SNAPSHOT: Violent unrest in Chile threatens travel, operations, and supply chains

SNAPSHOT: Violent unrest in Chile threatens travel, operations, and supply chains


A protester waves the Chilean flag in Quilpué, Valparaíso Region

KEY POINTS

In the past week, violent civil unrest has spread across Chile and prompted the government to impose multiple states of emergency and night-time curfews. At least eighteen people have died amid the violent confrontations.

Students began staging protests in Santiago on 14 October after the government increased the price of the capital’s metro tickets. On 6 October, peak fares had increased some 4 per cent.

Those protesting initially jumped turnstiles at metro stations, however by 18 October, the demonstrations were increasingly violent, with students vandalising stations and throwing debris onto electrified tracks. Vandalism, looting and arson of businesses and metro stations had become widespread. Major multinational retailers, including US supermarket chain Walmart, have been targeted. Violent protests took place alongside peaceful marches, with demonstrators calling on the government to address marked income inequality, high living costs and rising debt.

On 18 October, conservative President Sebastián Piñera declared a state of emergency amid widespread violent protests in Santiago. Over the weekend of 19-20 October, demonstrations spread to other cities north and south of the capital, including Antofagasta, Valdivia, and Valparaíso. This led the army to impose night-time curfews in Santiago and in more than half of the country’s 16 regions, including the deployment of soldiers onto the streets.

In a bid to de-escalate the unrest, Piñera proposed a package of welfare reforms on 22 October, including increases to the basic state pension and minimum wage, and apologised for successive governments’ failure to tackle inequality. These, however, have failed to de-escalate the unrest, and on 23 October, multiple trade unions began a two-day strike. Schools and many shops in the capital have been closed for several days.


President Sebastián Piñera has proposed a welfare package to address protesters' demands

ANALYSIS

The unrest is primarily an expression of anger shared among many Chileans over the country’s vastly unequal distribution of wealth. For instance, despite being one of the wealthiest countries in Latin America per capita, and being home to a highly-developed mining industry, the country ranks as the third-most unequal among OECD members, as measured by the Gini coefficient. Almost a third of Chileans are employed in informal or non-permanent jobs.

The imposition of multiple states of emergency and curfews across the country – the first occasion on which the latter has been done, other than for natural disasters, since the return to democracy in 1990 – signals the nationwide nature of the protest movement, that common grievances go well beyond Santiago, and its hugely disruptive impact.

While Piñera’s welfare package contains serious proposals likely to partially address many peaceful demonstrators’ grievances, the protest movement is largely unstructured and leaderless. In turn, this complicates the government’s de-escalation efforts as it has few parties with which to negotiate.

In the one-week outlook, there is a moderate-to-high likelihood that hardline protesters, who are unlikely to be satisfied with Piñera’s current and possible future proposals, continue violent demonstrations and looting. Piñera’s proposals and the persistence of violent unrest are likely to dissuade many peaceful activists from attending marches and demonstrations.


Copper production has been disrupted by the unrest and an associated strike

RESPONSE

Health, safety, security and environment (HSSE) managers at organisations with staff and facilities in Chile should immediately review security measures to ensure these are commensurate to the elevated threat environment. Broadly, the risk of violent unrest is highest in major urban areas. Flashpoints in Santiago include the wealthy eastern suburb of Las Condes, La Alameda avenue, and areas around Plaza Italia, a large square in the Providencia district.

Review site security measures, ensuring that they are fit-for-purpose. Staff and facilities at city centre locations are most vulnerable to security risks, vandalism, and looting.

Disruption to multiple transport options is likely in at least the one-week outlook. Factor disruption to supply chains, including on highways and at ports, into short-term operational planning. In the one-week outlook, minimise non-essential staff travel to major urban areas, particularly Santiago, and until there is a notable reduction in violent unrest. Where travel is required, ensure this is conducted under strict journey management protocols with trained and vetted drivers.