Prepared by: Emma Gies, Benjamin Conner, Joshua Rahaeuser, and Paul Steinberg
Photo Source: Emma Gies
Territorial Use Rights agreements save abalone and small-scale fishers
Chilean law provides a first step in preventing the extinction of benthic (bottom-dwelling) animals such as the Chilean abalone (Concholepas concholepas), known as the “loco.” In the late 1980s, the Chilean fishing industry experienced a crisis due to over-exploitation of commercial fish and other sea animals. In response, the government enacted a total harvest ban from 1989 to 1992. Early attempts by to stem the crisis by allocating catch quotas to fishermen failed. With backing from the 1991 General Law for Fishing and Aquaculture, the government tried a different approach, allocating stretches of the seabed to fishermen’s organizations, which are responsible for managing sustainable harvests by the thousands of artisanal (small-scale) operations that depend on them. These four-year agreements are based on a resource management plan prepared by outside biological consultants hired by the fishing groups.
Preliminary results suggest that the new rules have been successful in promoting the biological recovery of the loco. The approach has been replicated with other artisanal fisheries that farm sea urchins, macha clams, and scallops. Territorial Use Rights are also credited with preserving Chilean artisanal fishermen’s livelihoods, which were threatened by the unregulated catches of large industrial fishing boats. The success of this approach demonstrates how social rules can be used not only to protect the environment but to provide economic opportunities to locals.
Gustavo San Martín, Ana M. Parma and J. M. (Lobo) Orensanz, The Chilean Experience with Territorial Use Rights in Fisheries, in R. Quentin Grafton et al., Handbook of Marine Fisheries Conservation and Management, Oxford University Press, New York, 2010; Andrés Marin and Fikret Berkes (2010) Network Approach for Understanding Small-Scale Fisheries Governance: The Case of the Chilean Coastal Co-management System, Marine Policy 34 (5):851-858; and González E. (1996) Territorial Use Rights in Chilean Fisheries, Marine Resource Economics 11(3): 211-218.
Tax Policy Affects Traded Goods
Import taxes are a normal part of shipping and receiving goods in a busy seaport like Valparaíso. Collection of these tariffs is regulated by the government and its agreements with other nations.
In an effort to raise revenue and encourage consumption of local goods, Chile places a 19% Value Added Tax (VAT) on all imported goods. This is policy makes imports more expensive to Chilean consumers, and therefore, less attractive to purchase. Some World Bank authors argue that Chile would do better with a lower VAT or none at all, arguing that “when the VAT is increased, resources move into less highly taxed sectors. This reduces any possible gains from the trade policy change” (Harrison et al., p. 57).
When Chile transitioned from dictatorship to democracy following the end of Pinochet’s rule, tax reform was at the top of the agenda. According to Boylan, “Despite the rhetoric of social justice surrounding this reform, careful examination of its specific components suggests that the government was much more attuned to the interests and needs of the business class. Aware of this class’s fears regarding an uncertain economic future, the government sought to design a tax reform that would not alienate the support of this crucial actor in the transition.” This resulted in a very modest increase in the VAT.
Benedicte Bull (2007) Trade Liberalization and the Spread of Regulatory Institutions: The Case of Chile, Regulation and Governance 1: 372-384; Delia M. Boylan (1996) Taxation and Transition: The Politics of the 1990 Chilean Tax Reform, Latin American Research Review 31 (1): 7-31; and Harrison, Glenn W., Thomas F. Rutherford, and David G. Tarr (2002) Trade Policy Options for Chile: The Importance of Market Access, The World Bank Economic Review 16 (1): 49-79.
Ships must discharge ballast water far from the coast
To prevent the invasion of Chilean ports by foreign marine life, ships are required to dump their ballast water – the water that ships pick up and discharge to provide stability during ocean travel – at least 50 nautical miles away from Chilean shores. Invasive species are a major cause of species extinction and habitat degradation worldwide, and ballast water is a common source of invasive species of mussels, clams, and other ocean life.
Chile already has a collection of rules regulating ballast water, known as DIRECTEMAR A-51/002. But in recent years the international community has developed a set of common rules to tackle the invasive species problem globally. In 2004 the International Maritime Organization adopted a new treaty, the International Convention for the Control and Management of Ships’ Ballast Water and Sediments. Chile is now updating its rules to reflect the practices spelled out in the treaty.
Jeremy Firestone and James J. Corbett (2005) Coastal and Port Environments: International Legal and Policy Responses to Reduce Ballast Water Introductions of Potentially Invasive Species, Ocean Development & International Law 36:291–316.
New Rules Require Oil Tankers to Have Double Hulls
Following the Exxon Valdez oil spill in the United States, the US pushed for domestic and international rules to prevent future spills, with an emphasis on double hull designs. In a double-hulled tanker, if the outside hull is breached, the inner hull will still protect the oil tanks from being ruptured. Domestically, the Bush administration implemented these requirements in the Oil Pollution Act of 1990, which specifies that all oil tankers operating in US waters must have double hulls by 2015. The Administration also submitted a proposal to the International Maritime Organization to require double hulls of all tankers internationally. The rule was adopted in 1993, requiring that all ships worldwide conform to the new standard by 2026. European officials have called for a faster phaseout.
Largely as a result of these new rules, currently over 90 percent of new oil tankers are built with double hulls. Oil tankers last for about 30 years, so it is the older ships that represent the greatest threat to coastal environments in the interim.
Tsz Leung Yip, Wayne K. Talley and Di Jin (2011) The Effectiveness of Double Hulls in Reducing Vessel-accident Oil Spillage, Marine Pollution Bulletin 62 (11): 2427–2432; Brown, R. Scott and Ian Savage (1996) The Economics of Double-Hulled Tankers, Maritime Political Management 23 (2): 167-175; and Environment News Service. Single Hull Oil Tankers Banned Worldwide from 2005. 5 December 2003.
Air pollution rules make progress, face challenges
Chile’s Supreme Decree 4/94 sets acceptable pollution emission levels for vehicles including the trains and trucks that transport cargo from this port.
Over the past twenty years, rapid economic growth and industrial development in large cities like Valparaíso and Santiago has brought significant benefits to Chileans, including a large drop in poverty. But it has also been accompanied by rapid environmental degradation. Air pollution, and especially particulate matter, have become pressing issues.
Thus far, Supreme Decree 4/94 has not made a significant dent in Chile’s particulate pollution. Unpaved roads are the norm throughout Chile and are even abundant in urban areas. Automobile traffic lifts the dust from roads, leading to further particulate matter pollution. In Santiago, regulators are experimenting with new approaches to pollution reduction including tradable pollution permits and urban forestry, but overall Chile has a long way to go in cleaning up its air.
Jessica Coria and Thomas Sterner (2010) Tradable Permits in Developing Countries: Evidence from Air Pollution in Santiago, Chile, Journal of Environment and Development 19(2): 145–170; and Mayo Santiago, Environmental Impact Statement Project Transport, Construction and Operation of Thirty Meter Telescope (TMT) on Cerro Armazones, Antofagasta Region, pp. 74-75.
Chile’s Water Code tackles sewage problem
In the 1980s, Chile shifted from a state-governed water supply structure to a market-oriented system in the hopes of modernizing the country’s water system. Organized under the new Water Code, the move was intended to increase water resources by creating more efficient ways of extracting and treating water as well as generally improving Chile’s water quality.
Due to the vast amount of volcanic sediment near the Andes mountain range, the soil is high in boron and arsenic. Because Chile relies on Andean glacier water for the majority of its drinking water, urban sewage centers focus primarily on removing these toxic substances. The process is expensive and traditionally most of Chile’s sewage water has gone untreated and has been piped directly into the Pacific Ocean. The result is a shoreline contaminated with various amounts of industrial pollutants.
The reforms introduced under the Water Code have produced some impressive results. According to Hearne and Donoso, from 1989 to 2002, urban sewerage expanded from 81 percent of urban areas to 94 percent, while wastewater treatment grew from 8 to 42 percent coverage. Chilean water reforms have also produced a great deal of controversy, which particular concern over whether water services are provided equitably throughout the country.
Luís Cáceres, D. Erika Gruttner and N. René Contrera (2009) Water Recycling in Arid Regions: Chilean Case, Ambio 21(2): 138-144; and Robert R. Hearne and Guillermo Donoso (2005) Water Institutional Reforms in Chile, Water Policy 7: 53–69
Port safety rules prevent rats, terrorism
The Port of Valparaíso must follow both domestic and international safety rules. Within Chile, all maritime vessels must abide by safety regulations stipulated by Chilean Port authorities, using rat guards, safety nets, and gangway railings upon entering the port. If any repairs are required on the boat, a port authority agent must be advised, because only authorized contractors are allowed to enter the port.
Boats and ships must also comply with rules established under a 1974 treaty called the International Convention for the Safety of Life at Sea. This treaty was amended in 2004 to include the International Ship and Port Facility Security Code (ISPS Code). The ISPS code is an international security regime designed to guard against terrorist attacks. Participating countries must first undertake a security assessment of the port under examination. Port authorities must identify essential assets that, if damaged, would harm life, the economy, or the environment. The assessment then identifies plausible risks to these assets and begins prioritizing security measures. Finally, the port evaluates their own strengths and weaknesses and puts in place a security plan.
In addition to the specialized plan, the ISPS code requires that all ports have security guards and equipment and that they monitor and control access to the port. They must also track the activities of people and cargo and ensure that security communications are available at all times.
Hartmut Hesse and Nicolaos L. Charalambous (2004) New Security Measures for the International Shipping Community, WMU Journal of Maritime Affairs 3(2): 123-138; and Verónica Montecinos, Economic Policy Making and Parliamentary Accountability in Chile, Democracy, Governance and Human Rights Programme Paper Number 11, United Nations Research Institute for Social Development, 2003.
MERCOSUR trade agreement increases trade but ignores the environment
MERCOSUR, the Common Southern Market, is an agreement among South American nations to promote free trade and economic integration. In joining the organization, Chile had to agree to new rules concerning the imports it must accept, the taxes it can levy on imports, and what it can export to neighboring countries. However, there are few provisions for environmental protection in the MERCOSUR pact. According to Hochstetler (2002), “all the environmental components of the agreement are weak, and have even been downgraded in recent years.”
Chile does not yet have full membership status in MERCOSUR, but is considered an associate member along with a number of other countries. Its involvement allows Chile preferred trading with members of the organization and beyond. For example, under the rules and agreements of the organization, certain Chilean products, including most shoes and textiles, can be sold in the European Union without paying tariffs. For manufacturers, access to markets without the additional costs of tariffs and taxes is a great benefit and therefore many Chilean export industries are likely to support to MERCOSUR agreements despite their weak environmental provisions.
Kathryn Hochstetler (2003) Fading Green? Environmental Politics in the Mercosur Free Trade Agreement, Latin American Politics and Society 45 (4): 1-32. Quote p. 1.
Antoni Estevedeordal and Kati Suominen, Rules of Origin in FTAs in Europe and in the Americas: Issues and Implications for the EU-Mercosur Inter-Regional Association Agreement, Institute for the Integration of Latin America and the Caribbean Working Paper, 2004.
Recent legal reforms bode well for Chile’s coastal environment
In 2009, Chilean President Michelle Bachelet spearheaded a major reform of the country’s framework national environmental law (Law 19.300). Working with the legislature, she created new rules that strengthened environmental regulatory agencies and increased the independence of officials responsible for environmental impact assessment so that they would not be so easily subject to pressure from economic interests.
The new rules were inspired by citizen action. In southern Chile, scientists reported in 2004 that the world’s largest population of black-necked swans, an endangered migratory population protected under Chilean law, was in serious decline in the Río Cruces wetland due to pollution from a local pulp mill. A local movement called Acción por los Cisnes (Action for the Swans) raised national awareness and focused attention on the generally poor record of implementation of Chile’s environmental laws. Calling into question the legitimacy of national institutions, this local movement crystallized concerns shared by citizens throughout the country and provided the political impetus for a large-scale reform.
Sepúlveda and Villarroel argue that the new law does not go far enough in ensuring that citizens participate in environmental rulemaking – an especially important consideration in a young democracy trying to overcome the exclusionary legacy of the Pinochet dictatorship.
Claudia Sepúlveda and Pablo Villarroel (2012) Swans, Conflicts, and Resonance: Local Movements and the Reform of Chilean Environmental Institutions, Latin American Perspectives 39: 181-200.
David Carruthers (2001) Environmental Politics in Chile: Legacies of Dictatorship and Democracy, Third World Quarterly 22 (3): 343–358.
Leave a Reply