E/CN.4/2004/80/Add.3 page 11 case of a project involving the State, the private sector and indigenous communities is perhaps, as has already been pointed out by the Special Rapporteur elsewhere (E/CN.4/2003/90), the construction of the Ralco hydroelectric plant in Alto Bíobío, which led to the displacement of dozens of Pehuenche families from their traditional habitat. The Ralco project In the course of his visit to Chile, the Special Rapporteur met with Pehuenche families opposed to the Ralco project, the lawyers representing them and representatives of Endesa, the company building the dam. Together, they discussed in detail the various consequences that the project has had since its inception. On the basis of these conversations and the wide range of materials presented by the parties, the Special Rapporteur was able to establish that: (a) There were serious irregularities in the design, planning and implementation stages of this project and the one at Pangue, which are part of a larger integrated project. These irregularities have been fully documented and acknowledged by the Chilean Government, the courts and the Inter-American Commission on Human Rights. The neighbouring Pehuenche communities affected by the construction work were not consulted, nor were their needs and rights taken into consideration in the crucial stages of the project, which was carried out over the opposition on technical grounds of CONADI and other State services; (b) After long and difficult negotiations between the construction company, the Government and the people affected, a land swap was agreed to and carried out on terms that were generally unfavourable to the Pehuenche; (c) To meet some of the needs of the relocated Pehuenche population, the Endesa company’s Pehuen Foundation provided welfare, educational and cultural programmes. However, the communities are finding that this help is not proportionate to the losses they have suffered as a result of the construction of the dam or to the profits the company will earn from its use; (d) Despite resistance by a small number of families and the precautionary measures requested by the Inter-American Commission on Human Rights, there was no let-up in the pace of construction. 25. As he was completing this report, the Special Rapporteur was informed about an agreement reached between the parties which would allow construction to be completed as the Pehuenche families still objecting to resettlement had reached an agreement that would put an end to the conflict. The Government told the Special Rapporteur that the agreement was satisfactory to all sides and that the conflict was considered settled. Bearing in mind that it is impossible to quantify the harm caused since the beginning of the project, the Special Rapporteur trusts that the negotiations have allowed the families to obtain appropriate and commensurate compensation for the loss of their ancestral lands and sites.