CHAPTER 6 THE TRILLIUM DECISION AND ITS AFTERMATH: NEW REQUIREMENTS FOR ENVIRONMENTAL IMPACT STATEMENTS AND THE PERMITTING OF MINING PROJECTS IN CHILE

• Jurisdiction: United States

Mineral Development in Latin America
(Nov 1997)
CHAPTER 6
THE TRILLIUM DECISION AND ITS AFTERMATH: NEW REQUIREMENTS FOR ENVIRONMENTAL IMPACT STATEMENTS AND THE PERMITTING OF MINING PROJECTS IN CHILE


Juan Carlos Urquidi Fell
Urquidi & Coutts
Santiago, Chile
Jose Antonio Ramirez Arrayas
Cumplido, Verdugo y Asociados
Santiago, Chile

For delivery at the Rocky Mountain Mineral Law Foundation Special Institute on Mineral Development in Latin America

November 3 and 4, 1997

at

Santiago, Chile

1. INTRODUCTION.-

Major private mining activity in Chile experienced a booming process in the decade of the 1980's and since then it has continued experiencing a steady and uninterrupted growth in both exploration and exploitation of minerals and orebodies. Until 1994 the permitting phase of mining development projects and associated activities were mainly governed by the provisions of the Mining Code, which contains the specific sectorial requisites and formalities to be complied with by any miner or mining company before the initiation of either its exploration or exploitation mining developments. This was, of course, without prejudice of the rest of applicable legal requirements and demands arising out from the general legal frame applicable in the country to any industrial activity.

With the publications in the Official Gazette of Law No. 19,300 on March 9, 1994, and that of its main regulatory tool — Supreme Decree No. 30, Regulation on the Environmental Impact

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Assessment System — on April 3, 1997, the permitting process for the industry in general and particularly for the mining industry became definitely more sophisticated from both legal and technical points of view, since this new legal bodies introduced for the first time in Chile the notion of a formal procedural structure to assess and qualify the convenience or inconvenience of accepting the construction and development of projects and activities when their environmental impacts may result significantly negative to the ambient.

With this aim, Law No. 19,300 on General Basis of the Environment and its regulation (Supreme Decree No. 30) factually refounded the rather confusing and disperse preexisting set of permitting demands for projects and activities. In fact, the new regulatory frame brought in a new compulsory scenario by providing legal procedural structures to assess most projects and activities, it being clear as of this very moment that by the sole operation of environmental law, entrepreneurial projects and activities are now bound to submit in front of the new environmental institutionality its technical scope, documentation and specific antecedents for assessment and qualification prior to its physical or material implementation.

The enactment of Law No. 19,300 did not expressly nor implicitly abrogate any of the preexisting sectorial regulations applicable to the mining activity. To the contrary, Article 1st. of this law established that the right to live in a pollution-free environment, the preservation of nature, the protection of the environment and the conservation of the environmental patrimony are to be governed by the provisions contained therein, without prejudice to the provisions on the subject by other legal regulations in force.

Furthermore, Law No. 19,300 is an ordinary law (that requires only simple majority to be passed, as opposed to other laws that need special quorums) that regulates different matters of law contemplated in the Constitution, and such constitutional rank does not imply any kind of preference or primacy over preexisting

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sectorial laws on the same subjects. Similarly, it does not contain any provisions establishing a ban or prevention against the future enactment of regulations that may differ from the criteria contained in its own provisions.

Therefore, the enactment of this legal body has given origin to many difficulties for a correct legal interpretation of the applicability of environmental dispositions, specially taking into account that over 931 norms with environmental content are apparently still in force according to the outcome of the identification work carried out by the Chilean National Environmental Commission (CONAMA) in 1993.

However, it is worthwhile mentioning that before the entire set of provisions contained in Law No. 19,300 became legally mandatory and thus enforceable (which happened only after the enactment of Supreme Decree No. 30, Regulation on the Environmental Impact Assessment System, published on the Official Gazette on April 3, 1997), a voluntary system was implemented by the authorities in 1993 for the environmental assessment of projects and activities. The objective of this initially voluntary scenario was the implementation of something that for the sake of the present analysis can be denominated as the environmental assessment system's "dry test" period.

The legal grounds of this voluntary system can be found in the Presidential Instruction No. 888, issued on September 30, 1993 by the Ministry General Undersecretariat of the Presidency and denominated "Guidelines for Assessment of the Environmental Impact of Investment Projects", which constitutionally was an administrative instruction from the President of the Republic, with mandatory effects only in respect of the public agencies with environmental jurisdiction and that did not have legal force vis-à-vis the proponents or applicants (investors).

The voluntary system demonstrated to be a very effective

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environmental management tool and received wide application despite its lack of enforceability by the public agencies. Its use also showed that the initial fears of many local and foreign investors, afraid of submitting their projects to a joint multidisciplinary analysis by all the public agencies, were not justified; during its application, the environmental impact of several investment projects was assessed, approved and accepted by the then competent environmental institutionality (i.e., a Technical Committee formed of different governmental agencies with environmental jurisdiction, and the National and Regional Environmental Commissions integrated by governmental officers politically appointed by the President of the Republic).

The submission, assessment and qualification of two relevant industrial extractive projects took place during the voluntary period, one of them being representative of the forestry sector and the other of the mining industry; namely, the "Río Cóndor" Project owned by Forestal Trillium (a subsidiary of Bayside Ltd. — Oregon, USA) for the exploitation of Lenga/Coihue native tree forest in southern Chile, and the "Collahuasi" Project of Compañía Minera Doña lnés de Collahuasi SCM (a joint venture then owned by Falconbridge Ltd., Canada, and Minorco S.A., Luxembourg), a copper project currently under development and construction in the northern part of the country.

We will address in the following pages the main aspects of both cases as well as their similarities and most significant legal implications, all in light of the environmental frame applicable during the voluntary environmental assessment system.

2. BRIEF SUMMARY OF THE STRUCTURE OF LAW No. 19,300 ON GENERAL BASIS OF THE ENVIRONMENT (THE ENVIRONMENTAL FRAMEWORK LAW)

Law No. 19,300 was published in the Official Gazzette on March 9, 1994. Title II of this Law, on Instruments of Environmental

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Management, is by far its longest section and the one that provides orientation to the law. Title II has seven paragraphs, each one dedicated to a different Instrument of Environmental Management; they are, namely, Research and Education (I); Environmental Impact Assessment System (II); Participation of the Community in the Environmental Assessment Procedure (III); Environmental Quality Norms, Preservation of Nature and Conservation of the Environmental Patrimony (IV); Emission Norms (V); Handling, Prevention and Decontamination Plans (VI); Claiming Procedure (VII).

Paragraph 2nd. of Title II refers to the Environmental Impact Assessment System (hereinafter "SEIA"), which considers two alternatives for the evaluation of projects and activities that require environmental assessment prior to their material implementation: the Environmental Impact Study (hereinafter "EIS") and alternatively, the Environmental Impact Declaration (hereinafter "EID").

In turn, Paragraph 3rd. of Title II contains the provisions by virtue of which community groups and natural persons can participate and become involved in the proceedings established for the environmental assessment of an EIS or an EID.

Articles 10 of Law 19,300 and 3 of Supreme Decree No. 30, Regulation on the Environmental Impact Assessment System, contain wide and comprehensive lists of projects and activities that must submit their environmental impacts to the Environmental Impact Assessment System (SEIA) for assessment and qualification by the competent authorities, i.e., the National or Regional Environmental Comissions ("CONAMA" or "COREMA", respectively).

The projects and activities not included in the above lists do not legally require environmental assessment; nevertheless, Law No. 19,300 and Supreme Decree No. 30 provide the alternative for

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proponents to formalize submissions and request approvals of EIS and EID's on a voluntary basis.

Article 11 of the law lists the effects, characteristics and circumstances that will determine the need for the proponent to prepare and file an Environmental Impact Study (EIS); the general criteria that appear in this list are developed in thorough detail by Article 3 of Supreme Decree No. 30. If the project or activity presents or causes at least any one of the listed effects, characteristics or circumstances, then the submission of an EIA is mandatory. If they do not, then the project or activity listed in the referred articles must file an Environmental Impact Declaration...