The National Environmental Commission of Chile recently gave its final approval for the construction of a second 570-mw dam on the Bio Bio river despite stringent criticism from ecologists and local Indian tribes who seem destined to lose their indigenous land to the project. The electric utility Endesa's environmental impact study for the dam in southern Chile was approved by the commission on condition that it should carry out plans to relocate about 500 Pehuenche Indians. The ancestral land of the latter will be flooded by the proposed dam.

The commission directed that Endesa must also create a 3,800-ha wildlife reserve near the dam and accept independent auditing of the project. The us $600-million project calls for a 155-m high concrete wall spanning the upper reaches of the Bio Bio river which runs through the rainy, forested southern Chile.

With the building of the dam, a lake having an area of 5,440 sq km will force the Penhuenche to be displaced from their land besides flooding rare temperate rain forests and some of the world's best whitewater rafting stretches.

Endesa had first submitted its environmental report in 1996, but the commission rejected it by stating that the company's compensation and relocation plans for the Pehuenches were inadequate. Endesa rewrote the plan and resubmitted it. In fact, last year, the company finished building a smaller, 450-mw dam downstream the river which was also criticised by environmentalists.