Chapter 2. Environmental governance and management

Chile has significantly strengthened its institutional framework for environmental management and reinforced the regulatory framework for pollution control. Insufficient human and technical capacity and persisting socio-environmental tensions, however, generate implementation challenges. This chapter analyses Chile’s environmental governance system, including horizontal and vertical co-ordination mechanisms. It reviews the regulatory framework for environmental impact assessment and permitting, and discusses steps taken to improve compliance with environmental law. The chapter also assesses progress in promoting public participation in decision making and access to environmental information, education and justice.

1. Introduction

Following the 2005 OECD/ECLAC Environmental Performance Review (EPR), Chile established an environment ministry and distinct agencies responsible for environmental impact assessment and compliance assurance – a major environmental policy achievement of the last ten years. Over the same period, Chile has significantly strengthened its regulatory framework for air and water quality protection, and in recent years has given priority to biodiversity conservation and climate change mitigation.

Chile has the highest income inequality and among the highest poverty rates across OECD member countries (Chapter 1). This makes the issues of environmental governance closely intertwined with social issues, raising their political profile. The need to improve environmental and social justice and address simmering environmental conflicts has largely driven the government’s recent environmental institutional reforms and significant advances in enhancing environmental democracy.

While developing new environmental regulations for air, water and waste management, the government also seems to be particularly mindful of the large policy implementation gap. Specifically, it seeks to strengthen environmental compliance assurance, enhance the information base for decision making and build the capacity of young environmental institutions.

2. Institutional framework for environmental governance

Chile has a four-tier government system comprising the national level, 15 regions, 53 provinces and 345 municipalities. Regional and provincial administrations, which depend on the presidency, function as branches of the national government. While they have some territorial planning responsibilities, they play a minor role in environmental management. Municipalities are responsible for land-use planning and water supply, sanitation and solid waste management services. They also play a role in environmental impact assessment (EIA) procedures and in channelling citizen complaints about environmental offences to appropriate enforcement authorities.

2.1. National institutions and horizontal co-ordination

Since its last OECD/ECLAC Environmental Performance Review (2005), Chile’s institutional framework for environmental governance has undergone significant changes. The 2010 Environmental Quality Law (20.417/2010) replaced the National Environmental Commission (CONAMA) with three institutions that have distinct policy making, environmental assessment and compliance assurance responsibilities to raise the profile and capacity of each of these important functions:1

The Ministry of Environment (MMA) is responsible for policy design, regulatory drafting and information management in all environmental domains and has a strong regional presence (Regional Secretariats).
The Environmental Assessment Service is a decentralised technical agency under the MMA, based at the regional level, in charge of administering the System of Environmental Impact Assessment (SEIA), including an information system on environmental permits.
The Environmental Superintendence (SMA) is in charge of compliance monitoring and enforcement with respect to activities and projects that are subject to the SEIA or covered by Pollution Prevention and Decontamination Plans (PPDAs), environmental quality or emission standards.2

These institutional changes, recommended by the previous review (OECD/ECLAC, 2005), are expected to be complemented by the establishment of a Biodiversity and Protected Areas Service (Chapter 5). So far, the institutional reform has led to a significant increase of the budget allocation to national environmental authorities: while CONAMA’s total budget in 2006 was USD 22.5 million, the combined budget of the MMA and its affiliate bodies in 2011 was USD 61.8 million. Between 2011 and 2015, the budgets of the MMA, the Environmental Assessment Service and the SMA increased (in nominal terms) by another 51%, 31% and 156%, respectively. However, more staff are needed, particularly for the SMA, which currently has a weak inspector presence on the ground (Section 3.3).

The MMA is working to improve its performance management in line with international good practices. It currently tracks six key performance indicators, some of them related to policy outcomes (e.g. incidence of severe air pollution episodes, number of non-attainment areas for air and water quality standards). In addition to reporting on results annually to the Ministry of Finance to justify its budget, it has established a Budget, Planning and Management Control Office in charge of monitoring performance indicators.

With only 22% of the country’s environmental expenditures associated with the MMA’s responsibilities, many environment-related competences reside with sectoral authorities (CEPAL and MMA, 2015). The General Water Directorate under the Ministry of Public Works plans and manages continental water resources; the General Directorate of the Marine Territory and Merchant Shipping manages marine resources; and the Ministry of Health is responsible for preventing pollution with a potentially negative impact on human health, including regulation of waste management and several aspects of air and water quality and pollution control. Chemicals management responsibilities are shared by many ministries and agencies, principally the Ministries of Environment, Health and Agriculture.

The Council of Ministers for Sustainability, established in 2010, is the main horizontal co-ordination mechanism. It advises the president on sectoral policies, including draft laws and regulations that concern the environment. It is chaired by the Minister of Environment and comprises Ministers of Agriculture, Finance, Health, Economy, Development and Tourism, Energy, Public Works, Housing and Urban Development, Transport and Telecommunications, Mining and Social Development.

There are a number of issue-specific co-ordination committees at the national and, sometimes, regional level. For example, the Committee on Sustainable Consumption and Production under the MMA develops a national programme on these issues (Box 3.1). It is made up of over 50 professionals representing 18 public institutions. The Inter-institutional Committee on Environmental Information (CIIA), which includes representatives of about 50 public agencies and services, is chaired by the MMA. Created in 2012, it establishes guidelines and procedures for the collection and management of environmental information, and validates information provided by various public institutions.

2.2. Sub-national institutions

Municipalities in Chile have little institutional autonomy. For example, they cannot go beyond national environmental standards to take account of more severe local environmental conditions, a practice that exists in many other OECD member countries. They also have very little fiscal autonomy (Chapter 3) and lack financial resources to implement their limited responsibilities for environmental services. The MMA has a statutory obligation to work together with local authorities through collaborative agreements. The Ministry of Finance must approve these agreements if they involve a transfer of funds.

A System of Environmental Certification of Municipalities, created in 2009, is a useful tool for local environmental management capacity building, consistent with existing practices in some OECD member countries.3 It is a voluntary programme, supported by the national government, to assess the internal and external municipal environmental management. It also promotes local environmental governance through stakeholder co‐ordination and community involvement, consistent with the principles of Local Agenda 21. The conditions for certification include:

creation of a municipal environmental committee and/or an environmental unit in the local government
development of a community environmental strategy
design and implementation of a mechanism to manage environmental complaints from citizens
sustainability of local government operations
regular provision of environmental information to the national government
citizen participation in local environmental decision making
strengthened environmental education.

The number of municipalities participating in this programme grew steadily in its first five years of operation (Figure 2.1). As of April 2015, 164 municipalities have entered the system, of which 14 have been certified at the “excellent” level, 42 at the intermediate level and 59 at the basic level (which mostly reflects environmental awareness of municipal employees). Others are still working towards basic-level certification. Chile should build upon this achievement to expand the coverage and the level of environmental engagement of local governments. Initial steps of the programme include funding for personnel in charge of implementing the requirements for the different certification levels.

3. Setting of regulatory requirements

Since 2005, Chile has emphasised environmental regulation, adopting a large number of standards, particularly in the area of air pollution control. The main elements of the environmental regulatory framework are environmental quality standards and sector-specific emission or effluent standards. “Primary” environmental quality standards establish pollutant concentrations based on risk to human health, while “secondary” standards do the same based on risk to ecosystems or economic activity. The national law requires the issuance of PPDAs in all areas where primary environmental quality standards are exceeded (so-called saturated zones) or close to being exceeded (so-called latent zones).4 PPDAs have been developed for ten areas presenting air pollution problems (mainly from particulate matter), but many are outdated and more are needed. The development of PPDAs for contaminated water bodies is lagging behind (Chapter 1). As mentioned above, local governments in the PPDA area cannot impose more stringent emission or effluent requirements than those stipulated by national norms. Instead, they rely on other instruments to improve air or water quality.

3.1. Standards for environmental quality and pollution releases air quality and emission standards

Over the last decade, Chile has adopted a range of regulatory requirements for air quality protection: a primary quality standard (designed to protect human health) for major pollutants, including fine particulate matter (PM_2.5), and national emission standards for furnaces, copper smelters and thermal power plants, which are so far the only sectors covered by such standards (Chapter 1).5 The power plant emission standard is in effect for existing and new installations and has spurred investments in abatement and monitoring technology worth hundreds of millions of dollars. Other emission standards are implemented in the context of PPDAs, but do not have national-scale application. While not prescribing particular technologies, the sectoral emission standards are predominantly based on end-of-pipe pollution control technology references rather than integrated cleaner production process solutions.6 In Germany and Austria, for example, such standards are closely linked to best available techniques, which minimise cross-media environmental impacts. End-of-pipe solutions tend to be more costly than process-oriented ones and impede innovation in cleaner production. At the same time, Chile has updated its vehicle emission standards, introducing Euro 5 standards for new light duty diesel vehicles in 2012 and for petrol vehicles in 2014. New buses and trucks must meet the Euro 5 standard as of 2014.

The regulatory framework in this policy area remains incomplete. In the absence of emission requirements for many pollutants and categories of stationary sources, Chile is using the “emission compensations” scheme for areas where ambient air quality standards are exceeded. In these cases, an operator of a new emission source in the area must finance the reduction from other sources of the equivalent of 150% of its emissions. For example, with respect to particulate matter emissions, the commonly used compensation measures are road paving and the creation of green areas. This scheme, applied mostly in the Santiago metropolitan area, appears rather complex in terms of calculating equivalent emission reductions. It is also poorly adapted to situations where air quality standards are not exceeded, as it creates a perverse incentive for establishing new emission sources there. The forthcoming Santiago Respira pollution attainment programme (under public consultation at the time of writing) would limit compensation measures to the same polluting activity (e.g. fuel combustion).

The MMA developed the 2014-18 Atmospheric Pollution Control Strategy to replace the Clean Air Programme of 2010, which foresees the declaration of six new saturated areas and completion of 14 PPDAs (Chapter 1). In planning regulatory improvements for air pollution control, Chile may learn from other OECD member countries, especially European ones. These countries favour bespoke, facility-specific emission limit values for large industrial installations that are inscribed in environmental permits and based on local air quality requirements and best available techniques (often not entailing excessive costs). In their experience, this approach is significantly more economical than emission standards that impose the same requirements on every facility within the sector.

Water quality and effluent standards

Since 2011, Chile has adopted secondary (designed for ecosystem protection) surface water quality standards, mostly for nitrogen and phosphorus compounds (eutrophication being an important problem), but only for four river basins (out of 14 significant ones) and two lake catchments. It is updating cross-sectoral effluent standards for industrial discharges into marine and continental surface waters and groundwater, including new nutrient standards.

However, the effluent standards for discharges into water bodies would be based on the capacity of reference treatment technologies (without prescribing specific ones), but without ensuring that such treatment leads to compliance with quality standards in the receiving water bodies. Chile may benefit from introducing the “combined approach” to setting effluent limit values, stipulated in the European Union’s Water Framework Directive and implemented in most EU member states. With this approach, even when complying with technology-based standards, effluents from any point source of pollution should not lead to exceedance of surface water quality standards established to protect the designated use of the receiving water body (fishing, drinking water supply, bathing, etc.).

3.2. Regulatory impact analysis

The 1994 Environmental Basic Law (19.300/1994) requires the MMA to conduct ex ante General Economic and Social Analysis (AGIES) of draft environmental regulations. This assessment, which corresponds to regulatory impact analysis in many other OECD member countries, includes an assessment of related benefits and costs. Since 2000, 47 regulations, dealing with environmental quality and emission standards as well as PPDAs, have been analysed. The AGIES-calculated benefit/cost ratio for the 18 regulations and PPDAs assessed since 2011 varied from 0.2 to 6.3; no regulation has been rejected as a result of such analysis.

The methodology for this evaluation has been gradually improving, with a growing emphasis on quantitative analysis. With respect to air quality regulations, AGIES uses parameters of people’s exposure to pollutants and of related health impacts and other benefits such as reduced fuel use, congestion and noise to demonstrate the benefits of government intervention. The analysis covers both compliance costs of the regulated community and administrative costs of regulatory authorities. Where benefits are difficult to quantify, AGIES evaluates cost effectiveness of proposed regulatory measures.

In 2014, the MMA introduced a requirement for ex post evaluation of environmental regulations, as well as of environmentally relevant government programmes, every five years. This practice is being tested in the case study of the PPDA for Metropolitan Santiago.

3.3. Environmental impact assessment and permitting

Environmental impact assessment (EIA), introduced by the 1994 Environmental Basic Law, is the oldest, most important and most developed instrument of environmental regulation in Chile. It includes the evaluation and permitting of projects defined by that law as having a potentially significant environmental impact. Since 2010, the Environmental Assessment Service has administered the system.

EIA procedures were further defined in an implementing decree (40/2013, the so-called New Statute for SEIA). An Environmental Evaluation Commission – which includes the Regional Director of Environmental Assessment, the Ministerial Regional Secretary of the Environment and Public Regional Directors with jurisdiction over environmental issues – has been established in each region of the country. Each approved project receives a Resolution of Environmental Qualification (RCA), which is an equivalent of an environmental permit, and a consolidated evaluation report. These are available to the public.

The project proponent determines whether the project should undergo a full EIA, or if a simpler Environmental Impact Declaration (DIA) is sufficient. A DIA describes the activity and indicates applicable requirements and permits, whereas a full EIA requires in-depth analysis of environmental impact and respective mitigation measures. A full EIA is required in the case of a potential risk to public health or the environment; location in or near towns, protected areas or cultural heritage sites; or potential alteration of an area’s scenic or tourism value. However, even a full EIA does not thoroughly consider alternative development scenarios. Old, and often highly polluting, facilities that pre-date the 1994 law are not subject to any environmental regulatory requirements.

In 2013, 219 EIAs were conducted and 5 542 DIAs submitted, approximately 4% and 96% of all the procedures, respectively. At the same time, EIA cases corresponded to 40% of the value of investment associated with the evaluated projects, reflecting the effectiveness of the screening procedure. Since 1994, the approval rate has been relatively low – 64% for EIAs and 67% for DIAs – with very little variation across economic sectors. There is, however, a notable tendency to split projects into smaller parcels to avoid triggering the EIA requirement (OECD, 2013).

Public participation is mandatory for a full EIA process. The project proponent must publish a summary of the EIA study with the project’s essential details in a local newspaper. Representatives of the public (whether or not directly affected by the project) have 60 days to submit their comments. Municipalities are supposed to ensure community participation in the EIA on development projects proposed on their territory.

The Environmental Evaluation Commission must consider public comments and observations on the EIA (Section 4.3). Under a DIA procedure, the Environmental Assessment Service may, at its discretion, invite public participation if it is requested by at least two citizen organisations or by ten individuals in the affected community. However, since public participation occurs at an advanced stage of project development, where the consideration of alternative solutions is unlikely, the local community is essentially asked to approve a pre-designed project. As a result, public participation can only affect the prescribed environmental mitigation measures. Individuals and legal entities whose comments in the EIA process were not taken into account may appeal to the Environmental Assessment Service and demand modification of the respective RCA. A Presidential Advisory Committee for the evaluation of the SEIA, established in April 2015, has recommended to introduce public participation at an early stage, before projects undergo formal evaluation, and to extend mandatory public participation to DIAs.

A separate, sector-specific environmental permit from a sectoral competent authority (e.g. a water permit from the DGA, a waste permit from the Ministry of Health) may be required in addition to an RCA. However, it is administered as part of the same procedure based on the single window principle. A sectoral permit may have only environmental content, in which case a favourable RCA authorises all sectoral authorities to grant such permits. Alternatively, it may combine environmental and non-environmental content (e.g. a permit for the building and operation of mine tailings from the Ministry of Mining). In this case, the EIA process verifies the project’s conformity to sector-specific environmental requirements.

An RCA prescribes environmental impact mitigation measures, including those related to sector-specific permits. However, to the extent these measures concern the competence of sectoral ministries, the SMA does not monitor compliance with them (even though it imposes non-compliance sanctions in co-ordination with other ministries), which undermines the enforceability of permit conditions. This is different from the systems of other OECD member countries with integrated environmental permitting (notably, EU member states), where both the issuance of, and monitoring compliance with, environmental permits is done on a cross-media basis.

3.4. Land-use planning and strategic environmental assessment

The rapid growth of big cities and the poor management of the land market have led to a gap between urban expansion and infrastructure development, creating social segregation in many areas. Territorial planning generally lacks coherence and mostly reflects sectoral priorities. To address this challenge, the National Policy on Urban Development (2014) emphasised the need to move to integrated territorial planning. This would link land-use decisions with public investment in transport, road infrastructure, water, energy and waste management services (MINVU, 2014). While the National Policy set a target of balancing development and the natural environment, more needs to be done to integrate environmental concerns into land-use planning.

Land-use planning in Chile, which is focused on urban areas, is mostly regulated by the General Law on Urbanism and Construction (1976, with subsequent amendments). It establishes the levels of territorial planning and respective instruments: Ministerial Regional Secretaries of the Ministry of Housing and Urbanism (MINVU) develop Regional Plans of Urban Development (which are indicative rather than binding), as well as Regulatory Inter-communal or Metropolitan Plans. Municipalities prepare Regulatory Communal Plans.

The coverage of territorial planning has increased considerably over the last decade, although it still falls short of the entire country. There are currently 4 regional plans, 19 inter-communal plans and 270 communal plans, while the remaining municipalities are formulating or approving their plans. However, municipalities do not have real power to make planning decisions on their territory; in many cases, the central government overrules them. In theory, all regulatory plans (inter-communal, metropolitan and communal) are legally binding. In practice, inter-communal and metropolitan plans take precedence over communal ones. Furthermore, the National Policy on Urban Development proposed to give regional governments more powers and resources to manage inter‐communal and metropolitan plans.

According to the 2010 Environmental Quality Law, all territorial development plans are subject to strategic environmental assessment (SEA). SEA applies to all land-use plans, as well as other non-environmental regulatory policies and plans as determined by the president upon recommendation of the Council of Ministers for Sustainability (as was the case for the current energy policy). The MMA has developed SEA guidelines for other government agencies. The new Strategic Environmental Assessment Regulation published in November 2015 further addressed four elements in particular: evaluation of regional, inter-communal and municipal land-use plans; coastal zone planning (which should be performed by the MMA); the role of other government authorities; and public participation.

However, contrary to good international practice (represented by the EU Directive on strategic environmental assessment 2001/42/EC), there is no established list of sectoral policies and plans that must undergo SEA. While the application of SEA has substantially increased since 2011, only 95 of 235 spatial plans elaborated in 2011-15 have undergone this assessment (Figure 2.2). In addition, there is little evidence that SEAs have led to any significant modification of land-use plans in terms of better mitigating the environmental problems in urban areas (OECD, 2013). Housing and infrastructure planning remains poorly integrated with public investment in water and waste management services and does not consider nature protection.

4. Compliance assurance

4.1. Environmental inspections

The Environmental Superintendence (SMA) is responsible for monitoring compliance with RCAs, PPDAs and environmental quality and emission standards. It currently acts in collaboration with 15 sectoral government bodies, which execute specific inspections on its behalf, albeit the power to apply sanctions is exclusive to the SMA. For example, the 2010 Environmental Quality Law limited the competence of the Sanitary Services Inspectorate (under the Ministry of Public Works) to industrial effluents discharged into a municipal sewerage system and gave the SMA the responsibility for controlling direct industrial wastewater discharges into water bodies.

However, inspection activities even with respect to direct discharges continue to be conducted by the Sanitary Services Inspectorate under an Inspection Delegation and Collaboration Agreement. In 2013, the Sanitary Services Inspectorate inspected about 3 200 industrial facilities discharging into public sewers and over 500 facilities with direct discharges into water bodies. The SMA is supposed to undertake enforcement actions based on the Sanitary Services Inspectorate’s protocols on identified violations, but rarely does so due to capacity constraints.

The SMA, which started operations in 2013, is expanding its regional presence. To date, it has established only 6 of 15 regional offices. It administers a National Environmental Surveillance Information System, which includes RCAs, as well as information on all enforcement cases and respective penalties imposed.

In 2014, the SMA conducted 10 840 compliance checks (including 4 272 site inspections) and handled over 1 700 complaints.7 In 2014, the number of inspections nearly tripled from the year before, when just 1 377 site visits were carried out. This increase reflects the growing political emphasis on compliance monitoring and enforcement. Most inspections were related to different aspects of PPDAs, but only 311 to compliance with RCAs. Almost 70% of inspections were conducted in the Santiago Metropolitan Region where most enterprises are located (SMA, 2015). While some of the site visits are undertaken by the 40 field inspectors (out of 130 staff) of the central SMA office, most are conducted by sectoral competent authorities under above-mentioned delegation agreements.

Outside the SEIA process, the SMA has little control over compliance with environmental regulations issued by sector-specific competent authorities. These authorities have power to monitor compliance in all matters and instruments outside the SMA’s jurisdiction, but their budgets for compliance and enforcement activities are generally insufficient. Despite the creation of the SMA, co-ordination of various sectoral enforcement authorities remains too complex and fragmented to conduct coherent compliance assurance efforts. In order to address this institutional fragmentation, a National Environmental Inspection Network (RENFA) was created in 2014 (following the example of Spain and several other EU countries) in order to promote the harmonisation of criteria and procedures for environmental inspections and build capacity of different public bodies undertaking compliance monitoring.

4.2. Enforcement tools

The SMA has a range of administrative sanctions at its disposal, including, in escalating severity, a written notice; a fine from 1 to 10 000 “annual tax units” (USD 824 to USD 8.2 million per violation);8 temporary or permanent shut-down; and revocation of the RCA. For activities not subject to the SEIA, each sectoral competent authority can apply discretionary fines (subject to limits set out in the relevant legislation), withdraw the respective permit or order the activity to stop. In November 2015, the SMA issued an administrative enforcement policy that makes the fine depend on several aggravating and attenuating factors. It also takes into account the economic benefit incurred as a result of non-compliance. This follows the example of a long-standing practice of the US Environment Protection Agency, which some other OECD member countries such as Israel have also used as a model. There is already a provision that if an offender voluntarily, adequately and promptly reports its violation, the respective sanction may be reduced up to its entire amount.

Chilean criminal law does not contain distinct provisions for environmental violations, an issue of debate for the last ten years. Chile should pursue its plans to establish criminal liability for several categories of severe environmental offences and distinguish clearly between violations subject to administrative and criminal sanctions.

In 2014, the SMA initiated a total of 113 penalty procedures. Three-quarters resulted from an inspection, while complaints from citizens, municipalities or sectoral authorities triggered the rest. According to SMA (2015), 33.5% of complaints referred to noise, and another 11.5% to odour and air pollution. The total value of administrative fines imposed was CLP 9.2 trillion, or USD 16.1 million in 2014. The low number of penalty procedures compared to that of site inspections is primarily due to the fact that the SMA lacks the human resources to prepare more penalty cases that would withstand scrutiny of an environmental court.

4.3. Environmental liability

The Environmental Basic Law defines environmental damage as “any loss, reduction, detriment or significant impairment inflicted on the environment or one or more of its components”. Liability for environmental damage is fault-based, i.e. it covers only negligent and wilful actions proven to have caused the damage. In addition, when environmental regulations have been violated, liability for environmental damage is legally presumed. This legal regime diverges from the dominant practice in OECD member countries, where environmental liability is strict (i.e. it does not in most cases require proof of illegal behaviour or negligence of the responsible party), but conforms to the provisions of the OECD Council Recommendation on the application of the polluter pays principle to accidental pollution, which requires the party responsible for the accident to bear the costs of remediating the resulting damage.

The existing environmental liability regime envisages two types of corrective action. First, individuals and entities that have suffered damage or the State Defence Council may file a suit for environmental remediation before an environmental court. Any person may also request the municipal government under whose jurisdiction environmental damage has occurred to file the corresponding remediation suit. However, the municipality is not obliged to heed such requests, especially given the lack of resources to do so. The environmental court may order remediation measures to be carried out at the offender’s expense and require periodic reports to monitor compliance.

Alternatively, the directly affected party may file a civil suit for monetary compensation for damage to health and welfare in a court of general jurisdiction.9 Such suits can be settled through an extra-judicial agreement. The compensation is paid to the state treasury, but it could be partly earmarked to the community where the damage occurred. In principle, insurance covering civil liability for environmental damage is available. In practice, however, there is no regulation governing its scope and exemptions.

Chile is missing a legal framework for administrative liability for damage to the environment (as represented by the Environmental Liability Directive 2004/35/EC in the EU). Under the Environmental Quality Law, a polluter can file a remediation plan (supported by a technical study) with the SMA and the Environmental Assessment Service as a means of avoiding an environmental damage suit. If the SMA approves the plan, no action can be brought for environmental damage once the polluter executes the plan to the satisfaction of the SMA. However, there have been very few real cases of environmental remediation, showing that the system is not working well in the absence of enforceable legal requirements such as remediation standards.

Remediation of abandoned mine sites

As of 2015, the national mining service (Sernageomin) had catalogued more than 650 abandoned and/or inactive mine sites throughout Chile, including storage facilities (such as tailing dams) mostly in the Atacama and Coquimbo regions. Some are located near communities and cause significant environmental and public health concerns and related social inequalities. However, very few sites have been closed in accordance with modern standards due to the absence of coherent legal requirements (Weeks, 2015).

The 2009 National Policy for the Management of Polluted Sites stipulates different elements, such as their identification, risk assessment, mitigation of negative impacts and monitoring. The remediation of abandoned mine sites containing large amounts of heavy metals is a government priority. The 2012 Mine Closure Law required all new mines to get approval for end-of-life closure plans, and more than 1 300 such plans were presented to Sernageomin in 2012-13 (Box 2.1). However, the Mine Closure Law does not apply to already abandoned mining sites, for which decontamination plans are yet to be developed. In 2015, the ministries of environment and health together with Sernageomin started a process of designing soil quality standards for heavy metals.

Box 2.1. Legal framework and financing challenges for mine closure

The 2012 Mine Closure Law (20.551/2012) had an explicit objective of preventing the creation of abandoned mine sites in the future. It required mining companies to provide financial guarantees for each operation and develop detailed mine closure plans to regulate the physical and chemical stability of mine sites. This mechanism is supposed to generate sufficient funds to execute site closure should the operator default on its decommissioning obligations specified in its RCA. The first phase of the law’s implementation affected every mine over a minimum size threshold with an approved closure plan. These companies had to provide, by November 2014, a cost estimate that took into account remaining mine life and a discount rate based on a state-provided index. Once Sernageomin approved the estimate, the mining company had to provide a guarantee for the amount, using one of the approved financial instruments.

Initially, only 20% of the present value is required to be guaranteed. The amount gradually increases over 15 years (or two-thirds of the remaining mine life, whichever is shorter) to the full present value of closure costs. The law allows for partial reductions of the guarantee. The total amount to be guaranteed is estimated to be well over USD 30 billion. It is unclear how well these requirements will be applied in practice in the absence of an enforcement mechanism.

There have been a few positive cases of mine closure, but the financing arrangements varied. The locally owned Lo Aguirre copper mine site just west of Santiago was closed in 2008 based on a voluntary closure plan presented in 2000. Lacking the resources of international mining companies, the closure works were self-financed, largely through the sale of scrap generated in closure activities and the sale of copper obtained through reprocessing of select wastes.

Source: Weeks, 2015.

A first cadastre of abandoned mining sites was established in 2007, and since 2010 it includes information about tailings deposits. Inventories should be expanded and updated in a systematic manner to improve knowledge and transparency on the location and state of environmental liabilities. Sernageomin has issued non-binding risk evaluation guidelines, and there are plans to develop much-needed standards for heavy metal concentrations in soils. However, there is no specific regulation on the remediation of contaminated areas and no specific agency responsible for the investigation and clean-up of contaminated land. Limited financing of decontamination activities comes from the state budget, but a longer-term funding solution is necessary to address this important issue. One possibility would be to impose decontamination fees on hazardous industrial installations and earmark the revenue for a fund to clean up past land and water pollution.

4.4. Promotion of compliance and green practices

Government promotion of compliance can reduce costs for businesses by allowing them to achieve and maintain compliance as efficiently as possible. It may also reduce regulatory costs by increasing the efficiency of compliance monitoring and enforcement. Compliance promotion is particularly effective when targeted at the small and medium-sized enterprise (SME) community. Lack of knowledge and capacity, along with cultural resistance to enforcement, are the primary reasons for non-compliance among SMEs (Mazur, 2012). So far, Chilean environmental authorities have not given compliance promotion the attention it deserves.

Clean production agreements

Decree 156 of 2007 established a National Clean Production Policy and a Council for Clean Production (CPL) under the Ministry of Economy. It also strengthened the framework for Clean Production Agreements (APLs), which were first put in place in the late 1990s. In an APL, enterprises and a competent government authority set specific targets and actions to foster clean production, including the use of best available techniques (BAT), that go beyond the minimum legal requirements. BAT are suggested as part of an APL, but are not mandatory.

Since 1999, 100 four-year-long APLs have been signed with different production sectors. They have engaged about 6 000 enterprises, two-thirds of which are from the agricultural sector. APLs can also be territorial, addressing complex environmental problems that go beyond a single industrial sector. In 2011, for example, a territorial APL was concluded for the industrial zone of Puchuncaví-Quintero in the Region of Valparaíso. Between 2005 and 2014, the number of enterprises covered by APLs increased from just over 150 to over 1 600 (Government of Chile, 2013). APLs receive modest co-financing from the budget, amounting to USD 4.7 million between 2006 and 2014. The most recent APLs include provisions to evaluate their results, including economic benefits accrued by businesses themselves. While there are positive projections of how APLs can reduce greenhouse gas emissions (18.4 million tonnes by 2020; see Chapter 4), the overall environmental effectiveness of these agreements is difficult to evaluate.

The National Clean Production Policy (2010) set an objective of promoting cleaner production practices in the public and private sectors to modernise production processes and increase competitiveness of domestic producers. Similarly, the “Clean Production Agenda 2014-18: Alignments for a National Policy” interprets cleaner production as an economic development strategy that emphasises environmental and social opportunities as drivers for increased productivity. It sets, among others, the following targets focusing on SMEs:

Involve at least 4 000 new companies, mostly SMEs, into APLs.
Promote clean production practices in micro-enterprises through training and information dissemination.
Design mechanisms of financial support for adoption of cleaner technologies by enterprises, in addition to the funds made available through the Economic Development Agency (CORFO) – a public agency promoting increased competitiveness of Chilean industry, particularly SMEs.
Create a new framework for agreements between companies and their communities to promote socio-environmental responsibility.

Corporate social responsibility

In addition to APLs, corporate social responsibility has become increasingly important in Chile, especially in mining, agriculture and tourism. The Ministry of Economy, Development and Tourism created a Social Responsibility for Sustainable Development Council in 2013. Some large mining companies (such as CODELCO, Chile’s state-owned copper company) have established rigorous voluntary environmental and community standards.

In 2013, the MINVU adopted a Sustainable Construction Code – a good practice guide for the construction industry targeting such issues as material use efficiency and waste management. The National Tourism Service has developed a “Chile for Sustainable Tourism: Best Practices Manual” (2012) and launched a Seal of Distinction system to recognise tourism companies’ efforts in the field of sustainability (although the level of adherence to these green practice guides is unclear). Such initiatives are similar to those successfully implemented in other OECD member countries such as the “Small Environmental Guide for Construction Workers” in Scotland and Ireland’s Green Hospitality Programme (Mazur, 2012). The relevant government authorities in Chile would benefit from other countries’ experience in terms of engaging business associations in disseminating and promoting green practices.

Greening public procurement

Chile has also followed best practices in other OECD member countries by introducing environmental considerations into its public procurement policies. In 2012, ChileCompra – an agency under the Ministry of the Treasury that operates the country’s public procurement system – published a Sustainable Purchasing Policy. It also changed the 2004 Procurement Regulations, allowing government bodies to assign additional points in bidding processes in accordance with environmental and social criteria (although the criteria themselves have not been defined to date). ChileCompra and the MMA jointly developed and published a Sustainable Purchasing Manual in 2014. Plans are underway to train over 10 000 public procurement officials across the country on this new policy.

According to ChileCompra, 36% of public procurement orders in 2014 included some kind of sustainability criteria, compared to just 2.7% in 2009 (Government of Chile, 2013). Green public procurement can play a significant role in creating or boosting consumer demand for green products and services, particularly where public purchases represent a large share of the market (e.g. construction, health services and public transport). The national market for environmental goods and services reached 1.7% of GDP in 2010 and is developing rapidly (Chapter 3).

Eco-labelling schemes

Chile has no policies or legal instruments related to eco-labelling. There are, however, several initiatives to identify environmentally preferred products. These include the National System of Agricultural Organic Products Certification, which was created in 2006, and the Technical Standard DS No. 17/2007 (UNEP, 2011).

Chile has taken initial steps at eco-labelling that can enable producers to harness consumer demand for environmentally friendly goods. The country uses several international eco-labels, as well as several independent eco-labels, but the latter lack the recognition of a single agency and tend to confuse consumers. For example, Certfor is a voluntary label of the Chilean Sustainable Forest Management Certification System administered by the National Institute of Standardisation. However, it co-exists with other sustainable forestry labels such as the local Marcha Blanca and Sello Verde and the international label of the Forest Stewardship Council (Chapter 5). The forthcoming Framework Waste Law is expected to give the MMA authority for product certification and labelling.

Environmental management system certifications

The number of ISO 14001 environmental management system (EMS) certifications increased more than three-fold between 2005 and 2013 (Figure 2.3). While the government does not provide any regulatory or financial incentives for EMS certification, this growth has been fuelled by supply chain pressure, mainly in Chilean exporting industries. Such progress in corporate environmental management is an important factor in improving compliance and adopting more resource-efficient production practices.

At the same time, there is a big capacity gap preventing the business community from meeting and going beyond environmental requirements. This concerns SMEs in particular, which do not have the knowledge and skills to stay abreast of, and comply with, relevant regulations. There is a need to improve training in these areas, as Chapter 3 discusses.

5. Promoting environmental democracy

EJOLT (2014) ranked Chile ninth among 76 countries in the world, and fourth in South America, with respect to the number of environmental conflicts. These relate to a wide range of issues such as land acquisition, access to water, industrial and mining sites, exposure to pollution, and are particularly intense with some indigenous communities (e.g. in the Mapuche territory in Southern Chile). Non-governmental organisations (NGOs) have been increasingly vocal in their opposition to development. According to the first National Survey on the Environment, conducted in 2014, slightly more than a third of Chileans think the government is doing its best to protect the environment, or that environmental regulations are sufficiently stringent (MMA, 2015a). All this makes the effectiveness of environmental democracy mechanisms particularly important.

Since 2005, Chile has implemented the previous OECD/ECLAC review’s recommendations to improve access to environmental information, enhance public participation and strengthen environmental education (Annex A; OECD/ECLAC, 2005). According to the Environmental Democracy Index (WRI, 2015), Chile ranks 24th in the world on the basis of a composite indicator which factors in public participation, transparency and access to justice considerations. Chile scores well on transparency and access to justice mainly due, respectively, to the public’s clear right to access environmental information and the legal provisions for the review of administrative decisions related to the environment. Chile has a lower score on public participation, which often intervenes too late in the decision-making process (Section 3.3).

5.1. Public participation in environmental decision making

The MMA has been using different mechanisms for public participation in the design of policy instruments (e.g. environmental quality and emission standards), EIA (Section 3.3) and SEA (Section 3.4), development of PPDAs and wildlife conservation initiatives. NGOs and representatives of business and academia also have an opportunity to participate in environmental rule-making through the Advisory Council at the MMA and in the review of compliance assurance activities via the Civil Society Council at the SMA. In accordance with the 2011 Law on Associations and Citizen Participation in Public Management (20.500/2011) and several respective presidential guidelines, many environmental regulations now specify procedures for public participation. However, issue-specific permitting, which is not part of the EIA process, is not open to public participation.

In addition, the formation of Councils for Environmental and Social Recovery is envisaged for “environmentally vulnerable territories” faced with severe environmental degradation. The MMA would lead the multi-stakeholder council (with broad participation of the local public), which would propose time-bound measures to address the community’s socio-environmental challenges. Such councils were established in Quintero and Puchuncavi communes in 2014, and three more are planned for 2015. At the same time, while Chile ratified in 2009 Convention 169 of the United Nations International Labour Organization that states that indigenous communities should be consulted prior to development processes that will affect them, there is no effective mechanism for addressing special rights of indigenous communities.

The Environmental Protection Fund, operated since 1998 by the MMA, has been supporting environmental projects implemented by NGOs and other non-profit institutions. It is the only public environmental fund in Chile. More than three-quarters of its funding (CLP 12 billion) have gone to community organisations. Since 2011, the fund’s disbursement is focused on four areas: local environmental management, information and research, networking and indigenous communities.

5.2. Access to environmental information

Since 2005, Chile has greatly enhanced both the availability of, and access to, environmental information. Both the 2009 Transparency Law (20.285/2009) on access to administrative documents and the Environmental Quality Law provide guarantees of access to environmental data. Refusals of access to information can be appealed in court. Chile also leads the work to conclude a wide-ranging regional agreement on access to information, public participation and justice on environmental matters in Latin America and the Caribbean.

In recent years, the MMA has been actively consolidating and improving the National Environmental Information System (SINIA), which consists of databases (cartographic, graphic, documentary, legal, etc.) and procedures for managing environmental information. SINIA makes environmental indicators and statistics available to the public through its website. It also allows any person to access geo-referenced information on environmental quality and impacts. To enhance stakeholder collaboration on these issues, the MMA created in 2012 an Inter-Ministerial Committee on Environmental Information. The committee, which meets up to four times a year, brings together more than 50 public agencies with competence over environmental matters.

The National Institute of Statistics (INE) has been publishing an Environmental Statistics Yearbook since 1996. In addition, the Environmental Quality Law obliges the MMA to prepare state of the environment reports every four years (since 2012) and annually (since 2014). The annual report, a shorter document covering 71 national and regional indicators, shows trends on various environmental issues. About one-third of these indicators characterise environmental outcomes. A National Environmental Accounts Plan is expected to be developed in 2016. Feasibility studies of Environmental Satellite Accounts have recommended gradual implementation, starting with those areas where Chile has most experience (forestry and mining), followed by water, land and ecosystems accounts.

The MMA has also been upgrading the PRTR. The register, created in 2002, consists of a database on pollutant releases into air, water and soil, as well as waste generation and disposal. It also includes data on compliance with environmental regulations. The recent (2013) regulation concerning PRTR created a one-window system for reporting relevant data, which now covers over 20 000 facilities reporting on 132 pollutants. The National Information System on Waste (SINADER), which covers generation and disposal of all non-hazardous waste, was introduced in 2013 as part of the PRTR system. From 2015, all producers and recipients of waste (hazardous and non-hazardous) have the obligation to report to national registries, linked to the PRTR. In an innovative practice to allow data verification, the PRTR has been connected to the tax agency’s database to correlate pollution release and production information. The PRTR is used to generate periodic reports on local environmental impacts.

While Chile has created systems for managing environmental information, serious issues remain with respect to coverage and completeness. For example, little information is available on water abstraction and use, and almost none on biodiversity protection and negative impacts on ecosystems. Air and water quality monitoring stations often collect data on only a few parameters. As a result, Chile has difficulties in providing environmental statistics under international conventions and to international organisations such as the OECD.

5.3. Access to justice

The 2012 Law on Environmental Courts (20.600/2012) substantially enhanced access to environmental justice. Currently, the court in Santiago is handling cases from the central and northern parts of Chile, while the court in Valdivia has jurisdiction over the southern region. In creating these courts, Chile followed the example of the Environmental Appeals Board in the United States.

An environmental court is independent, but a Court of Appeals or the Supreme Court can overturn its decisions on appeal. Each environmental court is staffed by three judges: two lawyers and one environmental scientist, increasing the technical level of environmental rulings. Hearings are open to the public and broadcast live on the internet. However, ordinary civil courts will continue to hear constitutional actions based on the right to live in an unpolluted environment. This provision may lead to parallel actions in both courts regarding the same project.

The Law on Environmental Courts stipulates the right to sue against environmental standards, EIA decisions (Box 2.2) and SMA enforcement actions, as well as to seek environmental remediation measures. The Santiago court handled 133 cases over 2013-15, the majority of which dealt with EIA. Any physical or legal person can file a claim against a regulatory decision, while only victims of environmental damage, affected municipalities or the state (through the State Defence Council) have legal standing to demand environmental remediation. Chilean law also provides for administrative or judicial review of the implementation of most environment-related laws and regulations.

The high number of environment-related court actions demonstrates that civil society has access to justice in Chile. However, citizens and NGOs often face a major barrier in the unaffordable cost of legal expertise, especially in damage-related cases. Although the Constitution requires that legal services be provided to those who cannot afford them, there are few measures to reduce such financial barriers. Studies show that Chilean citizens have very little trust in their country’s judicial system: according to a 2013 Gallup poll, Chile is the OECD member country with the lowest level of public confidence in the judiciary: 19% of respondents stated they had confidence in the judiciary, compared to the average of 35% in Latin America and the Caribbean and 50% globally (Gallup, 2014).

Box 2.2. Citizen suits against environmental permits

There have been several recent cases of RCAs for mining, energy and industrial projects revoked by a court as a result of citizen suits filed based on the constitutional right to live in an unpolluted environment.

In a high-profile decision, the Supreme Court accepted a constitutional action and invalidated the RCA of El Morro, Goldcorps mining project. It ordered a new consultation with the indigenous community as part of the EIA process. The Supreme Court stated that while the competent authority for these kinds of matters is the environmental court, it decided to adjudicate the case based on an urgent need to protect constitutional rights.

The Supreme Court also accepted a civil suit against the construction of a tailings pond of Los Pelambres, Antofagasta Minerals’ mining project because its construction was harming surrounding communities. Although the tailings pond had undergone an EIA, the Supreme Court evoked the precautionary principle: where there are threats of serious or irreversible damage, lack of full scientific certainty shall not be used as a reason to postpone action to prevent environmental degradation.

In a similar case, the Supreme Court rejected constitutional action filed against the RCA for Punta Alcalde, ENDESA’s power generation project. However, it required several mitigation measures that were not considered during the EIA process.

Source: Eyzaguirre, 2015.

5.4. Environmental education and awareness

Over the last decade, Chile’s education system has increasingly incorporated environmental considerations. The 2009 General Law on Education (20.370/2009) stipulated that the education system should encourage respect for the environment and promote sustainability. The National Education Policy for Sustainable Development (2009) has led to the creation of several initiatives to address environmental education and awareness in the country.

One such initiative was the creation of a National System of Environmental Certification of Educational Establishments (SNCAE). This voluntary programme for all establishments accredited by the Ministry of Education is administered jointly with the MMA and the National Forestry Corporation (CONAF). SNCAE has three levels of certification: basic, intermediate and excellent. The certification is based on self-assessment matrices developed for early childhood education, primary and secondary schools, focusing on three areas: curriculum, environmental management and community relations. Between 2011 and 2014, the number of certified educational establishments increased from 546 to 935, and the share of the “excellent” grade grew significantly to over one-third of all certifications (Figure 2.4).

The MMA has also established an Environmental Creators Club to promote interaction among different stakeholders in the government, business and civil society, as well as socio-environmental initiatives. However, environmental curricula quickly become outdated; the government’s environmental education efforts are falling behind the rapid developments in the environmental policy arena. More outreach is needed to enable various non-government actors to contribute meaningfully to environmental policy making. The Ministry of Education should become a member of the Council of Ministers for Sustainability and take a more active role in facilitating these efforts.

Overall, the Chilean public is acutely aware of environmental issues: two-thirds of the population are concerned or very concerned about environmental problems (UNAB-IPSOS, 2012), mainly about air and noise pollution and urban waste (Figure 1.5). Chile conducted its first National Survey on the Environment in 2014. According to the survey, most Chileans (85%) believe that environmental protection yields social benefits. While more environmental information has become available and accessible over the past decade (Section 5.2), the majority of Chileans (66%) still believe more could be done to promote environmental education (MMA, 2015a).

Recommendations on environmental governance and management

Regulatory framework

Develop and implement a coherent policy for regulating pollution releases into air and water from stationary sources, including technique-based emission/effluent limit values for large, high-risk industrial installations and sector-specific emission and effluent standards for facilities with lower environmental impact.
Improve the EIA process to ensure it includes meaningful consideration of project alternatives, guarantees public participation in its early stages and takes better account of potential environmental impacts, particularly on ecosystems.
Enhance the practical application of SEA to territorial development plans and ensure the implementation of relevant mitigation measures; better integrate housing and infrastructure planning with public investment in water and waste management services, and nature protection; empower municipalities to take more control over local territorial planning by reinforcing the role of Regulatory Communal Plans.

Compliance assurance

Harmonise environmental compliance and enforcement policies across various national competent authorities and ensure the involvement of SMA inspectors in assuring compliance with sector-specific environmental permits; increase the enforcement capacity of the SMA; consider introducing criminal penalties for egregious environmental offences.
Introduce a strict liability regime for future damage to water bodies, land, species and ecosystems; develop and implement environmental remediation standards and plans, particularly for soil contamination with heavy metals; empower the SMA to enforce liability provisions through administrative actions.
Maintain and frequently update risk assessment inventories of abandoned contaminated sites; establish a financial instrument to impose decontamination fees on hazardous industrial installations and mines, and earmark the revenue to constitute a fund to be used for clean-up of past land and water pollution.
Upscale efforts to monitor and control the resource use (e.g. energy, water) and environmental impacts generated by medium- and small-scale mining industries, and support the adoption of new processes and technology to increase their efficiency and safety.

Environmental democracy

Strengthen the information base to support environmental decision making by expanding data collection and management with respect to water allocation, abstraction and quality, air pollution, biodiversity protection, etc., and make this information available to the public, as well as to international bodies.

References

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Notes

← 1. This type of arrangement also exists in several other OECD member countries. For example, environmental assessment is performed by an independent agency in Finland, while the Netherlands has an independent environmental inspectorate.

← 2. For projects or activities that are not subject to the SEIA, the competent sectoral government authority is in charge of enforcing environmental legislation.

← 3. For example, a number of cities in France and Sweden have obtained certification in accordance with the ISO 14001 environmental management systems standard.

← 4. Saturated zones are the equivalent of “non-attainment areas” in the United States. Latent zones are declared where 80% of the environmental quality standards are exceeded.

← 5. National emission standards for thermoelectric power plants were established in 2011 (covering SO_x, NO_x, PM and mercury); and for copper smelters in 2013 (covering SO_x and arsenic emission).

← 6. For example, the emission standards for copper smelters require that new foundries achieve a 98%-capture rate for SO_x and existing smelters 95% (SO_x can be captured and converted into sulphuric acid, which is used in various industrial processes). This compares with an average capture level of about 90% in 2010, the same level as in 2001 and significantly below that found in West-European countries and Japan (University of Chile, 2013).These standards aim to achieve a 53% reduction in SO_x emissions by 2018, compared to the 2007-11 average.

← 7. Municipalities are responsible for collecting citizen complaints about potential environmental offences and reporting them to the SMA.

← 8. The monthly tax unit and annual tax unit (or UTM and UTA, respectively) are indexed account units used in Chile for the payment of taxes and fines. Their value is adjusted monthly for inflation. As of December 2015, a UTM was 44 955 CLP and a UTA was 539 460 CLP.

← 9. Civil liability for damage from oil spills and releases of other harmful substances into the marine environment is governed by the 1978 Navigation Act.