I INTRODUCTION

Chilean legislation provides a series of mechanisms to ensure the constitutional right to live in an environment free of pollution. These mechanisms include the environmental licensing of projects causing environmental impact within the environmental impact assessment system (SEIA); liability due to environmental damage; the enforcement of environmental licences and regulations by a specialist agency, the Superintendency of the Environment (SMA); issuance of emission and environmental quality standards; the disclosure and reporting obligations linked to environmental monitoring and the follow-up of environmental licences; and waste transfer and valuation.

Upon entering the Organisation for Economic Cooperation and Development (OECD), Chile enhanced its environmental regulations and enforcement. The country underwent an institutional reform in 2010 that created environmental courts, the SMA, a specialist agency to assess environmental impacts of projects in the SEIA, the Environmental Assessment service (SEA); and an entity in charge of environmental policy, guidelines and regulations, the Ministry of the Environment (MMA).

The most widely used mechanism has been environmental licensing of projects within the SEIA, where sectorial agencies comment on projects submitted and are able to impose conditions within the sphere of their competences, which over time have become increasingly complex. Environmental licences (RCA) are then strictly followed by the SMA, an entity with broad powers to prosecute and punish administrative liability arising from any breach of an RCA.

Disputes arising from environmental regulations are resolved by the environmental courts; and when there is a violation of a constitutional right, by the higher courts of justice through constitutional remedies.

II LEGISLATIVE FRAMEWORK

Environmental regulation in Chile is established in the 1980 Political Constitution of the Republic (CPR) and Article 19 No. 8 sets forth the right to live in an environment free of pollution. Mechanisms for achieving this mandate, such as emission and quality standards; environmental policy; and environmental licensing of certain projects causing environmental impact within the SEIA are outlined in the Framework Law on General Bases of the Environment, Law No.19,300 (Law No.19,300) and then governed in detail in different regulations. One example of these is the Supreme Decree (SD) No. 40/2012 of the MMA, the SEIA Regulations (RSEIA).

The SEIA is a preventive mechanism by which several types of projects causing environmental impacts are assessed. Examples of projects that must be assessed are mining; real-estate of a certain scale or located in certain areas; projects in protected areas; infrastructure; forestry, etc. A project must be assessed through an environmental impact declaration (DIA) or by an environmental impact study (EIA) if it causes significant environmental impact.2 The main differences between both instruments relate to the level of detail in its contents, timeframes for assessment, and public participation.3 In both cases, the DIA or EIA is circulated among competent sectorial entities, who make comments and requests for the project holder to answer in a document named Addendum.

If SEA considers the impacts of the project assessed by the DIA or EIA meet legal standards, and the DIA or EIA fulfils legal requirements, it will issue a RCA, that authorises execution of the project approved.4 The RCA must be strictly followed by the project holder, and to legally make changes considered as ‘significant’ to conditions or requirements of a RCA, it is necessary to assess such changes in the SEIA.5

The RCA also approves environmental contents of several sectorial permits (PAS), detailed in the RSEIA. When the contents of the PAS are solely environmental, they are granted in the RCA.6 When contents of the RSEIA are environmental and sectorial, the RCA approves the environmental part of the relevant PAS. That is, the project proponent may show the RCA to the corresponding sectorial agency, which may not reject the permit on environmental grounds.7

Emission and quality standards are enacted through a process governed by SD No. 38/2012 of the MMA, and must be revised and updated at least every five years, or earlier if the MMA considers ex officio or after the request of a sectorial ministry, which is necessary to adapt a standard.8 Whenever an environmental standard is on the verge of being exceeded, or is in fact exceeded, the MMA may issue a Prevention or Decontamination plan containing specific measures aimed at curbing the emissions regulated by the corresponding standard.

The process of environmental enforcement is set forth in Law No. 20,417, Organic Law of the SMA (LOSMA). The SMA enforces RCAs, as well as other environmental permits and regulations. Compliance incentive mechanisms, such as self-report and compliance programmes are detailed in SD No. 30/2013 of the MMA.

Self-report is a communication made by a regulated party to the SMA, whereby he or she provides the SMA with accurate and verifiable information of a violation of an RCA or environmental regulation by him or her.9 The SMA may exempt the regulated party of the penalty after successful fulfilment of a compliance programme. The compliance programme, in turn, is a plan of actions and goals submitted by the offender, aimed at achieving compliance with the environmental regulations breached within the deadlines provided by the SMA.10

The most relevant legal developments of 2019 are still being processed. They include the Bill of Law Amending the SEIA, Bill No. 12714-12 (SEIA Reform Bill);11 the Bill of Law regarding Protection of Glaciers, Bill No. 11876-12 (Glaciers Bill);12 and the Bill of Law related to Environmental Crimes and Environmental Damage, Bill No. 12398-12 (Environmental Crimes Bill).13 We will briefly outline them below.

The SEIA Reform Bill acknowledges that even though the SEIA has proved itself as a successful instrument to include environmental variables in investment projects, it has not been free of certain complexities. These mainly relate to the complexity and rigidity of mechanisms to amend an RCA, the impossibility to divide an RCA, the need for increased public participation, and the need to enhance local participation in project assessment. The SEIA Reform Bill, in its first stage of analysis in the lower house of Congress, attempts to resolve these issues.

In turn, the text of the Glaciers Bill, originally submitted to Congress on 4 July 2018, was completely replaced on 13 September 2019. The new text under analysis is designed to protect glaciers located in the Chilean territory with the objective of conserving its ecosystem services as hydric resources reserves; eliminating the references to periglacial environment and permafrost included in the original bill that had caused controversy. The Glaciers Bill provides a new significant impact warranting assessment through EIA, which is the presence of rocky glaciers and their surroundings in the area of influence of a project or activity. Further, these projects will need to obtain a new PAS from the General Water Bureau (DGA) within the SEIA.

The Environmental Crimes Bill, on the other hand, has the purpose to prosecute those serious actions causing severe environmental damage or pollution that, in the absence of administrative liability, are left without penalty.

Finally, in relation to climate change, at the time of writing there is no legal instrument in Chile directly regulating climate change, its causes and effects. However, there is a first draft of a Preliminary Bill of Law regulating Climate Change, which was subject to public consultation by the MMA until 31 July 2019 (CC Draft Bill).14 The CC Draft Bill is aimed at achieving international commitments and the draft and implementation of plans, policies and programmes that aim to achieve carbon neutrality by 2050; and gives the MMA an active role with regards to climate change, as anointing it as the technical-administrative authority at the national level in the subject. At the time of writing, the CC Draft Bill is still being processed in the MMA and has not yet been submitted to Congress.

III THE REGULATORS

The environmental regulator is the MMA, which is in charge of collaborating with the President in the design and application of environmental policy, plans and programmes; as well as in the protection of biodiversity and renewable natural resources; and the promotion of sustainable development, the integrity of environmental policy and its regulation.

The MMA collaborates with other sectorial authorities through the Council of Ministers for Sustainability (CMS), an interministerial body that proposes overall environmental policy to the President of the Republic, and gives its opinion regarding proposed environmental bills and regulations prior to their adoption. The purpose of the CMS is to provide the government with an interagency overlook regarding environmental policy and regulation.

The CMS is presided over by the MMA and also by the Ministers of Agriculture; Finance; Health; Economy, Development and Reconstruction; Energy; Public Works; Housing and Urban Planning; Transport and Telecommunications; Mining; and Planning. The CMS meets whenever its president (the Minister of the Environment) summons it, which should take place at least twice a year. Any agreements that should be formed as an administrative act will be issued through the MMA.

Also, several sectorial agencies with environmental competences may issue specific regulations with environmental contents. They include the DGA, the Ministry of Health (MINSAL) the Agricultural and Livestock Service (SAG) and the National Forestry Corporation (CONAF) among others.

IV ENFORCEMENT

The agency charged with enforcement of legal standards, regulations and permits is the SMA. The SMA may prosecute administrative liability and impose fines ranging from a written reprimand to fines up to 10,000 Annual Tax Units (approximately US$7.5 million), including total or partial closure and RCA revocation.

The SMA may also prosecute administrative liability due to environmental damage, being able to impose the above-mentioned penalties. In this case, after conclusion of the penalty proceeding, the offender may submit a plan to repair the environmental damage caused, which must be backed up by technical studies.

If the offender does not present this plan, or if the SMA rejects it, then the government may bring a civil complaint before the environmental court to pursue liability due to environmental damage.

In turn, there is no overall environmental criminal liability in Chile. On the contrary, there are several narrowly defined environmental crimes disseminated among different statutes.15 The Environmental Crimes Bill analysed above tries to remedy this by establishing a broader hypothesis of criminal liability to punish the perpetrator in the most relevant cases of environmental damage.

V REPORTING AND DISCLOSURE

The SMA manages several reporting and disclosure systems, which operate in web-based platforms.16 The most relevant systems include disclosure of environmental follow-up and compliance of measures provided in RCAs; timely reports provided in compliance programmes; emissions of thermoelectric plants in compliance with air emission standards applicable to them; and emissions of liquid industrial waste, among others. Also, regulated parties may disclose their own environmental breaches to the SMA by the self-report mechanism previously described. Information contained in these disclosure systems is not publicly available unless the SMA commences a penalty proceeding against a regulated party.

Additionally, the MMA manages a Register of Emissions and Transference of Pollutants (RETC).17 The RETC is a publicly available database aimed at collecting, systematising, conserving, analysing and disseminating information on emissions, waste and transference of pollutants emitted to the environment that are potentially hazardous for human health and the environment, generated by industrial or non-industrial activities, transferred for their recovery or elimination.18 The ultimate objective of the RETC is to use the information collected to improve environmental management.

VI ENVIRONMENTAL PROTECTION

i Air quality

Air quality in Chile includes air emissions, noise and light pollution. These values are protected by means of environmental quality or emission standards. The difference between them is that quality standards set forth an acceptable level of risk for the presence (or absence) of a certain pollutant in the atmosphere or water.

Primary quality standards are aimed at curbing concentrations in the environment of some pollutants considered as dangerous to public health, and secondary quality standards have the purpose to protect the environment. Therefore, they do not entail enforceable obligations for regulated parties.19 In turn, emission standards set forth an emission limit for a regulated source, thus are directly enforceable.

When concentrations set forth in an environmental quality standard reach 80-100 per cent, then the MMA must declare that area as a ‘latent zone’, setting in motion the procedure to draft a prevention plan.20 When concentrations in the environmental quality standard are exceeded, then the MMA declares the area as a ‘saturated zone’, commencing the procedure to elaborate a decontamination plan.21 Both instruments will contain measures aimed at curbing emissions causing the latency or saturation of the corresponding area, which must be adopted by regulated parties.

The most relevant primary air quality standards in force include SD No. 104/2018 of the MMA, the primary quality standard for sulphur dioxide (SO2); SD No. 12/2010 of the MMA, the primary quality standard for PM 2.5.; and SD No. 59/1998 of the Ministry General Secretary of the Presidency (MINSEGPRES), the primary quality standard for PM10, whose latest update took place in 2015. The only two secondary air quality standards in force are SD No. 22/2009 of the MINSEGPRES, the secondary quality standard for sulphur dioxide (SO2); and Exempt Decree No. 4/1992 of the Ministry of Agriculture, the secondary quality standard for sedimentable particulate matter in the basin of the Huasco River, III Region of Atacama.

On the other hand, examples of air emission standards in force with country-wide application include SD No. 38/2011 of the MMA regulating noise from sources indicated therein; SD No. 28/2013 of the MMA, the emission standard for smelters and arsenic emitting sources; and SD No. 13/2011 of the MMA, the emission standard for thermoelectric plants.

ii Water quality

Water quality is safeguarded by the same mechanism as air quality: environmental quality and emission standards.

Secondary water quality standards are more often related to a specific water course, such as SD No. 9/2015 of the MMA, the secondary quality standard for the protection of surface continental water of the Biobio river basin. The only country-wide water quality standards include SD No. 143/2008 of the MINSEGPRES, the primary quality standard for protection of surface continental waters suitable for recreational activities with direct contact; and SD No. 144/2008 of the MINSEGPRES, the primary quality standard for protection of marine and estuarine waters for recreational activities with direct contact.

All of this is without prejudice of technical standards applicable to certain water uses, such as the Chilean Standards NCh. 1333 and Chilean Standard NCh. 409, applicable to drinking water. The difference between a technical standard and a quality or an emission standard is that a technical standard is not issued by the government, but by a technical entity. Further, in the context of environmental law, a technical standard is not enforceable unless a proponent is obligated by it on its RCA.

In turn, the most important emission standards are SD No. 90/2000 of the MINSEGPRESS, the emission standard for industrial liquid waste discharged in marine and surface continental water; and SD No. 46/2002 of the MINSEGPRESS, the emission standard for industrial liquid waste discharged in groundwater.

iii Chemicals

Chilean legislation does not provide comprehensive regulation of chemicals throughout their lifespan, but there are several specific regulations governing different types of activities and substances; enforced by different authorities, such as the Superintendence of Electricity and Fuel (SEC) dependent on the Ministry of Mining and the Health Authority of the Ministry of Health and the National Service of Geology and Mining (SERNAGEOMIN) dependent on the Ministry of Mining. If these standards are included as applicable law in an RCA, then they will be enforced by the SMA in relation to that specific project or activity.

Some of the regulations governing chemicals are Law No. 17,798 regulating explosive substances; SD No. 160/2008 of the Ministry of Economy, regulating governing facilities and operations of production and refining, transport, storage, distribution and storage of liquid fuels; SD No. 132/2002 of the Ministry of Mining, regulating mining safety, which, among other matters, regulating the storage of bulk solids in mining facilities and SD No. 43/2015 of the MINSAL, regulating the storage of hazardous substances.

iv Solid and hazardous waste

Different statutes govern the handling of solid and hazardous waste. Solid, non-hazardous waste is mainly governed by the Health Code and SD No. 594/1999 of the MINSAL, which regulates basic health and environmental conditions in work places.

Hazardous waste, in turn, is regulated by SD No. 148/2003 of the MINSAL, concerning health regulations for hazardous waste handling. SD No. 148/2003 governs conditions for storage, transport, and elimination of hazardous waste; following the ‘from cradle to coffin’ principle, establishing different recordkeeping requirements.

Generation, transport and elimination of waste, whether hazardous or not, must be reported through the RETC web platform. The statutes mentioned include provisions governing handling of waste generated, not providing any mechanisms to encourage waste minimisation, recycling or recovery.

Law No. 20,290 about extended producer responsibility and recycling promotion (Law No. 20,290) enacted in 2016 aims to include an economic instrument for waste management seeking to reduce waste generation and increase recovery. The MMA will gradually set goals for waste generation and recovery22 and compliance to be overseen by the SMA.

Law No. 20,290 sets forth a hierarchy for waste handling,23 that considers prevention of waste generation as the first alternative and the second to reuse; third, the recycling of waste or of one or more of its components and the fourth, total or partial energy recovery. Waste elimination is seen as the last resort for waste handling. Law No. 20,290 represents an important step towards a more comprehensive waste handling policy, which includes recovery and recycling in the life cycle of waste.

v Contaminated land

There is no special legal regime related to remediation of contaminated land or groundwater, which shall fall under the environmental damage regime. That is, the SMA may prosecute to gain reparations for the environmental damage caused and the government may pursue civil liability against the responsible parties, according to the mechanisms analysed in the preceding sections.

VII CLIMATE CHANGE

Chile has been an active part of the international negotiations regarding climate change. As such, it has joined the United Nations Framework Convention on Climate Change (UNFCCC), the Kyoto Protocol and the Paris Accords, among others. Chile also headed the 25th Conference of the Parties of the UNFCCC, which was held in Madrid.

As Chile is not a relevant emitter of greenhouse gases neither at the global or at the OECD scales, it has not been included in Annex 1 of the UNFCCC. However, over time Chile has been consistently increasing its greenhouse gases (GHG) emissions, which may not cause substantive global effects, but has a significant local impact.24

Even though, as previously analysed, there is no law directly regulating climate change at the time of writing, local factors, such as heightened air pollution in some areas pointed out as sacrifice zones and a long-standing drought have raised public concern regarding the country’s vulnerability to climate change. These, among other factors, have resulted in stricter requirements to projects being assessed in the SEIA; and sometimes to judicial challenges to licensed projects.

Chile does regulate some GHG through primary air quality standards, aimed at curbing concentrations in the environment of some pollutants considered as dangerous to public health, as explained above. The GHG regulated in Chile through primary air quality standards are nitrogen dioxide,25 ozone26 and carbon monoxide.27 On the other hand, some pollutants controlled by emission standards are GHG.28

This way, through the regulation of air pollutants, some of which are GHG, it can be said that Chilean legislation indirectly regulates climate change; with the caveat that these pollutants are regulated as a risk to public health or to the environment overall, and not as GHG causing climate change.

Regarding environmental protection, some opinions issued by the Environmental Courts or by the Supreme Court are noteworthy. As climate change is not broadly regulated, the few existing rulings do not address the issue in general terms, but rather decide on how climate change should be addressed in the context of a particular project assessed in the SEIA.

Law No. 19,300 does not directly regulate how climate change should be addressed in this context, which has led to different results: while some rulings order the agencies to include climate change as a risk factor to be assessed, others directly hold that climate change must not be part of environmental impact assessment processes.

For example, on one occasion, the Environmental Court stated that even though it is desirable that climate change is considered when assessing a particular project, it is not mandatory. 29 The Environmental Court concluded that even though positive effects of a project in relation to climate change may be a positive aspect that could be used to persuade the authority for achieving approval, the existing law does not mandate considering the effects of a project in relation to climate change when assessing a particular project or activity.

On the contrary, when analysing the operational continuity of a mining project, the Environmental Court mandated consideration of the effects of climate change in recharging an aquifer in the environmental impact assessment.30

It is expected that in the context of increased awareness of climate change, even in the absence of specific statutes ordering to address climate change when assessing a particular project in the SEIA, it is foreseeable that agencies will start to look closer at these issues when assessing and approving projects and activities within such a system.

VIII OUTLOOK AND CONCLUSIONS

From 2010 on, Chile is undergoing a deep process of improving its environmental regulations. This led to a profound environmental institutional reform that resulted in the creation of environmental courts, an environmental enforcement agency, a specialised environmental assessment entity and the Ministry of the Environment. The activity of these agencies has implied stricter requirements, closer enforcement for project holders, and higher requirements for environmental management. In relation to the foregoing, Law No. 20,290 on extended producer responsibility is a notable example.

Additionally, there are currently several bills of law in Congress aiming at improving environmental protection; such as the Glaciers Bill and the Environmental Crimes Bill. Also, the SEIA Reform Bill may result in a new SEIA, with broader public participation.

With relation to climate change, even though existing legislation does not directly or comprehensively regulate climate change and its effects, there is a CC Draft Bill seeking to provide a comprehensive framework for this task, and setting forth the objective of achieving carbon neutrality by 2050. Also, some GHG are indirectly regulated through air quality and emission standards, as we analysed.

Finally, as the effects of climate change become increasingly visible, the Environmental Court has decided differently how climate change must be addressed when assessing a particular project in the SEIA in the absence of a clear legal mandate: while some rulings order the agencies to include climate change as a risk factor to be assessed (but not an impact to be mitigated, compensated or repaired); others directly hold that climate change must not be part of the environmental impact assessment process.


Footnotes

1 Edesio Carrasco and Rodrigo Benítez are partners and Ana Sas is a senior associate at Schultz Carrasco Benítez.

2 Articles 10 and 11 of Law No. 19,300.

3 See Articles 18 and 19; 35 through 46 and 47 through 58 of the RSEIA.

4 Article 59 of the RSEIA.

5 See Article 8 of Law No. 19,300 and Article 2 g) of the RSEIA.

6 Article 108 of the RSEIA.

7 ibid.

8 Article 38 of S.D. No. 38/2012.

9 Article 41 of the LOSMA.

10 Article 42 of the LOSMA.

11 See complete text of the bill and process in Congress, online:

www.camara.cl/pley/pley_detalle.aspx?prmID=13251&prmBL=712714-12.

12 See complete text of the bill and process in Congress, online:

www.camara.cl/pley/pley_detalle.aspx?prmID=12397&prmBoletin=11876-12.

13 See complete text of the bill and process in Congress, online:

www.camara.cl/pley/pley_detalle.aspx?prmID=12927&prmBoletin=12398-12.

14 See full text of the CC Draft Bill online:

mma.gob.cl/proceso-de-consulta-publica-del-anteproyecto-de-ley-marco-de-cambio-climatico/.

15 For example, there are different criminal offences disseminated in the Criminal Code; article 44 of Law

No. 20, 290 on Extended Responsibility of the Producer; articles 38 and 38 bis of Law No. 17,288

Regarding National Monuments; and articles 30 and 31 of Law No. 19,473 Law on Hunting, among others.

17 See Supreme Decree No. 1/2013 of the Ministry of the Environment, RETC Regulations.

19 Article 2 n) of Law No. 19.300.

20 Article 2 t) of Law No. 19.300.

21 Article 2 u) of Law No. 19.300.

22 Article 2 b) of Law No. 20,290.

23 Article 2 d) of Law No. 20,290.

24 See ‘Greenhouse Gas Emissions’, OECD, available online:
https://stats.oecd.org/Index.aspx?DataSetCode=AIR_GHG

25 SD No. 114/2003 of the MMA, Sets forth Primary Air Quality Standard for Nitrogen Dioxide (NO2).

26 SD No. 112/2003 of the MMA, Sets forth Primary Air Quality Standard for Ozone (O3).

27 SD No. 115/2002 of the MMA, Sets forth Primary Air Quality Standard for Carbon Monoxide (CO).

28 For example, the following air emission standards govern, among others, pollutants that are also GHG: SD No. 13/2011 of the MMA, regarding the emission standard for thermoelectric power plants, aimed at capping emissions of, among others, nitrogen oxides.

29 Third Environmental Court, 4 January 2018, Case No. R-42-2016. Considering Section 56° (free translation):

Fifty Sixth. Indeed, as noted by the Respondent, the SEIA is designed to identify, assess, and -if appropriate- mitigate, compensate or repair significant environmental impacts produced within the area of influence of the project. In this sense, environmental assessment provided in Law No.19,300 is intended [to effect] only in the local sphere. While it is certainly desirable that the Administration takes into account the positive and negative effects that a [particular] project may have in addressing climate change, but current law does not require to consider it. The former is not an obstacle for a project proponent to describe to the Administration the positive and negative impacts [of her project], as a way to influence approval: a plus of the project is that it indeed improves CO2 emissions baseline. And even when such improvement may be minimal, unfortunately existing legislation does not address it. Nor the Court or the SEA, nor the Committee of Ministers are allowed to step into [the attributions of] our legislative power or exercise of the regulatory power, thus being inappropriate to replace those activities through interpretation. Therefore, the claim shall be rejected in relation to this matter’.

30 Second Environmental Court, 8 February 2019, Case No. R-141-2017. Considering Sections 79°, 81°, and 82° (free translation):

Seventy Ninth. That, there is consensus in the international scientific community that climate change will affect recharge of aquifers at the global scale, due to alteration of precipitation and temperature patterns (TAYLOR, Richard G., et al. Ground water and climate change, Nature Climate Change, 2013, vol. 3, No. 4, p. 322). According to said authors, in higher altitude areas the effect of climate change translates in lower snowfall and earlier melting, as well as an increase in winter precipitation in the form of rain on snow. The aggregate impact of these effects on aquifer recharge would entail that changes in snowmelt regimes tend to reduce seasonal duration and magnitude of recharge. Likewise, Green and collaborators point out that adaptation to climate change must include careful management of groundwater as renewable resources, especially due to its slow and uncertain future recharge (GREEN, Timothy R., et al. Beneath the surface of global change: Impacts of climate change on groundwater, Journal of Hydrology, 2011, vol. 405, No. 3-4, p. 532-560.) […]

Eighty First. That, upon analysis of the environmental impact assessment file of the project (Environmental Impact Study, Addendums, Consolidated Assessment Report), as well as of the environmental authorisations […] it was possible to confirm that, in this case, simulations performed to assess effects of groundwater pumping and of measures and/or conditions provided for their control, failed to consider the influence of climate change on aquifer recharge and, therefore, on expected recovery times. This situation must be amended when complying with this judgment.

Eighty Second. That, in conclusion, when complying with this judgment, the environmental authority must assess the effect on the Lagunillas ecosystem of groundwater extraction for CMCC’s mining activity, considering the climate change scenarios used by experts in the matter.