Ruling prompted by illegal trading of Alerce timber puts an end to secrecy in granting or changing of land titles

Thanks to a little heralded but very important ruling last week by Chile’s Transparency Council (CPLT), the process by which an individual gets or changes legal title to a piece of property will be completely opened up for public scrutiny.

The new ruling was the result of a July, 2009, lawsuit filed before the CPLT by environmental attorney Miguel Fredes, who charged that the State violated Chile’s newly passed Transparency Law (20.285) in the way it carried out its land title operations.

Fredes had for years run up against a stone wall when trying to ascertain ownership rights to highly valuable Region X Alerce forests owned by his client Forestal Sarao.

Prior to last week’s ruling by the CPLT, the process by which the State granted or changed title to a landowner had been completely shrouded in secrecy. But as of January 23, 2010, the Ministry of Public Properties is obligated by the CPLT decision to provide online all executive resolutions – temporary or permanent – regarding the title granting process throughout the country. The website is found at: http://www.bienes.cl/sitioweb2009/recursos/t_activa/index_res_efectos_terceros.html

The case leading to last week’s decision has to do with the nearly indestructible Alerce redwood (a first cousin to the U.S.’s giant Sequoia redwood tree). The valuable Alerce timber had been traded for centuries until 1967 and was getting close to extinction, when the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES) declared it an endangered species.

Matters took a turn for the worse in 1987, when Chile passed a law that allowed Conaf, the state’s forestry agency, to issue permits for the logging of Alerce trees that died before 1976. This loophole encouraged a black market in Alerce, with traders often stripping off Alerce bark or starting forest fires to kill them.

Fredes’ client Forestal Sarao claimed ownership of Alerce forests that were being burned and logged near the Region X town of Fresia by people who appeared to have color of title or some kind of legal claim to his property — but who did not, in fact, own the property.

But Fredes’ client had no way of determining how his ownership rights were being taken away from him because of the opaque proceedings of the National Properties Ministry.

Prior to implementation of the new Transparency Law (20.285), government functionaries hid behind Decree Law 2.695, arguing that information in all land title matters belonged only to those seeking the land title changes, or that access should be denied because the land title was “being processed” or had already been archived.

In fact, the relevant files sought by Fredes were oftentimes in the possession of those who were making the false ownership claim, making it all the more difficult for the attorney to learn exactly what was happening in the case. This also led to the strong suspicion that major political players were somehow involved, using their influence within the regional ministry offices for political payoff purposes.

Because of the secrecy of the whole process, legitimate landowners only learned that they were being deprived of their property after the fact, and only if they were attentive to the small print “notices” published in local media.

“Before Transparency Law 20.285 came into effect, it was very, very easy for abuses to occur because everything was done without any kind of public transparency,” Fredes told The Santiago Times.

"The whole Alerce situation is a national embarrassment, and you can quote me on that one," added Carlos Felipe Baraona, a former Conaf lawyer who also involved himself in the complex legal battle against Alerce traffickers and the government itself.

At the heart of the problem, Baraona said, is a nexus of local politicians and government functionaries that facilitate, or at best ignore, transgressions in order to access the lucrative black market. Alerce trees, sold to the United States, Canada, Taiwan, and a number of Middle Eastern nations, fetch staggering prices (ST, Nov. 16, 2006).

As a result of work by Fredes, Baraona and other environmental attorneys, Fresia mayor José Nelson Schwerter was convicted late last year (ST, Dec. 22, 2009) for his role in facilitating the illegal trade of Alerce.  Schwerter, who served no jail time, was reported last year by local media to be a leading regional and financial backer of President-elect Sebastian Piñera.

But attorney Fredes told The Santiago Times that Piñera’s team personally asked him about Schwerter after arrests were first made and that Schwerter subsequently lost all support from Piñera.

“I provided the Renovacion Nacional (Piñera’s party) information clearly establishing Schwerter’s role in the scam,” said Fredes. “And in all my years involved with this case, I never saw any attempt by RN or Pinera to help or support Schwerter in the criminal case.”

Still, Fredes asserted that other politically connected people were not so innocent.

“I do recall, however, that Lucio Diaz – chief attorney for the State Defense Council in Puerto Montt – tried to help Schwerter, who is a close friend of Diaz’s,” said Fredes. “Diaz did not file any civil compensation lawsuit against members of Schwerter’s gang.

Fredes also asserted that Christian Democratic party Sen. Sergio Paez “used his political influence to push the Ministry of Public Property to illegally grant land settlement permits to more than 100 families so that they could cut and harvest Alerce trees. This was his way of buying political support in the Fresia community.”

By Steve Anderson