forestry engineers by funding infrastructure and research. The most recent case was this past March 30, when the School of Forest Sciences and Nature Conservation of the University of Chile and Celulosa Arauco Constitución (CELCO) joined together to cut the ribbon at the official inauguration of the university’s new Arauco Pavilion – leading numerous organizations to join forces to circulate a letter of condemnation (in Spanish The company also participates in international fairs and spends millions of dollars on publicity campaigns with unscrupulous slogans like “Bosques de Verdad para Chile” (“Real Forests for Chile”), alluding to its tree plantations, among other strategies.

Arauco has expanded its forestry model to other parts of Latin America, as well. In 1996, it bought the largest forestry company in Argentina, Alto Paraná S.A. Now it has moved on to Uruguay: through a joint venture with the Swedish-Finnish company Stora Enso, it is preparing to begin construction on a pulp mill in the department of Colonia, which is scheduled to enter into operation in the first half of 2013. Arauco strives to portray itself as an international model for “sustainable development” of forestry products. It claims to express this vision through “the search for opportunities for sustainable growth” and “efficient management that is responsible to the environment, local communities and future generations.” Well then, watch out Argentina and Uruguay, because in Chile, these principles have been systematically ignored.

By Claudio Donoso Zegers, Forestry Ecologist, and Magdalena Donoso Hiriart, Colectivo VientoSur,

(Sources consulted: General Comptroller’s Office of the Republic of Chile; Department of Labour of the Bio Bio Region; Arauco 2010 Sustainability Report; Forestry Companies and the Mapuche, Chamber of Deputies 2007;;

(1) In her 2007 book The Shock Doctrine: The Rise of Disaster Capitalism, Klein argues that free market policies have risen to prominence in some countries because they were pushed through while citizens were reacting to disasters and upheavals. She compares this economic shock doctrine to the original shock therapy, in which mentally ill patients were treated with the application of electric shocks.

(2) From an article published by the Ñuke Mapu Mapuche Information Centre: