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As of June 2020, the Pension Fund Administrators (AFPs) invested more than $ 15,777 million dollars in shares of national public limited companies and in bonds issued by Chilean private and public companies, with the aim of making the funds of their affiliates profitable. It is not the only mechanism they have, because there are others, such as term deposits and representative fund-raising certificates, issued by financial institutions.
Regarding investments in companies, the majority is oriented towards high-impact extractive activities, in the Electricity (US $ 5,033 million), Forestry (US $ 2,162 million), Hydrocarbons (US $ 1,827 million), Mining (US $ 1,659 million), SAPS sectors (US $ 915 million) and Monocultures (US $ 325 million). Moreover, 56.3% of the total investments are concentrated by 10 companies considered emitters or highly polluting.
As a whole, extractivist activities –intensive and large-volume extraction of Natural Resources, with very low processing and destined for sale abroad– accounted for 75.5% of the investments of the AFPs in companies operating in Chile. Only the first two –the electricity and forestry sectors– accumulate 45.6% of the total investments of the AFPs. As of June 2020, for example, the AFPs invested $ 1,659 million in companies and investment funds for mining projects
This is part of what the study “Investments by the AFPs in extractive companies with high environmental impact” analyzed, prepared jointly by Heinrich Böll Stiftung and the Sol Foundation, where they conclude that “extractivist companies with high environmental impact constitute a A privileged investment destination for the AFPs. This relationship has reached such a point that at present 9 out of 10 pesos invested by the AFPs are allocated to companies that appropriate resources from nature or generate a high impact by articulating global chains production of goods (such as the shipping sector) “.
“This research seeks to provide an X-ray of the relationship between the investment of the AFPs and the installation or expansion of extractivist companies with high environmental impact that operate in Chile and have short, medium and long-term consequences on nature and communities. This relationship implies that workers’ savings are used -through the purchase of shares, bonds and other instruments- for the capitalization of companies whose activity is based on the appropriation of resources, “they explain in the document.
Celulosa Arauco, ENAP, AES Gener, Agrosuper and ENAEX stand out among the companies that receive large direct investments from the AFPs. A group of companies that have been involved in conflicts with communities and later with justice. The investment in these companies amounts to a total of $ 1.57 trillion ($ 1,575,893 million).
The problem with these investments is that, in general, they are located in places that, at this point, are already “sacrifice zones”. “The historical review of the installation and deepening of extractivisms, reveals an articulated institutional framework to promote the growth and expansion of this type of activities over time. Objectives such as placing Chile as an Agri-Food Power, are clear examples of this type of orientation and the force with which it has been promoted as a national ‘development’ strategy oriented towards the appropriation, extraction and export of resources. The current discussion on post-pandemic reactivation shows a strengthening of the guarantees that are given extractivist projects and a relaxation of regulations, “says part of the study.
It is in these places where the AFPs have invested, through the purchase of bonds and shares, such as dirty and cellulose electrical projects, “both emblematic in terms of environmental damage.” Together with the hydrocarbon sector, transportation and mining, they exceed one billion dollars in investment from the AFPs. The companies are all linked to large economic groups, such as the Matte, Angelini, Luksic, and some state companies.
Precisely the 10 communes with the highest percentage in favor of Approval in the Plebiscite were called “Sacrifice Zones”. “These are territories that suffer the effects of extractivism. A longing for profound changes, which for some and some are urgent,” they say.
Human sacrifice
Recaredo Gálvez, one of the study authors, spoke with The counter on this: “Why are we financing companies that generate a human sacrifice recognized in different territories and that to a large extent we are sustaining with a system of individual accounts that does not even pay enough pensions?”.
“We are seeing that this is a design that benefits big capital, which is also destroying the environment,” he added. “Many companies, such as AES Gener, Freirina with Agrosuper, receive investments from the AFPs. There one wonders who wins with all this, why develop it in this way. The big winners are the same economic groups that are behind these companies, like Matte or Angelini groups, for example, “says Gálvez.
According to the expert, this type of investment “is part of the original design that the AFPs have been carrying out from the beginning, which is to invest in companies of large economic groups and this is related to the Chilean economic model in terms of its primary export matrix.”
“Regarding the AFPs, beyond the fact that it has to be corrected, it is necessary to look at two lines: that this is part of a productive model that has to go out and, on the other hand, the AFPs do not need small reforms or corrections because we have to think that the objective is to pay pensions. Through these investments, the pensions that they are paying are insufficient, they are below the minimum salary. They must be replaced by a social security system, “he added.
“In this way, since its creation, the AFPs have changed their role, establishing themselves in recent decades as a fundamental gear in the financing of the national economy, by providing a sector of national companies with independent capitalization mechanisms from the bank. This form of expansion of the financial world towards non-financial companies is complemented by the disproportionate growth in the weight of the financial sector in all areas of the economy, but, above all, its growth towards the household sector and a business strategy based on the relationship between household resources and open markets, “they say.
The “fake news” of employment
One of the arguments used by those who defend this type of activity is that, despite being harmful to the population, they provide a lot of employment in the area. This study, prepared by Recaredo Gálvez, Benjamín Sáez, Andrea Sato and Caroline Stevens demystifies this, since it says that “extractive labor activities do not generate a great quantitative impact in terms of employment.”
As a whole, when considering the workers employed in extractive activities, a total of 392,452 people are reached at the national level, which is equivalent to 5.6% of salaried people.
This is worse in the so-called “sacrifice zones”, since if at the national level 54.8% of the people of working age are employed, in these zones this percentage is equivalent to 49.6%. The “inactivity” in these areas reaches 44.3% compared to 40.6% nationally.
“In this context, relevant problems in the quality of employment are observed. These problems acquire particular characteristics depending on the sector. In this way, high-technology sectors and high salaries, such as mining, present subcontracting as the main way to make the ‘ use of the labor factor “by capital. It is a contractual form that violates rights, maintaining a lower salary scale, worse working conditions and security, among others,” the study explains.
On the other hand, in other sectors, such as agriculture, livestock, forestry and fishing, “the lack of a written contract appears as the main form of violation of labor rights, in a branch of activity characterized by low wages and working conditions It is precisely the most feminized sector among extractivist activities. “
These last activities concentrate 69% of women employed in extractive branches. It is followed in relevance by the exploitation of mines and quarries with 15.8%. In the case of men, 53.3% are concentrated in agriculture, livestock, forestry and fishing activities. The second most important activity is also the exploitation of mines and quarries, but with a higher percentage, reaching 28.9%.
“This research has made it possible to observe the unequal distribution of paid and unpaid activities in households, showing how male occupation in extractive activities encourages the traditional figure of the ‘provider’ and the formation of households that combine activity and inactivity In female-headed households, the organization of single-person or full-occupation households is more frequent, presenting a lower percentage of households in which occupation and inactivity are combined “, says the study.
11.8% of the agricultural, livestock, forestry and fishing sectors do not have a written contract. This is above the national average, estimated at 8.8%.
Meanwhile, the branch with the greatest outsourcing is mining, where 18.2% of the people employed are hired through subcontract, supply or down payment. In water supply activities there are 16.5% of all employed persons. As a whole, at the national level, 13.2% of salaried people in the extractivist sector are outsourced.
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