Why Chile's constitutional convention isn't done with mining yet

Mining has been a focus of the environmental and economic model committee in Chile’s constitutional convention. 

But in the end, the 154-member body tasked with writing the new constitution – which leans left-of-center – rejected the committee's most controversial proposals, such as nationalizing the country's copper and lithium mines.

BNamericas talked with Bessy Gallardo, a member of the environmental and economic model committee who is a self-proclaimed communist and current member of the committee on the harmonization of the final constitutional text, about the constituent work and how their discussions could impact mining sector. 

BNamericas: What have been the positive developments of this constitutional period and what has been negative about it?

Gallardo: I don't see anything negative about this process. If we compare it with the 1980 constitution, this has been a democratic process that emerged as a solution to the 2019 social crisis.

As for the committee, I would not have mixed the issue of the environment with the economic model in it. I would have sent mining matters to an economic committee. It has been said that members of our committee are not mining experts. In my case, I had to study the subject.

Evidently, we, myself included, have a political tendency toward the left and we believe the State must exploit Chile's natural resources. We are against the neoliberal and extractivist model. We always bet on the nationalization of minerals, which is already included in the 1980 constitution.

Our state-owned companies, such as Codelco, are greatly diminished because Chile has promoted the private sector more. In addition to improving public companies and diversifying our productive matrix, we should create more public companies to increase government collection and finance all pending social rights.

Exploration and exploitation must be done by the State, either with public-private alliances or only by the State. But as these articles were not approved, we’ll have a broad discussion process before us which will take place in other bodies, such as in the transitory norms committee or in congress.

BNamericas: Some experts said the State does not have the financial power to carry out all mining activities. What is your response and how much do you value private investment?

Gallardo: I believe Chile has made a big mistake in leaving exploitation to the private sector. The mistake is that we do not have a royalty that effectively finances the country's needs. So establishing a royalty with a clear percentage is a priority because there is a specific tax on mining that is only levied at around 3% and we could have higher revenues. We are leaders in copper production.

I'm not just concerned with the amount of money that is involved in mining projects, but with the amount of power that is involved to the detriment of people. What should interest me is how we finance the lives of Chileans because that's why we do politics. I understand the concern of the miners, especially the big ones, but they have to contribute their part and establish a fair royalty. [Miners] cannot take the wealth of Chile at bargain prices.

BNamericas: What were the arguments in favor of changing the concessions model to an administrative authorization one?

Gallardo: The assumption was always to understand that mining has a finite character, because a vein cannot last forever. But above all, this change would have made it clear that if all the requirements of the Chilean State were not met, [mining operations] had to end.

The property of the mineral belongs to Chile, so whoever extracts must pay what corresponds to that mineral, and if not, it must end. There are two parts here: The State, which is the custodian of Chilean assets, and the private sector. I don't think it's wrong for private companies to exploit the mineral, as long as they pay what is fair, take care of the environment and fulfill their social role. Complying with that, go ahead.

I understand the concern about administrative authorizations because according to some, they did not provide legal certainty about property, as is the case today. But we must understand that those resources can finance social rights such as housing, health, and education, which are demands of the people. 

BNamericas: In the approved articles, small miners are protected, but large mining was left out.  

Gallardo: We can't squeeze small-scale mining, because their business is too small. But with large mining, we are talking about billions of dollars, which are traded on international stock exchanges, where their businesses are sold in long terms, where our copper has no final product in the country. So, it's different.

We need to have a great discussion at the country level, because [companies] are not taking the mineral out, without paying what is due. Australia has a 30% [federal corporate income tax]. Why can't we? Large-scale mining does not stop gaining because of a high royalty.

In my case, as a good leftist, I believe the State should exploit minerals, whether through a mixture of public-private alliances, State intervention in companies, or solely the State. We are analyzing possible transitory regulations that make the step gradually, but trying to include fair payments.

BNamericas: What could have influenced the plenary to reject most of these big mining articles? Was there pressure from small miners?

Gallardo: As communists, we have always been very concerned about small and medium-sized companies. On May 14, an article to protect medium and small mining was approved. Ironically, that article was rejected by the right-wing members.

There is always a myth against us communists that we are all bad, but we promoted that article and won it. Now, in this new stage of work for the final constitutional text and as we are going to solve the transitory norms, mining discussions will continue [elsewhere]. 

Meanwhile, we call for tranquility because nothing has changed. We only have article 22 on nationalization and that would be it all.

BNamericas: Which of the articles that were rejected should have been included?

Gallardo: I believe that not having included the issue of administrative authorizations was a big mistake, but it was due to lack of time. We should like to have opportunities to listen to large mining players and not know about them only through the media. 

BNamericas: What are your perspectives for this harmonization stage? What does the draft need to be well-structured and coherent?

Gallardo: The objective is to correct some issues that are repeated, others that are inconsistent, review the concepts used. The harmonization looks for consistency in the text. The transitory articles committee is more political, and they will check certain issues that were not completed in our first stage.

It's there where we could finish exhausting mining [debates]. Then, quite interesting new discussions will arise. It could happen that transitory norms are not in line with President Gabriel Boric's program, but these will be transitory articles for economy, mining, social rights, among others, which must be met anyway [in case the constitutional charter is approved].

By mid-June we will see how the [proposed] constitution really is, because essential pieces are still pending.

BNamericas: A recent poll suggested over half of voters will reject the text in the plebiscite on September 4. What do you think about that?

Gallardo: We must face profound self-criticism, starting with the fact that many members have never been in politics, including myself. And that is very important, because nobody was trained to speak to the press. We had colleagues who told the press that we’d “go after Escondida,” which was a serious mistake, because obviously we will never go after Escondida. 

We hope Escondida mining does well and pays us more taxes to be able to finance more things. But some colleagues didn't study. This is a constitution, we should be constantly studying. We are not all lawyers; we are not all mining experts.

In my case, I had to study a lot, read the mining code, and that was our responsibility as [constitutional convention] members, just like a lawmaker or senator. But not everybody did that.

I don't think the reject option will win. It won't be in the range of 80% [in favor] like in the first [plebiscite, when the constitutional convention was approved]. But we’ll have to see and start working very hard to win in the exit referendum on September 4, where voting will be mandatory.

So there will not be high abstention as during the previous [plebiscite] or the election of the [convention] members. We have to go and convince people who are not yet convinced to make them see that this new constitution is supporting people.

BNamericas: You will be campaigning?

Gallardo: On July 5 [after the presentation of the final text] I will start preaching the word of the new constitution. The constitution is looking beautiful, and I believe that there are parts of the 1980 constitution that are not bad. But the current text is beautiful, without even having gone through harmonization. People have said that there are 499 articles approved, but we will have to remove about 200 that are repeated.

BNamericas: And what are the great milestones that mark a before and after in the history of Chile?

Gallardo: The 1980 constitution includes the milestone of being one of the first constitutions in the world that mentions the environment, but it mentions it related to the right to live in a healthy environment. Instead, the [drafted] constitution talks about the rights of nature. This is a great milestone, because it assumes that nature has rights just like people.

On the other hand, the 1980 constitution establishes the right of parents to educate their children, but this new constitution speaks of providing quality education that will also be free, which is a social demand that has been articulated for 20 years. So, what former president [Ricardo] Lagos did not solve, what former president [Michelle] Bachelet did not solve, what was never going to be solved with former president [Sebastián] Piñera, this constitutional text will solve.

For example, the right to decent housing, the right to understand the city as a place where someone can really live, decent work, a salary that allows you to make ends meet, parity seen as a minimum floor, all these issues that are being discussed in other countries, we are ready to implement them in Chile.

The new constitution itself is a milestone that arises from the first [gender] parity convention in the world. We are 154 people who got there thanks to a democratic vote. So everything surrounding the constitutional convention is a milestone in itself. We have so many reasons to vote in favor on September 4. Around 23:30pm on that day we can celebrate.