CHAPTER 9 THE BEGINNING AND THE END: LIABILITY FOR PRE-EXISTING CONDITIONS AND RECLAMATION OBLIGATIONS IN LATIN AMERICA
| Jurisdiction | Derecho Internacional |
(Nov 1997)
THE BEGINNING AND THE END: LIABILITY FOR PRE-EXISTING CONDITIONS AND RECLAMATION OBLIGATIONS IN LATIN AMERICA
Urrutia & Cia
Santiago, Chile
FOR THE ROCKY MOUNTAIN MINERAL LAW FOUNDATION SPECIAL INSTITUTE
NOVEMBER 3 and 4, 1997
INTRODUCTION
The environmental protection concern appears, as a universal principle, once a certain level of economic growth is obtained. Latin American countries, while achieving a rapid economic development during the mid 80's and the 90's, through the exploitation of their natural resources, did not consider environmental protection as a high priority issue. Poverty, unemployment and illiteracy were the principal concerns. Most foreign investors did not see a significant environmental cost in their projects due to a lack of enforceable standards on one side, and a lack of governmental, technical capability of enforcement on the other. As a result, by the turn of the 90's, a large number of environmental disasters were in sight of every citizen, with no remedies imposed by law.
These events obliged most of these countries to enact environmental legislation without having enough environmental experience. This issue left a number of legal blanks which have not been answered.
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In this article we will analyze the development environmental law has had in Latin America. We will particularly discuss the issue of environmental responsibility and the development of the reclamation obligations in the region.
In section 9.1, we will address the general development of environmental law in Latin America. In Section 9.2, we will concentrate our analysis on the countries we consider to be the most representative of Latin American mining countries, such as Argentina, Bolivia, Chile and Peru. Logically, we will study the case of Chile in more detail as it is the country I have most experience with and where the conference will be held. We will analyze these countries' Constitutions and the environmental provisions contained therein, as well as their environmental legislation, where enacted. In Section 9.3, we will study their norms which regulate environmental responsibility, identifying the particularities of each. In Section 9.4, we will deal with reclamation obligations in Latin America and the state of law in these countries. Finally, in Section 9.5, we will elaborate a conclusion on responsibility for pre-existing conditions based on the study of Latin American countries' legislation and the way to face such responsibility. Our conclusion will lead us to suggest that investors should develop environmental audits in order to establish what is the real state of the environment at the moment of acquiring a mining field, and to determine where the new responsibility begins. To illustrate this, we will use the case of Chile and present how an environmental audit can be developed based on the attorney — client privilege. It is our conclusion that the ideas developed from the analysis of the legal structure of Chile may be applied to other Latin American countries, with few differences.
9.1 ENVIRONMENTAL LEGISLATION IN LATIN AMERICA
Latin American countries have a complete adherence to Civil Code legal systems. According to this system, the written statutes passed by Congress are the primary and most important source of law. Existing law on any issue is found in the statutes, decrees and regulations that have been published in the official gazette. Judicial decisions can only be used as a reference indicating how courts have previously decided on similar issues but there is no stare decisis whatsoever.
In this scenario, Congress has to legislate most issues. The legislative process may vary depending on the type of government existing in the country. Today, most constitutions in Latin America have adopted a presidential type of government as opposed to a parliamentary one. This means that the President has the initiative to legislate on a broad spectrum of matters. It is the President of the country who indicates to the Congress which matters should be legislated.
Since most Latin American countries are on the road to development of these areas, the environment does not always rank high on the political agenda. In fact, it is only when a lack of environmental rules prevents further development that these countries have historically shown concern regarding environmental legislation.
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The difficulty of passing environmental rules will depend on the level of enforceability the country may have. The lower the chances of enforceability, the easier the legislative process may be. In fact, it is easier for the relevant sectors to pass legislation which will not likely be applied when enacted. On the other hand, if there is a high record of enforceability, passing environmental rules may encounter stronger opposition, as the higher chances of enforcing the new law brings with it the concern of slowing down economic development.
For example, Chile has a high rate of law enforceability. Laws passed by Congress are generally fully enforced. Only laws passed previously that have become obsolete may not be fully enforced by courts. Accordingly, legislating on the environment raises a big concern for all sectors as the risk of passing bad rules in such a sensitive area may hurt people's interest. Therefore, reaching consensus among all relevant sectors is a condition to obtaining approval from Congress on a new law.
In Latin America it is impossible to intend to be involved in any legislative discussion without approaching all political, social, and economic sectors. It is equally important to take into account not only the perspective of the central authorities, ie. those in the large metropolitan areas, but also to realize that it is important to reach the rural areas and the provinces to understand their concerns and requirements which often differ from those existing in the large urban areas. Implicit in this understanding is the performance of "grass root" work and research, both in metropolitan and rural areas. Only then is it possible to realize what the country is prepared to face in terms of environmental legislation.
The process can be complicated because it is difficult to reach consensus on new areas of law and as a result, the legislative effort may be slowed down and become time consuming. The exchange of information is critical in order to aid the decision-making process.
In the case of Latin America, several countries have incorporated environmental provisions within their Constitutions, for example, the first legislation that consecrated this right was the Constitution of Panama of 1972, then the Constitution of Cuba in 1976 (article 27), the Constitution of Peru in 1979 (article 123), replaced in 1993 (article 22(2)), the Constitution of Ecuador in 1979, the Constitution of El Salvador in 1983, the Constitution of Guatemala in 1985, the Constitution of Nicaragua in 1986, Brazil in 1988, Colombia in 1991 and recently, in 1992, the Constitution of Paraguay1 . These Constitutional provisions and the environmental legislation recently enacted reflect an excellent starting point and also where the governments must allocate their efforts to expedite the necessary legislation and regulations to fully implement the principles, tools and concepts contained in the new law.
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9.2 ANALYSIS OF ENVIRONMENTAL LEGISLATION OF LATIN AMERICAN COUNTRIES.
9.2.1.- Argentina
a) The Constitution
The recently enacted Constitution of Argentina, deferring from the previous one, expressly establishes the right to live in a clean environment.
Article 41 consecrates this right by proving that "All citizens have the right to live in a healthy, balanced environment, which enables human development and allows productive activities to satisfy the present needs without endangering the ones of future generations, and having the obligation of preserving them. In accordance with the law, environmental harm originates the obligation of repairing it.
In the second paragraph of this article, the Constitution establishes the obligation to the government. It states that "the authorities will foster the protection of this right, the rational utilization of natural resources, the preservation of the cultural and natural patrimony and the biological diversity, and the environmental information and education".
It adds that "it corresponds to the Nation to enact the norms that contain the basic requirements of protection, and to the provinces, the necessary complementary ones, without altering the local jurisdictions".
Finally, it establishes a direct prohibition to allow the entrance of hazardous wastes. It provides that "the entry to national territory of presently and/or potentially hazardous or radioactive wastes is forbidden".
Consequently, there has been a great development in the Argentinean legislation. The new Constitution seems to have taken into account the experience of other Latin American countries by incorporating an express protection of the environment and even some substantive norms that could be directly applicable, as the case may be, related to hazardous wastes.
b) Argentina's Environmental Legislation
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There is no Federal Law which regulates the protection of the environment in Argentina as a whole. Environmental law consists of legislation with underdeveloped environmental standards and requirements. There is also a relative lack of regulatory involvement by the federal government, and little enforcement of the environmental requirements that do exist.2
In addition, as previously stated, federal environmental legislation is a piecemeal system containing laws regulating specific areas such as the Clean Air Act3 , the pesticide residue concentration, and chemical composition of fertilizers.4 The federal regulation of broad categories such as air...
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