Lawmakers file impeachment proceedings against Chilean president

Earlier this month, lawmakers in Chile filed impeachment proceedings against President Sebastián Piñera after allegations surfaced in the Pandora Papers about a deal involving the Dominga iron ore project. The lawmakers claim that information contained within the Pandora Papers suggest that the president used his position to favor the project.

Days earlier, prosecutors announced that they were opening a criminal investigation into the deal.

The Pandora Papers consist of millions of documents that include details of financial deals made by some of the world’s political and business elite, according to the International Consortium of Investigative Journalists.

President Piñera has vehemently rejected the claims and denied favoring the project, noting that he and his family had handed control of their assets to a blind trust before he became president in 2010 and therefore had no knowledge of the deal.

The president has also pointed out that Chile’s Supreme Court had already investigated his participation in the transaction in a previous case in 2017 and cleared him of any wrongdoing.

The move to impeach the president comes two months after authorities in northern Coquimbo region gave the greenlight to the US$2.5 billion Dominga project. If it goes ahead, the project, now owned by mining company Andes Iron, could produce 12 million tonnes of iron ore a year from an open-pit operation as well as 150,000 tonnes a year of copper in concentrate.

According to the lawmakers’ allegations, the Piñera family and others agreed to sell their shares in the project to the president’s friend and business partner Carlos Alberto Delano for US$150 million, which would be paid in three installments over twelve months. The lawmakers claim that ownership of the project was first transferred to a vehicle in the British Virgin Islands.

Lawmakers and prosecutors claim there are grounds for a new probe after the Pandora Papers included the sales contract allegedly signed by Piñera’s asset manager. According to their allegations, the sales contract showed that a final payment of almost US$10 million was conditional on the government taking no action that could affect the project’s development.

“In other words, the private benefit of the Piñera-Morel family was subject to the direct public decision of the family head, Mr. Sebastián Piñera,” a translation of the impeachment document states. “As long as the president does not decree a park or nature reserve, the payment of US$9,900,000 will be made.”

President Piñera vehemently denies all allegations of wrongdoing.

It is not the first time that the Dominga project has caused headaches for Chile’s leaders. In 2017, a decision by the previous administration to reject the project on environmental grounds — amid a severe slump in mine investment— split the cabinet. In an unprecedented move, both the Economy and Finance Ministers resigned after they felt Piñera’s left-wing predecessor Michelle Bachelet failed to back them.

Since then, Andes Iron has successfully appealed the ruling before the Environmental Court, which ordered regional authorities to vote again.  Now shorn of its proposed port, the project has won the backing of the regional authority.

The proposed mine, which would almost double Chile’s annual iron ore production, is strongly opposed by environmentalists who claim it threatens a nearby marine reserve, including the world’s largest colony of the threatened Humboldt penguin.

While the criminal probe is likely to take several months, beyond the end of Piñera’s four-year term, which ends in March 2022, the impeachment vote is expected to take place before Chileans head to the polls to choose his successor on November 21.

Radical left-wing candidate Gabriel Boric, who is leading in the polls to become Chile’s next president, has vowed to block the mine.

“We have to transition towards a new kind of development, one that lives in harmony with our environment, that respects ecosystems and does not destroy them,” he said.