Written by Ian Cardenas, Paralegal
In an effort to catalyse economic growth and attract investment, the Chilean Government has unveiled two landmark bills poised to revolutionise the country’s permitting landscape. Among these, the Legislative Framework for Sectoral Authorisations, colloquially known as the ‘Intelligent Permit System,’ and the amendment to the General Bases of Environmental Law, dubbed ‘Environmental Assessment 2.0,’ stand out as pivotal initiatives aimed at dismantling barriers to investment in Chile. Recognising the intricate web of permits and regulatory hurdles that have historically hindered progress, these measures represent a concerted effort to modernise and streamline the permitting process, heralding a new era of efficiency, transparency, and accountability in project authorisation. By addressing the complexities inherent in obtaining sectoral permits and enhancing environmental assessment procedures, these bills signal a transformative shift towards a more investor-friendly environment, with far-reaching implications for Chile’s economic development and sustainability.
Context
On 10 January 2024, the Chilean Government unveiled two of the most anticipated bills of 2024: The Legislative Framework for Sectoral Authorisations, also referred to as the “Intelligent Permit System” and the amendment to the General Bases of Environmental Law referred to as “Environmental Assessment 2.0”, which aim to directly address the complexity of permit granting, a major obstacle to investment in Chile.
The term “sectorial permits” refers to the set of all non-environmental permits needed for the development of different investment projects in Chile. For example, today, undertaking certain investment projects, such as large-scale mining or energy endeavours, may involve processing and obtaining around 380 different permits, which are granted by 37 different public services and require compliance with multiple different laws.
The Intelligent Permit System introduces a series of measures to considerably reduce permit processing times. On its part, the Environmental Assessment 2.0 project contemplates the modernisation of the Environmental Impact Assessment System (SEIA). Thus, both bills address an ongoing challenge that has impeded the progress of both public and private investment. It is expected that these measures will have a significant impact, not only on major investment projects, but also across the entire spectrum of projects.
What are the key aspects of the bill?
The key aspects of the Intelligent Permit System bill are as follows:
- “One-stop shop” platform: Currently, developing certain projects requires obtaining many different permits and dealing with multiple public services and agencies. Under the bill, all sectoral permits will be processed through a unique platform. Thus, the SUPER platform will be established as the State’s digital centralised platform for the processing of all sectoral permits and the submission of affidavits by project owners. Also, through this platform, investors will have continuous access to the specifics of their authorisation requests.
- Maximum Deadlines and Administrative Silence: While some permits are subject to legally defined maximum terms, many lack such regulations. Furthermore, it is common for deadlines to go unmet due to the absence of explicit penalties for delays incurred by specific public services. The new legislation aims to establish universal maximum deadlines for all procedures and introduce the use of administrative silence as a final step under specific circumstances. Administrative silences entail a default decision after the evaluation period concludes, with outcomes being positive or negative based on the permit type. The bill comprehensively addresses all 380 existing permits, introducing a mechanism for their categorisation into different types, each associated with a specific form of administrative silence.
- Threshold System: One of the key aspects of the reform is the implementation of a threshold system. A procedure will be established to replace certain authorisations – which can take a long time to obtain – with sworn statements or other techniques based on the risk associated with each project. These processes will result in differentiated processing routes based on fixed risk thresholds.
- Improved Governance: The bill introduces the creation of a new public agency to ensure compliance with processing standards and coordinate and guide different public services in both their processing processes and the continuous improvement of the regulatory framework for sectoral permits.
Conclusion
The bill entered the Chamber of Deputies on Monday 15 January and is currently going through the first constitutional procedure. The introduction of the Intelligent Permit System bill alongside the amendment to the General Bases of Environmental Law represents a significant step forward for Chile in streamlining its permitting processes and fostering a more conducive environment for investment. By addressing the complexities and inefficiencies inherent in the current system, these legislative initiatives aim to not only reduce processing times but also enhance governance and accountability in permit granting. With the establishment of a centralised platform, implementation of maximum deadlines and administrative silence measures, adoption of a threshold system, and improvements in governance, the government is poised to facilitate smoother and more expeditious authorisation procedures for a wide range of projects. As the bill progresses through the legislative process, its potential to unleash investment opportunities and drive economic growth remains promising, signalling a positive trajectory for Chile’s development in the years to come.
