Consequences of the "Chilean Miracle": The Salmon Farms and the Privatization of the Sea

Raúl Zibechi

The so-called "Chilean Miracle" is based on three pilars: the high price of copper, the production of celulose driven by Pinochet's dictatorship, and the salmon industry, which have expanded in the current democracy. But overfishing has caused a great health, environment, social, and economic crisis.

A little over a thousand kilometers south of Santiago, from Puerto Montt and across the Chacao Canal on boat, is the fantastic island of Chiloé, where vast plains and hills are dotted by various shades of green sprouts due to abundant southern rains. In the spring, the symphony of green is scattered with numerous wild flowers, yellow, purple, and red, while myrtles, oak trees, hazlenut trees, and pangue plants stand out on the hills.

Each year, these forests receive 2,000 milimeters of rainfall; they are covered with fern and moss, and together with the native trees they form a mystical atmosphere. The rich biodiversity of the island and the presence of native animal and plant species impressed Charles Darwin in the 19th century. At the time he believed that the potato originated in Chiloé. Although later it was proven that it originated in southern Peru, the island is home to some 400 varieties of potatoes, the same ones consumed by the majority of the world today.

But the isolated island not only allowed the growth and conservation of an impressive diversity of life, including the indigenous horse Caballo Chilote, that measures just 1.25 meters in height, and the Chilean Pudu, the smallest deer in the world. The Chiloens also maintained its linguistic dialects, artesanry, family fish farms, and a peculiar architectural style that uses wood shingles. The churches, inspired by those found in Bavaria, and the stilt houses show that the traditions of the place have endured much longer than in other areas.

This paradise located in the southeastern Pacific Ocean, is one of the five most productive marine areas of the planet. "Although its surface is less than 1% of the world's oceans, it attracts 25% of the world's fishing boats," points out Ecoceanos,1 an environmental organization. Similar productivity has attracted companies from around the world, whose investments reaped promising profits.

About 15 years ago, the Chiloé island and the Puerto Montt zone were known for their vigorous growth in aquaculture, and by a very special mode of salmon production. Substantial investments from Northern European and Japanese companies permited the growth of salmon aquaculture in Chile at an annual rate of 15%; in other words, growing 13 times larger in just 15 years. Chile exports about $2.5 bilion in salmon to the United States, Japan, and the European Union. As such, salmon added to copper and celulose production explains the 70% increase in exports, the "Chilean Miracle."2

Chile has become the fifth country in the world in marine product exports, the seventh exporter of fish resources, and the second exporter of cultivated salmon, after Norway. The reason for this impressive growth is due to one thing: it is the country with the lowest cost in salmon production in the world.

The Achille's Heel

On March 27, 2008, The New York Times published an article titled "Salmon Virus Indicts Chile's Fishing Methods."3 It was a major scandal. The article called attention to millions of salmon that died from the ISA (Infectious Salmon Anemia) virus and the health crisis caused thousands of worker layoffs.

"The breeding of salmon in crowded underwater pens is contaminating once-pristine waters and producing potentially unhealthy fish," added the report. Professor Felipe Cabello, from the Department of Microbiology and Immunology at the New York Medical School, pointed out "an underlying lack of sanitary controls" and explained that "the Parasitic infections, viral infections, and fungal infections disseminated when the fish are stressed and the centers are too close together." Additionally, it was showned that in Chile, high levels of antibiotics were used in fish, some of which were prohibited in the United States.

If taken into account that 30% of Chile's salmon exports go to the United States, the Times report had a major impact. The Norwegian enterprise, Marine Harvest, the largest producer of cultivated salmon in the world, who exported 20% of Chilean salmon, recognized that the ISA virus arose from their farm as well as its high usage of antibiotics in Chile. The article went on to say, "Salmon feces and food pellets are stripping the water of oxygen, killing other marine life, and spreading disease, biologists and environmentalists say."

What is striking is the response that the largest companies in the world has to the recognition of the environmental and health problems that resulted. "As long as everybody has been making lots of money and it has been going very well, there has been no reason to take tough measures," said Arne Hjeltnes, spokesperson for Marine Harvest in Oslo.4

In 2005, the OECD (Organization for Economic Cooperation Development) released a report with strong criticism of the Chilean salmon industry, given the escape of one million fish each year, the use of fungicides such as malachite green—a carcinogen—and the excesive use of antibiotics that has been prohibited since 2002. Doctor Cabello estimated that Chile uses between 70 and 300 times more antibiotics than Norway, and there is a black market for salmon antibiotics in the country.5

In the following days, the government of Michelle Bachelet supported the salmon industry due to her concern for the business climate and a possible fall in exports.6 Nevertheless, production fell by between 30% and 50% and 20,000 of 50,000 workers were laid off. The industry went into a serious crisis because aquaculture businesses were unable to pay their bank debts due to a drop in production.

Ironically, everything that has happened in the past two years (ISA virus was discovered in July 2007), had been anticipated by several studies and investigations.

The Lowest Cost in the World

The main explaination for the low cost of salmon production in Chile is bad working conditions for the 50,000 workers in the sector. The salmon cultivation sector is number one in rates of accidents in the country and it has been confirmed that between February 2005 and June 2007, 42 workers from the sector died or disappeared into the sea according to data from the Navy and the National Department of Labor. Between 2003 and 2005, there were 572 pre-scheduled inpsections, and 70% of these cases received a fine.7

The main problems are in hygiene and worker's safety in the cultivation centers (enormous underwater cages) and processing plants. Two-thirds of the salmon companies violate labor laws and there is a tendency to outsource the most dangerous functions. Women, who make up 70% of the sector's workers and 90% in the plants, sufer from the cold, humidity, overcrowding, and lack of access to bathrooms. The same conditions apply to pegnant women, some of which have been dismissed.

Divers have the riskiest job. Among the 4,000 divers that worked in 2007, only 100 have received certified training according to international standards.8 Subcontracting and financial difficulties in the companies have made it such that only between 13% and 15% of the workers are affiliated with a union.

Workers are not the only ones to have filed complaints. Tourism companies and family fish farms have also complained. Until 2005, almost 5,000 hectares of the waters on the edges of lakes, fjords, canals, and estuaries were granted to salmon companies (1,215 hectares were granted to the Norwegian Marine Harvest alone). These are the same sites visited by tourists and where fishing communities are located.

The complaints are against contamination and massive salmon escapes (two million in 2004), that contribute to the propagation of contagious disease in other species and human beings, threatening the survival of wildlife species. However, the most concerning and scandolous of all is the massive use of antibiotics.

Dr. Cabello argues that the use of antibiotics in fish farming may encourage bacterial resistance, resulting in generations of resistant strains affecting humans and fish.9 On various occasions, Japan and the United States have found antibiotic residuals in Chilean salmon. One of the purposes for the use of antibiotics is to control salmon sepsis, for which quinolones are used. The bacterial resistance to these chemicals is increasing at an alarming rate around the world.

During a seminar organized by Ecoceanos in March 2007 in Puerto Montt, the director of the School of Chemistry and Pharmacy from Austral University presented convincing evidence on the increase of bacterial resistance in the hospitals of Puerto Montt and Castro (in Chiloé). In the first city, between 1999 and 2003, the resistance to ciprofloxacin increased from 2.6% to 9% and in Castro, it surpassed 4.4% to 8.3%.10

The decision of the salmon producers to reduce their costs and maximize capacity has led to "a negligible contribution to scientific research, very high concentrations of salmon farms, the indiscriminate use and lack of rotation in the use of antiparasitics such as emamectin benzoate and antimicrobials, coupled with a failure to respect basic aspects of environmental and health management."11

Other serious environmental problems are related to fish net manfacturing zones and wastes. In the Aysén region, south of Chiloé, the Chilean Environmental Authority fined every one of the salmon fish net manufacturers in 2005, and in the Lagos region (that belongs to Puerto Montt), more than 50% received fines for the improper treatment of industrial liquid residuals. In 2006, none of the waste industries from Los Lagos complied with the standards and 30 out of the 49 industries were shut down.

Juan Carlos Cárdenas, a veterinarian and the director of Ecoceanos, argues that "The European multinationals do things in Chile that are banned in their own country."12 It is believed that Chile is one of the last areas of expansion for fishing, mining, and forestry multinationals. The Puerto Montt zone and Chiloé have a comparative advantage over Northern Europe because the water is warmer and this allows a higher rate of salmon production. The concentration of fish farms is the serious problem causing contamination: "Here we have 300 kilometers occupied by 600 fish farms cultivating 120 million fish; that is the same quantity of fish produced in 1,000 kilometers in Norway," explains Cárdenas.

The salmon is grown in circular cages of 30 meters by 60 meters deep. The intensive farming led to the increase from $190 million in salmon exports in 1991 to $2.4 billion in 2008. The prices are unbeatable: Chile produces salmon at $2.90 per kilo while the price is $7.90 in the international market. "But, here in Chile, a kilo in the supermarket is sold at $10, more expensive than in New York," assures Cárdenas.

Now that Puerto Montt and Chiloe are contaminated, the salmon producers are seeking to expand south, toward the Aysén and Magallanes regions. According to Cárdenas, the contamination remains the same in these regions, where the ISA virus has already been detected, showing that it has spread over 2,000 kilometers in 10 months. He adds that "none of this would have happened if the state was not absent and there were no high levels of corruption."

This is evident with the knowledge of just one piece of information: according to the company Marine Harvest, in its last annual report, in 2007, 0.02 grams of antibiotics were used for each ton of salmon produced in Norway. In the same year 732 grams were used per ton in Chile. In 2008, the statistics are 0.07 in Norway and 560 grams in Chile.13 This means 36,000 times more antibiotics in 2007 and 8,000 times more in 2008 were used in their Chilean plants, although no authority has questioned this.

Last July, the government declassified a 2008 report requested by the organization Oceana, which pointed out that the Chilean salmon industry used 325 tons of drugs, while Norway, the leader of the world's market, used only one ton. The report affirms that almost 40% of the antibiotics belong to the quinolone family, a drug prohibited by the Food and Drug Administration in the United States.14

Dr. Cabello argues that it has been proven that the ISA virus was probably introduced to Chile from Norway in 1996, and that its dissemination "was probably facilitated by the large population of virus generated by the bad health conditions in the salmon farms of Chile."15 From the biological point of view, what occurred in Chile is comparable to that of the swine flu virus.

The Privatization of the Sea

"We are transforming public assets into financial capital," says Lucio Cuenca from the Latin American Observatory for Environmental Conflicts.16 This came from the blessing of authorities many years ago. For example: in April of 2007, the Chamber of Deputies voted on a report from the Committee of Fisheries, Aquaculture, and Natural Resources, which argued that the Chilean salmon industry "worked under the international standards (inlcuding environmental standards) demanded by the modern market it supplies."

This report recieved 67 votes in favor, one against, and one abstention. Three months after declaring the ISA virus outbreak, a few claimed that it has been hiding for some time before.

Nevertheless, the failure of the Chilean parliament is evident.

A recent event brought evidence of all these problems to the surface. Felipe Sandoval was the assistant secretary of the Fishery Ministery during Ricardo Lagos' administration (2000-2006), which was in charge of promoting the privatization of the state's fishery industry. Currently he serves as executive secretary of the Salmon and Cluster Aquaculture Bureau, which brings together the business sector and the state to reposition the salmon industry. He acts as a representative of President Michelle Bachelet on salmon issues.

On Februrary 5, 2009, the Regional Comptroller of Valparaíso accused Sandoval of impinging on administrative integrity after having used $740,000 from the state with falsified service receipts, when he was assistant secretary of the Fishery Ministry. The accusation from the Comptroller came about in the midst of a debate on a new Fishery and Agricultural Act to revise industry measures for businesses. On June 21, the Bachelet government issued a decree to pardon charges against Sandoval and argued that due to the lapse of time he was absolved of any resposibility.

According to the Ecoceanos News on August 3, since Sandoval has been in office he has managed the receipts of $450 million for the salmon industry, with 60% support from Chilean taxpayers. This shows that the state is in favor of the industry, despite its failure to comply with labor, environmental, and health laws.

The Fisheries Act seeks to reboost the salmon industry through the transfer of perpetual rights on maritime territory to businesses.17 According to the Economics minister, Hugo Lavados, the law permits businesses the right to "use and take advantage" of matritime and coastal territories, so that it can be appropriated as mortgage assets, a crucial key for banks to issue loans and refinance debts. Juan Carlos Cárdenas argues that articles 81 and 81a permit "salmon producer debtors to mortgage national assets, such as agricultural concessions with bank creditors."

The presidential candidate for the December election, Senator Marco Enríquez-Ominami, along with other law makers, argued that the law "privatizes the sea by giving the salmon producers aquaculture concessions that are forever binding and mortgagable," which he considers "unconsititutional."18 Environmentalists, who did not expect any major opposition to this law, were thrilled when the Senator added 160 ammendments to the Fishery Act. "What the Senator has done is an important step against the unconstitutional act of impunity and attempted robbery of our national assets," said Cárdenas.

Meanwhile, there are those who are profitting from this salmon crisis. Marine Harvest announced that despite its losses in Chile, it is preparing to acquire Chilean salmon producers as part of the restructuring process in the industry, as each crisis opens an "opportunity" (acquisitions, sales, mergers), acknowledged Jorgen Andersen, the president of finance in the company.19

To the extent that Chile has signed free trade agreements with 24 different countries, and the elites are proposing, in the words of Lucio Cuenca, "a strategic project that could turn the country into a food producing power," everything indicates that the salmon industry will continue to grow. Regions in the south, where businesses are moving, are mirrored by Chiloé. Fifteen years ago, the island was a society of small farmers, herders, fish, and seafood farms. "Now workers are dependent on the transnational industry," said members of Ecoceanos.

According to Lucio, "The process of politicalization driven by dozens of small struggles against contamination in mining, salmon, and celulose production, who have succeeded in putting issues such as water on the public agenda, will continue to grow until it has become a social movement." The criticisms you hear in the Senate largely mirror the new politicization of the Chilean society.

Other versions of this article here:
Consecuencias del "milagro chileno": Las salmoneras y la privatización del mar (Spanish)
Konsekvensene av «det chilenske miraklet»: laksefarmene og privatiseringen av havet (Norwegian)

Notes

1. "Radiograía de la industria del salmón en Chile," ob cit p. 5.
2. Ibid.
3. Barrionuevo, Alexei, "Salmon Virus Indicts Chile's Fishing Methods," The New York Times, March 27, 2008.
4. Idem.
5. Idem.
6. Reuters, April 2, 2008.
7. "Radiografía ..." ob cit p. 10.
8. Idem, p. 14.
9. Felipe C. Cabello, "Heavy Use of Prophilactic Antibiotics in Acquaculture: A Growing Problem for Human and Animal Health and for the Environment," Environmental Microbiology, 2006, cited in "Radiografía," p. 28.
10. Ibid, p. 30.
11. Ibid.
12. Personal interview.
13. "Marine Harvest Sustainability Report 2008," p. 16, in www.marineharvest.com.
14. Sergio Jara Román, ob cit.
15. Felipe Cabello, ob cit.
16. Personal interview.
17. Xinhua, July 31, 2009.
18. Ecoceanos News, August 5, 2009.
19. La Tercera, July 15, 2009 at www.latercera.cl

Translated for the Americas Program by Jessica Shao.

Raúl Zibechi is an international analyst for Brecha of Montevideo, Uruguay, lecturer and researcher on social movements at the Multiversidad Franciscana de América Latina, and adviser to several social groups. He writes the monthly "Zibechi Report" for the Americas Program (www.americasprogram.org).

To reprint this article, please contact americas@ciponline.org.

Sources

Ecoceanos: www.ecoceanos.cl.

Interview with Lucio Cuenca, from OLCA (Latin American Observatory of Environmental Conflicts), Santiago, July 15, 2009.

Interview with Juan Carlos Cárdenas and Patricio Igor, members of Ecoceanos, Santiago, July 25, 2007.

Felipe Cabello, "De diputados, salmones, antibióticos y virus ISA," 30 de julio de en www.elclarin.cl.

Marine Harvest: www.marineharvest.com.

Patricio Igor Melillanca and Isabel Díaz Medina, "Radiographic of the Salmon Industry in Chile," Ecoceanos, Puerto Montt, 2007.

Sergio Jara Román, " Antibiotic Abuse in Salmon Producers Complicates the Government and Aprobation of the Fishery Act," in Invertia, July 27, 2009.

For More Information

The Other Chile: Following Victor Jara's Songs
http://americas.irc-online.org/am/6332

Massacre in the Amazon: The U.S.-Peru Free Trade Agreement Sparks a Battle Over Land and Resources
http://americas.irc-online.org/am/6191

Cochabama: From Water War to Water Management
http://americas.irc-online.org/am/6154