Logging Gripes.

Chile's National Environment Commission collects criticism from activist and business leaders.

CHILE'S RECENT ENVIRONMENTAL BATtlegrounds--Trillium and Ralco--are so well known they go by single names like Brazilian soccer stars.

Another quality the two investments have in common is less auspicious. After millions spent on planning and tough legal and political clashes, the logging project and the major new dam remain in development limbo, neither canceled nor really moving forward.

Yet the final casualty of the political fire fights, which forged Chile's nascent green movement in the summers of 1996 and 1997, may well be the reputation of the government's own National Environment Commission, also a locally famous one-namer, Conama.

How well Conama can resuscitate its image as a relevant, well-run watchdog remains to be seen. Both environmentalists and business leaders have logged their share of gripes about the agency and its much-debated mission.

The aftermath of the Trillium disaster eventually pushed the head of Conama out of office. Vivian Blanlot left in mid1997 following a successful legal challenge to her commission.

Bellingham, Washington-based logger Savia, Inc., head of the Trillium project, had planned to log native lenga trees in Patagonian Chile. The company's US$260 million project included measures aimed at preserving the environment to gain Conama approval.

Environmental groups sued, winning a substantial delay on grounds that the government's failure to fully publish a new environmental law rendered Conama's approvals moot. Trillium eventually got the green light it wanted, but with so many conditions it may never get off the ground.

Meanwhile, the Ralco Dam, headed by Endesa of Chile, would block a portion of the Bio-Bio River to produce much-needed hydroelectric power. Ralco was besieged by lawsuits from both environmental and indigenous groups. But the coup de grace was a private letter from the World Bank--leaked to the local media--that was critical of the project. Ralco remains on track, but work has slowed to a crawl.

Conama's replacement director, Rodrigo Egana, now two years on the job, says critics should see the agency for what it is--a technical administrative body that responds to the government. In the past, Egana says, Chile did not put enough energy into caring for the environment, especially considering the size and complexity of new investments. Balancing the demands of investors and public interest is a straightforward matter of policy that is open to political debate, he adds. "People complain that we're not independent. We are, in fact, part of the government. I think it would be strange if we weren't close to the government on development issues."

Conama can't hold the line against big developers whose projects are important to politicians, environmentalists contend. Miguel Stutzen, an official with Chile's National Committee for the Defense of Fauna and Flora, says the Commission is more comfortable simply setting administrative hurdles and then voting whichever way suits the minister most affected by the project being considered.

"There is a political policy to approve all projects, regardless of their impacts:" Stutzen complains. "It's like an orchestra with no conductor Each musician just plays whatever he likes."

Public hearings are held for each environmental impact study, a lengthy process patterned consciously after environmental practices in the United States. Although Chile's non-governmental organizations (NGOs) take an active role in those forums, their most concrete success in stopping projects has been in the Chilean court system.

That once-successful gambit, however, may have run its course. Chile's latest headline-making development project also goes by a popular single name: Cascade. The U.S. logging giant Boise Cascade Corp. teamed with Chile's Maderas Condor S.A. to harvest 925,000 cubic meters of native forest annually in the southern Lakes region near Puerto Montt. (Other private loggers already working the area--one of Chile's most thickly forested--cut more than 5 million cubic meters yearly) At press time, the $180 million joint venture had wrapped up its Conama paperwork, was awaiting its final approval and was just 20 days behind schedule.

Cascade realized it had an uphill battle after Trillium. The company spent $4.5 million and two years on preliminary studies, partly to prepare for the Conama review, says Italo Zunino, managing director of Maderas Condor.

From Cascade's point of view, that should be it. But now the company faces interminable delays in the courts, with some suits filed against the project and some in favor, specifically eight separate indigenous groups and local citizens from the nearby town of Bahia Ilque interested in new jobs in the rural, under developed south. The plant would provide 250 permanent positions and 700 construction jobs during the two-year building phase. "Every environmental permit should not end up in court, Zunino says. "Unfortunately, lawsuits have become normal'

Cascade is confident it will win eventually, and as time goes by, precedents set by Cascade and other new investors will make filing suits against new investments less attractive, Zunino says. Chile's environmental rules are already demanding, so the NGO tactic of using a plodding courts system to delay sound projects is risky business, he contends. "The funny thing is, our credibility is worse than theirs," he says. "But if they continue to play with the truth, they will be discredited in the end."

As might Conama if it doesn't get some teeth.