Chile Information Project -- "Santiago Times" -- Political, Environment, Human Rights, Economic News
May 15, 1997
May 15, 1997
*
HEADLINE: DEPARTMENT STORES BALK
At Changing Alleged Abusive Credit Card Contracts
KEYWORDS: ECONOMY; LEGISLATION
SOURCE: LA NACION
TEXT: The war of words between the government and department
stores over alleged unfair credit practices continued to heat up this
week, with consumer authorities accusing stores of abusing a
loophole in the law and the stores claiming they are the victims of
discrimination.
Sernac announced last week an investigation of the credit card
contracts of the country's seven department store chains for
suspicion of inducing customers to sign unfair credit card contracts,
in violation of the new Consumer Rights Law. These practices include
charging interest fees for which the calculations are not explained in
the contract, charging customers for unspecified administrative
services, and using a barely legible print size.
A meeting Monday between the government and the stores set
the edgy tone for the week. Representatives of Almacenes Paris,
Ripley and Falabella, which along with Hites control four-fifths of
retail credit, met with Dep. Eugenio Tuma (PPD), president of the
Chamber of Deputies Economy Committee, Economy Minister Alvaro
Garcia and National Consumer Service (Sernac) Director Francisco
Fernandez. The department stores balked at changing the contracts
in question, saying they would not do so unless legally required.
The new Consumer Rights Law was passed in March, but does
not take effect until June 5 because of a 90-day grace period for
implementation proposed by the Economy Committee. Several
department stores have since switched to new credit card contracts,
using heavy promotional campaigns including drawings for trips and
new cars to urge existing customers to sign up.
Dep. Tuma said Monday he regretted that the grace period had
been used by the companies to temporarily skirt the new law, rather
than prepare to comply with it as the committee intended.
On Tuesday, Sernac released a detailed list of transgressions in
the contracts of CMR Falabella, Ripley and Hites. Similar public
charges about Almacenes Paris kicked off the investigation last week.
The stores accuse Sernac of a biased smear campaign against
them. They say that consumer credit agencies, or financieras, use the
same sorts of contracts, and Sernac has not attacked them.
Carlos Eguia, director of Almacenes Paris' workers' union, said
Tuesday that the store is "without a doubt" a victim of a personal
attack. "We don't know where from, but there is definitely a dark
hand in this that wants to persecute us," he said.
Eguia said the chain's sales have fallen nearly 30 percent the
past week because "our clients are believing what they publish in the
newspapers." Sernac's actions are therefore seriously harming
workers and their families, he said.
National Chamber of Commerce President Alfonso Mujica came
out in support of the stores Tuesday, saying that Sernac's actions
were "arbitrary and discriminatory."
Sernac Director Fernandez responds that the agency could not
wait to carry out a separate study of financieras before announcing
their findings.
As for the stores' customers, as of today they can join a class
action led by the Consumers' and Users' Defense Organization (Odecu)
intended to nullify the new contracts.
*
HEADLINE: CURRENT EVENTS BRIEFS
KEYWORDS: POLITICS; ECONOMY; INTERNATIONAL; ENVIRONMENT
SOURCE: EL MERCURIO
SOURCE: LA EPOCA
TEXT: Today's other headline stories in brief:
-- GOVERNMENT DENIES HARASSMENT OF TOMPKINS. Interior
Undersecretary Belisario Velasco denied Wednesday that Chile's
government is harassing U.S. businessman/ecologist Doug Tompkins
in his efforts to develop a huge 300,000 hectare nature sanctuary
(the size of the state of Rhode Island) in southern Chile.
In a press conference held Tuesday with Chile's leading
environmental groups, Tompkins said he had received death threats
from neo-Nazi groups, that his telephone was tapped, that
government officials were scrutinizing his activities and that Air
Force jets and helicopters had flown low over his properties as a
show of intimidation.
"No one in this government is harassing or pursuing Mr.
Tompkins," said Velasco, who ordered police officials to investigate
the death threats made against Tompkins.
Regarding the low flights over Tompkins properties, Velasco
said, "This is national territory, not Mr. Tompkins' territory, and the
Air Force can fly wherever it chooses to fly."
-- DEFENSE ATTORNEYS ABANDON PAUL SCHAFER. Defense
attorneys for the elusive leader of ex-Colonia Dignidad, Paul Shafer,
announced Wednesday that they have abandoned the case, their
client having opted to continue defying court arrest orders.
Shafer's defense team confirmed that they had warned that if
he did not voluntarily heed the court order and turn himself in to
Judge Hernan Gonzalez, their services would be discontinued. The
attorneys said they were unwilling to represent a defiant client or to
take responsibility for the consequences of an eventual police raid on
Villa Baviera.
Interior Undersecretary Belisario Velasco cautioned those who
have covered-up crimes committed by Shafer that "they will have to
respond before a court of law." In the six months since the warrant
for Shafer's arrest was issued, "people have concealed Schafer and
the day is fast approaching when they will have to explain their
actions in court," Velasco said.
Wednesday two German citizens, close associates of Schafer at
Villa Baviera, turned themselves in to Judge Gonzalez. Both are
believed to have connections with the crimes of alleged sexual abuse
of minors Schafer was charged with.
-- MAPUCHES MARCH IN SANTIAGO. Nearly 300 Mapuches
and Pehuenches arrived in Santiago Wednesday and marched
through the streets to dramatize their indignation with the plan to
relocate them to make way for a hydroelectric plant, and the
removal of the Corporation for Indigenous Development's director.
Endesa's planned Ralco hydroelectric plant would flood several
indigenous communities along the upper Bio Bio River, forcing their
relocation.
Indigenous leaders who had traveled with the delegation from
the south overnight, made known their frustration that President
Frei would not receive them personally. One leader, carrying a spear,
was allowed to enter La Moneda to deliver a letter detailing their
grievances.
Manuel Pilquin, coordinator of Mapuche organizations in
Temuco said the groups are eager to talk but so far "the government
has remained silent."
-- EDUCATIONAL REFORM LACKS FINANCING. The
administration's education reform package remains in limbo. The
Senate Education Committee dispatched the bill Wednesday, but
without approving financing due to rightist opposition to maintaining
the national value-added tax (IVA) at 18 percent. The bill's
extended schoolday is already in progress in some schools, but most
lack the necessary funds.
Education Minister Jose Pablo Arellano had asked the Senate to
approve the bill before next Wednesday, May 21, when President
Frei makes his annual address to Congress. It will be the one-year
anniversary of his announcement of the reform. Nonetheless, the
opposition/designated senators block is expected to reject the 18
percent IVA when the bill goes before the full Senate next week.
Frei insisted Tuesday that the value-added tax must be
retained to finance education in low-income areas. Frei told 600
teachers who had participated in university training programs
abroad that "people with high income will pay the VAT to benefit
poor children of our country who need quality education to eliminate
poverty."
In related news, Santiago Mayor Jaime Ravinet disputed the
federal government's claims about public school financing. The
Education Ministry contends that municipalities' share in funding
schools declines every year, amounting to a little over eight percent
in 1995. Mayor Ravinet refuted these figures Tuesday, saying
municipalities contributed more than 15.7 percent of the total
education budget last year.
*
HEADLINE: POLL REVEALS FEAR OF VIOLENCE IN SANTIAGO
Even Though Capital City Is One Of Safest In Latin America
KEYWORDS: CULTURAL; SOCIAL ISSUES
SOURCE: EL MERCURIO
SOURCE: LA NACION
TEXT: Santiago residents feel less secure than the residents of other
capital cities in Latin America, despite statistical evidence showing
Santiago to be one of the safest cities in Latin America.
A "violence poll" organized by the Pan-American Health
Organization (OPS) and carried out by Chile's Social and Education
Studies Center (SUR) revealed that 65 percent of "Santiaguinos" feel
unsafe when using public transportation and 71 percent consider the
downtown area in Santiago a risky area to be in. A similar poll was
conducted in other Latin American capitals to give a basis for
comparison.
The feeling of insecurity grows according to the distance a
citizen is from his home, said researcher Enrique Oviedo. While only
12 percent of those polled feel unsafe in their house or apartment,
17 percent feel unsafe when walking in their neighborhood and 40
percent unsafe when walking the same streets at night. "The
'unknown', be it a place or a person, arouses feelings of uneasiness,"
said Oviedo.
The polling data showed that nine percent of Santiago's
residents have guns in their homes and another 27 percent aspire to
have one. Santiago thus ranks second in Latin American cities
regarding the number of citizens wanting or having guns.
The poll also revealed, however, that Santiago is one of the
safest Latin American cities and ranks last when it comes to overall
"victim rates." The most dangerous Latin American city is San
Salvador, El Salvador, followed by Caracas, Venezuela, and Medellin,
Colombia.
Attitudes and cultural norms relating to violence, as revealed
by the poll, paint a picture best described as "worrisome." A high
percentage of Santiago residents approve of using violent means to
combat delinquency. Almost 60 percent of those polled agree with
"killing to defend your family," and almost half agree with "killing to
defend your home." Also surprising is that 24 percent believe that
"people have the right to take matters into their own hands" if police
do not respond adequately or if justice is not served.
The poll was taken in Greater Santiago with the participation of
1,212 citizens, and the results were presented last week in Santiago.
Poll results could have been skewed by recent violent acts in
Santiago, however, including the assault of a family by a hooded
robber and the death of a police officer killed while trying to stop an
attack inside a city bus.
*
HEADLINE: NATIVE CULTURE HINGES ON LANGUAGES
New Efforts Made To Preserve Ancient Linguistic Heritage
KEYWORDS: INDIGENOUS PEOPLE; CULTURAL; EDUCATION
SOURCE: EL MERCURIO
TEXT: Forced to keep quiet, language is forgotten. Silenced by the
whip, death, displacement and separation from family, a language
and a culture are lost.
Such was the tried and true method for eliminating Kunza, the
language of the ancient people of Atacama, as a policy of the Spanish
conquistadors who arrived in Chile in the 16th century.
Such was also the fate of other native languages - Chango,
Diaguita, Selknam, Yagan and Chono - says linguistics
researcher Gilbert Sanchez. These languages all died as a result of
cultural impositions that preceded the disappearance of the people
speaking these languages.
Use of Quechua, the prevailing native language in Peru and
Bolivia, has practically ceased in Chile, with the exception of elders of
the province of Cupo-Turi and immigrant workers in some border
towns.
Also on the brink of extinction is Kaweskar or Alacalufe, the
language of the indigenous people of southern Chile, decimated in the
previous century. Only 15 individuals in Puerto Eden, besides a few
others in Punta Arenas, speak the language.
On Rapa Nui, also known as Easter Island, less than half the
1,600 native inhabitants - and only seven percent of children - speak
their ancestral language.
Today efforts to keep native languages alive are in the hands -
and mouths - of university professors and indigenous cultural
institutions. As always, the greatest obstacles are a lack of resources
for intercultural educational programs and the prevailing notion that
a single language is spoken in Chile.
At Arturo Prat University in Iquique, Aymara-speaking
teachers are being trained in an effort to rescue the language, spoken
by an estimated 30,000 persons. Researchers in Region I indicate
that 57 percent of respondents in a recent study on the preservation
of the Aymaran language know their maternal tongue, but only 30
percent employ it, rather than Spanish, with their children. This
finding means a 25 percent loss from one generation to the next.
But in the towns of Caquena, Parinacota and Guallatiri, an
Aymara language program is bearing fruit. School children in these
communities, a university linguistics researcher says, are totally
bilingual.
Likewise the ethnic group comprised of some 4,000 Atacamans
is intent upon resuscitating its vanished language by incorporating it
as part of the school curriculum.
Roberto Lenhert, an ethnolinguist at the University of
Antofagasta, has dedicated 20 years to the recovery of the Atacaman
language, which scarcely anyone has even heard since the latter
years of the past century. He says the language is "a legacy too
important to lose because it was the language of the most ancient
American Indian culture that inhabited northern Chile more than
11,000 years ago." A survey conducted last year of persons of
different ages revealed 200 new terms in Atacaman now
incorporated in daily Spanish usage.
At Chile's other extreme, the language of Mapudungun retains
its vitality among the Mapuche people. With Mapudungun speakers
estimated between 400,000 and 500,000, linguists consider the
language one that will remain strong. Bilingual education already
exists in some of the region's schools and Austral University is
presently developing a pilot program under the sponsorship of the
Education Ministry. The great interest on the part of cultural-
political organizations in teaching Mapudungun among Mapuches as
well as non-Mapuches raises expectations that the language will
continue to thrive.
Language, linguists agree, reinforces indigenous identity; if it
succumbs to oblivion, the culture will become an endangered species.
And generations of once vibrant indigenous people in Chilean
territory give silent testimony that this is so.
*
HEADLINE: MINING NEWS ROUND UP
KEYWORDS: MINING
SOURCE: EL MERCURIO
SOURCE: EL DIARIO
TEXT: Today's mining news, as it appears in the national media:
-- LOWER ENERGY COSTS FOR MINING COMPANIES. Mining
companies operating in northern Chile expect their energy bills to fall
by as much as 15 percent with the arrival of cheap Argentine natural
gas to the region. The Norte Grande Energy Distribution System
(SING) currently service the region are 100 percent coal fueled. The
Two of the principal energy providers for SING, Endesa and
Electroandina, are building competing natural gas pipelines to
provide alternative, cheap fuel for generating electricity. Existing
energy contracts at most mining operations allow for the periodic re-
negotiation of energy rates paid to energy providers.
"Many mining companies anticipated the eventual arrival of
natural gas to northern Chile and made sure their contracts provided
for this eventuality," says Jos Remacol, general manager at the
Electroandina energy company (formerly Tocopilla). Electroandina
has contracts for providing 500 MW to Chuquicamata, El Abra and
Radomiro Tomic.
Industry sources say new, lower-priced energy contracts have
already been re-negotiated for the Zaldivar copper mine, while
Mantos Blancos is now doing the same.
"The market situation has changed because there is a greater
supply of energy," said Mantos Blancos spokesman Ricardo Munoz.
-- TESORO PROJECT GETS FINANCING. The Luksic Group has
increased the capital at its Michilla Mining Company by US$100
million to allow the company to administer the group's Tesoro copper
mine, said industry sources Wednesday. The move comes in spite of
the earlier announced decision to have the newly created Orengo
Minas company administer the Tesoro project.
Tesoro is expected to require a total investment of US$220
million and will produce 60,000 mtpy of copper cathodes. Financing
for the project is expected to break down to 30 percent from local
owners and 70 percent from financial institutions.
In other Luksic-related news, industry sources say financing
for the Los Pelambres copper mine (owned 60 percent by Luksic and
40 percent by a Nippon Mining-led Japanese consortium) will most
likely be sewed up by this September, while approval of the mine's
environmental impact statement (EIS) is expected sometime late
June. The mine is seeking a US$900 million bank credit, approval of
which is contingent upon its EIS. The mine has run into opposition
from residents near the projected port of Punta de Chungo in Los
Vilos, Region IV, who fear their livelihoods as fishermen could be at
peril if the project is approved.
*
HEADLINE: BUSINESS BRIEFS
KEYWORDS: ECONOMY; INTERNATIONAL; NAFTA
SOURCE: EL MERCURIO
SOURCE: EL DIARIO
TEXT: Today's top business stories:
-- SOUTHWESTERN BELL NOT PART OF CTC-VTR MERGER. U.S.
firm Southwestern Bell, a major shareholder of VTR, will not take
part in a planned CTC-VTR merger. The Compania Telefonica de Chile
(CTC) is holding negotiations with telecommunications company VTR
to acquire its subsidiaries Telefonica del Sur and Telefonica del
Coyhaique. According to some sources, the acquisition of VTR's cable
TV company, Cablexpress, is also being discussed. The deal could
cost CTC around US$900 million.
Southwestern Bell will receive around US$400 million for its 40
percent share of VTR. This will be a lucrative deal for the U.S. firm
because it purchased its share two years ago for US$316 million.
-- CHILEAN COMPANIES QUALIFY FOR COLOMBIAN BID. Two
consortia including three Chilean companies are among the five
consortia qualified to bid for the Empresa Electrica del Pacifico
(Epsa), a Colombian power generating company in the process of
being privatized.
One of the two consortia with Chilean involvement is composed
of Chilean electricity generating company Endesa, Emel Colombia
(affiliate of Emel of Chile), PMDC (an affiliate of the U.S. multinational
Power & Light Resource), and Corfivalle, a local group. The second
consortia is composed of Chilean electric utility company Chilquinta,
its Peruvian affiliate Luz del Sur, and Canadian company Hydro
Operation Incorporated.
The government authorities announced that 100 percent of the
Epsa shares will cost US$515 million, implying a minimum of
US$300 million to have a controlling majority. The next round of
bidding is on May 16, when 57 percent of the shares will be offered.
-- ENAP TO ACCEPT PRIVATE CAPITAL BEFORE 1999. State-
owned Empresa Nacional del Petroleo (Enap), Chile's only refinery of
crude oil, will incorporate private capital into its modernization
process before 1999, government officials say.
The government's plan is to convert Enap into a corporation. A
partner from the private sector will contribute 20 to 30 percent of
the company's assets, the government will make a similar
contribution and the workers will also own a share of the property,
according to sources close to the process. In addition, the private
partner will not sell the company's assets and the government will
retain control although it will hold less than 50 percent of the
enterprise, which will remain a holding company.
Enap presently has the highest equity value in the country at
US$1.5 billion.
-- CORFO COMPANIES INCREASE PROFITS BY 20%. The
companies held by state holding company Corfo earned total profits
of US$74.4 million in the first quarter of 1997, a 20 percent increase
compared to the same period last year.
The transportation sector had the biggest growth with a 875
percent increase. Santiago's Metro subway system had a 4,311
percent increase due to the new No.5 line.
The electric utility sector also registered high profits, with
Edelaysen posting a 48 percent increase.
Water treatment companies had total profits of US$50 million,
only a 4 percent increase. Emssat had the biggest increase at 161
percent.
-- LADECO PLANS TO INCREASE CAPITAL BY US$17 MILLION.
Chilean airline Ladeco announced that it will hold a shareholders'
meeting on June 19 to propose a US$17 million captital increase. The
capital increase will be used to improve passenger services. Ladeco
earned profits of US$2.5 million in the first quarter of 1997.
The company also announced it will acquire two new planes by
February of 1998, bringing its fleet to 10 planes.
Ladeco said its goal is to recapture 40 percent of the domestic
flight market, which implies annually transporting 1.2 million
passengers. The company presently has 4 percent share of the
domestic market.
-- ENAMI GETS US$70 MILLION CREDIT. The state-owned
Empresa Nacional de Mineria (Enami) will get a US$70 million credit
from the French bank Societe Generale de Francia. The loan will
have a term of seven years and Enami will use it for its
modernization and decontamination plan to be carried out in the
Fundicion Hernan Videla Lira (Paipote) in Region III and the
Ventanas refining plant in Region V. This plan will cost US$150
million.
Enami said its short-and long-term loans will increase to
US$320 million for 1997. The company antisipates1997 profits of
US$10 million.
-- SPANISH BANK TO INVEST US$2 BILLION IN CHILE AND
BRAZIL. Banco Bilbao Vizcaya (BBV) announced this week that it will
invest US$2 billion to expand its operations in Latin America,
specifically in Chile and Brazil. The announcement came after it
became known that the Argentinean based Banco Frances del Rio de
la Plata, where BBV owns a 30 percent share, has closed a deal to
create an investment group. BBV controls 30 percent of the group
and will manage its operations. In addition to Argentina, the BBV
holds shares in a number of banks in 14 Latin American countries.
BBH will face competition from two other Spanish banks in
Chile: Santander, which controls 75 percent of the Osorno-BCH
merger, and the Central Hispano.
*
-- BASIC ECONOMIC INDICATORS :
Dollar's value: Observed, 418.83; Accord, 462.52
Interbank, 418.60
Today's Unidad de Fomento, UF: $13,571.53
Copper Price: US$1.11
Stock Exchange: IGPA, Off 0.22% to 5335.66; IPSA, Off
0.73% to 118.69
*
