America's Quarterly on New Chilean Constitution

I somehow missed pasting this quote into the last piece on Chile. It was getting quite long anyways, but here goes.

A recent America’s Quarterly article entitled “Chile’s Proposed Constitution: 7 Key Points” written by Nick Burns dedicates several paragraphs to mining.

Many investors were relieved after a proposal failed to switch Chile’s current concession model, embedded in the 1980 constitution, to a system of temporary, revocable permits. But the lack of specific language governing mining in the draft charter itself could still mark a sea change in the regulatory environment—although the exact contours will remain unclear pending enabling legislation.

“There’s a general rule (in the current constitution) that every substance or mineral is available for concession and only a few of them are reserved to the state,” said Delaveau. But the draft constitution would leave that to be determined by normal statutes. The concession system might be kept, or might be replaced by revocable permits—and these rules could change as successive legislatures enact different laws, adding uncertainty.

It’s also unclear who will give permission to mine under the new constitution. It might remain the task of the judicial system, as under the current constitution; or it might be done by new administrative organs of the state.

One specific change is in the terms of compensation for expropriations. The current constitution specifies the “actual damage”—the market value, more or less—as the standard for setting the amount of compensation, while the new draft would change this to a “fair price,” a standard seen as more open to a judge’s discretion, Delaveau told AQ. Unlike the current constitution, there’s no default rule for how compensation should be awarded if the parties can’t come to an agreement.