“Until 1979 and even 1980, the pages of El Mercurio called for public auctions of huge plots of land, almost all of which were suitable for forestry. The generalised economic crisis of those years meant that only a handful of institutions, usually banks, could access these auctions and buy the land at ‘egg’ prices. At the same time, the pulp mills that had been built by the state, the sawmills, in short, the forestry sector was completely privatised. In those years, studies were carried out that showed that the purchase of forestry land, the pine plants donated by Conaf, the labour subsidies and the famous decree law 701 that subsidised the plantations, meant that those forests were free, totally paid for by the state”.

José Bengoa, Land reform and peasant revolt (2016)

By Jorge Molina

The year was 1974 and unemployment was a serious problem for the civil-military dictatorship. This is when Decree Law 701 came into play, which allowed the state to subsidise forestry work for many years.

“Masses of workers from the province of Arauco, former miners, were loaded onto military trucks and taken to the Nahuelbuta mountain range to dig holes and plant pine trees for the forestry companies. They bought the land for eggs and the plantations were not only free, but they also earned from them. This native Creole form of accumulation led to the existence of enormous fortunes that today they boast of exporting to all parts of the world”, points out José Bengoa in Reforma agraria y revuelta campesina (Agrarian reform and peasant revolt).

The forestry industry is one of the most powerful in the country and made its fortune, according to Bengoa, practically for free: “They received from the state the land, the plants, the workers, in short, they received for free the current forests that cover the south of the country”.

The book Xipamün Pu Ülka! (“go away the greedy ones” in Mapudungun), tells the story of how two of the country’s most important business groups (Matte and Angelini) became the legal owners of the Mapuche territory of Lavkenmapu and the Nahuelbuta mountain range. A Mininco official, quoted in the publication, who worked for the Ministry of Agriculture during the dictatorship, told how “in some cases they changed the suitability of the land to pass it off as forestry land and give it to the Conaf (National Forestry Corporation), which was the passageway to hand it over to the two economic groups”, in reference to the Matte (through CMPC) and Angelini (Arauco).

Flor Laviqueo, leader of the María Colipi community, tells in the book how in 1974 a group from her community went to the Ministry of Agriculture and were tricked into having their land declared forestry land; however, for the good of the community, part of the Labranza estate was recovered a few years ago. This estate corresponds to 808 hectares located in the vicinity of Quidico, commune of Tirúa. In 1979, Ponce Lerou’s Conaf sold it to the Crecex forestry company – part of the Vial Group – which in the 1980s was taken over by the Mattes and their forestry arm, Mininco, for $3,686,849. A ridiculous amount by any standards.

The same happened with land such as El Canelo and in towns such as Paillaco, Lleulleu, Antiquina and Huentelolén. All sold at giveaway prices. The most notorious is the Choque estate of 6,905 hectares, sold to Crecex for $968 million according to the current CPI. A mere $140,000 pesos per hectare.

The Angelini group, for its part, paid $200 million (the current pecuniary amount) for 2,200 hectares of the Tranaquepe estate. In 2015, the National Corporation for Indigenous Development (Conadi), a state agency created to purchase indigenous lands, paid $5,151,134,962 for 1,859 hectares destined for the Juan Lincopan, Kellgo and Kralhue communities. More than $2,700,000 per hectare, a bumper deal!

Xipamün Pu Ülka! also tells how many Mapuche – most of whom could not write – were cheated in the sale and purchase of the land by the land owners, who then sold the land to the forestry companies for millions of dollars. One person identified as Román Cea, who according to former members of the communities was a forester and “palo blanco” of Arauco, bought a plot of land for 30,000 pesos and sold it to his bosses for more than $2 million.

Many of the conflicts that exist today over the return of land and autonomy of the native communities are the result of this agrarian counter-reform carried out by the Pinochet regime in collusion with its civilian accomplices. The Concertación governments brought in a law and a body that can buy land, but not expropriate it.

Also key to this whole story is Julio Ponce Lerou, who in democracy would take over the power of SQM to finance the entire political spectrum for years. In the 1970s, Pinochet’s then son-in-law was at the head of Conaf and was instrumental in DL 2247 of 1978, which allowed the transfer of agrarian reform lands to Conaf, so that they could then be sold to forestry companies. In total, 352,000 hectares of reform land came into Conaf’s ownership. According to an investigative commission of the Chamber of Deputies, this was 44% of the total land expropriated up to 1973.

In 1972 Ponce Lerou began his business career. In Panama he became assistant manager of the El Chagres sawmill. He was there when the coup d’état took place in Chile and while doing his professional internship as a forestry engineer in Canada, he returned to Chile and obtained a position as general manager at Industrias Forestales S.A.

In 1978, Pinochet assigned him a management position at Celulosa Constitución Celco (a state-owned company) and the following year, Ponce Lerou was appointed manager of companies at Corfo, which at the time had direct links with most of the large state-owned companies.

In those years, the military dictatorship issued a series of decrees that promoted the business and plundering of natural resources in the hands of private and foreign capital through the privatisation of a series of state companies. The coup leaders’ discourse was the inefficiency of public management, while in the strategic sectors hundreds of workers were persecuted, disappeared and murdered for questioning the profits of the rich and powerful businessmen. In 1974, the forestry industry underwent profound changes, with Conaf being in charge of the land expropriated from the Agrarian Reform Corporation (CORA). One of these changes was Decree Law 701, promoted by the Minister of Economy Fernando Léniz and implemented by Ponce Lerou. This law initiative strengthened the state’s forestry plantation bonus, which implied a 75% bonus for pine and eucalyptus plantations, benefiting businessmen in the sector, which was the basis for the multiplication of the wealth of forestry groups such as the Angelini and Matte families. Currently, some Mapuche communities have attributed DL 701 to the handing over of land to private companies during Ponce Lerou’s time at Corfo, giving rise to the now historic conflict that has kept the community members in constant dispute with the forestry companies, the State, forestry businessmen and large landowners.

Towards the end of 1975, Julio Ponce Lerou took the time to preside over the Panquipulli Forestry and Timber Complex, a company founded in 1971 in the province of Valdivia, which managed an area of more than 400,000 hectares and employed more than 3,000 workers under a “co-management” scheme between the workers and the State. Ponce Lerou would be in charge of the Complex until 1982, when he was in charge of the transfer to private companies of the three forestry companies that were in charge of the State: Celco, Arauco and Inforsa.

The companies Celco and Arauco passed into the hands of the Angelini group, and with this, Julio Ponce Lerou consolidated power and influence in the forestry sector through his executive position in Conaf.

According to Manuel Salazar in his book Todo sobre Julio Ponce Lerou, “from 1976 to 2010, 1,400,000 hectares were subsidised. 85.4% for forestation; 14% for recovery of degraded soils and forestation and 0.6% for dune stabilisation. This denies that DL701 was for the recovery of degraded soils. DL701 subsidises 75% of the plantation. Between 1974 and 1999, the planted area increased 470% (in only 25 years), making it the most successful sector of the national economy”.

However, the macroeconomic success did not translate into benefits for the forests and peasant communities, since that infamous decree law authorised Conaf to alienate the lands in the so-called “agrarian counter-reform”, a reactionary process that deprived the peasantry and the Mapuche world of the victory to recover part of their lands.

It should be noted that in all this panorama, today regions such as Maule, Biobío and La Araucanía concentrate the highest levels of poverty in the country, while their soils are extensively planted with monoculture forestry. This has caused damage to the productive system in south-central Chile, affecting food production and costs.

Following Diversidad.org, historian Fernando Pairican explains that the Mapuche movement of the 1970s managed to challenge Allende’s socialist government and “mapuchise” the agrarian reform, transforming it into an anti-colonial struggle for the recovery of the lands that had been taken from them in the occupation of a century ago. The best example is the so-called “Cautinazo”, the great mobilisation of 1971 that led thousands of Mapuche to occupy agricultural estates near Temuco. The impact was so great for the government that Allende decided to move the Ministry of Agriculture to the capital of the ninth region.

The Indian, the slave, became the owner of the land. This was something that the bosses would not forgive, as it struck a chord that hurt the conservative right the most: their property. “With the agrarian counter-reform of the Pinochet dictatorship, the estate owners pointed the finger at the leaders who had recovered their land,” says Pairican.

The report Trabajo de investigación de ejecutados y desparecidos, 1973-1990, pertenecientes a la Nación Mapuche, by historian Hernan Curiñir Lincoqueo, sociologist Pablo Silva Carrasco and social worker Conrado Zumelzu-Zumelzu, puts the number of Mapuche victims of the dictatorship at 171, 36 more than the Rettig commission. “The murder of many of them is linked to land tenure,” it says in one of its conclusions.

The report also shows how many victims of the dictatorship were never able to prove that they were tortured before the various truth and justice commissions, as they were not detained in barracks, but on their employers’ estates, which were converted into concentration camps for torture and disappearance. The Mapuche, says the report, were tortured in front of their families and communities.

Pairican explains that the socio-cultural impact of the dictatorship was even more profound for the Mapuche than for the rest of the country, because with the arrest or murder of the lonko, the entire social fabric of the community was dismantled and, as a result, the foundations of the Mapuche world were dismantled.