Endesa in Argentina and Peru

Endesa states that on its website that "7.7% of ENDESA's consolidated assets in Latin America are located in Argentina" and that it has a controlling interest in the Dock Sud generating plant, with a installed capacity of 870 megawatts (MW), and "through Enersis at the Costanera-Central Buenos Aires fossil-fuel facility, with a installed capacity of 2,324 MW, as well as at the 1,328 MW El Chocón hydroelectric plant." It also "has a stake in the distribution market through Edesur, with 2.3 million clients in the south of Buenos Aires" and has an interest in Yacylec, which operates a line of 282 km between the Yaciretá hydroelectric plant and the Resistencia switching station." Endesa’s operations in Argentina began in 1996 when it acquired the Central Dock Sud thermal generation station, which had been recently privatised (in 1992) and which is located only four kilometres from the city of Buenos Aires. The company employs 3,127 people in Argentina.

Endesa states on its website that it has 10.2% of its Latin American assets are in Peru. "ENDESA directly manages an installed power in Peru of 1,598 MW.It has a controlling interest of 83.60% in Edegel, which has an installed power of 1,467 MW, and 60% of Empresa Eléctrica de Piura (Eepsa), with 131 MW. Edegel S.A.A. is Peru’s largest private electricity generation company. Also, ENDESA, together with Enersis, holds a controlling interest in Edelnor, a company that distributes energy in the north part of Lima to 1 million customers," it states.

In June 2009, The Centre for Research on Multinational Corporations (SOMO) published a case-study that looked at the sustainability of AES' activities in Argentina. The research looked at the social, environmental and economic aspects of the company's business activities, and focused on the company's subsidiaries Edelap and Central Dique.

Social issues

Community lifestyle impact

The Villa Inflamable (“Inflammable Town”) community in Buenos Aires is home to over 10,000 residents and borders directly on the Dock Sud petrochemical hub, an industrial area housing dozens of companies and a range of industries, including Endesa's Central Dock Sud. According to a survey carried out by Japan International Cooperation Agency (JICA) in 2002, there are over one thousand storage tanks in the hub with a capacity to store 1,500,000 cubic metres of fuel and other chemical substances. Residents are exposed to exasperating pollution levels, extreme poverty, and precarious living situation.

Central Dock Sud has been in direct conflict with the local residents of Villa Inflammable. In early 1999, the power station decided to construct several high-tension towers with power lines carrying 132,000 volts. The cabling route was planned to run directly through the Villa Inflamable neighbourhoods. Residents were concerned about the potential health effects of large electro-magnetic fields that these towers would create, and there were numerous protests calling on the company to change the cabling route. A legal suit was also filed, and the case is currently still pending. In addition to seeking compensation for the damages derived from the construction of the high-tension power lines, the lawsuit also requested the cessation of pollution and environmental harm, demanding the prohibition of the use of power transmission lines as well as the removal of existing towers and cables located in front of or above their homes.

The residents requested a preliminary injunction based on their need to avoid further health damages from their exposure to the diverse harmful elements generated by the industrial hub and which could be aggravated with the construction of the lines. They argued that lines above or in front of their houses would expose them to risks of electrocution, fires, explosions and, in particular, the threat of diseases derived from exposure to the potentially-carcinogenic electromagnetic fields (EMFs) generated by these works. The difficult issue at trial is the uncertainty around the problem of EMFs generated by high tension cables, which remains complex even when exposure is within legally established limits but prolonged in time. The issue is currently the subject of ongoing scientific research around the globe, but in 2008 Swiss researchers found a statistically-significant link between living close (within 50 metres) to high-tension power lines and deaths related to Alzheimer’s disease. A similar statistical link has been made with regard to proximity to high-tension power lines and leukaemia in children. It should be noted that in neither case is there proof that the high-tension cables are the direct cause of the disease.

In view of the scientific uncertainty about the negative effects of EMFs on human health, the residents requested that the companies apply the precautionary principle and take on the costs of laying the cables in an alternative location. In 2006, the court rejected the preliminary injunction, arguing that “the precautionary principle cannot prevail, due to the real damage that would be generated by interrupting the essential electricity service for the users alien to this process”. Despite the court’s decision, residents feel that that Central Dock Sud and its parent company Endesa should apply the precautionary principle as established in the OECD Guidelines for Multinational Enterprises as well as various other international standards.

Access to electricity

Access to electricity is extremely low in some of the Peruvian districts in which Endesa’s Edegel operates. only 22% of households in the rural Monobama district of the Junín province, where Edegel’s Chimay power station is located, have access to electricity. The small number of households that do have electricity in this district are supplied by a municipal station rather than by Edegel. This situation has created an atmosphere of distrust and uneasiness toward the company among local government officials, who oppose the fact that a power plant established in the area does not supply electricity to the district. While Edegel is not legally required to supply electricity to the local community, municipal authorities feel that it is the company’s responsibility to do so. Company representatives have stated that Edegel is arranging to transfer one of its transmission lines to Electrocentro, the public company that supplies electricity in the area, in order to serve a small village of 12 households.

Environmental Issues

Climate change and greenhouse gas emissions

Endesa’s heavy reliance on fossil fuels for electricity generation results in a high level of CO2 emissions. Endesa’s Central Dock Sud and Costanera thermal facilities are two of the country’s three largest emitters of the greenhouse gas.

In Peru, Edegel was the first company to invest in electricity generation from natural gas. Its investment in the combined cycle gas turbine in Ventanilla turned it into the country’s most efficient and most potent power generation station. However, its thermal generation stations still operate as dual stations, using both gas and oil, and recently, as a result of the energy crisis that began in September and a spike in the price of natural gas, the company has been relying more heavily on oil-firing. The company has also invested heavily in the enlargement of the Santa Rosa thermal station, which has also shifted from using natural gas to using more CO2-intensive fuel oil. The recent increase in generation from and investment in thermal power stations seems to be at odds with the company’s commitments to combat climate and to contribute to long-term sustainable development.

Waste and pollution

In 2006, residents of the Buenos Aires neighbourhoods of Belgrano, Colegiales, Palermo, Recoleta and Retiro appeared before the city’s Ombudsman to complain about stains that would appear on sidewalks on rainy days. According to their statements, these stains “have features similar to those produced by the action of an acid agent. In addition, on dry days, a dark dust with greasy characteristics settles on external surfaces”. According to the Office of the Ombudsman, the most likely cause for these stains is the use of fuel oil with high content levels of sulphur at Endesa’s Central Costanera power plant.

The levels of sulphur dioxide (SO2) in the plant’s fuel oil exceed the national regulatory standard, which sets the maximum relative content at 0.5%. The fuel oil is imported from Venezuela, a result of the Argentine energy crisis discussed in Section 3.1 and a subsequent agreement between the Argentine and Venezuelan governments regarding the import of Venezuelan fuel oil for use in Buenos Aires. The Ombudsman states that the use of fuel oil with high sulphur content is partially due to the Argentine government’s non-compliance with its own regulations, but that there is also a responsibility of the company. When asked by the Ombudsman whether Central Costanera uses catalysts to reduce the sulphur content of its emissions, the company responded that they believe there is no need for such measures: They are provided with fuel oil conditional to approval by the Secretary of Energy and the Secretary of Planning, and the company believes that it acts within the regulatory limits.

Economic issues

Reliability of supply

Central Dock Sud has been fined by ENRE four times between 2003 and the present in relation to the technical quality of electricity generation. Specifically, the sanctions are due to the company’s failure to notify the regulator (either completely or within the required time frame) about disturbances in power supply and power cuts.

Articles and resources

Related SourceWatch articles

• Corporate Social Responsibility
• AES in Argentina

External resources

• J. Wilde Ramsing and T. Steinweg, Down to the Wire, SOMO (Center for Research on Multinational Corporations), June 2009. (Pdf)

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