Chile: Trade unions lash out at copper nationalization advance in Constitutional Convention

RIO DE JANEIRO, BRAZIL – A new uproar was provoked in the mining industry by the definitions being taken by the Constitutional Convention. One week after the Environmental Commission of the Convention approved the annulment of the concessions located on indigenous lands (see related), yesterday, the green light was given to a constitutional norm initiative to nationalize copper, lithium, and other mineral mining.

The decision generated a strong reaction from the industry. The president of the National Mining Society (Sonami), Diego Hernández, set off the alarms by recognizing his extreme concern for this approval: “It is an outrage, with clear and evident legal errors”.

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It has been approved to nationalize copper, but the metal currently belongs to the Chilean State. Thus, “this measure only means nationalizing the companies, not the natural resources, which is what we want to protect. With this measure, the Constitutional Organic Law on Mining Concessions is also repealed,” he said.

And he pointed out that, when listening to the arguments that would justify this decision, “the impact of a measure of this nature is not weighed”. “It is intended that, through nationalization, the price of copper will be managed. The lack of information behind the approval of such a measure is worrying”, he said.

In the leader’s analysis, Chile has signed international treaties that cannot be ignored. “A nationalization would have serious consequences for our economy, since the affected companies will resort to those treaties to defend their legitimate interests, generating lawsuits in international courts.”

He added it means “paying the companies the amounts that the treaties and international tribunals indicate, based on what the Constitution, in force today, indicates.”

He was not the only one. The executive president of the Mining Council, Joaquín Villarino, said that it is regrettable that some members of the commission “ignore acquired rights, openly exceed their powers and even naively ignore the principle of reality”.

Although aware that these are preliminary statements, he was emphatic. “The intemperance and frequency that these ‘general approvals’ have generate an uncertainty that far exceeds that which naturally exists in a constituent process”.

Along these lines, he pointed out that a mixed system explains the success of Chilean mining. Thus, if changes are made in this area at the constitutional level, he said he hoped that they would have a long-term view and that they would be implemented and regulated efficiently and equitably”.

THE VOTES

An intense morning of definitions was recorded in the Environment and Economic Model Commission of the Convention, where a norm on Nationalization and New Social and Environmental Management of Copper Mining was approved in general, in divided votes of six of the nine articles of a norm that establishes the constitutional status of strategic natural assets.

The initiative states that natural assets such as copper, lithium, gold, silver, and other minerals are strategic assets.

The committee also approved the transitory articles that establish, among other things, that the State will take immediate possession of these assets at the time determined by the President of Chile. It was approved with 11 votes in favor and eight against.

The second transitory article, which establishes the repeal of Law 18,097 Constitutional Organic Law on Mining Concessions, among other points, was approved in general with 11 votes in favor, seven against, and one abstention.

Given what happened, the constituent Rodrigo Álvarez (UDI) stated in his Twitter account that the “Environment Commission approved the nationalization and expropriation of all strategic companies, for example, the copper industry. The price is fixed by the Comptroller’s Office and paid in installments. A legally and economically wrong norm. It entails serious international responsibilities”.

The plenary of the Constitutional Convention must analyze the text and maintain or discard its content in a 2/3 vote in each vote.

THE OTHER REGULATIONS THAT HAVE GENERATED CONCERN IN THE INDUSTRY

The progress of the Constitutional Convention is being carefully followed in the business world. On January 25, the first alert for the industries was lit when the same commission of Environment of the instance approved to annul the concessions located in indigenous lands.

Although discussion is still pending, the idea provoked the immediate rejection of the mining and forestry business associations. At the time, the president of Sonami, Diego Hernández, warned that if the norm were approved, it would increase the judicialization of projects.

Later, the same Environmental Commission rejected the freedom to undertake. It caused the president of the Confederation of Production and Commerce (CPC), Juan Sutil, to arrive on Friday at the former National Congress to express his concern about different initiatives that have been discussed in the committees of the Convention.