Environmental Law 2019 Second Edition

Last Updated November 13, 2019

Chile

Law and Practice

Authors



Eelaw, Medio Ambiente y Energía, Asesorías Legale is a highly specialised environment, energy and natural resources law firm. With extensive and proven experience in the legal analysis required for the development and implementation of projects, proceedings before the public authority, and the study of environmental regulations. The firm believes in the full compatibility between economic activity and the sustainable development of the country, fully respecting the rules in force and generating positive links between the clients and their surroundings and communities. Eelaw goes further, taking as reference the development of international environmental practices, allowing the firm to bring to Chile the most advanced perspectives in the region and the world. The team is composed of 12 highly specialised attorneys and seven paralegals who also works in sophisticated environmental matters. The team's main areas of practice are: project development and permitting, environmental litigation, environmental compliance, regulatory development and monitoring and pollution control and circular economy.

In Chile, the Political Constitution guarantees all people the right to live in a pollution-free environment and, correlatively, declares that it is the state's duty to ensure that the environment is not affected and to protect the preservation of nature.

In this context, Law No 19,300 came into force in 1994 and establishes the legal framework for environmental matters in Chile. This regulation contains all the principles that govern environmental regulations in Chile, such as environmental responsibility, the prevention principle, "polluter pays", gradualism, the participatory principle and efficiency.

Other key environmental protection standards in Chile are:

  • Law No 20,417, Organic Law of the Superintendence of the Environment, which provides the regulatory framework for environmental compliance and enforcement;
  • Law No 20.600, which creates the Environmental Courts and a special environmental jurisdiction;
  • D.S. No 40/2012, Environmental Impact Assessment System implementing regulations (SEIA); and
  • Law No 20,920 (REP Act), which establishes the framework for waste management, extended producer responsibility (under which producers or importers of so-called "priority products" must organise and finance the collection and management of waste generated by these products) and the promotion of recycling, seeking to reduce waste generation and encourage reuse, recycling and other valorisation actions.

There are also other special laws that regulate aspects of environmental protection, such as the Sanitary Code (D.F.L. No 725/1967), the Native Forest Protection Law (Law No 20,283) and implementing regulations on the hazardous waste sanitary management and the storage of hazardous substances (D.S. No 148/2003 and D.S. No 43/2015, respectively).

The principal regulatory authority that is responsible for environmental policy is the Ministry of the Environment (MMA), which collaborates with the President in the design and implementation of environmental policies, plans and programmes. In addition, the Council of Ministers for Sustainability is responsible for proposing policies for the management and sustainable use of renewable natural resources.

The agency in charge of administering the environmental impact assessment system in Chile is the Environmental Assessment Service (SEA), which is charged with ensuring that an environmental assessment of projects listed in Article 10 of Law No 19,300 is conducted in accordance with the regulations, including ensuring the public is provided with an opportunity to participate in the environmental assessment.

With respect to environmental compliance and enforcement, the Superintendence of the Environment (SMA) is the agency within the MMA that is responsible for enforcing environmental regulations (including environmental licences) and promoting compliance.

The Environmental Courts are specialised jurisdictional bodies, independent from the Administration and of a mixed composition, whose function is to resolve environmental controversies within its competence (Article 17 of Law No 20,600) and to examine and rule on any other matter entrusted to them by law.

There are three Environmental Courts in Chile, divided by territorial areas: the northern part of Chile (Macrozona Norte) is subject to the jurisdiction of the First Environmental Court, based in Antofagasta; the central part of Chile (the Central Valley) is under the jurisdiction of the Second Environment Court, which is seated in Santiago; and the last tribunal, the Third Environmental Court of Valdivia, has jurisdiction over the southern regions of Chile.

Other government agencies have permitting and enforcement powers on environmental and natural resources matters, such as the National Geology and Mining Service (Sernageomin), the General Water Bureau (DGA), the Agriculture and Livestock Service (SAG), and the National Forestry Corporation (CONAF), among others.

The Superintendence of the Environment (SMA) has broad investigative and access powers with respect to breaches of environmental licences and/or regulations. The regulations allow the SMA to perform inspections, granting broad access powers in case of resistance, to request additional background information, to take samples and perform monitoring, and to issue injunctive measures to protect the environment before and during a sanctioning proceeding.

Regarding environmental incidents, Chilean regulations do not establish a general duty of disclosure for regulated parties, however, the SMA have the power to investigate incidents within projects that have an environmental licence. For this purpose, the SMA has established an electronic platform where those licence-holders that are responsible for environmental incidents must report such events, in accordance with the terms regulated in the respective licence.

Notwithstanding the foregoing, any person or entity may file a complaint before the SMA denouncing the breach of environmental management instruments and/or environmental regulations, having the authority to report on the results of the complaint within a period not exceeding 60 business days.

Under Chilean regulations, all projects listed in Article 10 of Law No 19,300 and further detailed in Article 3 of D.S. No 40/2012 (Environmental Impact Assessment System Implementing Regulations) must undertake an environmental impact assessment proceeding and obtain an environmental licence (RCA). The list of projects in Article 10 includes a number of productive activities, such as mining projects with production above 5,000 ton per month of mineral ore and power generating projects above 3 MW, among others. In addition, a project or activity must also be registered under the environmental impact assessment system (SEIA) in case of substantial modification.

In this context, it is relevant to note that there is one environmental licence and many sectorial environmental permits. Through the SEIA, projects can benefit from an integrated permitting regime, called a “one-stop shopping system”, through which holders must file all related environmental sectorial permits needed for the project’s implementation. As a consequence, all environmental issues arising from these permits must be reviewed through the SEIA. Thus, once the project has obtained an environmental licence, the sectorial agency cannot deny the permit based on environmental grounds.

The objective of this regime is to provide an integrated proceeding for obtaining all the relevant environmental permits for a project that is subject to the SEIA. In contrast, if a project is not required to enter the SEIA, all relevant sectorial permits (including environmental permits) must be filed independently before the proper sectorial agency.

Overall, any significant environmental impact activity will require some kind of environmental permit, whether through a whole environmental assessment proceeding (to obtain an environmental licence) or simply by a sectorial permit approval.

Various environmental regulations provide different ways in which to appeal permitting decisions. Environmental impact assessment proceedings provide for a legal action to appeal decisions of the assessment authority. At first instance, the complaint can be reviewed by the executive director of the Environmental Assessment Service (SEA) or the Committee of Ministers, depending on whether it challenges a decision regarding a project submitted through an environmental impact statement (DIA) or a full environmental impact study (EIA). Both decisions can be appealed to the competent environmental court. In turn, all environmental court decisions can be challenged before the Supreme Court through special legal remedies (ie, cassation recourses) following a regular judicial proceeding.

Sectoral permits are subject to their own appeal procedures before the common courts, regardless of whether they are environmental in nature.

Further, Law No 19,880 sets out administrative actions to have an act or decision reviewed by the issuing authority or its hierarchical superior.

The key types of liabilities that can be imposed on operators, polluters, landowners and others for environmental damage or breaches of environmental law are as follows.

Civil Liability

Civil liability is set forth in articles 51 to 55 of Law No 19,300, which establish the general statute of liability for environmental damage in Chile. The law sets out a fault-based liability regime by which any party that negligently or wilfully causes environmental damage will be liable and required to restore the damage caused. The environmental damage action must be filed before the competent Environmental Court in order to obtain relief. If the Environmental Court finds a party liable for environmental damage, tortious claims may be presented directly by affected individuals.

There are a few strict liability cases where fault is not a requirement, such as nuclear damage, oil spills and the application of pesticides.

Administrative Liability

Administrative liability arises from the violation of an environmental licence or other environmental permits as required by their own regulation. Breaches of environmental licences are regulated by Law No 20,417, which establishes a range of administrative penalties depending on the magnitude or effect of the violation (very serious violations, serious violations and minor violations). The agency in charge of enforcing compliance with environmental licences is the Superintendence of the Environment (SMA). 

There are other types of administrative penalties linked to the enforcement of other environmental permits and subject to the specific permit statute. These penalties are imposed through a sanctioning administrative proceeding, led by the competent sectorial agency.

Criminal Liability

Criminal liability can arise exceptionally, if the violation causes environmental harm and the offender has intentionally caused such harm. However, there are no general provisions that establish criminal environmental liability; it applies to isolated sectorial cases established in the Chilean Criminal Code and in Article 136 of Law No 18,892, the General Law of Fishing and Aquaculture, which prescribe that the unauthorised release of any chemical, biological or physical pollutant into the sea or a river, lake or other water body that causes damage to hydrobiological resources is unlawful and subject to criminal penalties, in addition to administrative penalties.

It is important to note that Congress is currently discussing a bill that proposes environment-related criminal offences.

In Chile, liability for historic environmental incidents or damage is restricted and subject to statutes of limitations. Also, there are no special liability rules for current landowners or operators related to historic environmental incidents caused by previous owners or operators. However, a current owner could be responsible for environmental damages caused by a previous owner under general environmental damages liability rules, if the conditions for such liability are met.

Civil liability arising from environmental damage requires the occurrence of four conditions:

  • an action that caused the damage;
  • the damage or injury to the environment (significant harm);
  • the fault or negligence of the party (fault-based system); and
  • the causal connection between the action and the damage. 

The law provides for a presumption of negligence in the case of violation of environmental regulations (such as environmental quality standards, emission standards, prevention and decontamination plans, among others). In this event, the breach of a given permit or regulation will eliminate the need to prove the third condition.

The main defences against this kind of lawsuit are centred on challenging the concurrence of any of the four conditions required for the existence of the liability; key defences include lack of evidence of the damage claimed, discussing the proper determination of the damage, and/or challenging the causality between the environmental damage and the effects of it.

It is relevant to note that this liability requires the filing of a reparation of environmental damage claim, with the purpose of obtaining reparation of the damaged environment. This lawsuit is filed before the Environmental Court of the place where the damage has occurred or has been exposed. This suit may be filed by the person who suffered the damage, by the municipalities for the actions that cause damages in their respective territories, and by the State Defence Council (CDE) on behalf of the state. 

In addition, Chilean legislation recognises strict liability in very specific cases, such as nuclear damage, oil spills and the application of pesticides.

Chilean civil law also recognises tortious liability, in which case the injured party is entitled to obtain compensation for the damages experienced, whether monetary or moral, as determined by civil courts. Nonetheless, it is important to note that damage compensation derived from environmental damage can only be filed once the Environmental Court have established, in a final ruling, the existence of liability for environmental damage; therefore, this tortious suit can only be brought after the Environmental Court’s ruling.

On the other hand, the administrative liability arising from non-compliances with environmental regulations that fall under the competence of the Superintendence of the Environment (SMA), may be imposed by said authority through the corresponding administrative sanctioning proceeding. In these cases, the general defences that may be presented are:

  • due process or a violation of defendant’s right to a defence or other fundamental rights;
  • non-configuration of the alleged infraction (materially or legally);
  • the infraction having been the consequence of a fortuitous event or force majeure; or
  • the defendant having exercised due diligence in compliance with the rules and conditions of the environmental licence.

Liability for the breach of non-environmental regulations is carried forward by the pertinent sectorial agency, following its own regulation. In general terms, the same defences that may be presented before the SMA can be used against the accusations of the sectoral agencies.

Chilean legislation dictates that either a person or a legal entity, in any of its forms, can be responsible for any environmental damage or breach of environmental legislation. The liability is extended to the company's representative, which is a general environmental liability regime by which any party that negligently or wilfully causes any environmental damage must respond to restore the damage caused.

There are some cases of strict personal responsibility set by the regulation, such as the Mine Closure Law (Law No 20,551), which establishes the personal responsibility of the legal representatives of the company for concealing the abandonment of a mining site ("concealed abandonment").

However, there are no particular rules concerning the liability of a corporate entity, although Congress is currently discussing a bill that regulate specifically the criminal liability of legal entities regarding environmental damage.

Chilean legislation does not consider that shareholders or parent companies may be liable parties for environmental damages or regulatory breaches. However, there are some legal bills that have been submitted to Congress that seek to regulate specifically the criminal liability of legal entities regarding environmental damage.

Chilean legislation dictates that either a person or a legal entity, in any of its forms, can be responsible for environmental damage or the breach of environmental legislation. This liability is extended to the company's representative, which is a general environmental liability regime by which any party that negligently or wilfully causes any environmental damage must respond to restore the damage caused.

Nonetheless, under certain exceptional circumstances, directors or other officers may be personally liable for breaches of environmental laws or regulations. An example of this is found in Article 34 of Law No 20,551, Mine Closure Law, which establishes the personal responsibility of the legal representatives of the company for concealing the abandonment of a mining site: “The company representatives of a mining industry and those who are declared responsible for breaching the execution of a closure mining plan will be sanctioned with a fine of 100 to 1,000 monthly tax units”. (The monthly tax unit (UTM) is a Chilean currency unit indexed according to inflation: 1UTM is approximately USD66.) The possible penalties that can be imposed are generally of a civil nature, such as monetary penalties.

Chile has no systematic framework governing criminal liability for environmental damage. However, Congress is discussing a bill that proposes environmental-related criminal offences.

Chilean legislation does not regulate such insurance against those penalties or sanctions specifically. However, there could be insurance coverage in such cases, from foreign insurance companies.

It is currently impossible for a financial institution to be liable for environmental damages or breaches of environmental law, and there has been no development of this kind of liability in the legislation or court rulings. However, it is important to consider that any financial institution might be subject to reputational damage if it has financed a highly controversial project.

Lender protection is not currently regulated in Chilean legislation. Therefore, lenders could protect themselves with contractual clauses of liability exemption caused by environmental damages or breaches in environmental regulations, as well as requiring borrowers to follow environmental good practice standards and establishing regular environmental compliance audits as part of the conditions of the loan.

Civil claims for the compensation of environmental damages can only be filed after the competent Environmental Court have established, in a final ruling, the existence of liability for environmental damage; therefore, this suit can only be brought after the Environmental Court's ruling. 

If the Environmental Court did not accept such claim, the affected party may only claim compensation for damages in accordance with the general rules of civil liability, in civil courts.

The courts cannot award punitive damages, since Chilean legislation sets the “integral reparation of the damage” as a principle in liability matters. Therefore, it is not possible to settle compensation beyond the damage actually caused.

Chilean legislation does not consider class lawsuits for environmental matters. Such suits have only recently been incorporated in the areas of consumer rights and deficiency in construction.

Class or group action lawsuits are not legislated in Chile for environmental matters, so there have been no cases regarding this issue so far.

Indemnities and other contractual agreements can be used to transfer or apportion liability for incidental damage or breaches of law. These are only binding among the parties, and not on the regulators or enforcement agencies.

In the case of environmental damage claims, it is possible to go through transaction agreements between the parties. These agreements could only be used to repair the damage caused, through the implementation of actions, obligations, deadlines and reports to monitor the restoration of the damaged environment. However, such agreements cannot transfer or apportion the liability for incidental damages or breaches of law.

The legislation in Chile regulates insurance for certain risks arising from environmental damage (eg, nuclear damage). Such insurance aims to cover the eventual compensation derived from the civil liability of environmental negative impacts, but there is no general insurance to cover environmental damages or breaches in environmental laws or regulations.

In addition, some insurers in Chile offer environmental insurance to cover pollution damage, including compensation to third parties, costs of damage to the biodiversity and costs of cleaning the site when needed, but those are exceptional cases.

Although there are several statutes that address different issues relevant to contaminated land, Chile does not have one landmark statute that regulates the remediation of contaminated land or provides guidance as to liability and apportioning such liability among multiple liable parties.

The general approach taken by regulatory agencies to address the remediation of contaminated land is the use of the environmental damage liability provisions set forth in articles 51 to 55 of Law No 19,300. These provisions establish a general environmental liability regime by which any party that negligently or wilfully causes any environmental damage must respond to restore the damage caused. The environmental damage claim must be filed before the competent Environmental Court in order to obtain redress. 

It is important to note that, parties seeking redress for soil contamination, can also invoke the civil actions which arise from tortious liability, as regulated by the Civil Code, whereby an affected party may request monetary compensation if affected by a tortious conduct.

Chile does yet not have a climate change law. However, as a party to the Paris Agreement, the Vienna Convention for the Protection of the Ozone Layer, the Kyoto Protocol, and the Montreal Protocol on Substances that Deplete the Ozone Layer, it has developed a series of plans and policies to address this matter, especially through the Second National Action Plan for Climate Change (2017-2022), which establishes adaptation and mitigation guidelines.

With respect to adaptation, the National Adaptation Plan 2017-2022 and the Sectorial Adaptation Plans for the forestry and livestock sector, the health sector, biodiversity, and the fisheries and aquaculture sectors stand out in this regard. Adaptation plans are currently being prepared for the energy sector, tourism, water resources and cities.

With respect to mitigation, the policy comprises the following action areas:

  • maintaining and updating the National Inventory of Greenhouse Gases;
  • developing and implementing mitigation actions and policies, including mitigation actions for specific sectors (such as energy, transport, forestry and agriculture, low carbon strategies for housing, urban planning and public infrastructure) and cross-sectorial mitigation actions;
  • determining the emissions of short-lived climate pollutants (CCVC) and implementing mitigation measures;
  • implementing accounting systems and measuring, reporting and verification systems; and
  • implementing actions to comply with international climate change mitigation commitments.

The policy also sets the standard for the ministries and related agencies, which are developing different initiatives, such as the National Strategy for Climate Change and Vegetative Resources of the National Forestry Corporation, and the Energy Sector Mitigation Plan of the Ministry of Energy (adopted on 4 December 2017), among others.

The Ministry of the Environment is currently working on the final details of the Climate Change Bill before it is introduced to Congress.

Chile's Intended Nationally Determined Contributions to the Paris Agreement is the reduction, by the year 2030, of CO₂ emissions per unit of GDP by 45% compared to the level achieved in 2016. This policy also includes a specific target for the forest sector of sustainable management and the reforestation of 200,000 hectares of mainly native forest, and the forestation of 100,000 hectares, mostly with native species.

Until 14 November 2019, this proposed NDC policy will be under a public consultation process, through which the Ministry of the Environment will receive observations and/or comments submitted by any person or entity.

In addition to this commitment, there are various inter-agencies efforts – for example, the Mitigation Actions and policies aiming at GHG reduction, and the implementation of the National Greenhouse Gas Inventory System of Chile and the National Management Programme of Carbon Footprint (HuellaChile) for the voluntary management and quantification of GHG.

In Chile, there is no special treatment regarding asbestos, but its regulation falls under the hazardous substances category within the current legal structure. However, there have been some historic initiatives regarding this issue.

The first legislation that referred to asbestos was published in 1954, and established the maximum standard of asbestos allowed in areas with a human working force. This standard was updated in 1976.

In 2001, through the enactment of D.S. No 656/2000, the following activities were prohibited:

  • production, import, distribution, sale and use of crocidolite (blue asbestos) or any material or product that contains it;
  • production, import, distribution and sale of construction materials containing any type of asbestos;
  • production, importation, distribution, sale and use of chrysotile, actinolite, amosite, antophyllite, tremolite and any other type of asbestos, or a mixture thereof, for any element, thing or product that does not constitute construction material (with a few exceptions as set forth in Article No 5).

The key law governing waste regulation is Law No 20,920, which establishes a framework for waste management, extended producer responsibility and the promotion of recycling (REP Act), as well as the principles that guide the legal and regulatory treatment of waste, which has been in force since 1 June 2016.

In addition, Chile has specific regulations on hazardous waste, landfills, industrial waste, sludge, and the emission of liquid waste.

In this context, other key legal bodies that govern the storage, transport and/or disposal of waste, as appropriate, are:

  • D.S. No 148/2003, which establishes the Hazardous Waste Sanitary Management Regulations;
  • D.S. No 594/1999, which approved the Regulations on Basic Sanitary and Environmental Conditions in Workplaces and provides regulations for the storage of industrial waste;
  • D.S. No 6/2009, which approved the Regulations on the Management of Waste from Healthcare Centres;
  • D.S. No 4/2009, which approved the regulations on the management of sludge generated by sewage treatment plants; and
  • D.S. No 189/2005, which approved the regulations on basic sanitary and safety conditions in landfills

Law No 20,920 (the REP Act) establishes an extended producer liability system according to which the producers (ie, generators) of "priority products" are responsible for the management of the waste that they commercialise in the country; therefore, even though there is a third party that disposes of the waste, the producer will remain liable for such waste until its final disposal or treatment by authorised facilities. The proper and legal transfer of waste to another entity with the proper permits and authorisations for managing such waste (eg, waste landfill or a waste treatment facility), releases the producer of any further liability.

With respect to the extended producer responsibility scheme regulated by the REP Act, producers must:

  • meet certain collection goals;
  • register, organise, collect, store, transport and recycle waste; and
  • ensure that waste management is carried out by an authorised waste manager.

The same law determines the priority products, which have been selected due to their massive consumption, size, toxicity, feasibility to be valued and the existence of compared experiences at the international level. Accordingly, seven residues have been established as priority products: lubricating oils, electrical and electronic equipment, batteries, containers, packaging and tyres. 

Regulations will be issued periodically to establish the goals for recycling, setting an amount of waste that each producer or vendor must manage and valorise.

The law establishes that any potentially recoverable waste must be destined to that end, in order to avoid its elimination, which is the responsibility of the producer.

For that purpose, the Ministry of the Environment will issue regulations that establish the obligation for the producers of priority products to collect and value certain quantities of priority products. In addition, these regulations may establish annexed obligations related to labelling, eco-design, prevention of waste generation, communication and awareness-raising strategies, and the limitation of hazardous substances in waste, among others.

At present, the Ministry of Environment has issued two regulations in the context of Law No 20,920 (the REP Act):

  • the Regulation of the Recycling Fund (D.S. No 7/2017), which allows the financing of projects, programmes and actions aimed at preventing the generation of waste and promoting their separation, reuse and recycling; and
  • the Goal Setting Regulation, which establishes the mechanism to set the goals for the recycling of waste from priority products (D.S. No 8/2017).

In October 2019, the Ministry of Environment indicated that the regulation that sets the goals for the recycling and valorisation of discarded tyres has finished its elaboration process and is ready to be referred to the General Comptroller’s Office for its legality control before its enactment. In addition, the draft regulation that sets the goals for the recycling and valorisation of containers and packaging was published in the Official Gazette, opening a public consultation process for 30 business days.

There is a mandatory requirement to report any environmental incident associated with the RCA to the Superintendence of the Environment through the Environmental Monitoring System, within 24 hours of the event, providing all the background information on the incident, and also its effects and implemented containment measures.

Beyond the scope of the corresponding requirements set forth in an RCA, there is no mandatory requirement to report environmental incidents to the environmental authority, however, Law No 20,417 establishes, as other comparative enforcement systems do, a set of regulatory mechanisms to promote environmental compliance. Among these mechanisms, the self-report was established to provide incentives to regulated parties to proactively correct any discovered environmental violations, disclose such information and prepare adequate compliance proposals.

In this context, Law No 20,417 establishes that, once the self-report is submitted by the offender and approved by the SMA (if regulatory requirements are met), said authority “shall exempt [the offender] from the amount of the fine”. The second and third time, however, the offender will only get a progressively smaller reduction (75% and 50%, respectively). In turn, the offender must submit a compliance programme and execute it satisfactorily.

Any person has the right to access the environmental information held by the Administration. The access to public information is regulated by a special law (Law No 20,285, the Access to Public Information Act), which applies to different agencies.

Additionally, by legal mandate, the Ministry of the Environment administers a National Environmental Information System (SINIA) with general environmental information of free access, including a list of all the authorities that hold environmental information.

In the same line, the Superintendence of the Environment (SMA) has developed and manages the National Environmental Inspection Information System (SNIFA), a public access website, in accordance with the provisions of Law No 20,417 (articles 31, 32 and 33) and in the SNIFA Implementing Regulations (D.S. No 31/2013 of the Ministry of Environment). The site provides information to the public about the control and sanctioning proceeding carried out by the SMA, under a territorial approach, along with rulings, judgments and resolutions issued by authorities, related to environmental matters. In addition, it includes access to public records of environmental instruments and sanctions.

Companies have the duty to disclose environmental information about their projects under various regulations: the environmental decontamination plans or environmental permits, through periodic reports, and through monitoring on web platforms, among others. For example, emissions, waste and/or the transfer of pollutants are publicly administered by the Ministry of the Environment, with information provided every year from the companies.

Environmental due diligence is one important part of the general due diligence conducted in M&A, finance and property transactions.

Under a share or asset sale scenario, the general rule is that the company will be liable for historic environmental damage not covered under the statute of limitations, and for breaches of environmental regulations. The current owner of the company or of its shares will have to bear the burden of dealing with such liability. Therefore, contractual liability distribution and indemnity clauses are common in these transactions.

Typically, environmental due diligence is conducted through a desk review of relevant environmental documents and files, such as permits, monitoring reports, enforcement notices and communications with authorities, among other pertinent information. However, in certain cases, it is necessary to undertake a more thorough and site-specific environmental due diligence, which includes a visit to the site, sampling and other site-specific environmental investigations.

Under Chilean legislation, in most cases the seller is not required to disclose any environmental information to a purchaser. Therefore, proper environmental due diligence is essential in the acquisition of industrial properties or companies.

There was an important modification to the tax regime in 2014, which included a tax on emissions (carbon tax) from mobile sources and fixed sources, which has progressively introduced some relevant issues. 

The first of these amendments imposes a tax on the registration of new private passenger vehicles, which depends on the retail price of the car, the efficiency of fuel consumption and the emission of nitrogen dioxide (NO₂).

The second amendment imposes a tax on emissions of carbon dioxide, nitrogen dioxide, sulphur dioxide and particulate matter (carbon tax). This tax applies to establishments whose fixed sources made up of boilers or turbines generate at least 50 MW of heat, either individually or as a whole. The thermoelectric power stations and pulp mill industries are included in this amendment.

The carbon tax levied on stationary sources entered into force in 2017, at a rate of CLP5 per ton.

In addition, Chile is reviewing different carbon pricing alternatives for complementing its carbon taxes. In 2018, the government filed in Congress a new bill that proposes to amend the Tax Reform of 2014 (Bill No 12043-05) which incorporates specific modifications on the emissions taxes and considers offsets for taxpayers who implement projects for reducing CO₂ emissions. 

Eelaw, Medio Ambiente y Energía, Asesorías Legale

Av. Apoquindo 3910
Piso 7
Las Condes
Región Metropolitana
Chile

+56 2 2207 7896

priquelme@eelaw.cl www.eelaw.cl
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Law and Practice

Authors



Eelaw, Medio Ambiente y Energía, Asesorías Legale is a highly specialised environment, energy and natural resources law firm. With extensive and proven experience in the legal analysis required for the development and implementation of projects, proceedings before the public authority, and the study of environmental regulations. The firm believes in the full compatibility between economic activity and the sustainable development of the country, fully respecting the rules in force and generating positive links between the clients and their surroundings and communities. Eelaw goes further, taking as reference the development of international environmental practices, allowing the firm to bring to Chile the most advanced perspectives in the region and the world. The team is composed of 12 highly specialised attorneys and seven paralegals who also works in sophisticated environmental matters. The team's main areas of practice are: project development and permitting, environmental litigation, environmental compliance, regulatory development and monitoring and pollution control and circular economy.

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