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Land Deal Opens the Door to Protecting 147,500 Acres of Chilean Rainforest

Valdivia, Chile - Transforming a bankruptcy into a conservation opportunity, three international conservation groups have partnered with Chilean environmental organizations to protect the rare plants and wildlife on 147,500 acres of biologically rich temperate rainforest in the Valdivian Coastal Range in southern Chile.

On November 4, The Nature Conservancy acquired the Valdivian property for $7.5 million at a public auction following the bankruptcy of the forestry company, Bosques S.A. The land acquisition was facilitated by FleetBoston Financial Corporation, the largest major creditor of Bosques S.A.

The acquisition is part of a larger partnership among the Conservancy, World Wildlife Fund (WWF), The Global Conservation Fund at Conservation International and local organizations in Chile, including National Committee for the Defense of Fauna and Flora (CODEFF), Association of Foresters for the Native Forests (AIFBN), the Coastal Range Conservation Coalition (CCCC) and the Committee for the Defense of the Chaihumn River (CDRC). The acquisition represents the next step in building upon existing conservation efforts by the Chilean government and local environmental organizations to protect the Valdivian Coastal Range.

"This is a unique opportunity to work with a diverse range of partners to protect one of the most imperiled ecosystems on Earth," said Steve McCormick, president and CEO of The Nature Conservancy. "Over the last 100 years these rich evergreen forests have been reduced by 50 percent, but we can make the next hundred years a lot better."

The property contains 9,000 acres of non-native eucalyptus trees and 4,000 acres of land that was previously clear-cut for another eucalyptus plantation. The Conservancy, WWF and local partners in Chile will harvest the eucalyptus in an environmentally responsible manner and restore the entire 13,000 acres to native forest.

The Valdivian Coastal Range is part of a larger temperate rainforest system that is one of only five temperate rainforests on Earth. It harbors numerous species found nowhere else in the world, including two of the planet's longest living tree species. Olivillo trees, which can live up to 400 years, survive in large stands only on the western slopes of this range, and alerce trees, which resemble North American giant sequoias, have life spans of up to 4,000 years.

These native forests harbor an incredible wealth of wildlife including one of the world's largest woodpeckers; the world's smallest deer; a small tree dwelling marsupial ('mountain monkey'), considered by scientists to be a "living fossil;" at least 58 bird species; and several rare carnivores, such as the southern river otter.

"Wildlife and people will both benefit here," said WWF Vice President for Latin America Guillermo Castilleja. "This is the first step toward the goal of a major protected area in the coastal range where sustainable development will allow people and nature to prosper together for generations to come."

When FleetBoston learned of the significance of this forest, they made a corporate decision to balance their interests as a creditor with their commitment to be environmentally and socially responsible. FleetBoston and the Conservancy agreed on a solution whereby the Conservancy would purchase the debt secured by the Valdivian property (by acquiring a wholly-owned special purpose company created by FleetBoston to hold the secured debt). Acquiring the debt enabled the Conservancy to purchase the property at the public auction in Santiago, Chile.

"By partnering with The Nature Conservancy we were able to construct a unique transaction that reflects our corporate values and fulfills our financial responsibilities to our shareholders, while preserving an ecologically-critical area in Chile," said Chad Gifford, chairman and CEO of FleetBoston Financial Corporation. The Conservancy will provide the majority of the funding, with World Wildlife Fund and Conservation International's Global Conservation Fund contributing up to $1 million each toward the transaction. Local Chilean groups and the government also will raise funds to contribute to the protection of the area.

"The protection and restoration of this important area is a win-win situation for biodiversity and the people of Chile," said Peter Seligmann, chairman and CEO of Conservation International. "This is an example of just how important it is to form partnerships with local communities and governments to achieve important conservation victories."

"This is a phenomenally important piece of property for Chile and biodiversity worldwide," said Margo Burnham, Chile country program director for The Nature Conservancy. "This group of partners was able to take the bankruptcy and turn it into an opportunity to protect an area long considered a conservation priority by the Chilean government and local environmental organizations, while helping local communities flourish."

Now that the land has been acquired, the project's partners - with participation from local communities, Chile's national environmental agency (CONAMA), Chile's national forestry and park service (CONAF) and civil society - will start developing the plans for future conservation management of the property and sustainable development activities to improve the local economy.

Gianni Lopez, Executive Director of CONAMA, said "Ten years ago the existence of protected areas not owned by the government was unthinkable. Today our society is more environmentally responsible and therefore other stakeholders have become interested in preserving our natural heritage. In this sense, this project is a new model for conservation and a great opportunity in which public and private efforts converge.

"In addition, this area is very important with respect to biodiversity, which has been internationally recognized. This effort complements others that are already underway in this area, such as the change in the planned route for the Coastal Highway, the creation of a marine park in the Bahia Mansa area, and the project proposed for financing from the GEF (Global Environment Facility) to preserve the Valdivian forest."

The partnership has begun a process to determine how to establish Chilean ownership of the land for conservation. Once this is determined, The Nature Conservancy will transfer ownership and management of the property into Chilean hands to ensure this treasure is protected for generations to come.

"This initiative is even more valuable because it has emerged from citizen organizations and it is projected to have a positive impact on improving conservation in an area whose environment had previously been impacted," said Jenia Jofre, National Committee for the Defense of Fauna and Flora (CODEFF), a leading Chilean conservation organization. "This project offers a great example of what is possible when many stakeholders work together."