Chilean Environmental Framework Law – An Overview

Colorado Environmental Law Journal Colorado Environmental Law Journal

Volume 7Number 2

Article 3

Chilean Environmental Framework Law – An Overview Chilean Environmental Framework Law – An Overview

Paul J. Schlauch

Lawrence J. Jensen

Paul J. Schlaucht

Lawrence J. Jensen"

PART I*

I. INTRODUCTION AND SUMMARY OF THE LAW

Although Chile had enacted more than two thousand laws relating in one form or another to environmental matters, until recently it had no organized framework for environmental administration or regulation. However, on March 9, 1994, a new environmental framework became effective.' The new law will significantly affect the manner in which the potential environmental impacts of future major public and private projects and activities are evaluated and regulated. The law creates a system of environmental impact review, with which all projects and activities in broadly defined categories must comply. If a project or activity is within the scope of the statutory system, its proponent must prepare either a Declaration of Environmental Impact or a Study of Environmental Impact. A Study must be prepared for any activity that could pose a risk to public health, have a significant adverse affect on renewable natural resources, lifestyles, customs, or tourism, or have other specified adverse impacts. Declarations must be prepared for all activities or projects subject to the environmental impact review system

for which a Study is not required. The law requires that the public be notified of all projects subject to the evaluation system and be afforded an opportunity to comment on all Studies.

The new law assigns responsibility for administration of the evaluation system to the relevant Regional Commission on the Environment (COREMA) for matters affecting only one region, and to the National Commission on the Environment (CONAMA) for activities effecting more than one region.2 The law contemplates "one-stop shopping" for permits by making the COREMA or CONAMA responsible for coordinating the efforts of all of the governmental authorities that must evaluate and approve the proposed project. It limits the time period for reviews of Studies to 120 days and the time for reviews of Declarations to sixty days. If it approves a Study, the COREMA or CONAMA, as appropriate, may require any other state organization to issue the necessary permits or determinations.

The law provides for the adoption of regulations which will specify the primary (human health) and secondary (environmental) standards that proposed projects or activities must meet and makes CONAMA responsible for coordinating the development of these standards. It also contemplates procedures for classifying and inventorying plant and animal species that are at risk of extinction, or otherwise vulnerable, rare, or inadequately known and for restricting their cutting, capture, sale, and transportation. Additionally, it provides for the creation of a system of protected national wild areas.

La Ley de Bases del Medio Ambiente also creates a cause of action for the restoration of environmental damage caused intentionally or negligently. Any natural person or legal entity that has suffered damage can bring an environmental damage claims. Along with municipalities, the state is authorized to bring environmental damage claims as well.

II. ENVIRONMENTAL IMPACT EVALUATION

A. The System of Environmental Impact Evaluation

Chile's Environmental Framework Law specifies the types of projects and activities which are subject to environmental impact review. As a general matter, any significant public works project or private industrial activity

must comply with the system. Among other projects and activities, airports, highways, ports, regional development plans, mining activities, oil and gas pipelines, industrial plants, activities in national parks, reserves, monuments, or other protected areas and the manufacturing, transporting, storing, disposing of, or recycling of toxic, radioactive, or dangerous substances, are subject to environmental impact review.,

The proponent of any project or activity subject to environmental impact review must prepare either a Study of Environmental Impact or a Declaration of Environmental Impact.' The required Study or Declaration must be submitted to the COREMA for the region in which the activity or project is to be conducted. If the project will create environmental impacts in more than one region, the Study or Declaration must be submitted to CONAMA. If there is doubt about which agency has jurisdiction with respect to a Study or Declaration, the executive director of CONAMA will determine whether more than one region is affected by a proposed project or activity on his own initiative or at the request of a COREMA or the project proponent.

All required permits and environmental determinations for projects or activities subject to the impact review system may be issued only in accordance with the system and with the environmental standards established by regulations to be developed in accordance with the new law.' The COREMA or CONAMA, as appropriate, is responsible for the administration of the impact review system and for coordinating the involvement of state organizations that must review the proposal and grant the necessary permits or determinations.

If the COREMA or CONAMA approves the project or activity, it will issue a resolution certifying that all relevant environmental requirements will be met. If a project or activity receives a favorable resolution from the COREMA or CONAMA, no state agency may refuse to grant any required environmental permit.6

B. Studies of Environmental Impact

A Study of Environmental Impact, as opposed to a Declaration, is required for any project or activity that: (1) poses a risk to human health; (2) may have a significant adverse effect on the quantity or quality of renewable

natural resources; (3) involves the re-settlement of human communities or alteration of their lifestyle or customs; (4) may significantly alter the landscape or value of an area for tourism; (5) may adversely affect population, resources, or protected areas; or (6) may cause the alteration of monuments, places of archeological, anthropological, or historical value, or places of cultural significance.'

A Study must describe in detail the characteristics of the proposed activity or project, provide baseline data, analyze and evaluate its environmental impacts and potential risks, identify measures that will be undertaken to minimize adverse impacts and contain a plan for compliance with environmental standards.8

The law requires the Ministry of the General Secretariat of the Presidency to prepare regulations containing a list of permits for each sector and the requirements for their issuance. The regulations must also specify the administrative procedures applicable to the review of Studies of Environmental Impact.' The administrative procedures must include: methods for consultation and coordination of the state organizations responsible for issuing the relevant permits; time limits for review of Studies; procedures for requiring the clarification, correction or amplification of Studies; methods of public notification, and mechanisms allowing for public participation in the impact review process."

The COREMA or CONAMA must issue an opinion on a Study within 120 days after its submission." During the review period, the proponent may be required to alter, correct, or amplify the Study. If additional or corrected data are required, the review period may be extended with the agreement of the proponent. In appropriate cases, the review period may be extended for an additional sixty days, lengthening the total review period to 180 days. In reviewing a Study, the COREMA or CONAMA may request reports from, and consider the conclusions of, state organizations with responsibil-

19961

ity for relevant environmental areas. I If the Study is approved, the determination of the COREMA or CONAMA must be accompanied by all required environmental permits or determinations.3 The COREMA or CONAMA may require other state organizations to issue any permit or determination necessary for a project or activity it has approved. If the COREMA or CONAMA does not make a decision on a Study within the 120-day review period, the Study is deemed approved.'4 If a Study is rejected, the COREMA or CONAMA must specify the criteria which the proponent must satisfy in order to obtain approval."

Within thirty days after notification of a Study's rejection, the proponent may appeal to the CONAMA Board of Directors. Within the same period, the proponent may also appeal any stipulations or conditions placed on an approval.'6 Citizens and legal entities that have submitted comments on the Study may appeal within fifteen days after approval of the Study.' The Board must decide an appeal within sixty days. A judicial proceeding to challenge the decision on appeal may be filed within thirty days after that decision.

C. Declarations of Environmental Impacts

The proponent of any project or activity that is subject to the environmental impact evaluation system, but which does not require the preparation of a Study, must submit a Declaration of Environmental Impact to the COREMA or CONAMA .'1 A Declaration is, in effect, a sworn undertaking by the proponent that the project will be constructed and operated in full

[V01.7:2

compliance with all relevant environmental standards.'9 A Declaration may also contain voluntary undertakings, not required by applicable laws or standards, which become binding on the proponent if the Declaration is accepted.

The COREMA or CONAMA must determine whether to accept or reject a Declaration within sixty days after it is submitted.0 During this sixty-day review period, the proponent may be required to clarify, correct, or amplify a Declaration. The review period may be extended for up to thirty days. If any permit or determination necessary for a project or activity subject to a Declaration has not been issued within sixty days after submitting the Declaration, the COREMA or CONAMA may require other state organizations to issue it. A Declaration will be rejected if it contains substantive errors, omissions, or inaccuracies that the proponent does not correct or if the project or activity requires a Study.2

The proponent may appeal a rejection of a Declaration to the Executive Director of the CONAMA within thirty days after notice of the rejection.22 The same periods for decision on the appeal and the filing of a judicial proceeding that are applicable to Studies also apply to Declarations."

III. ENVIRONMENTAL STANDARDS

A. Procedures for Developing Environmental Standards

The CONAMA is required by the new law to standardize the criteria, requirements, and the technical and procedural rules relative to environmental quality of the various ministries and state organizations. The new law requires the promulgation of primary and secondary environmental quality standards. The Ministry of the Presidency and the Ministry of Health are required to develop the primary standards, which regulate risks to human health.2" The secondary standards, which regulate risks to the environment, are to be developed and promulgated by the Ministry of the Presidency and the minister of the relevant ministry. Environmental quality standards must be revised every five years.25

The procedures for the promulgation of environmental quality standards must include technical and economic review (including a cost-benefit analysis), provide for the development of adequate scientific data, incorporate provisions for consultation with the public and private sectors, and afford an opportunity for public review and comment.26

The new law also provides that emission standards shall be established by a supreme decree of the appropriate ministry, or by the Ministry of the Presidency for materials that are not within the jurisdiction of a particular ministry.27 The emission standards shall establish the maximum permissible quantity of a contaminant that may be emitted by a source." CONAMA is required to propose, facilitate, and coordinate the promulgation of these standards.

B. Application and Enforcement of Environmental Standards

The Constitution of the Republic of Chile assures every individual the right to live in an unpolluted environment and imposes on the State the duty to defend the preservation of nature. 29 To protect this constitutional right, the relevant state agencies must develop, on a regional basis, programs for the monitoring and control of air, water, and soil quality." State organizations participating in the environmental impact review system must monitor compliance with the standards and conditions upon which a Study was approved or a Declaration accepted. If the organization believes the project or activity is not being conducted in compliance with applicable standards and conditions, it may request that the COREMA or CONAMA issue a warning, impose fines, or rescind its approval?'

C. Plans of Operation, Prevention, and Decontamination

The public agency responsible for regulating the use or development of renewable natural resources in a particular area may require the preparation of, and compliance with, special plans to protect such resources.2 However, this requirement does not apply to projects or activities subject to an approved Study or Declaration.

The new law defines "saturated zones" as areas in which one or more environmental standard has been exceeded, and "latent zones" as areas in which the concentration of any contaminant in the air, water, or soil lies between 80 percent and 100 percent of the relevant environmental standard.33 Latent and saturated zones are to be established by the Ministry of the Presidency and the Minister of Health for matters relating to primary standards and by the minister of the appropriate department for matters relating to secondary standards. CONAMA is responsible for the development of plans for prevention or decontamination of latent and saturated zones.?4 All contaminating activities in a zone subject to a plan must, within a reasonable time, reduce their emissions to levels that permit achievement of the plan's objectives. Only new activities that comply with the plan may be authorized in zones subject to a plan.

IV. THE CAUSE OF ACTION FOR ENVIRONMENTAL RESTORATION DAMAGES

Anyone who causes "environmental damage" is responsible for the restoration of the damaged resource, if possible, or liable in damages for the costs of restoration." The law broadly defines "environmental damage" as any significant loss, reduction, detriment or impairment to the environment or one or more of its components." "Restoration" is defined as the action of restoring the environment or one or more of its components to a quality similar to that which existed prior to the damage, or if this is not possible, the reestablishment of its basic characteristics.37 Compliance with an applicable prevention or decontamination plan or special emergency regulation is a complete defense to a claim for environmental restoration damages. Conversely, a party is presumed liable for damage if there is an infraction of environmental quality or emission standards; prevention or decontamination plans; emergency environmental regulations or standards for

environmental protection, preservation or conservation established by law. However, a party will only be held liable if a cause and effect relationship is established between the infraction and the damage.8

Individuals and public or private legal entities that have been directly damaged, municipalities, or the state may assert claims for environmental restoration. Any person may request that a municipality in which environmental damage has occurred institute a claim for environmental damages on his or her behalf. The municipality has forty-five days in which to decide whether to make a claim and to notify the requesting person of its decision. If the municipality fails to reach a decision within the forty-five day period, it becomes jointly and severally liable for damages incurred by the requesting person.9

The law specifies the penalties that may be imposed for violation of a prevention or decontamination plan or special emergency regulation and grants the court authority to order immediate suspension of the activity causing the emission. The law also identifies the factors a court should consider in determining the fine to be imposed.10

A claim for environmental restoration damages may be instituted at the site of the damage or at the legal residence of the party bringing the claim, at the claimant's election. Such litigation is to be conducted in accordance with 42 summary procedures" and shall be given priority for hearings and rulings. Claims for environmental restoration damages must be initiated within five years of the manifestation of the damage.43

V. ADDITIONAL PROVISIONS

The law also provides for the creation of a system of national wild protected areas, which may include beaches, lakes, lagoons, swamps, and wetlands." It dictates that the state will promote and foster the creation of privately owned wild areas, which will be administered under the same rules as the public wild areas.

Procedures are to be established to classify wild flora and fauna in the following categories: in risk of extinction, vulnerable, rare, inadequately known, and previously at risk of extinction. To preserve such species and

promote biological diversity, the competent state organizations must prepare and maintain an inventory of such wild plants and animals and establish restrictions on their cutting, capture, hunting, sale, and transportation.5 In addition, the law provides that renewable natural resources must be used and developed in a manner that guarantees their ability to regenerate and to protect the plants and animals dependent on such resources, with particular emphasis on species that are in danger of extinction, rare, or inadequately studied.4b

VI. SUCCESS OF THE LEY DE BASES DEL MEDJO AMBIENTE: HAS THE FRAMEWORK LAW HAD AN IMPACT?

The measure of any law lies in its application and enforcement. Many of the environmental problems Chile currently faces are manifestations of past environmental laws that went unenforced and were largely ignored."7 Further, jurisdictional problems caused by the numerous government agencies that regulate environmental issues within Chile have hindered the promulgation and implementation of effective and clear environmental regulations.

The Framework Law can be an important step in creating a comprehensive environmental regulatory regime in Chile. It can ease existing enforcement and jurisdictional problems and lead to the adoption of modern environmental standards. Yet, as of this writing, Chile has not made significant headway in solving these problems.48 The lack of success is primarily due to the delay in promulgation of regulations and technical notes. As a result, mining and other activities that cause significant environmental impacts continue to be regulated by incongruous health standards and decrees.9 However, regulations establishing the environmental review procedure which will be applicable under the Framework Law were signed by the President of the Republic of Chile on May 2, 1996. The regulations are now being reviewed by the Centraloria General de la Republica. It is anticipated that the review process will be complete and formal regulations will be published by August 1, 1996.

VIII. CONCLUSIONS

Chile's new Environmental Framework Law grants significant powers to CONAMA and the COREMAs: to review and evaluate the environmental impacts of significant proposed public and private projects and activities; to regulate the environmental impacts of these projects and activities by applying environmental standards and imposing special conditions; and to require compliance with the terms and conditions of approved Studies and Declarations. The law has created the procedures by which primary (healthbased) and secondary (resource-based) standards of environmental quality will be established. The development of these standards will be the key to determining what effect the Ley de Bases del Medio Ambiente will have on both business and the environment in Chile in the coming years.

--- FOOTNOTES ---

Part of the Environmental Law Commons

t Paul J. Schlauch, a partner in Holland & Hart's Denver office specializes in mineral law and has an active international transactional practice. He is a past president of the Rocky Mountain Mineral Law Foundation. The authors wish to express their appreciation to Terry M. Fox of Holland & Hart, Denver, Colorado and to Juan Ignacio Lira of Philippi, Yrarrazaval, Pulido & Brunner, Santiago, Chile for their assistance in connection with this article.

tt Lawrence J. Jensen, a partner in Holland & Hart's Salt Lake City office, specializes in environmental law. Mr. Jensen served as General Counsel of the United States Environmental Protection Agency in 1988-1989.

* This is the first of a two part article examining the Ley de Bases del Medio Ambiente, or the Chilean Environmental Framework Law. Part II will appear in the Winter 1997 issue of the Colorado Journal of International Environmental Law and Policy.

1. La Ley de Bases del Medio Ambiente [Environmental Framework Law], Mar. 9,

1994, Gazetter Oficial de Chile [hereinafter Ley].

2. CONAMA was established in 1990. It operates on a decentralized basis, subject to the supervision of the President of the Republic through the Secretariat General of the Ministry of the Presidency. The agency is administered by an executive director and controlled by its executive council. The COREMAs are the regional branches of the agency. Among other matters, CONAMA is responsible for proposing environmental policies for the government, administering the system of environmental impact review, and coordinating the process of developing environmental quality standards. Ley, supra note 1, art. LXXI.

3. Ley, supra note 1, art. X. Public sector projects, state-owned enterprises, and projects that obtain public financing are also subject to the system of environmental impact review. Ley, supra note 1, art. XXII.

4. Ley, supra note 1, art. IX. Projects and activities not within the scope of article

X may voluntarily submit to the system.

5. Ley, supra note 1, arts. VIII, IX. 6. Ley, supra note 1, arts. XXIV, XXV.

7. Ley, supra note 1, art. XI. In evaluating the risks included in the first two categories, applicable environmental quality and emission standards are to be considered.

8. Ley, supra note 1, arts. II(i), XIII. 9. Ley, supra note 1, art. XIII. The environmental impact review system is still administered pursuant to presidential guidelines issued in 1993, prior to the passage of the new law.

10. Ley, supra note 1, art. XIV. 11. Ley, supra note 1, art. XV. For significant projects on public lands in the United States, from the publication of a notice of intent to prepare an Environmental Impact Statement (EIS) under the National Environmental Protection Act ('NEPA') until completion of the Final Environmental Impact Statement (FEIS), the period is typically 18 to 30 months.

12. Ley, supra note 1, art. IX. 13. Ley, supra note 1, art. XV. If a proponent submits, along with its Study of Environmental Impact, an insurance policy covering the risks of environmental damage during the review period, the COREMA or CONAMA may authorize the proponent to commence the project or activity pending completion of the review. If a proponent receives provisional approval, it may commence the project or activity at its own risk and without prejudice to the right of the COREMA or CONAMA to reject the Study.

14. Ley, supra note 1, art. XVII. 15. Ley, supra note 1, art. XVI. Studies that comply with relevant environmental standards, considering mitigation proposed by the proponent, must be approved; but those that do not must be rejected.

16. Ley, supra note 1, art. XXV. 17. Ley, supra note 1, art. XXIX. The proponent of a project or activity that requires the preparation of a Study must publish in a publication of regional or national circulation, as appropriate, a summary of the Study. Citizens and legal entities directly affected by the proposal can inspect the Study. However, at the request of the proponent, the COREMA or CONAMA must protect the confidentiality of technical, financial, and other information. Citizens and legal entities may submit written comments on a Study within 60 days after the publication of the notice of the Study.

18. Ley, supra note 1, art. XVIII.

19. Ley, supra note 1, arts. 11(f, XVIII. 20. Ley, supra note 1, art. XVIII. 21.

If a Declaration is rejected, its proponent may submit a new Declaration or a

Study. Ley, supra note 1, art. XXI.

22. Ley, supra note 1, art. XX. 23. The COREMA or CONAMA, as appropriate, must publish, on the first business day of each month, in a regional or national newspaper, a list of projects or activities for which Declarations have been filed during the preceding month and must notify the affected municipalities. Ley, supra note 1, arts. XXX, XXXI.

24. Ley, supra note 1, arts. 11(n), XXXII. These standards will be applicable

throughout the Republic of Chile.

25. Ley, supra note 1, art. XXXII.

26. Ley, supra note 1, art. XXXII. 27. Ley, supra note 1, art. XXXX. 28. Ley, supra note 1, art. 11(o). The law defines "contaminant" as any element, compound, substance, vibration, noise, or combination thereof, whose presence in the environment at certain levels, for certain periods of time, can cause a risk to human health, the quality of human life, the preservation of nature, or the conservation of environmental resources. Ley, supra note 1, art. II(d).

29. Constitution of the Republic of Chile, art XIX, no. 8. 30. Ley, supra note 1, art. XXXIII. 31. Ley, supra note 1, art. LXV. 32. Ley, supra note 1, art. XLII.

33. Ley, supra note 1, arts. 11(t), 11(u). 34. Plans may use emission standards, adjustable emission permits, and taxes or user fees on emissions. Ley, supra note 1, art. XLVII. The plan shall provide for the transfer, division, characteristics and duration of adjustable emission permits. Ley, supra note 1, art. XLVII.

35. Ley, supra note 1, arts. III, LII, LIII. This new cause of action for restoration of environmental damage does not prevent a directly injured party from asserting claims for damages. Ley, supra note 1, art. LIV.

36. Ley, supra note 1, art. II(e). In turn, "environment" is defined as the global system formed by natural and artificial elements of a physical, chemical, biological, or sociocultural nature and their interactions, in permanent modification by human and natural action, and that limits and conditions the existence and development of life in its multiple manifestations. Ley, supra note 1, art. II(11).

37. Ley, supra note 1, art. II(s).

38. Ley, supra note 1, art. LIII. 39. Ley, supra note 1, art. LV. 40. Ley, supra note 1, art. LIX. 41. Ley, supra note 1, arts. LXI, LXII. 42. Ley, supra note 1, art. LXIII. 43. Ley, supra note 1, art. LXIV. 44. Ley, supra note 1, art. XXXVI.

45. Ley, supra note 1, art. XXXVIII. 46. Ley, supra note 1, art. XLI. 47. Lack of Implementation of Chile ' Framework Law Holds up Emissions Standards, ENV'T WATCH LATIN AM., Oct. 1994, available in LEXIS, News Library, CUJRNWS File.

48. Air Pollution Laws for Mines, Smelters Will Meet Global Standards Within Decade, CHEM. REG. DAILY (BNA), Dec. 8, 1995, available in LEXIS, News Library, CURNWS File.

49. Id.