The ISA crisis in Los Lagos Chile: A failure of neoliberal environmental governance?

Geoforum 48 (2013) 196–206

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The ISA crisis in Los Lagos Chile: A failure of neoliberal environmental governance? Beatriz Bustos-Gallardo ⇑ Departamento de Geografía, Facultad de Arquitectura y Urbanismo, Universidad de Chile, Chile

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Article history: Received 10 December 2010 Received in revised form 18 March 2013 Available online 28 May 2013 Keywords: Salmon ISA crisis Environmental governance Chile Science Neoliberalism

a b s t r a c t This paper discusses the Infectious Salmon Anemia (ISA) crisis that affected the salmon industry in Chile between 2007 and 2009. For nearly 30 years, the salmon industry grew exponentially to become one of the top five exporting sectors, and the face of the new Chile: globalized and democratic. I argue that the crisis showed cracks in the neoliberal environmental governance mechanisms followed by Chile during that period, raising questions about the need for socially restructuring the political economy relationship with the environment by increasing state oversight over the use of the natural landscape in which the industry produced, while allowing firms to continue their exploitation pattern and global exports of commodities as their accumulation strategy. Furthermore, the political solutions that were introduced tested the ideological reliance of neoliberal environmental governance mechanisms on science and knowledge production for providing appropriate answers. Ó 2013 Elsevier Ltd. All rights reserved.

1. Introduction The salmon industry in Chile has been known for its successful and accelerated growth into one of the top producers and exporters of fish in the world, transforming local and regional economies (see Fig. 1 for a map of regions of influence) and exacerbating social differentiation (Barton and Floysand, 2010). However, in 2007 it was hit by a crisis that threatened its accumulation strategy, breaking apart the ‘‘picture-perfect’’ image of Chile as a model of economic integration into the global economy through natural advantages. In July 2007, the country largest salmon company, Norwegian owned Marine Harvest, announced an Infectious Salmon Anemia (ISA1), a virus similar to the human flu virus, outbreak in Chiloé. While ISA does not affect humans, it produces high mortality rates among fish and a rapid deterioration of their physiology. Following the ISA sanitary crisis, the industry suffered severe economic conse⇑ Address: Portugal 84, Santiago, Chile. E-mail address: [email protected] According to Toennessen et al. (2009, pp. 308–309): ‘‘The infectious salmon anemia virus (ISAV) is classified as the type species of the genus Isa virus in the Orthomyxoviridae family and is evolutionarily remote to the influenza viruses. ISA was first recognized as a disease in 1984 in farmed Atlantic salmon (Salmo salar) in Norway and has since been diagnosed in Canada, Scotland, the Faroe Islands, the US, and Chile. Fish in the terminal stage were found to be severely anemic, and this feature gave name to the disease. Field outbreaks of the disease have only been detected in farmed Atlantic salmon. There are no reported natural outbreaks in other species or in wild fish. The mortality can be higher than 95% during outbreaks, but low mortality also occurs. The disease causes large economic losses for the fish farming industry.’’ 1

0016-7185/$ - see front matter Ó 2013 Elsevier Ltd. All rights reserved. http://dx.doi.org/10.1016/j.geoforum.2013.04.025

quences: Many producers could not repay the loans they obtained during the industry’s boom to support further expansion, exposing its fragility and the effects of regional dependency on a single resource for development. In this article, I discuss how the ISA crisis reflects the shortcomings of neoliberal environmental governance mechanisms and the role of science in providing inputs into the decision-making processes involved. While political ecology literature acknowledges the importance of knowledge production in environmental policy (Merchant, 1980; Prudham, 2003; Duffy, 2006; Robbins, 2006; Prudham, 2007) the issues of how and what kind of science is used both discursively and in practice remains a key topic for examination, particularly in resource-based economies where the sciencepolicy-nature interaction is hybridized in neoliberal practices of governance and political action. In this way, I examine how socio-environmental conflicts are resolved (Barton and Floysand, 2010; Perreault and Valdivia, 2010) and the role of science in providing alternatives within political spaces of decision-making (Apostolopoulou, 2010; Horowitz, 2010). I argue that existing environmental governance institutions created are incapable of considering scientific arguments, demonstrating the inability of the formal political system to address long-term ecological implications of environmental crises. The case of the ISA crisis shows that there are two moments in its treatment: first, a moment of framing, where scientific explanations were looked for but were not found in the form and themes needed for policy-making, and a second moment of intervention where the actual solutions focused on economic restructuring and financial considerations. In these terms, environmental governance

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Fig. 1. Map of the area.

institutions did not use science to provide the solutions for nature as obstacle for capital accumulation, but instead, for providing the discursive justification for the financial restructuring of the circuits of accumulation for the salmon industry. In the process, the solutions are creating new circuits for capital accumulation (moving to new geographical areas, forcing firms mergers) at the same time as structuring the social relation with the environment, (Bridge and Perreault, 2009) by establishing new regulation but also changing perceptions on environmental exploitation. To support this argument, I first discuss the science-policy-nature interface from a political ecology perspective, followed by a narrative of evolution of the ISA crisis to emphasize the role of science in building the environment for salmon-production and thus, the contradictions that arise for environmental governance. I conclude with a revision of the solutions proposed to understand the new social structure of nature-society interaction post-ISA and potential implications for the industry in Chile. 2. Environmental governance and science in resource-based economies Scholars have broadly studied and presented Chile as an iconic example of neoliberal policies in action (Collins, 1995; Drake and

Jaksic´, 1995; Harvey, 2005; Barton, 2006; Barton and Murray, 2009). It could more accurately be described, however, as an example of ongoing economic dependency on nature with an unresolved tension in its accumulation strategy. The economic and political system has been unable to absorb the costs of using nature as the backbone of the neoliberal export-oriented strategy (Cademártori, 1968; Meller, 1996; Quiroga and Hauwermeiren, 1996; Claude, 1997). Barton and Floysand (2010) have studied the trajectories of the Chilean salmon industry as an example of globalization and the rising concerns for the social and environmental impacts of export-oriented economies. This article builds on that analysis and examines knowledge of nature as an obstacle for capitalist accumulation; ‘‘the material properties of the nonhuman world influence direct attempts by capitalists to profit from these’’ (Benton, 1991 in Castree, 2008a, p. 145). With the implementation of neoliberal policies – such as free trade agreements in the 1990s – the economic and political systems have paid attention to nature as a barrier to the economic strategy by implementing an explicit environmental framework based on experts and science for decision-making (Azuela, 1993). Such a framework requires the necessary intellectual discourses to support such purposes by identifying resources avail-

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able for exploitation, and turning them into attractive enterprises for investment (Azuela, 1993). Scientific and technical cadres significantly pushed state interventions in nature that provided the rational justifications for introducing natural resources to the accumulation strategy. Given the intrinsic connectedness of knowledge about nature and capital accumulation in a resource-based economy through the processes of commoditization and resource exploitation, I propose a political economy-political ecology framework to examine this case. Critical resource geographers have illustrated the role of knowledge in environmental policy by discussing the constructed and contested nature of extractive spaces (Bridge, 2000; Bakker, 2003; Castree, 2008b) through examining how decisions and consensuses are reached, and what role knowledge about nature plays in such spaces. This case advances these ideas to examine them in times of crisis and provides a concrete example of how capitalism eases the contradictions for accumulation by circumventing actual science and turning it into an opportunity for economic restructuring. Previous research suggests that by focusing on actors and coordination mechanisms within a context of neoliberalism (Barton and Floysand, 2010), we can shape the geography of environmental governance, and more precisely, the spaces of decision-making and strategies for the circulation of ideas (Backstrand, 2004a,b; Bulkeley, 2005; Duffy, 2006). I will start from this basis to examine the role of scientific knowledge in environmental policy. Bridge and Perreault (2009, p. 277) emphasize that environmental governance encompasses ‘‘both the social organization of decision making with respect to the environment, and the production of social order via the administration of nature’’. As such, governance represents ‘‘efforts to offset various crises of underproduction by shoring up the ecological conditions on which accumulation depends’’ (Bridge and Perreault, 2009, p. 483). Examining spaces of environmental governance then requires questioning the science-policy interface in terms of its capacity to produce a social order for the administration of nature. Understanding the science-policy interface of the salmon industry begins with identifying the mechanisms through which salmon enters production processes, and the mechanisms of decision-making necessary for turning salmon from an ‘‘uncooperative commodity’’ (Bakker, 2005) into a ‘‘cooperative commodity2’’ by adapting salmon to human-created cycles in ecosystems that are not native to salmon. However, a crisis may emerge when these attempts to make salmon cooperative are based on the premises of ‘‘equalized landscapes,’’ to use Smith’s terminology (1984), between Chile’s constructed ecological conditions and those in Norway, Canada, and Alaska. As Smith (1984) argues, capital thrives from the tension between differentiated landscapes and its need to equalize production conditions in order to move on. However, there is no such thing as an ‘‘equalized landscape’’, at some point we will reach a crisis of accumulation considering the incapacity of different ecosystems to support high levels of production in stressful conditions. The ISA crisis lets us explore such a moment.

3. Salmon production in Chile: the science and the crisis The geography of salmon production is particularly global: all species are originally from the northern hemisphere (either the Pacific or Atlantic Ocean), and are actively produced in Chile (see Fig. 2) and Norway, but are primarily consumed in the United States and Japan. Here, I focus on the biological processes involved in producing salmon in Chile in order to understand how the sal2 As discussed by Bakker (2005) an uncooperative commodity is one whose biophysical characteristics represent a set of contradictions for its commoditization and therefore are a challenge for capitalist expansion.

moneros (salmon farmers) used science to work with nature to produce salmon (Benton, 1989), a species that is not native to these territories. Since salmon is not indigenous to Chile, its production in exporting quantities requires a series of active interventions in the landscape and the actual body of the fish: the constructed landscape and the real subsumption of nature (Boyd et al., 2001) start when eggs are selected to genetically improve the biophysical qualities of the species. Here, the river gravel is replaced with the hygienic and generic site of the laboratory. Several years ago, producing eggs in Chile was challenging and eggs were brought in from Norway or other producer countries; however, by 2002, more than 90% of eggs were produced locally (Henoch, 2006). Once eggs are chosen, prepared, and fertilized, they are released for hatching in lakes and rivers where conditions are controlled as much as possible before reaching smoltification. These attempts at nature subsumption are part of the evolution of the industry in Chile, but also show that there was no local scientific knowledge or innovation involved, just a low-budget copy of overseas experiences: In the first years of the salmon industry in Chile (1976–1986), the hatcheries were artisanal structures, roughly based on foreign design. According to the industry, local contractors used technologies from other countries – particularly the United States, Norway and Scotland – but using wood, plastic netting, and plastic tubes for making cradled incubators or the construction of circular tanks and raceways (Technopress, 2003). The newest techniques include using tanks where conditions for water flow and oxygenation can be further controlled without polluting natural environments. These shifts are partly a response to critiques from environmentalist groups. In Chile, salmon producers use different rivers and lakes to maximize the production of smolts. In all of these, the landscape has been artificially shaped to simulate the natural conditions of salmon: For production and maintenance of Atlantic salmon alevins, higher water temperatures are needed, which requires heating the water during the winter, either by electricity, wood, gas, or diesel burners, heat exchangers, and temperate water distributions systems. Inversely, there are hatcheries that need to reduce the water temperature to 8 °C in the fall, with the use of water chillers (Technopress, 2003, p. 243). To deal with nature as an ‘‘obstacle, opportunity and surprise’’ (Boyd et al., 2001, p. 560), the industry adopted a very hierarchical and concentrated configuration. Firms control everything from the eggs to the export chain, facilitating the introduction and implementation of technologies dealing with the main obstacles: such as transport and feeding. This includes technology to control oxygen and temperature levels in the ships transporting salmon from the ocean farms to the processing plants without the need for killing on site, reducing risks of site-pollution and damage to the fish. Additionally, the transition from hand-feeding to a blower dispenser, not only replicates natural conditions, but speeds up growth and improves the quality of the meat, and involves the use of video cameras and sensors to control and monitor the feeding process. Technology was also developed to speed up growth rates and increase farming capacity, by introducing photoperiod regulation, the application of oxygen in hatcheries to heighten animal density per farm site (Henoch, 2006), and the implementation of new cages or ‘‘net-pens’’ to contain the salmon while in the grow-out phase (from five square meter wooden squares to thirty meter diameter circular plastic net pens). By increasing production, all these factors played a critical role in the ISA outbreak of 2007. Due to these transformations in the landscape and the fish, the Chilean salmon industry production grew from 104 tons in the

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Fig. 2. Spatial distribution of Chile’s salmon industry by stage of the production process.

mid-1980s to 630,647 tons by 2008 and exports of US$ 2.392 million, with reported jobs around 30,000 before the crisis. (SERNAPESCA, 1998–2008). These numbers turned Chile into one of the major players in the farmed fish industry, the most rapidly growing ‘‘animal-food producing sector’’ since 1970s representing over 30% of fish production (FAO, 2006), far surpassing wild salmon production. Along the chain there are several moments in which aspects of the constructed environment for salmon production in the Los Lagos region represent a threat to production itself. The most obvious is the introduction of foreign eggs and species into a different ecosystem, which became one of the explanations for the ISA outbreak affecting the industry. In the words of a salmonero (AQUA, 2008a): ‘‘It must be understood that the salmon is an ‘ecological fuse’, which means that if the environment is not at its optimal conditions, the business doesn’t work.’’ Through the production chain, the industry is connecting not only three different ecosystems (marine, rivers, estuaries), but also at least four different scales of regions and economies. From the physical challenges inherent in transporting eggs, salmon, and food from one point to the other, to the political and economic implications of moving capital, people, and knowledge, the industry grew on the premise that it was possible to equalize everything – ecosystem, production processes, and profit rates – to the production conditions in salmon’s original countries. In those terms, technological and scientific practices as well as policy spaces are appropriate arenas to test the capacity of any given economic system to overcome crisis and accommodate new conditions. This is why we turn now to see how the ISA crisis was dealt with and resolved so accumulation could move forward.

4. The ISA crisis: from scientific explanations to economic solutions In this section, I outline the two moments for approaching the crisis: first, the framing, where the gaps in the science-policy interface were exposed, and second, the interventions focusing on the economic restructuring and financial concentration. I examine the way in which the outbreak was discursively configured as a sanitary problem, but later on, was dealt with through the introduction of structural and financial changes that saw the industry adjust to the new circumstances of lower exports, closed operations, and less financial credit that required a redistribution of the accumulation circuits. My analysis is based on fieldwork3 carried out during the first 18 months of the crisis (July 2007–December 2008), the period that represents the peak of the conflict. To guide my narrative of the ISA outbreak I use material from interviews and the news portrayed in the industry’s main newspaper, AQUA, a specialized journal where all news related to the salmon industry is published.

3 Fieldwork was carried out in Santiago, Valparaíso, Puerto Montt, Valdivia, Chiloé, and nearby localities. It included interviewing 46 experts for 1–2 h, via an open-ended questionnaire, recorded and transcribed (in Spanish). Experts came from the government sector (13), the private sector (7), academia (10), NGOs (13), independent consultancy (1), and congress (2). The data gathered was coded identifying key words that represented the concepts involved in the research question (discourses about natural resources, salmon impact on the region, relationship between actors, material transformations, knowledge production and science, environmental policy, neoliberalism). I chose those based on the literature review and the main ideas and themes discussed through interviews.

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Fig. 3. Crisis timeline.

4.1. The framing The story of the political debate regarding the ISA virus began when the governmental agency Servicio Nacional de Pesca – SERNAPESCA, the National Fishing Agency – officially declared the existence of an ISA outbreak and established health and safety control measures (see Fig. 3). On July 30th 2007, the Norwegian company Marine Harvest reported a case of ISA virus in some of its operations on the Chiloé coast. By August 1st, the sanitary authority (SERNAPESCA) had detected at least nine centers affected by ISA, in Chiloé. An academic interviewed provides an explanation as to the origins of the ISA: What happened was that man made an activity grow in such a way that the ecosystem could not assimilate it. It was thought that you could measure the impact of the industry by observing the ocean floor and the level of oxygen below cages. . . but clearly it didn’t work, the system exploded somewhere else. (01.12.2008).

ISA renders salmon unsuitable for export.4 Thus, the economic impact is important: according to reports, production of Atlantic salmon in Chile decreased from 386,000 tons in 2006 to a little more than 230,000 tons in 2011 (Gutierrez, 2011). The speed of the outbreak in 2007 and the absence of ready to use vaccines affected the capacity of the industry to react and by the end of the first year, there was a widespread consensus on the causes of the ISA crisis: overproduction and fish overcrowding, importing of contaminated eggs, spatial concentration of operations, lack of knowledge of the relationship between salmon production and the marine environment in which it takes place, and lack of oversight and enforcement mechanisms by the public sector (lack of resources, personnel, infrastructure, and legal faculties). 4 Meat quality is affected, and the salmon cannot reach the necessary trading weight and size.

While the salmon industry initially denied that there was an outbreak, later on, it explicitly framed the outbreak in terms of the end of the industry in the Los Lagos region and called for state support. NGOs, on the other hand, raised broader questions about the capacity of the industry to pass environmental tests. In response, the government decided to create a task force, the ‘‘Mesa del salmón’’ (Salmon Task Force) in April 2008, to coordinate all the public sector agencies involved in monitoring the industry, to define new industry guidelines, and to consider scientific evidence to redesign the environmental regulations and the public institutions responsible for their enforcement. In the following months, the political actors responsible for containing the crisis turned to the scientific sector looking for solutions, but they found that the scientific community for the salmon industry was atomized5 and that its research was not addressing the pressing issues that were needed to make decisions. Bravo (2006a) found that project themes did not respond to any strategic long-term logic, but more to each researcher’s personal interests and were closely linked with industry needs, but lacking any strategic long term perspective. Twelve thematic areas were identified, with disease and sanitary management (28%) and genetics and reproduction (16%) the most important ones. It became problematic that an economic sector so dependent on the natural landscape did not have readily-available and publicly-available information on ecological interactions and the effects of the industry in the ecosystem because the industry became dependent on foreign interpretations and provisions of veterinary solutions, but also because the state wasted important time gathering data and

5 Bravo (2006b) studied aquaculture research produced in the period 1987–2005, and found 895 projects funded by public sources, 178 of them on salmon involving 48 principal researchers for M$13,772,960 (US$26.183.300 approx., 20% of total figure) developed by four universities: Universidad Católica de Valparaíso, Universidad de Los Lagos, Universidad de Valparaíso, and Universidad Católica de la Santísima Concepcion. While the figure may not tell much, the academic community selfdefined as small, dispersed and isolated with important mistrust between each other in all the interviews conducted during fieldwork.

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information to understand the extent and consequences of the crisis. Thus, scientific information became a contested terrain for decision-making and diverted attention from examining the cracks in the existing development model that the crisis exposed. On the one hand, policies were discursively reliant on scientific knowledge, on the other, in practical terms; policies reconfigured the financial and territorial practices of the industry to sustain the same accumulation strategy without much consideration of scientific information which was pointing toward the need for new productive practices. One way to think about this tension is considering the kinds of knowledge available for policy makers and what science is left behind. Over the past 20 years academia has prioritized research moved by publication and grant agendas, moving away from policy-relevant research. This scenario provided the perfect discourse to legitimize those policies focusing on reforms to the industry’s financial structure as a way to rebuild the circuit of capital accumulation instead on those policies calling for ecological control which lacked scientific support. SERNAPESCA had no other choice but to officially declare it an outbreak by August 16th (AQUA, 2007a,b), and establish a series of measures to control it: (1) the immediate removal or harvesting of animals within cages/centers affected by the outbreak; (2) the establishment of strict bio-security and disinfection measures, following standardized procedures defined by technical standards for live fish; (3) the moving of fish was prohibited without the permission of the service; (4) the reporting by each affected farm of the weekly mortality rate from their center; (5) the use of open wellboats for transferring the fish was prohibited. The measures, however, proved to be ineffective; by the end of August 2007 over thirty farms were officially infected. By mid-September, SalmonChile – the industry lobby group – decided to counteract the increasing rumors and debates about the implications of this outbreak (AQUA, 2007c), while the government declared that environmentalist concerns were unjustified attacks (AQUA, 2007d). However, by the end of 2007 the outbreak expanded toward the Aysén region, transforming the regional sanitary crisis into a national problem. The initial reaction was to frame ISA as a sanitary problem and therefore a ‘‘scientific-pharmaceutical’’ one. Several scientific conferences and meetings were organized by transnational pharmaceutical companies6 (AQUA, 2007e,f,g) to discuss the ISA virus and salmon health, which included presentations by international experts from Canada, the USA, Norway and Scotland, but only a few Chilean scientists. Around the same time, the government and SalmonChile organized a joint private workshop to discuss the ISA outbreak (AQUA, 2007h). By December 2007, the NGO world also organized a meeting of ‘‘salmon dialogs’’7 in Chile, discussing chemical inputs, nutrients, carrying capacity, and the social and economic impacts of the industry. 4.2. The interventions: sites of knowledge production and policymaking These meetings and conferences demonstrated the primacy of a particular kind of science and knowledge (biotechnology, 6 BIOVAC, Aquagestión, Skretting, NOVARTIS, DSM, Schering Plough and Nutriservice, to name a few. 7 The salmon dialogues were established in 2004 by WWF-US to gather the perspectives of the industry, communities, and environmental groups toward creating a common set of standards that would increase the industry’s environmental performance while facilitating access to markets through developing a green-label in the way of Forest Stewardship Council, FSC. In addition to WWF-US, the board is made up of the Coastal Alliance for Aquaculture Reform, Fundación TERRAM, Marine Harvest, National Environmental Trust, Norwegian Seafood Federation, SalmonChile, Salmon of the Americas, Skretting, and WWF-Chile.

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veterinary, pharmaceutical) referring to animal disease, owned by private pharmaceutical companies. These companies were concerned with framing the disease in terms of animal pathogens and imposing their scientific solution to treat ISA as the way to prevent the outbreak from affecting production. The seminars exposed the existence of a market for knowledge production within the salmon industry, closely associated with productive practices, and whose main actors are multinational corporations that produce knowledge outside the Los Lagos region. From 1990 to 2010 the number of actors and sites producing scientific knowledge in Chile has increased. These new actors have the explicit aim of influencing decision-making, changing the expectations of the state about what constitutes legitimate knowledge. If before (1960s), universities gained legitimacy through being the site of knowledge production, now, legitimacy is obtained by providing policy-relevant (usually economic-based) knowledge. One key factor in understanding the new landscape of actors and sites for knowledge production is the collaboration established between them, or rather, the lack thereof. Several interviewees (from NGOs, academia and government) argued that scientists are usually isolated from other actors: I believe that there is good research, but what is missing is an integrated system. There are plenty of isolated efforts, even when researchers decide to work together and create consortia, they even create a pretty website, but that’s not true, they do not integrate with each other, they don’t do it even with the scientist next door, therefore, there is an important barrier to break. (NGO officer 09.04.2008). The consequences of this isolation, according to government and NGOs interviewees, is that university scientists are not able to produce relevant research for the kind of environmental challenges the country is facing. In turn, decision-makers need to go to new sites and actors for knowledge production: the independent consultant, in the case of government and firms, or NGOs’ own resources as part of global networks (in the case of international NGOs), resulting in a lack of systematization of produced research, privatized results (they belong to those who paid for them), and contested knowledge about the same reality. Although private sector investment in research has reached 40% of Chile’s total investment in research and development (Academia-Chilena-de-Ciencias, 2005) during the last decade, it has not been a key actor in either the funding or consumption of science. One interviewee from the private sector explained as follows: Still, the salmonero is a very complicated character to deal with in terms of research and development, because generally they only see bucks, they just see the bottom line, thus, they see that the bottom line tells them that probably what they invest in research even if it solves a problem won’t be enough to make the money they need to make, you see? I mean, the cost-benefit relationship is what’s first for them. (02.12.2008). As a result, the growth experienced by Chile’s export-based economy is not correlated with an increase in the scientific body that might contribute added value to nature. The interviewees from the private sector argued that academia does not fulfill their requirements in terms of time and quality of research; thus, private firms prefer to import and buy technology from abroad: Chile has the problem that basic science is really behind. Academia still has a hard time turning their research and development into ventures or part of the technology offer for industry; however, I am not saying it is not possible. For instance, Chilean scientists who have researched in the US have discovered the genomic map of salmon, but they are the exception to the rule. Today, the research centers of universities are

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far away from global research centers. Furthermore, I believe most Chilean universities, not to mention PhDs, are below international standards. (Corporate sector 19.01.2009). This statement exposes the failure of Chile’s demand-driven scientific policy: on the one hand, firms have not produced demand for scientists, on the other, university scientists have failed to address policy relevant research, showing that Chile lacks scientists to face the challenges of a development strategy based on exporting natural resources (Prenafeta et al., 1987). This new map of knowledge production shows how university scientists have been displaced from their privileged position as state-advisors, but also exposes several tensions between the kind of knowledge needed for decision-making and the knowledge produced by scientists within universities: timing (‘‘they want it right now’’ and ‘‘science takes time’’), processes (‘‘no peer review’’, ‘‘when they invite us,’’ and ‘‘we don’t get paid for participating’’), legitimacy (‘‘who are these consultants?’’). Interviewees also noted problems within the academic community that prevented their involvement in policy-making processes: the lack of coordination between groups, the non-existence of an integrated database which contains findings related to environmental problems that could be used by decision-makers (‘‘who has time to do it?’’), and also the lack of incentives for participating. Usually universities assess scientists by their capacity to publish in peer review journals and obtain funding; there is no reward for outreach (including policy processes). In June 2008, a private laboratory – BIOVAC – discovered the DNA sequence of the Chilean ISA virus (AQUA, 2008b). This discovery enabled the identification of vaccines, but once the pharmaceutical solution was found, the debate turned to finding the scapegoat: why did the crisis take the industry by surprise, leaving it with no available scientific information to face it speedily and efficiently? During 2008, several scientific meetings took place, at which each party appeared to be blaming the crisis on someone else. The government highlighted their innovation policy that provided funds for research and development, the industry argued that they invested more than any other economic sector in research, and the scientists argued that there was both a lack of funding and government guidelines. In all, these meetings showed that research produced over the past decade was concentrated in activities associated with production and there was no synthesis of existing research, making it difficult for both industry and government to access the results in a practical way. 4.3. Economic solutions for a sanitary problem In addition to the scientific explanations, during 2008 other issues such as the responsibilities and financial impacts of ISA on the industry were also discussed. Marine Harvest was the most affected company (with reported losses around US$15 million), and rumors spread that they imported contaminated eggs from their headquarters in Norway, so Chilean producers argued for the complete prohibition of eggs imported from that country. The company vehemently denied these rumors, stating that ISA existed in Chile long before the crisis began. The ‘‘egg controversy’’ became a geopolitical matter, as Chilean producers aligned against Norwegian producers in a struggle between economic forces to define the problem in a way that affected the economic interests of all involved by the redistribution of their share in the accumulation process. The Norwegian producers claimed that the overproduction method of the Chilean industry was the main cause of the ISA outbreak. The government promised to identify the sources of contagion and to improve the screening of imported eggs, but did not prohibit imports because Chile is a member of the WTO sanitary

and phytosanitary agreement and it could be considered a barrier to trade. Through bypassing the debate over who was responsible, the state played a role in aligning opposing forces into a single front redefining the ways in which nature entered accumulation to accommodate the tensions created by the sanitary outbreak. Within the debate over responsibilities, the industry (mainly SalmonChile) argued that nobody expected this to happen. However, among those I interviewed (even from the industry), there was widespread consensus that an outbreak was predictable: Our current sanitary status is due only to a lack of proactivity. I mean very few can say today, ‘‘Hey, I never thought we would get to this situation.’’ I believe this was the result of a system of production that was not at the level of the animal biology (Industry executive, 12.02.2008). The crisis that the industry faces was avoidable. Six or seven years ago people could have told you what happened, but because they had no problems and were growing and making huge profits, nobody asked what was going on (Academic researcher, 10.12.2008). If in 2000 they had taken the same measures, [ISA] could have been avoided. We were raising awareness, so, of course this could have been avoided (NGO officer, 29.10.2008). I believe there was a series of elements that hinted that this might happen, but what was prioritized in the general discourse was the exponential growth of the industry and the goal to produce two million tons by 2015 (Public sector officer, 15.12.2008). This debate about what was expected and what was not from an industry that grew at such a fast pace is related to the fracture of the neoliberal premise that the market is the most efficient allocator of resources and production. Although the outbreak helped the industry dampen public debates on implementing a new royalty8 surcharge on the salmon sector (AQUA, 2005, 2007i), the industry was facing financial challenges, given the high costs of production (particularly the high costs of fish oil for food), and the low value of the US dollar. Thus, banks and insurance companies noticed the situation affecting the industry and by March 2008 they went public with their concerns: The ISA virus is a matter of concern within our business portfolio. We have talked with our clients to understand how they are defending themselves and what measures they have taken to minimize the impact of the disease and survive the outbreak. . . there is concern about the ISA virus, but the salmon industry will not disappear. (Rabobank executive director in Chile, AQUA, 2008c). By June 2008, when the reported losses of the sector reached between US$34 and US$64 million and over a thousand jobs were lost (AQUA, 2008d), another bank (BCI) publicly announced that it was reconsidering the criteria and requirements to loan money to the salmon industry, given the higher probability of many companies defaulting on their debt payments (AQUA, 2008e). The salmoneros understood that the increasing losses and fall in 8 The idea, proposed by Camilo Escalona, senator for the Los Lagos region, was to introduce a charge between 0.5% and 5.0%, to the profits obtained by salmon companies (depending on volume produced) that had marine concessions alongside the shore of the region. Up to 2010 the aquaculture law established that the salmon sector pay a patent (permit) of 2UTM (Monthly Tax Unit) per hectare of surface (CLP$70,170 or US$146 as May 2008). Fifty percent of the money goes to the Regional Development Fund (FNDR), and the remaining to municipalities where the industry exists. In 2007 the industry paid $791.7 million (US$1.5 million). The new aquaculture law, a reformulation of the existing one as a policy solution to the crisis, was approved in March 2010, and it raised this patent to 6 UTM in 2011 and 10 UTM by 2013.

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production numbers meant only one thing: a tougher end-of-year negotiation with the banks over the US$2 billion in debt. In the words of a public officer involved in the sector for over a decade:

converging to make normal ranges 50% lower than crops in the X Region.

. . .ISA is a production and sanitary problem that would not have this repercussion if the financial crisis had not happened. I can name five or six events that the industry faced through the 90s – which could be a sign, because it is not normal for an industry to have so many crises – but from a sanitary point of view, we have several endemic diseases that kill more salmon than ISA and nobody says a word. But today we have ISA and everyone flagellates themselves about it. To me, we need to worry about the financial crisis, because firms are not going to lose money. They will adapt, but that means that they will fire people, you see? (Public sector officer, 02.12.2008).

Another example is found in this interview with Victor Hugo Puchi, owner of the second largest producer of salmon in Chile (AQUA, 2008i):

Five banks (Banco de Chile, BCI, BBVA, Santander and Corpbanca), encompassing 75% of the debt, organized themselves by naming negotiators and taking a common position, to hint that one negotiation would be a sign for the others to come. In April 2009, BICE bank decided not to renew the US$5 million credit to INVERTEC, one of the three bigger salmon companies (AQUA, 2009a). While the amount was not significant, considering that the same company owed Rabobank US$25 million,9 the idea was to let the market know that the banking system was not willing to negotiate unless serious restructuring happened. The banking industry and the salmon industry had differences of opinion in relation to three key areas: (1) participation in the ownership of the companies for the duration of the loans; (2) use of farm concessions (the rights to exploit marine concessions) as collateral; and (3) the interest rate for new loans. Of these, point two was the most debated between the parties because it implied legal reform (to the aquaculture law) and was framed strategically by environmental groups as a privatization10 of marine waters. It was a struggle to define what kind of structural arrangement would prevail: either a new institutional and legal system (preferred by the banks) that would redistribute property rights and thus, participation, or a geographical shift that would retain the sector structure and participation, but which would compensate the lower revenues by expanding production south (preferred by the industry). The ‘‘way out’’ of this impasse was the geographical expansion into the Aysén and Magallanes regions. As reported by SERNAPESCA (AQUA, 2008f), several salmon firms introduced over 171 projects totaling US$354 million for environmental assessment in Aysén between January 1st and February 23rd, 2008. Despite the fact that the presence of the virus was confirmed in that region, nearly 80% of new concessions requested were concentrated in Aysén and Magallanes11 (AQUA, 2008g). As stated by BanChile investments, one of the main banks involved in the sector (AQUA, 2008h):

In this way, the industry’s discourse quickly focused on demanding that the government map out new zones where the industry could move, a discourse that the government embraced:

. . .The relocation of production to the XI (Aysen) Region and the greater geographic diversification of crops will help the company to tackle the sanitary challenges that have affected the industry, allowing them to reach higher levels of productive efficiency. Specifically, it is expected that growth rates will be 20% higher, there has been a drop in the presence of Caligus (75% lower than the X Region) and a decline in mortality rates,

9 As a comparison, the other big company, AquaChile owes US$400 million, 25% of the total debt from the salmon sector (AQUA, 2009b). 10 Although in essence it was the transfer or creation of property rights. In this case the proposed policy implied that concessions could be transferred in the market and banks could control them in case of inability to pay debts, thus, the state would defer its control over them to the market. 11 It is important to note that there was also a saturation of available concessions in the Los Lagos region that also pushed concessions south.

We have to reorganize the industry and create mechanisms to relocate concessions in bigger management areas. The revision of current regulations must be made for the future, not just for the moment, guaranteeing the sustainability of the industry. There is a need to develop incentives for us to abandon dense areas and for those to be replaced by new ones.

The government is working alongside the industry to improve mechanisms against ISA, but the measures are not on the side of developing vaccines, they go along the lines of managing the fjords and sectors where farms are located. . . the government should promote a law to reorganize the industry and to speed up the granting of these new concessions. Today, the minimum wait time is three years, and that is not fast enough to be effective against ISA (AQUA, 2008j).

While moving south seemed a mere geographical shift, the banks’ demand for using marine concessions as collateral is the most explicit sign of the kind of structural shift that the banking system promoted: to explicitly incorporate the biophysical properties of both the salmon and the ocean into capital accumulation processes. In those terms, it was absolutely necessary to have an active state intervention in order to push forward the legal reforms needed for this new industrial order, and for securing consensus on the legitimacy and necessity of it. The geographical shift of the industry to the Aysén and Magallanes regions was criticized by environmental NGOs and artisanal fishing associations, who asked for government intervention to freeze further action until the causes and solutions for the outbreak were defined through a participatory process. This environmental opposition, as well as increasing unemployment from salmon companies, ongoing debate about the creation of a new royalty tax for the salmon sector, industry lobby for new regulations and subsidies to overcome the crisis, and legislative initiatives to reform the industry, created a very tense social atmosphere that exploded after a March 2008 New York Times piece exposing the environmental and social impacts of the industry (Barrionuevo, 2008). The article triggered an immediate response from the government, given the dependency on the US market for salmon exports and the decision of one of the largest supermarket chains in the United States (Safeway) to stop importing Chilean salmon. In domestic terms, it became an opportunity for the government to create a formal policy solution to address the now evident structural problems faced by the industry. By presidential order, the Ministry of Economy established in April 2008 what became known as the ‘‘Mesa del salmon,’’ composed of all the public agencies involved in the salmon sector, to coordinate and discuss an integral plan of intervention and reform for the industry. Justified by discourses about employment and growth - the state apparatus put itself at the service of the industry, not only to facilitate the appropriation of new territories and natural resources into circuits of production and accumulation, but also to speed up the process of reorganization to avoid interrupting production.

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5. Policy solutions and scientific knowledge I have argued in the previous section that there are two moments in the approach to the crisis. It was only at the moment in which the industry framed it as a financial crisis that the state actively entered into the governance of the problem. In this section I explore the policy institutions and discourses created to legitimize the actions implemented and the changes imposed on the salmon sector. 5.1. The ‘‘lack of knowledge’’ trap The government gave the Mesa a ninety-day period to identify short-term policy solutions. To endow the Mesa with some sort of political leverage, Felipe Sandoval, former Undersecretary of Fishing, was appointed coordinator and leader of the process. In general terms, interviewees regarded the Mesa del Salmón initiative as an opportunity to restructure the sector within sustainable guidelines, for which a scientific advisor was appointed. However, the interviewees and public opinion raised several critiques in terms of access to information, transparency about the ideas debated, who was participating, and whose voices were heard. Some scientists felt excluded, other groups questioned the real capacity or willingness of the Mesa to incorporate scientific information, or even the capacity of the policy-makers involved to understand the information provided. Furthermore, given the long-term nature of marine and aquaculture research, and the fact that policy-relevant research was not produced by traditional actors, not all the scientific information could be considered on time. Thus, the scientific information available was that produced by the Fondo de Investigación Pesquera (FIP) with its productive bias, and the CONICYT (National Commission for Science and Technology) system, which did not properly covered the policy-relevant themes, and considering that reports produced by NGOs or other sources outside official academia were dismissed, the Mesa ended up demanding more knowledge production than using what was available, thus, circumventing knowledge for decision-making. As the scientific advisor for the Mesa (07.04.2009) explained: ‘‘How would you describe the role of scientific knowledge in the mesa? It is respected. If there are elements, usable elements for discussion, they are incorporated. In fact, the Mesa requests reports all the time, we’re thinking and suggesting projects that can be done. In fact, around eight to ten projects have been started like that [When someone says,] ‘why don’t we look at this theme?’ ‘Why don’t we research this other issue?’ Projects happen and money is designated from somewhere like the FIP. . . . . .We met regularly once a week to discuss and analyze different topics. . . there were people from the fishing under-secretariat and SERNAPESCA working, new reports and data arrive all the time. In all, it is a task force that provides guidelines for the activities implemented. And part of that group for example, the president or executive secretary plus some others, continue the negotiations with the salmoneros, the fishing associations, etc.’’ There are several interviewees who feel that within the community, scientists seriously criticized those few scientists that took ‘‘sides’’. Yet both government and industry in general question the academic capacities of scientists: . . .All scientists have that perspective, that NGOs do not produce science, [but] the minute that [NGO] offer them money; they [scientists] jump right into it. So, NGOs ponder ‘‘why get involved with the big names’’ if when the time is right they will not stand strong when that research needs to be translated into

policy, which is the main purpose of NGOs. Right then is when nobody takes chances. . . (NGO consultant, 20.08.2008). However, the main critique from the scientific community is the degree to which the national environmental policy is subordinated to the economic strategy pursued by Chile over the past 30 years. Scientists feel that the state lacks commitment to move forward, and that it is using the ‘‘we do not have enough information’’ discourse as a way to avoid taking hard but necessary measures. Similarly, the lack of governmental priorities for research, have become a blind spot for both scientists and decision-makers. Neither CONICYT or CONAMA (National Commission for Environment, now Ministry of the Environment) or any of the sectoral state agencies have defined priority areas for research to which scientists interested in contributing to decision-making can look. Furthermore, CONICYT lacks a cross-listed database to identify themes that have been over studied, those that have not been fully covered or those that might be integrated. Each year projects compete for funds, and the researcher’s CV is the main factor for assigning them. Thus, repetition is rewarded over the proposal of new themes or relevance for national policies. Scientists acknowledged their role in the lack of necessary research, but at the same time, they perceived this as an excuse, because the state has not created any funding or special policy to actively fill those knowledge gaps. The question became: How much is enough knowledge to make a decision? 5.2. Toward a new configuration for the salmon industry By the end of August 2008, Mesa del Salmón published its recommendations: to modify the Environmental Regulatory Framework for Aquaculture (RAMA), to implement new requirements for processing liquid and solid residues (RILES and RISES) from infected farms with the Sanitary Regulatory Framework (RESA), and to certify eggs through regulation. One of the most important and debated components of the recommendations was the establishment of ‘‘barrios’’ (neighborhoods). Wherever there are at least three contiguous concessions, owners could, on a voluntary basis, request to be declared a ‘‘barrio’’ to coordinate their operations in terms of seeding and harvesting, applying antibiotics or other chemicals, and most importantly, better controlling and containing of future outbreaks. The main incentive offered to owners was to be located at a greater distance from other farms and operations. This idea has been accepted by most parties, but academics have raised critiques concerning the lack of studies regarding oceanographic conditions in Chile that would support the barrios, but also because barrios represent the deepening of a monoculture mentality that has had devastating consequences for the ecosystem.12 Barrios became a political response to a financial crisis that needed a structural change to survive, instead of being a scientific response to a sanitary and environmental crisis that was collapsing a fragile ecosystem. Environmental NGOs questioned the efficacy of the recommended measures and called for an immediate closing of all operations in Los Lagos and a prohibition on moving south. Both sectors called for a new legal framework, but the government argued it would not be feasible to have a new regulation before the elections of December 2009. In October 2008, the head of SalmonChile, Cesar Barros, publicly explained that the industry would need US$250 million to contain the crisis. While he did not explicitly ask for this amount from the 12 When asked if they had studies that scientifically support the decision to create barrios, or that identified the best places within the region to locate those barrios, the executive coordinator of the Mesa del Salmón replied that they did not (personal communication 2008). He responded that they essentially thought barrios would work because of its success in those countries that implemented barrios such as Canada, Norway, and Scotland.

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government, help came in the form of a funding package announced by Chilean President Michelle Bachelet herself on November 2008. The package included a state guarantee for up to 60% of bank loans funding sanitary and environmental investments through the Corporación de Fomento de la Producción, CORFO, with a cap guaranteed at US$8 million. In terms of a regulatory framework, the package confirmed the proposed measures on egg imports, the implementation of ‘‘barrios,’’ and the definition of standards for antibiotic use. Finally, the funding package also acknowledged the need for more and better science, and considered a cooperation agreement with the governments of Norway and Canada to provide research funds to fully sequence the salmon DNA (AQUA, 2008k). All these measures became part of a new aquaculture law, passed in early 2010, and which would go into effect in March 2012.13 I have argued that environmental governance institutions created – like the Mesa, the barrios and the geographical shift-circumvented scientific arguments, demonstrating the inability of the formal political system to address long-term implications of the environmental crisis. I also discussed the way in which scientific explanations were discursively used through the two moments of the crisis: first, during framing, the lack of dialog between scientific production and policy was used to define the crisis in terms of lack of knowledge as opposed to over exploitation, later, during the intervention, solutions referred to economic restructuring and financial concentration, instead of biological recovery. In these terms, environmental governance institutions were not meant to provide the solutions for nature as obstacle for capital accumulation, but instead, to provide the discursive justification for the financial restructuring of the circuits of accumulation for the salmon industry. This reflect what Bridge and Perreault (2009) call a social restructuring of the relationship with the environment by building new circuits for accumulation. 6. The salmon industry moves forward? The previous section examined the spaces of environmental governance created to deal with the ISA crisis questioning the science-policy interface in terms of its capacity to produce a social order for the administration of nature. This section discusses the implications regarding neoliberal environmental governance practices. The interviews identified several critiques of the mesa and the science-policy interface: the distance between spaces of science and spaces of policy, the lack of guidelines for scientists to produce policy-relevant research, but most importantly, the lack of real transformations based on scientific assessment of the salmon industry. These critiques reveal the limitations of neoliberal environmental governance mechanisms. By selectively opening spaces for debate and inviting all actors, the state’s neoliberal governance mechanisms create the illusion of participation and inclusiveness when in reality the mechanisms for incorporating public opinion are not available. This case along with the latest conflict in Chile’s energy sector14 reflects what Zografos and Martínez-Alier, (2009:1726) argue about participation in environmental policy: 13 Between 2010 and 2012 several administrative regulations were approved and implemented such as waste treatment procedures, environmental and sanitary authorized certificates, imports, to name a few, but the modification to the sanitary measures and territorial organization of aquaculture concessions was approved by the parliament on March 22nd, 2012 (AQUA, 2012a). 14 The rejection by the supreme court of the approval by the EIA system of the coalbased thermoelectric plant of Castilla (August 2012) in the Atacama Region showed the tension between the political nature of decision-making in Chile’s environmental matters and the technical system in place to define the conditions in which projects are implemented, as well as the lack of mechanisms for public participation in the decision-making process, leaving only the courts as last resort.

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‘‘the absence of opportunities for meaningful deliberation in decision making and the predominance of decisional bottom lines curtail claims to fairer distribution of costs and benefits from locally hosted energy developments, as well as alternative landscape value claims, and that this fuels conflict’’. On the one hand, neoliberal ideas propose that experts and scientific knowledge should be at the forefront of any decision-making process. On the other hand, the knowledge produced by this kind of governance space relegates scientific expertise to a justification of political and economic decisions. I would argue that they are an example of the ‘‘unstable and contradictory political form’’ of the neoliberal state (Harvey, 2005, p. 64) where the private sector enjoyed a privileged position for negotiating the terms of their participation and the use of the information discussed in the Mesa, to the detriment of the NGOs and the scientific community who felt their own perspectives were excluded. The critiques also reveal the tension that exists in terms of the role of knowledge in neoliberal spaces of decision-making. Once the political space was created, the official discourse of the state turned to explaining in new terms the history of the industry to position the current crisis within a long-term perspective, emphasizing that the industry was here to stay. The main argument running through speeches, interviews, and analysis of the salmon sector were framed in terms of ‘‘the unprecedented speed of the industry’s growth and success,’’ forgetting that the industry faced several crises throughout its history, including two dumping15 accusations in the United States. This framing contributed to erasing almost 30 years (if not more) of active territorial intervention, including state action to change property rights through implementation of tradable property rights, and to finance private enterprise through market mechanisms. According to all the experts I interviewed, time was key point in explaining the crisis: ‘‘production times were fast’’ and ‘‘scientific times were slow,’’ or ‘‘the industry grew fast’’ but ‘‘policies developed slower’’. Two years after the peak of the crisis was reached the salmon industry in Chile is showing disturbing signs. While the government celebrates that finally all the legal reforms were finally completed and Chile has a new aquaculture law (with still uncertain environmental impacts), the news warns that the industry is showing similar production levels as before and similar practices that lead to the crisis in the first place. The scientific community is building more alliances (AQUA, 2011; AQUA, 2012b,c,d) with international research centers and even some private salmon producers, but there are no clear indications that the blind spots identified in the science-policy interface have been addressed. Should a new crisis happen – and most experts say it will – what new discourses will be raised to legitimize policy solutions? Acknowledgements I would like to thank Tom Perreault, my advisor in the geography department at Syracuse University, for his comments, support and interest in my research. Also, I want to express my appreciation for Jennifer Ashley, Emily Billo, Claudia Ash and Patricio Pliscoff, who helped me in many ways with this manuscript. Finally, to Patricio, Maira and Javiera, for being there through the whole process of dissertation. References Academia-Chilena-de-Ciencias, 2005. In: Allende, J.E., Babul, Jorge, Martínez, Servet (Eds.), Tito Ureta Análisis y proyección de la Ciencia en Chile. Santiago, Academia Chilena de Ciencias. 15 In 1997, US producers denounced that Chilean producers were being subsidized by the state and were selling below production costs. The allegation was disregarded by the Department of Commerce in 2003.

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