Research analizes the impacts of the transnational company Iberdrola

Originally published by the Rebellion, and later republished in Brasil de Fato, the interview helps to elucidate the influence of multinational companies in the electricity sector in other countries, particularly the Spanish Iberdrola, and the consequent loss of national sovereignty over this strategic resource.

The actual crisis, is actually a process of “public planed robbery” being done by large companies to increase the richness of a minority. The case of Iberdrola is paradigmatic at this matter, says Luismi Uharte. This because the “transnational companies are dominant companies at actual capitalism, they have a precise function, which is concentration of property, natural resources and wealth at the expense of the majority of the population of all countries of the world. Iberdrola is a company over which reproduces this perverse logic of capitalism” says the researcher.

The book published is the result of a research on the phenomenon of the multinationals and more specifically about the transnational energy company Iberdrola. Who drove this investigation and what was your main goal?

Indeed, the book is the end product of a research process, which was driven by Platform 2015 y+ , a space of state level of different social organizations, which among other researches, decided to conduct a study on the impacts of Iberdrola in Mexico and Brazil. The primary goal was to identify the main impacts of this multinational in two Latin American countries (Mexico and Brazil), from a multidimensional perspective, ie, assessing environmental and social impacts, but also of economic, political and cultural order.

Why have you researched about Iberdrola in particular?

Because it is a major multinational Spanish state company, with a strong presence in Latin America, as well as others (Telefonica, Repsol, Santander, BBVA), but on which there were no critical researches about it . Therefore, the need for a study on the impacts of a transnational which insists in selling a idyllic image of the company in environmental and social terms.

Iberdrola seems to sell an image of itself as a “different” multinational. Is this true?

The first thing I would say is that Iberdrola is a multinational like any other else, no better or worse than other. I believe it is important to clarify that Iberdrola is a multinational and therefore a strategic agent of capitalism, which plays its role in the current economic and historical context.

What do you mean when you talk about “strategic agent of capitalism”?

To the fact that multinationals are the dominant institutions in contemporary capitalism with a function and need, which is concentration of properties, resources and wealth in detriment of majority of the population of all countries of the world. Iberdrola is a company over which reproduces this perverse logic of capitalism.

And at this context of “crisis” is the role as concentrator of wealth more obvious?

Certainly. The actual crisis, is actually a process of “public planed robbery” being done by large companies to increase the richness of a minority. The case of Iberdrola is paradigmatic in this sense, as stated at its Earnings Report of 2010, the company have achieved the highest profits in history, while at the same time, at the Spanish state, the poverty and unemployment has increased, housing evictions are dairy drama, for example.

Can you tell us something about the environmental impacts of Iberdrola? Does this company promote environmental respect?

The companies advertising as “green”, environmental responsible and favourable for renewable energy is far from their daily practices. Firstly, it should be clear that more than 50 % of the energy produced is not clean, that is, energy produced from fossil fuels. If we add nuclear generation, we have more than 2/3 of “dirty” or high risk Iberdrola’s energy production. In fact, only 15 % is wind or similar, the remaining 14% are generated in large hydro-power plants, which also causes serious environmental impacts.

One of the countries that you studied is Mexico. What were the main impacts detected there?

Both in Mexico and in Brazil, one of the main impacts is the loss of sovereignty over a strategic resource, which is energy. This combines with the commodification of a basic public service such as the supply of electricity, representing an exponential increase in tariffs. To this we must add the systematic practice of lobbying with political authorities to legislate in favour of multinationals.

In Mexico you conducted field work in the South, in Oaxaca, where Iberdrola has several wind projects. Why did you decide to go there and what are the most important impacts?

Iberdrola has several thermal plants in northern Mexico and so far three wind farms in the south. A priori, it seems that the greatest impact would be at Ibedrola’s central gas plants, which are more polluting. However, from all those people I have consulted it indicated that I should go to Oaxaca, since there was a very strong social conflict due to the presence of Iberdrola and other foreign companies. The impacts are manifold. Iberdrola and other firms co-opted the local authorities to operate according to their interests. Thus, cheated small farmers by making them sign contracts to rent their land which were disadvantageous for those farmers. This caused a social upraise and of the indigenous peoples of the Isthmus of Tehuantepec and the answer was the criminalization and repression of the people.

It is very significant that several people who agreed to be interviewed did so on condition that their testimony was anonymous because they were afraid of reprisals from the company. One asserted that the company even threatened with death if they did not stop the protests. The Assembly of Indigenous Peoples of the Isthmus of Tehauntepec characterized the arrival of Iberdrola and other multinationals as a second colonization. The imaginary shock is very strong, since while for companies wind is a resource for business, for indigenous peoples it is a sacred element of their culture .

As for Brazil. What were the main impacts detected?

Regarding Brazil, besides the loss of sovereignty and commodification mentioned above, add the high price of energy, which is the fifth most expensive in the world. This means that the high degree of profitability of the company occurs, in part, due to the disproportionate rates that millions of Brazilians have to pay. Moreover, in environmental terms, only 2% of its production in the country is wind, clean energy.

In Brazil the field work you did in the North of the country, in Pará, where Iberdrola has part of a consortium responsible for the construction of Belo Monte hydroelectric plant, which will be the world’s third largest hydro-power plant. Why did you decide to go to Belo Monte and what are the main impacts ?

The size of the dam and its associated brutal impacts indicates the most conflictive venture in which Iberdrola is involved. The impacts are numerous and very serious. Belo Monte is part of a large transnational project to colonize the Amazon by the interests of transnational capitalism. There are more than a dozen hydroelectric-plants being constructed in the Amazon region. Those will provide power to transnational mining and metal complex, which is being installed in the region.

In the case of Belo Monte, the consortium Norte Energia formed by Iberdrola and other companies, became the lord of this territory. Not only by co-opting politicians, but also the police works directly for the company. The company has equipped the police with vehicles and this leads to their cars advertising the company. Visually it is very aggressive because so blatant shows who’s the boss in Belo Monte.

Moreover, the working conditions are staggering. Pro-companies trade unions has being operating the negotiations, which lead to spontaneous emergence of other trade unions in order to defend the rights of workers. The salaries has reduced 30%, holidays has been reduced and the conditions of safety and hygiene (food) are depreciable. This has led to the emergence of several labor strikes in the last year. Furthermore, it is estimated that 40,000 people will be displaced due to the flooding caused by the dam construction.

Luismi Uharte is professor/researcher at the University of the Basque Country – Euskal Herriko Unibertsitatea (UPV/ EHU) and Ph.D. in Latin American Studies. Is ascribed to the Institute for Development and Cooperation ‘Hegoa’, the UPV/EHU, and is member of the Research Group ‘Part Hartuz’, the same university. Just published the book Multinationals in the XXI century: multiple impacts.