CHILE: An Introduction to Chile

CHILE: An Introduction to Public Law  

General Presentation 

Chile is organised as a democratic republic, governed by a presidential political system and a legal system based on the Political Constitution of the Republic of 1980. The latter has undergone several reforms and is currently in the process of being replaced.

Chile has a sectorial Public Administration, made up of ministries, governors' offices and public services created for the fulfilment of the administrative function. Additionally, our country has autonomous state bodies, such as the Public Prosecutor's Office, the Constitutional Court, the Electoral Service, the Comptroller General of the Republic, the Central Bank, among others.

New developments in Public Law for regulated activities

Currently, Chile does not have an administrative litigation procedure for the resolution of legal conflicts of an administrative or constitutional nature between individuals and the state.

For this reason, the ordinary courts of justice (the Courts of Appeals and the third chamber of the Supreme Court), the Constitutional Court and the Office of the Comptroller General of the Republic have been the bodies that have assumed this function in a dispersed manner.

These bodies have ruled both on general administrative law issues (administrative act and administrative procedure, sources of law, public powers and administrative organisation, administrative sanctions, public property, administrative contracting, public function, judicial control of the administration, state liability, expropriation, among others) and on legal conflicts in many sectoral spheres, with notable rulings on environmental, urbanistic, electricity, telecommunications and health matters, among others, that have outlined and updated the criteria for the resolution of legal conflicts of Public Law.

In recent times, certain relevant criteria have been developed for regulated activities, among which we wish to highlight the following:

In the area of social security health, the Supreme Court issued two rulings that have an impact on this sector and will probably result in the current government pushing for a legal reform of the system. In this context, in August 2022 the Supreme Court annulled the increase in the annual base plans of the Pension Health Institutions (better known as "Isapres"), as it considered the adoption of a general increase to the affiliates to be arbitrary, without providing background information to justify such increase to each of the affiliates individually, and without basing its decision on the parameters established in the law.

On the other hand, in December 2022 the Supreme Court also ruled on certain aspects of the contractual relationship of the affiliates with the Isapres, leaving without effect the “factor tables” that these have associated with the respective contracted health plans, taking into consideration criteria related to the base health plan, the prohibition to elaborate factor tables by sex and age, among other aspects.

In the area of transparency and access to information, a recent Supreme Court decision has pointed out that the background information held by the Administration regarding regulated activities is public information, stating that its release to third parties in such a case would not constitute an infringement of the economic or commercial rights of the operators of the respective industries.

Finally, another relevant aspect for the investment projects in recent times has to do with the impulse to the dictation of administrative norms to give certainty on the installation of the green hydrogen industry associated to energy infrastructure, considering the sustained increase of the projects that seek to use this renewable energy source.

In this context, the Ministry of Energy has announced that an "Action Plan 2023-2030" will be carried out, with the objective of advancing in the corresponding regulatory framework, the promotion of specialised human capital and the generation of public baselines to achieve the deployment of this industry, tending to the dictation of regulations focused on the use of green hydrogen as an energy vector, as well as in the determination and strengthening of the public institutions that will be in charge of the processing of the respective permits.

For 2023, the government has also announced various legal reforms that will be relevant for certain industrial and commercial sectors, including a reform of the National Consumer Service, a new Fisheries Law, projects to strengthen and help Small and Medium Enterprises (colloquially known as "Pymes"), an improvement in the environmental evaluation process for investment projects and the strengthening of environmental institutions, among other aspects.

The constituent process 

In 2019 a process to replace the 1980 Constitution began in our country, for which a Constitutional Convention, composed of 154 democratically elected citizens, drafted a proposal for a new Constitution. This text included relevant changes to the country's political, institutional and economic system, generating varied discussions on aspects such as plurinationality, justice systems, indigenous consultation, the regime of natural resource exploitation, among others, incorporating certain norms that could have influenced the activity of regulated industries.

The proposal was rejected, however, by the popular vote in a plebiscite that was specially called for this purpose in September 2022. This prompted the start of a new process that recently resulted, in December 2022, in the signing of an agreement between most of the political parties with parliamentary representation. Within the framework of this agreement, it was decided that a proposal for a constitutional text would be drafted by a "Constitutional Council", composed of 50 citizens democratically elected through a plebiscite to be held in May 2023, and 24 experts appointed by the National Congress. This proposal will have to be ratified by the citizens through a mandatory plebiscite to be held in late 2023 or early 2024.

Based on the experience of the previous constituent process – in which no broad agreements were reached among the participating political forces – and the characteristics of the new body proposed for the drafting of the constitutional text, it is expected that the text of the new constitutional proposal will be minimalist in nature, with a special emphasis on institutional and procedural aspects, excluding, consequently, the dictation of rules that may compromise regulated industries.