HomeNewsFrom Copper Theft to Ransomware - Chile's Criminal Challenges Begin to Mount
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From Copper Theft to Ransomware - Chile's Criminal Challenges Begin to Mount

CHILE / 1 JUN 2022 BY CHRIS DALBY EN

A new report by Chilean think tank AthenaLab has laid bare Chile's ever-increasing spectrum of criminal threats, from copper theft and illegal fishing to cybercrime and weapons trafficking.

Chile's reputation as Latin America's "golden child" remains intact. In comparison to its neighbors, the country's homicide rate remains low. It routinely outperforms European countries on international corruption rankings. And its gross domestic product (GDP) per person is among the best in the region.

Yet concerns around criminality are growing. Homicides saw a worrying spike in 2020, while gang violence and drug trafficking are on the rise. Chile's natural wealth, from copper to fisheries, is being plundered. In its new report, "Illegal Economies - Factors Facilitating Organized Crime in Chile," AthenaLab reviews this series of dangers facing the country, and looks at potential solutions.

InSight Crime sat down with lead researcher Pilar Lizana to discuss its findings.

InSight Crime (IC): Copper theft appears to be an overlooked criminal economy in Chile. Has it been a priority for the government?

Pilar Lizana (PL): We are currently studying this particular subject. During our research, we've observed organized criminal groups at work in the illegal copper economy, stealing everything from cables and minor parts to concentrate and copper cathodes. And this copper theft is international in scope: large seizures at national ports indicate that the stolen proceeds are exported to Asia, primarily to China.

There is less media coverage on copper theft in comparison to other criminal activities in Chile. However, specialized journals do report on it. An additional element impacting coverage of copper theft are the other criminal economies in the country, which have higher levels of violence, such as timber theft or microtrafficking.

In terms of government priorities, it is important to consider that we have legislation that criminalizes the theft and receipt of stolen copper cables. The country's investigative police have specialized teams dedicated to investigating this crime, and the companies affected work with government agencies to aid prosecution of criminals. Both private and public companies are victims of this criminal economy. Mining, electrical and telecommunications companies suffer from theft or from cables being cut. The state mining company, Codelco, has had major quantities of copper concentrate stolen.

The illegal copper economy presents a major challenge for the State, and agency coordination is fundamental. But we've already seen results with the coordination of the Attorney General’s Office, Customs, Internal Revenue Service and police, in 2007, and with the Scrap Plan in 2011.

Copper theft is certainly less visible than other criminal economies in Chile, but it has a million-dollar impact on the national economy and on the country's development. It directly affects mining companies, and has consequences for communities, who are left in the dark when power cables are cut or stolen.

SEE ALSO: Chile's Microtrafficking Zero Program: Success or Failure?

IC: The report suggests that Chile's institutions are not prepared to fight organized crime. Did the country's reputation as a regional safe haven slow its response to crime? What steps does AthenaLab recommend to improve this?

PL: The surprise is not that organized crime has arrived in Chile. Sooner or later, this was going to happen, especially with Chile opening up and the undeniable effects of globalization. The challenge is preparing the country to face this threat. The state either operates as a facilitator of crime or it doesn’t.

The conditions of the country permit crime. The strengths and weaknesses of institutions, social conflict following the 2019 protests, issues with violence in Macrozona Sur, the financial system and the infrastructure that connects Chile all have an impact.

The government has promoted certain bills that would improve its ability to combat organized crime, as with the Intelligence Law and the packages against organized crime that have been debated in Congress. But there is still progress to be made in regards to comprehensive strategies that respond to the phenomenon as a whole and that allow for the development of specific planning for each illegal activity.

Organized crime is rather new for Chile. While drug trafficking has had an impact since the last century, the arrival of new crimes such as targeted killings and territorial control are phenomena that have taken the population by surprise and raised the perception of insecurity. Despite boasting one of the lowest homicide rates in the region and being far from the complex realities in countries like Mexico, Colombia or Jamaica, the perception of security has declined.

This situation forces our leaders to design strategies to confront this new reality. Because it was predictable that organized crime would arrive, the State's response was late.

I believe that a national system against organized crime is required, built on the basis of a comprehensive vision and coordinated work involving various State sectors. Police officers are essential for combating this criminal phenomenon, but they are not the only ones.

The response to organized crime requires cooperation from different actors within security and health, and includes financial, educational and judicial aspects. Therefore, an exercise in effective sovereignty across the country, educational campaigns for the prevention of crime and for the rehabilitation and reinsertion of criminals as well as fair punishments, would help us address this problem in a comprehensive way that improves security, development and the well-being of the population.

IC: There has been a recent influx of arms trafficking into Chile from Argentina. Where are these weapons crossing into Chile? Are gangs increasingly better armed and what consequences have we seen from such arsenals?

PL: We do know of arms shipments from Argentina, but there are also others that have entered from the north. The most observed trend is in blank-firing guns being modified for lethal ammunition. There are also modifications for semi-automatic weapons to be converted into automatic weapons. In that sense, the use of modified and unmodified weapons in street riots as was seen in the Meiggs neighborhood of Santiago recently, is of great concern. In Meiggs, a microtrafficking street vendor joined forces with organized gangs and has started to take territorial control of the region.  

Criminal gangs are not afraid to use their firepower on public roads, and even to push back against the State, as was seen in recent social unrest when police stations and police checkpoints were attacked.

But the main consequences of trafficked weapons are experienced by those already living in areas with higher rates of violence, where drug trafficking and organized crime have been established. In the case of Macrozona Sur, firearms are also used by radicalized organizations.

SEE ALSO: Chile Increasingly Worried About Weapons Trafficking from Argentina

IC: AthenaLab has noted a steady decline in corruption in Chile, but the magnitude of cross-border criminal economies indicates that there is some degree of official involvement. What evidence is there of customs officials, police and the government supporting or turning a blind eye to organized crime?

PL: The Corruption Perception Index places Chile in a privileged position with respect to other countries. However, the Index shows perceptions slightly declined been 2005 and 2020, opening the door for organized crime to exist. This has mainly been seen at the local government level, like in the municipality of San Ramon.

This setback offered the chance for criminal groups to buy state agents and develop their businesses. The theft of copper and its export to Asian markets would indicate that there is some sort of corruption, but I don't think we can speak of government officials 'helping' organized crime, as is the case in other places. There may be other cases, but it’s not at the level of general corruption seen in other countries within Latin America.

IC: Ransomware attacks are going up across the region. How has Chile responded and how has it prepared to combat such attacks?

PL: We have had two emblematic cyberattacks in Chile; one on the Banco de Chile and the other on the Banco Estado. The cost was high for Banco de Chile, and as a result cybersecurity was strengthened.

There are now a number of regulations against cybercrime. Progress has been made in developing policies in this area. There is a National Cybersecurity Policy and a Cyberdefense Policy, which seek to foster inter-agency dialogue and coordination to counter cybercrime. Progress still needs to be made.

IC: The consequences on Chile's marine life from illegal fishing, including Chinese fleets and algae theft, have been considerable. What is being done?

PL: It is important to consider that both fish theft, and unreported and unregulated fishing, have a negative impact on Chile and signify millions of dollars in losses for the industry.

Both activities have a great impact on an important production sector. Around them are organized criminal organizations whose activities affect the health of those who consume the poor-quality products, as well as the environment, due to indiscriminate exploitation. Illegal fishing also violates national sovereign territory.

The Navy, through its maritime police, plays a fundamental role in monitoring and protecting the ocean and its environment to combat illegal fishing. With fish theft, the police, through their different units, investigate and prosecute criminals. The justice system is responsible for imposing sanctions.

As with copper, an investigation specifically on fish theft is expected, which will provide more information.

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