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ahead of time in which areas concessions might have the least impact—when possible giving preference to land that is already disturbed—and which areas might require more careful review. Additionally it should ideally identify areas that are too sensitive for development and should not be eligible for concession. n Earlier environmental impact studies Current regulations in Chile stipulate that an environmental impact study is to be conducted only when a project enters the period of exploitation. This means that developers are legally obligated to consult with local communities only after exploration occurs. Impacts to the surrounding environment can occur in exploration just as they can occur in exploitation. Communities near projects are generally uninformed about the potential impact of exploration activities, and this can generate mistrust. Conducting a preliminary environmental impact study at the beginning of the exploratory phase would help address potential concerns and ensure that local communities have a true voice in the decisions that affect their surrounding environment. An early-stage impact study would also provide valuable information about the baseline environmental conditions at the site, making it easier to identify, attribute, and remediate any potential environmental degradation that may arise during project development, or to identify sites where development would not be appropriate. Early impact studies are practiced in some countries with established geothermal sectors, like the United States, Nicaragua, and Iceland.40 Waiting until the exploitation phase to require an environmental impact assessment from the developer may seem like a policy that helps streamline and reduce costs for businesses, but it can actually have the opposite effect. Relying solely on impact studies completed late in the project’s life cycle can lead to significant delays and additional costs due to unanticipated findings and public opposition. Resources spent early to evaluate project impacts, address community concerns, and secure local support may help developers avoid the much larger costs of delaying exploitation due to unforeseen environmental concerns and/or social issues. n Incorporation of the spirit of ILo Convention 169 into geothermal law In 2008 the government of Chile ratified the International Labor Organization (ILO) Convention No. 169, an international instrument that recognizes the aspirations of indigenous peoples to “exercise control over their own institutions, ways of life, and economic development and to maintain and develop their identities, languages, and religions, within the framework of the States in which they live.”41 By signing this convention, Chile signaled to the world it planned to make sure indigenous communities would be carefully considered in the institutional and legal framework of the country. Yet the government has not considered this agreement in relation to geothermal concession law or any other institutional framework related to geothermal projects. The lack of clarity about indigenous issues and rights in Chile’s legal and institutional framework has led to an increased level of uncertainty in all energy development projects, including those in the geothermal sector.42 Failing to involve local indigenous communities by providing clear and sufficient information on project plans and expectations early on can lead to disputes, damaged relationships, and costly delays in project development. There has indeed been a significant lack of consideration for indigenous community rights in the concession-granting process. Concessions have been granted in areas that are important to indigenous groups, particularly areas the government designates as “natural reserves.” One example of a project that moved forward despite the concerns of the local indigenous community is Geotérmica del Norte’s El Tatio project. A well failure led to even greater opposition, and the incident cast a shadow over geothermal development. To move beyond this early controversy, it will be important to consult and engage local communities and ensure they are on board. The government should better understand the claims of indigenous communities in sensitive territories and consider these claims when granting concessions. For example, many communities—particularly those in the arid northern regions of the country—are particularly concerned about groundwater and perceive geothermal development as a threat to their already scarce water resources.43 Geothermal plants often require significant amounts of water to be pumped from deep reservoirs to produce the necessary steam to turn turbines and generate electricity. The current law does not contain any provisions that would ensure these communities retain their water supply. Given this, local communities in dry regions may be particularly wary of geothermal development. Prior to granting concessions, the government should also require companies to be more proactive in consulting indigenous groups. This consultation could be part of the pre-exploration environmental impact study suggested above n Flexibility of the concession Currently in Chile, exploration concessions have a period of two years and in some cases a two-year extension may be requested by the developer. A two-year period may be insufficient for some concessions in extreme climates that preclude year-round exploration. It may also be insufficient if local community concerns require a negotiation or mediation process. Finally, a two-year period may be insufficient for concessions located in areas that require lengthier environmental impact studies due to characteristics of the surrounding ecosystem and/or the geological context. While an extended concession period is not necessary for all projects, some may warrant more time for exploration than others. This would require both a change to the law PAGE 7 | Geothermal Energy: Unleashing the Earth’s Power to Fuel Chile’s FuturePDF Image | Geothermal Energy 2013
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