CHILE ENVIRONMENTAL REGULATION
Chile sits on the western edge of the South American continent, with Argentina, Peru and Bolivia bordering. The country is both one of the world’s narrowest and one of the world’s longest, resulting in diverse climates and terrains as one journeys through the country from north to south. The north of the country is primarily desert and includes the Atacama Desert, which is known to be the driest non-polar location in the world; further south, in the central part of the country there exists a Mediterranean style climate with fertile lands, forests and valleys which extend from the capital Santiago; in the southernmost region, the end of which is just 600 miles from Antarctica, one finds a particularly rough terrain with deep fjords, and a cold, wet climate with extremely harsh winters; to the east are the Andes mountains which stretch along the entire eastern border of the country, separating Chile from neighboring Argentina.
Around 20% of Chile’s territory is protected by a system of national parks and reserves. As with the climate and terrain the flora and fauna vary across the different regions of Chile and in fact the country has some of the highest levels of endemic flora and fauna in the world. Chile’s waters are rich in marine life; blue whales, dolphins, sharks, including the great white, salmon and sardines populate the South Pacific Ocean and a number of seabirds such as cormorants and penguins can be found in the coastal regions. In recent years, hordes of dead sea life and sea birds have washed up on Chile’s coastline and the full causes of this phenomenon are, as yet unknown, but the El Niño currents are certainly a contributing factor.
In recent years, controversy has surrounded a number of mining and energy projects which have faced fierce opposition from communities, NGOs and local authorities, who have resorted to litigation as a means to challenge environmental licenses, claiming investors’ non-compliance with environmental legislation. The most common opposition is used through a writ of protection in the Court of Appeal, which is an injunctive relief, basing the claims on the guarantee established in the Chilean Constitution of the fundamental right to live in an environment free from pollution.
In some cases, citizens have been successful in obtaining the revocation of an environmental license and subsequent halt of the project. One of the major cases involved Pascua Lama, a US$8.5 billion gold mining project developed by Minera Nevada SpA, a subsidiary of Canadian Barrick Gold. In 2013, a group of indigenous peoples filed an injunction arguing the company’s severe failure to comply with obligations contained in the environmental license and illicit interventions of hydrological resources, which were causing negative effects on the environment. The court ordered the suspension of the project’s construction until all measures established in the environmental license were fulfilled. In 2013, Barrick decided to postpone the project indefinitely.
PRINCIPAL LEGISLATION AND REGULATOR
Under Article 19(8) of the Chilean Constitution, citizens have the right to live in a pollution-free environment and the state is obliged to protect this right and ensure the conservation of nature via environmental legislation. The main statutory environmental framework in Chile is contained in the Environmental Law (No. 19.300, 1994). The law introduced the Environmental Impact Assessment System (“Servicio de Evaluación de Impacto Ambiental”, or “SEIA”), which sets forth the process for obtaining a project’s environmental license. The Environmental Law is supplemented by a series of bylaws. The main bylaw relating to Environmental Impact Assessment (EIA) is contained in Decree No. 40 (“Reglamento del Sistema de Evaluación de Impacto Ambiental” or “RSEIA”), which approved the new regulation of the SEIA.
The Environmental Law was recently modified in 2010 when Congress enacted Law No. 20. This was a result of the need to restructure the environmental regulatory system, as Chile sought to become a member to the OECD. The new law created three centralized institutions to oversee and enforce environmental regulations: (i) the Ministry of the Environment, in charge of applying policies and promoting sustainable development; (ii), the Environmental Assessment Service (“Servicio de Evaluación Ambiental” or “SEA”), in charge of assessing projects that according to the law must undergo EIA; and (iii) the Environmental Superintendence (“Superintendencia del Medio Ambiente” or “SMA”). The latter is perhaps the most significant innovation to the environmental regulatory structure, as the SMA has the power to suspend a license or adopt any other urgent measures to preserve the environment when “the execution or operation of a project or activity generates immediate and severe harm to the environment as a consequence of severe infringement of the norms, measures and terms’’ as established in the license.
Another considerable modification to the environmental framework was introduced by Law No. 20.600 (2012), which created the Environmental Courts and bestowed upon them the power to resolve environmental disputes.
In 2008, Chile ratified ILO Convention No. 169, a legally binding international instrument that recognizes and protects the rights of indigenous peoples and promotes their cultural identity. As a consequence, a process of consultation must be carried out under for certain projects under an EIA. In 2013, two regulations affecting this process were enacted. Decree No. 66 established a new procedure of consultation. Additionally, the RSEIA was modified to incorporate specific regulation on consultation through Decree No. 40. Pursuant to Article 85 of the modified RSEIA when a project directly affects one or more human groups of indigenous descent, a consultation process must be designed and developed.
There are two types of environmental assessments in Chile: an Environmental Impact Statement (“Declaración de Impacto Ambiental”, or “DIA”), and an Environmental Impact Study (“Estudio de Impacto Ambiental”, or “EIS”). As defined in the SEIA, one of these must be prepared prior to starting any mining and/or development project (including coal, building materials, peat or clays) or processing and disposal of tailings and waste. The Environmental Law requires that any project or activity that may have environmental impact in any of its phases, perform an EIS prior to execution. Article 10 lists a number of activities that are required to undergo this process, including mining development projects. Article 11 of the Environmental Law reads in part: “The projects or activities … [require] the preparation of an Environmental Impact Study if they generate or present, at least, one of the following effects, characteristics or circumstances: a hazard for human health; significant adverse effects on the quantity and quality of renewable natural resources; resettlement of human communities; significant alteration to a populations’ livelihood or customs, located adjacent to a protected population, resources or areas; significant alteration of the scenic or tourist value of an area; or an alteration of monuments or sites with an anthropological or archaeological value”. Thus exploration activities will require an environmental assessment if they are likely to cause any of the impacts outlined in Article 11 of the Environmental Law. Projects or activities which do not cause the impacts identified in the legislation will be required to complete a DIA only.
Environmental Impact Statements must be presented to the Regional Commission on the Environment within the Region where the project is located. Where the project or activity may cause environmental impacts in more than one region, the Environmental Impact Statement shall be presented to the Executive Directorate of the National Commission on the Environment. The environmental authority has 120 business days (which may be extended up to 180 business days under qualified circumstances) to issue a decision regarding a study. For statements (DIAs), the time frame is 60 business days (which may be extended up to 90 business days under qualified circumstances). If no response is given by the relevant authority within the established statutory deadline (Law 19.300, articles 15, 16, 18 and 19), it is assumed that the response to the DIA or EIS is positive.
As a result of the environmental assessment process, the authority will issue a resolution either rejecting or approving the project. If it is considered that the project fulfills the necessary environmental requirements, an environmental license will be issued (“Resolución de Calificación Ambiental” or “RCA”). Once obtained, the project will need to acquire other specific legal authorizations, such as air, waste and water, among others. Decisions on EIS or DIA and the subsequent issuance of the permit, are made by the relevant Regional or National Environmental Commission and may be appealed.