Chile's Supreme Court Blocks Dam Project

Patricio Segura
2012-05-16 14:54
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Chile's Supreme Court has handed down a possibly landmark decision that will require more stringent environmental reviews of major construction projects and could help opponents challenge a series of planned hydroelectric dams in Patagonia.

In the 11 May decision, the high court voted 3 to 2 to invalidate the recent approval of the Río Cuervo dam in Chile's Aysén region. The justices ruled that project backers had not completed a required geological survey before a regional government agency approved the project. The dam's approval "is unlawful" because the agency hadn't considered "the indicated ground survey that, in the opinion of this Court, is essential for the approval or rejection of the project."

The decision "is clearly a radical change in the historical judgments of the Supreme Court," said Fernando Dougnac, attorney for the Environmental Prosecutor's Office, which filed the challenge on behalf of local residents opposed to the dam. It confirms that "studies should be performed before the decision is made," he said.

The Rio Cuervo dam is being developed by Energía Austral, a joint venture between Switzerland-based Xstrata Copper and Australian energy retailer Origin Energy. The dam would have a total installed capacity of more than 640 megawatts and cost $735 million. It is part of a larger $3.6 billion scheme that calls for three dams.

The project has been controversial. The proposed dam and a 13,000 hectare reservoir would be located on the Liquiñe-Ofqui fault, which was involved in the recent eruptions of the Chaitén and Hudson volcanoes, and in a 2007 earthquake that killed 10 people near the city of Puerto Aysén.

Energía Austral noted that "in no way should the court's ruling be understood as a rejection of the project under evaluation," and said it will renew its effort to have the project approved and will complete the required geological survey within 6 to 12 months.

The decision also appears to open the door to challenging another major hydroelectric project in Patagonia: the $10 billion HidroAysén project, which plans to build five dams on the Pascua and Baker rivers and flood 5910 hectares. The same regional commission that approved the Río Cuervo dam gave the green light to the megaproject in May 2011, also without considering a number of incomplete studies.

Government officials say they will respect the decision, which overturns a long-standing practice of allowing project planners to carry out some environmental studies after project approval but before construction. "Now the Supreme Court has applied a change of opinion, of course, we will abide," said Ignacio Toro of Chile's National Environmental Commission.

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