Pinera Under Fire Over Chilean Coal Mine Project
July 27, 2011 by UPI - United Press International, Inc.
SANTIAGO, Chile, July 27 (UPI) — Chilean President Sebastian Pinera has been spared a politically damaging campaign to discredit him, at least for now, because he owns shares in a Patagonian coal mine in southern Chile.
Critics had said the president’s stake in the Riesco Island coal mine project was a blatant conflict of interest.
But after weeks of bitter campaigning by political foes and environmental protest groups, Comptroller General Ramiro Alfonso Mendoza Zuniga rejected accusations of a conflict of interest.
Pinera, a multimillionaire, has been divesting his substantial commercial interests since becoming president in 2010.
In the Isla Riesco controversy, however, he found himself pitted against political rivals as well as environmental groups that oppose addition of any new coal-fired power generation capacity when Chile is facing notoriety as a major polluter in the region.
Pinera has his stock portfolio in a blind trust but has included the project in a development plan for the southern Magallanes region despite protests from numerous opponents.
Critics said Pinera could profit from the outcome, an accusation the president denies.
The Isla Riesco project’s potential to entangle Pinera in more potentially damaging political controversy isn’t exhausted yet. The project must be approved by a council that includes 14 Cabinet ministers. Critics counter that the ministers are all presidential appointees and will do his bidding.
Mendoza dismissed the argument, ruling the ministers’ appointment by the president couldn’t mean the ministers would cease to be impartial.
The Chilean comptroller general is the head of a powerful and autonomous body and has been known to insist to strict adherence to the law in past incidents. Opposition or resistance to the senior law official’s rulings is rare.
However, the campaign against the mining project isn’t over and the ministers’ vote on its feasibility could be challenged, analysts said.
The mining area near the regional capital Punta Arenas aims to produce up to 240 million tons of coal over a 25-year period. However, the project has faced opposition since it was approved by the regional environmental authority in mid-February. Critics say the mine’s poor quality coal will add to Chile’s pollution woes and worsen its track record for efforts to reduce carbon emissions.
Riesco Island, west of the Brunswick Peninsula in southern Chile, has the country’s largest known coal reserves, with mining activities dating to the 19th century. More than 300 million tons of low-quality coal deposits are known to be spread across three areas on the island, Rio Eduardo, Elena and Estancia Invierno.
Opposition Democracy Party leader Carolina Toha, a leading critic of the project, said Mendoza’s decision was “contrary to common sense” and that she will appeal the ruling.
Lawmaker Enrique Accorsi said the president might already be benefiting from the project as share prices for the company involved, COPEC, had appreciated since the February approval.