CHILE Trends and Developments Contributed by: Pablo Méndez, Christian Rojas, Pablo Neupert and Vicente Huidobro, TM Abogados
ject timelines are long and the procurement of per- mits involves multiple agencies. The ability to anchor investment decisions on known legal bases for up to eight years will allow project proponents to reduce exposure to legal or regulatory shifts that might jeop- ardise viability or alter financial forecasts. Strengthening environmental oversight: the SMA reform Alongside these advances, Chile is also debating the modernisation of the Superintendence of the Environ- ment (SMA), the agency established under Law No 20,417 responsible for environmental enforcement and sanctions. The reform project, having passed general approval in the Senate, aims to strengthen SMA’s institutional structure, improve the efficiency of its sanctioning pro- cesses, and incentivise voluntary environmental com- pliance. It is structured around six key axes, intended to refine the state’s response to non-compliance and promote a more preventative and co-operative envi- ronmental governance. Among the most notable elements are the following. • Differentiation of sanctioning procedures according to the severity of the infraction, to expedite minor cases and focus resources on complex ones. • Reassignment of competencies in specific matters – such as noise control – to optimise the distribu- tion of responsibilities across agencies. • Incorporation of corrective and oversight mecha- nisms that prioritise early remediation before apply- ing formal sanctions. • Adjustment in complaint handling, including the possibility of anonymous submissions, to encour- age citizen participation and early detection of infractions. These changes signal a shift from a predominantly punitive model towards responsive regulation, blend- ing deterrence, prevention and remediation. Practical- ly, they may yield a more efficient, flexible and predict- able oversight regime, encouraging early resolution of non-compliance before escalation to formal penalties.
Yet the reform also introduces new sanctioning tools that merit careful attention from project holders. • While existing maximum fine caps remain, the SMA would be authorised to double the fine when the economic benefit obtained by the infringer exceeds the legal maximum. This enhances proportionality and removes incentives to violate where illicit gains would outweigh the cost of non-compliance. • For very serious infractions, the project allows the SMA to revoke not only the RCA of an investment project, but also other environmental operating permits issued by sectoral authorities. These modifications would significantly broaden the reach and deterrent power of the sanctioning regime, compelling companies to bolster internal compliance and monitoring systems, especially in sectors where multiple permits and competing authorities intersect. However, since the bill remains under parliamentary review, its provisions could undergo material changes; it is thus prudent to monitor legal alerts and regulatory developments to anticipate their practical effects. Reform to SEIA: “Evaluación Ambiental 2.0” Another structural reform under discussion, Environ- mental Evaluation 2.0, proposes substantive amend- ments to Law No 19,300, with the central aim of strengthening the environmental permitting authority (SEA), diminishing political interference in decision- making, and shortening procedural timelines for pro- jects under the Environmental Impact Assessment System (SEIA). The bill eliminates the decision-making authority (the Environmental Evaluation Commissions, or COEVAs) – currently composed by Presidential Delegates and Regional Ministerial Secretaries – and transfers the approval powers to the Regional Directors of the SEA, which currently only prepare “Consolidated Evalua- tion Reports” (a proposal for the final decision to be adopted by COEVAs). Those Directors would gain the power to approve or reject projects directly, relying on technical evidence and scientific criteria, thereby enhancing the independence of the evaluation pro- cess. Inter-regional projects would be handled by the SEA Executive Directorate, promoting consistency and uniformity at the national level.
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