For a new constitution making Chile a sovereign state not subordinated to foreign powers
By Chilean authors Javiera Martinez and Fernando Toro, and Andy Higginbottom
Before the social explosion in Chile in October 2019, the country was immersed in discussing the global climate crisis, not only due to the extensive and systematic socio-environmental conflicts in the country, but also because of the government’s refusal to sign the Ezcazú Agreement – the first environmental human rights treaty in Latin America and the Caribbean approved in March 2018, which could provide basic guarantees to the Chilean people and a real commitment to socio-environmental justice.
There is also an ongoing fight to stop the government agreeing the latest version of the Transpacific Economic Cooperation Agreement (TPP), known as TPP-11. As explained by economist Gabriel Palma, TPP-11 would grant the right to transnational corporations to use international courts to stop any actions that go against their economic interests and expected profits, therefore restricting the sovereignty of the country concerned. After the cancellation of the COP25 and APEC summits because of the political and social crisis that Chile is experiencing, today’s task is to think about how a new Constitution can protect national sovereignty and the sustainability of our territory and communities.
It all started with the government’s announcement to raise prices on public transport, which saw an increase of 30 pesos for subway tickets and 10 pesos increase for bus tickets. From that initial catalyst, demands for socio-environmental justice have fused with the historical demands of different movements. During the days of State of Exception and Curfew, mobilizations increased, accumulating social forces from labour unions, student federations and environmental organizations among others, under the Social Unity platform. “It’s not 30 pesos, it’s 30 years” has been the call that represents the systematic violence of the State after 30 years of policies of exclusion, precarious living and exploitation. The historical demands were encapsulated in the demand for a New Social Protection System; a fairer pension system “No + AFP” (Administrador de Fondos de Pensiones), a guarantee of the constitutional rights to public education and health, recovery of our metallic and non-metallic mineral wealth, nationalisation of water, labour reform and a structure that guarantees a sustainable future with global climate change – in short, an entirely new development model.
In the middle of the social awakening, President Sebastián Piñera declared war on the Chilean people on national television. He announced that “We are at war against a powerful enemy” , causing the frustration of the mobilised people, summoning the largest demonstration in the history of the country. In Santiago alone, more than 1.5 million people came to the ‘Plaza de la Dignidad’, the new name given to the former ‘Plaza Italia’ by the social mobilization . The demonstrations kept going: for days the people continued on the streets, in every corner and in every city; every day there were more people who demanded justice, dignity and rights. But also the repression was increasing on the part of the State, military and police forces. According to the National Institute of Human Rights, up to 14th November, 5 complaints for homicide were filed; more than 55 complaints of sexual violence; about 240 complaints of torture; 6,199 people detained, including 726 girls, boys or adolescents; 2,365 people were injured by bullet shots, pellets, firearms or pellets and at least 190 people have suffered partial, total or severe eye damage. The State has struck the excluded people down with the most crude terrorism. This systematic violation of human rights, multiple injuries and more than three deaths, should not remain unpunished.
Social mobilization, through councils, called “cabildos” and from different fronts has managed to highlight a fundamental issue, the need for a new constitution, via a Constituent Assembly. The current constitution is one of the fundamental pillars of years of abuse. It was designed by the Pinochet dictatorship in 1980 and has allowed the present neoliberal, extractive, colonial and patriarchal system to deepen, benefiting the owners of political and economic power, granting greater powers to the private business sector over the State and that has also allowed unscrupulous extractivism through transnational companies, protecting the privatization and exploitation of our natural assets. It does not guarantee social rights, and this facilitates the policies of social exclusion, exclusion of women, the elderly, indigenous communities, sexual diversities and the working class in general.
The organized citizenry began to convene councils, “cabildos” or assemblies, with the aim of taking the mobilization a step further and starting to talk about the causes of this predatory system, generating proposals for change, demanding a new constitution. The councils took place throughout Chile, they were spontaneous and self-convened. Some Chileans abroad also convened themselves as councils. This led to the official political system having no choice but to act, to finally give way to a constitutional process to create a new democratic constitution with active participation. This process will be carried out with a plebiscite, choosing the body that draws up this new constitution, leaving behind the 1980 constitution.
Although there are multiple demands from the citizens, the re-nationalisation of our common assets and a sustainable development model are repeated in the streets and town halls. Both the deprivatization of water, as well as the nationalization of lithium and copper, among others, are vital in this new Magna Carta.
The Constituent Assembly, although it is a hope in the transformative process, is only the beginning of a democratic path, where it will be the people who must decide the mechanisms and the representatives for the assembly of this construction of a new Magna Carta. It is necessary to realise the historical demands of citizens for greater social justice, but also to discuss the fundamental issues that have not been discussed. Only if this is achieved, can we meet the demands of the citizenry. Because so far nothing has changed, pensions remain a misery, education remains a market, the model remains subordinated and neoliberal, delivering state resources to the private sector, and human rights continue to be systematically violated.
The 1980 Constitution as the basis for the privatization of our rights, Copper
In this context and in order to allow the realisation of our historical demands, the role that transnational private companies have had in the country, especially those based in the United Kingdom, must be taken into account. These companies exploit the territory of Chile, but they have their operations centred in the London Stock Exchange. Extractivism, defined by Romero-Toledo (2019) as “a multiscale process that involves the mobilization of large volumes of natural resources, normally unprocessed, and specialization in mono-production of the territories”, has had various consequences especially in mining, and most especially copper mining and lithium. Mining, an economic activity with the highest foreign investment in the country and with profitability levels that reach 85%, is closely linked to the accumulation of capital in the Global North. This capitalist, neo-colonial development model has affected our territories through uncontrolled and massive mining projects. It has dispossessed communities, causing their displacement and co-opting their legitimate will to continue inhabiting a territory with which their identity is bound up. Extractivism is a double process that consists in extracting and exporting materials, but does not involve the development of national industries, the modification of international markets or the role of the State in the productive process. It promotes the subordination of the State by extractive companies.
The weak role of the State in regulating the extractive mining industry has meant that natural resources directly benefit the world powers, not the people. If we go back to the turning point in our contemporary history, we know that on July 11, 1971, the Popular Unity government, led by Salvador Allende, unanimously approved Law 17,450 on the Nationalization or Copper. This law modified the 1925 Constitution, in force at the time. The new law declared mining to be in the State domain, with the goal of using it for the progress of the people. However, when the dictatorship came to power in the military coup of 1973, it implemented the prevailing neoliberal and extractive model, consolidating it with the Constitution of 1980. The dictatorship’s institutional framework destroyed Law 17,450; it denationalized Chilean copper and designed various instruments that gave incentives to foreign companies: for example, the Foreign Investment Statute, Decree of Law 600 of 13.07.1974; Law 18,097 of the Constitutional Organic Concession of Mining Concessions, which became effective with the Mining Code in 1983; and the Law on Income Tax of 1974, which provided the perfect context to dismantle the State, giving way to a foreign investment policy without limits, with benefits and securities, handing over the country’s wealth to foreign entities.
José Piñera, former Minister of Mining during the dictatorship and brother of the current president of Chile, was responsible for the creation of this structure. He regressed from the position that the State owns the resources domain, to what is called a concessionary regime, thereby delivering power to private corporations who were granted broad mining rights of indefinite duration, protected under the right of property, without any State regulation or interference. This “Full Concession” regime of José Piñera had two fatal consequences for the history of our country: 1) the State lost control of natural resources and did not use them for the common good; 2) private companies had absolute ownership and control over the land and all that lies under the surface, such that even to build a road the public authorities would have to ask the corporation’s permission. The concessions did not require any payment, that is, the State ceded our deposits free of charge to private and foreign companies. The result is that today 71% of revenues from mining exploitation goes to private corporations which have been enriched all these years, without benefits coming to a people that is crying out for dignity and rights. Far from dimming, this model has deepened in the last 30 years.
Our resources, our rights: World copper profits and London’s role in mining extractivism
The effects of the climate crisis in Chile are increasingly devastating. Today there are regions with extreme water stress levels. In fact, according to studies by WRI Aqueduct, Chile is among the 20 nations with the highest level of water stress in the world. On the other hand, the impact of lithium exploitation in the Chilean desert has deepened in recent years, seriously affecting the ecosystems of the Salar de Atacama. These are elements in the current social and ecological crisis in Chile.
As a consequence, environmental conflicts are increasing, as the map of the National Institute of Human Rights (NHRI) shows, with the Mapuche and other indigenous peoples resisting to defend their territories. Today, the reality is that there are people, cities, communities and organizations that are fighting for their life, water and territory, against companies and the State, who daily violate their human and environmental rights, systematically repressing and criminalizing them without hearing their demands. Let us not forget that the Chilean State is also part of the environmental problem, according to the Sustainable Chile report: coal-fired thermoelectric plants operate in “zones of sacrifice” that are responsible for 91% of the total CO2 emissions in the communities where they exist. Despite this, legal initiatives continue to be designed and sent to Congress that favour the economic interests of these extractive companies.
Chile is the world’s largest copper producer, with 553 billion dollars of foreign direct investment. The sector and government policies that support it are held up as a positive example for international business. Chile is home to six of the ten most important copper mines in the world:
- Escondida, in the Atacama Desert, which in 2013 alone produced 1.1Mt (Millions of Tons) representing 5% of the world’s copper production, operated by the mining company BHP, with Rio Tinto among others investing.
- Collahuasi, southeast of the port of Iquique. The mine, which produced 0.3Mt of copper in 2012, is operated by Anglo American and Glencore.
- Andina is the fourth largest copper mine in the world by reserves. It was estimated that the mine contained 18.8 Mt of fine copper at the beginning of 2013. It is operated by the state-owned Codelco (National Copper Corporation of Chile), the world’s largest copper producer. The copper deposit was discovered in 1920 and mining operations began in 1970.
- El Teniente, 80 km south of Santiago, was estimated to contain 15.2 Mt of fine copper at the beginning of 2013
- Radomiro Tomic, in the Atacama Desert. In 2013 the mine had 12.1 Mt of fine copper.
- Los Bronces, 65 km northeast of Santiago. In 2012 the open pit mine was estimated to contain 11.13 Mt of copper, operated by Anglo American.
Chile is also the second largest lithium producer globally, which is one of the most important reserves for new technological challenges. Our popular movements demand the nationalization of lithium, so that the mistakes of handing over copper wealth are not repeated.
Our copper assets are being exploited by the richest mining companies in the world.
BHP, a UK-Australian, mining company, made $4.6 billion profits from its copper operations in the financial year ending in 2019, the second largest source of revenue for this company. ($ denotes US dollars).
Anglo American, a British mining company, made $1.8 billion profits from copper in 2018.
Rio Tinto, also Anglo-Australian, reports profits from copper and diamonds combined of $2.8 billion in 2018.
Glencore is a Swiss conglomerate with a strong London connection (it is listed on the London Stock Exchange). In 2018 its worldwide copper revenues were $18.2 billion, at an estimated profit of $2 billion.
London’s role in mining extractivism is crucial, since it is the world’s largest investment centre in the industry. This means that the largest mining companies, such as Anglo American or BHP, with operations in Chile, are quoted in the London Stock Exchange, where they decide how, where and what to exploit, together with international banks and investment funds, who invest hundreds of millions of pounds a year in mining projects, generating a link between the profits of the dominant economic groups with the exploitation of our territories; that is, while developing countries get rich, the communities affected throughout the Global South suffer the consequences of the change of their territory, deadly diseases, destruction of flora and fauna, and water shortages, among many others. In addition to the fact that when there is a conflict, the UK government provides diplomatic support to mining companies that have their headquarters in London, even when the localit communities are opposed to extractive activities. The commercial wing of the British embassy in Chile claims “The UK is pursuing £70 billion in mining business in Chile”.
The cost of the proposals presented by the government, through its social agenda, have no comparison with the profits made from exploiting Chilean copper by foreign mining companies. According to the study “The wealth given to large-scale copper mining in Chile,” between 2005 and 2014 mining rents, known as GMP-10 Concentrated Income, were US $156 billion. So mining rents averaged $15.6 billion. According to the methodology of the report a mining rent is the extra profit calculated from revenues less costs and less normal profit returns. The report’s figure of mining rents (i.e. surplus profits) was actually more conservative than the World Bank estimate of $204 billion. Even on its conservative figure, the report states that at least $11.4 billion profits every year have been taken by the private mining corporations.
According to the document presented by Orlando Caputo, Former General Manager of CODELCO, the total cost of the proposals presented by Sebastián Piñera only amounts to $1.2 billion. This is less than a tenth of the profits made by the large foreign mining companies. This and the previous government’s proposals are insufficient in comparison with the Chilean people’s needs, and what we have demanded for these last 30 years. We demand a minimum salary of 350,000 pesos ($447) a month, pension reform, stable prices for medical drugs, electricity and other necessities. These are minimum demands that could be financed from copper and lithium revenues, but they would still not bring substantive change to people’s lives: for that the system that must be changed fundamentally.
The question we must ask is, what is the model that Chile needs to move towards socio-environmental justice? The Chilean neoliberal system, overseen by a constitution made by the dictatorship, has deepened the precariousness of the lives of millions of people and the degradation of our territory. The ongoing social mobilization is beginning to rebuild the social fabric destroyed by decades of exclusive, abusive, inequitable and unsustainable policies. We now have the historic opportunity to create a constitution with the active participation of the people. Leaving behind the constitution of 1980 is the beginning of the structural change that Chile needs. We need to come up with a new political, economic, social, productive and environmental model that leaves behind the over-exploitation of resources and transnational neo-developmental extractivism. This will be the way to cement a sustainable future, a fairer, anti-patriarchal, plurinational, sovereign future in which the natural commons will be protected for future generations.
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