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From the Matrix to Arauca. The Spanish multinational energy companies in Latin America

From the Matrix to Arauca. The Spanish multinational energy companies in Latin America

By Erika González and Pedro Ramiro

In the past, to know reality you had to look out the window. And in them we see that Iberdrola accepts the challenge of green energy, Repsol brings us the weather forecast, Endesa the daily press summary and Unión Fenosa helps us save energy at home.

From the Matrix to Arauca. The strategies of the Spanish multinational energy companies in Latin America

“This is your last chance, afterwards you won't be able to back down. If you take the blue pill, end of story. You will wake up in your bed and believe what you want to believe. If you take the red pill, you will stay in wonderland and I will show you how far the rabbit hole goes. Remember, the only thing I offer you is the truth, nothing more. "
Morpheus speaking to Neo, in The Matrix (Larry and Andy Wachowski, 1999)


“Today too, as it happens every day, the sun will go down. For this reason, because there is night and darkness, you have Unión Fenosa providing light ”. In its latest marketing campaign, the electric multinational explains in this way what its objective is: to provide people "a little help for an almost perfect world."

And the fact is that, if we were to heed the advertising of the Spanish energy companies, we would have to assume that, indeed, we live on an almost perfect planet. Because in the advertisements an idyllic world always appears, with green fields, transparent rivers and people who live in peace. In the manner of the Matrix [1], it is a computer-designed virtual representation that replaces reality. In other words, by dint of repeating the same message, the idea that thanks to Repsol and Unión Fenosa the planet is in good health and nature is respected.

In the past, to know reality you had to look out the window. And in them we see that Iberdrola accepts the challenge of green energy, Repsol brings us the weather forecast, Endesa the daily press summary and Unión Fenosa helps us save energy at home. What we propose in this article is to open the window and listen to the people who directly suffer the effects of the presence of the Spanish multinational energy companies. We are clear, like the protagonist of Matrix, that the red pill is worth taking.

Between big numbers and brand equity

Transnational companies are experts in showing different faces depending on the audience they are targeting. For shareholders and investors, they show their more favorable economic profile, with sustained growth and with numbers that each year have more figures [2]. At the same time, for consumers and customers, they show their politically correct face, where the values ​​of solidarity and respect for the environment prevail [3]. In short, these are two complementary visions, which contribute to forging the brand image of large companies.

The first strategy is based on consolidating the myth that transnationals are a safe asset that can always be trusted. Thus, the arrival of spring is felt not only because El Corte Inglés reminds us of it, but also because it is on that date when the profit and loss accounts of the large multinationals are announced from the rooftops that, curiously, always manage to grow with respect to the previous year. In the case at hand, this year Endesa has increased its profit by 154% and Unión Fenosa by 119%, while Repsol YPF obtained a growth of 29%, raising its profits to 3,120 million [4]. Surely this news is not much different from good commercials. The machinery of takeovers, mergers, sales of unprofitable companies, staff reductions and outsourcing of the most expensive tasks also gives them an image of competitiveness for the shareholder and a better position to face possible acquisitions.

The second of the strategies consists of forging a corporate image that transcends the consumer object itself. Pointing to the trend of selling values ​​and not products that have been developed so successfully by large companies worldwide, energy multinationals seem to assume values ​​more typical of an environmental or solidarity organization than of a private company. And it is that so many years of complaints about the labor and environmental exploitation of these companies has forced them to rebuild a new business model that transmits values ​​that currently enjoy social prestige.

"The cleanest energy is the one that is not consumed", says Unión Fenosa. "Your energy moves us," says Repsol YPF. “The best company is yours”, we see in Endesa's advertisements… Even the company's logo itself symbolizes nature, such as Gas Natural's butterfly or Iberdrola's colored leaves. And, in the event that there are unforeseen events that put the much-worked brand image at risk, these multinationals are always ready to counter-attack. For example, the scandal of the reduction of reserves, the accusations of oil smuggling and the decree of nationalization of hydrocarbons in Bolivia have caused Repsol YPF to multiply investments in new oil fields around the world [5].

The hidden curriculum of Spanish energy companies

Although it seems that these multinationals have been established in Latin America all their lives, the truth is that they have only been there since the mid-1990s. The economic reforms that were implemented in the golden age of neoliberalism, known as the Washington Consensus, paved the way for them and allowed them to establish their activities throughout the continent. Let us not forget that Endesa and Repsol were public companies that, after their privatization, had the necessary capital to invest in their Latin American expansion. The fact is that this entire process has been accompanied by a succession of serious impacts on the peoples of Latin America, accumulating an enormous ecological and social debt in the curriculum of the transnationals [6].

Endesa is the leading multinational in the electricity sector in Latin America and is present in Chile, Argentina, Colombia, Peru, Brazil and throughout Central America. The activity in this region reports 31% of the total profit, which is built from various business lines: the purchase of key companies in the sector, the subcontracting of less profitable tasks and the construction of megaprojects.

Endesa's main megaproject has been the Ralco dam, in Chile, whose construction had a very serious environmental, social and cultural impact. Several years of pressure from the company to the government allowed its start-up, with the consequent displacement of the Mapuche-Pehuenche communities from their ancestral land. On the other hand, the environmental consequences go beyond the flooding of a territory with high ecological value, without going any further, in July of this year the abundant rains and the opening of the floodgates of the hydroelectric plants have caused floods that have killed seven people.

Currently, Endesa is participating in the construction of the Central American Electrical Interconnection System (SIEPAC), whose purpose is to connect Mexico with Colombia through an electrical transmission network of almost 2,000 km that passes through all of Central America, with the ultimate objective to provide energy to the North American market in these times of energy crisis. This project is part of the Puebla-Panama Plan, a regional development strategy sponsored by the World Bank and which will boost the business of energy multinationals operating in the region, such as Unión Fenosa.

Unión Fenosa is present in Mexico, Guatemala, Nicaragua, Panama and Colombia. It is not among the fifty largest multinationals in Latin America ... but, if there were a ranking of the most criticized companies, it would appear in the top positions. The company currently controlled by the construction company ACS entered the Central American electricity market by buying the state companies. In the case of Guatemala, where Unión Fenosa owns more than 90% of the two main distribution companies [7], the Spanish electricity company benefited from the implementation of the Rural Electrification Program, whose financing was contingent on the entry of transnational companies according to the dictates of the international financial institutions. The same recipe was applied in Nicaragua, which led Unión Fenosa to acquire the two largest companies and to control 92% of the country's electricity distribution [8].

While it is true that these plans have expanded electricity coverage, it is no less true that the quality of service is quite low. The end result, citizen protests. Because the most typical phenomenon of this poor service is blackouts, as we have seen this year in Nicaraguan newspapers [9]. Considering what has been seen, and given that Unión Fenosa considers “one of its first responsibilities to promote the rational use of energy”, it would not be surprising if the company included blackouts as a method of energy saving in the future. But the problems do not end there, since, according to the complaints made by different social organizations in Central America, there have been constant increases in rates, exorbitant billing and poor customer service.

Lastly, Repsol YPF is the leading multinational company in the hydrocarbons sector in Latin America. What catapulted this former state-owned company into the category of transnational was the purchase of the Argentine giant Yacimiento Petroliferos Fiscales (YPF), which allowed it to focus a large part of its activities in Argentina and, at the same time, expand to almost all other countries. of the continent: Bolivia, Brazil, Chile, Colombia, Cuba, Ecuador, Mexico, Peru, Trinidad and Tobago and Venezuela. In 2004, 88% of its operating income came from Latin America [10].


This expansion throughout Latin America has brought succulent benefits ... as well as an enormous list of social, environmental and cultural impacts on the peoples of the region [11]. For example, in Argentina, where the contamination generated by the Loma de la Lata deposit has affected the Mapuche communities Kaxipayiñ and Paynemil, and where the privatization of YPF led to a great loss of jobs and the deterioration of working conditions. Or in Ecuador, a country in which Repsol YPF's activities in the Yasuní National Park have an impact on the Huaorani ethnic group, and where the Spanish multinational is part, along with six other companies, of the consortium that operates the Heavy Crude Oil Pipeline (OCP) , which transports oil from the Amazon rainforest to the Pacific coast and affects 11 protected areas. And also in Bolivia, where Repsol carries out its operations in the Multi-ethnic Indigenous Territory, in which Chimanes, Moxeñas and Yurakarés communities coexist, in the Chimán Indigenous Territory and in the Isiboro Sécure National Park Indigenous Territory, just to mention some of the territories inhabited by Amazonian ethnic groups that the multinational has invaded.

Colombia, different strategies for the same purpose

And, how could it be otherwise, Colombia is not an exception within this logic: Endesa, Unión Fenosa and Repsol YPF are fully established in the country and are leaving a trail of impacts from it. Moreover, the fact that Colombia has been a country with an internal armed conflict for more than 40 years, means that these companies operate in a context of continuous human rights violations, of which it could be said that, at the very least, they take advantage of … If they do not contribute directly to feeding it in some of the cases.

Endesa entered Colombia by winning the Bogotá Energy Company, laying off 2,000 workers and subcontracting numerous tasks to international companies in which it had economic interests. [12] Basically, the company eliminated the public service character of electricity, making it a commodity available only to those who can pay for it. This resulted in higher rates or the fact that the users themselves had to face payments for the improvement of the distribution infrastructure. On the other hand, obtaining energy has been carried out through infrastructures that harm the local population [13].

Unión Fenosa's entry into Colombia has been somewhat more popular. Not so much because of the purchase of the EPSA company, but above all because of the acquisition of the distributors of the Caribbean Coast (Electricaribe and Electrocosta) [14]. According to the company itself, 72% of its clients on the coast belong to the poorest strata. For this reason, the business must be based on a very aggressive strategy: forcing blackouts on users, increasing rates, overbilling ... In the face of citizen protests that have arisen in this regard in recent years, Unión Fenosa's new stratagem has been create the company Energía Social which, by the way, is subsidized by the State. What they call “management adapted to the idiosyncrasy of the most depressed neighborhoods on the Atlantic coast” was first done through the outsourcing of social leaders to read and collect bills, which generated tensions in the community and in the process destroyed the social movement that generated the protests. The business has been round, because the collection rate has increased by 65% ​​and the idea has won an international award in Corporate Social Responsibility. Meanwhile, complaints against Unión Fenosa continue, such as the one recently filed by a Colombian union before the ILO after the company accused union leaders of being part of the guerrillas. [15]

To finish this tour, we have to talk about the oil company Repsol YPF because it represents a paradigmatic case. The company carries out its activities mainly in the department of Arauca, where the Uribe government has established a permanent state of exception. Repsol operates in this region in three different but complementary ways: associated with the state company Ecopetrol, in consortium with the American transnational Oxy, and alone. In all modalities, the presence of the Spanish multinational in Arauca is characterized by benefiting from the persecution of social leaders, which combines prosecution strategies with massacres, as well as by its little respect for indigenous peoples and the environment [ 16].

This example helps us to highlight an apparent paradox: the largest oil company in Latin America works underground in Colombia. That's right, the same company that in our country sponsors motorcycling and the weather forecast and which in its annual reports includes its presence in Colombia, operates through a subcontractor in Bogotá and lacks any type of logo or identification in its offices and wells, with what anyone would say looks like a shell company.

Their situation shows the great capacity of adaptation to the environment that transnational companies possess. In Arauca, where more than twenty years of oil activity have barely benefited the population, Repsol knows very well that it is not welcome and that its operations can have repercussions on its corporate image. So as he drills new wells and fattens his profits, he chooses not to show his face. This, which could be paradoxical when compared with the publicity they give to their activities in other countries, is nothing more than another form of the same representation of the Matrix: it is also about building a parallel imaginary, but now through the technique of erasing itself from the map. and operate in secret.

And it is that nobody said that in all parts of the world they had to have the same version of the program ...

Observatory of Multinationals in Latin America (OMAL)
Peace with Dignity

This article has been published in the magazine El Viejo Topo, number 225, October 2006.


Notes:

[1] For those who have not seen the movie, The Matrix is ​​a modern version of the myth of the cave. It is that the Matrix is ​​a computer program that controls the representation of reality and serves so that human beings create living in a perfect world ... when in fact they are enslaved by machines. This metaphor has been widely used in the analyzes carried out from social movements; see for this, for example: Iglesias Turrión, Pablo (2002): “Sabotear Matrix. Notes on the role of the disobedient in the European Social Forum in Florence ”. El Viejo Topo, nº 174 and Lara, Ángel Luis (2003): “The rebellion in the time of the war: notes from the Madrid laboratory”. Rebellion, nº 6, April.

[2] Large Spanish companies will distribute more than 8,200 million euros in value of shares during the month of July 2006, as reflected in Jiménez, Miguel (2006): “Record rain of business dividends”. El País, July 2.

[3] Consumehastamorir (2006): “The advertising washing machine”. Diagonal, nº 22, January 19.

[4] These data have been obtained from the annual reports of the companies. The profits of Endesa and Unión Fenosa are inflated with the sale of certain company assets, which have just been included in the overall result to increase the value of their shares.

[5] Between March and August 2006, Repsol YPF announced the launch of new activities and investments in Russia, Spain, Algeria, Brazil, Canada, Argentina, Libya, Trinidad and Tobago, Nigeria and the United States.

[6] Ortega, Miquel (coord.) (2005): The Spanish ecological debt. Economic and social impacts of the Spanish economy abroad. Muñoz Moya Editores, Seville.

[7] Electricity distribution in Guatemala is divided between Iberdrola and Unión Fenosa. The first operates through a subsidiary (EEGSA) that distributes only in the capital and the center of the country, while the second has subsidiaries (DEORSA, DEOCSA) that control the rest of Guatemala.

[8] Paz, Mª José; González, Soraya; Sanabria, Antonio (2005): Central America on. Icaria - Peace with Dignity, Barcelona.

[9] For this, see the issues of El nuevo diario (Nicaragua) of April 19 and 26, May 23 and June 29, 2006.

[10] Pulido, Alejandro and Ramiro, Pedro (2006): “Repsol and the engine of global capitalism”. Peoples, number 22, July.

[11] Gavaldá, Marc (2003): The recolonization. Repsol in Latin America: invasion and resistance. Icaria, Barcelona.

[12] CENSAT (2002): Gats, liberalization and privatisation of the power sector in Colombia. The Endesa case. Bogotá, November.

[13] Llistar, David and Roa, Tatiana (2005): “The case of the Muña Reservoir: a pestilential investment in the hands of Endesa”. Political Ecology, nº 30, Icaria, December.

[14] ODG (2006): “Unión Fenosa in Colombia. A socially irresponsible strategy ”. Available on the web at the address http://www.debtwatch.org

[15] The Central Unitaria de Trabajadores (CUT) of Bolívar (northern department of Colombia) has filed a formal complaint with the ILO against the multinational for seriously endangering the lives of its workers, stating in an internal statement of the company's subsidiaries in Colombia that a high percentage of members of the union's leadership are members of the guerrilla. The complaint is available on the Colombia Trade Union Alert Network (http://www.ddhh-colombia.org ).

[16] For example, the launch of exploratory activities in the interior of the indigenous reserves of Arauca by the Repsol-Ecopetrol consortium is imminent. See Laverde, Juan David (2006): "Free way to search for oil in U’wa territory." El Espectador, July 17.


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