Excessive bureaucracy in obtaining project permits—often referred to as “permitting”—is a matter of growing concern in the mining and energy industries. La Tercera consulted experts to explore the causes of this issue and how to resolve a problem that could impose a significant economic cost on the country.
By Sebastián Labrín
Sebastián Herrera, partner at Lathrop Mujica Herrera y Diez Abogados
For the lawyer and former head of the Sustainable Development Division at the Ministry of Mining, “to achieve sustainable growth, it is essential that the State provides timely and accurate responses to investment permit requests.”
He adds, “according to the National Commission for Evaluation and Productivity, a new mining project takes about seven years to obtain all its approvals, while data from the SEA indicates that just the environmental qualification of an Environmental Impact Study takes nearly 1,000 days.” According to the expert, “many of these bottlenecks do not require new laws, but rather urgent improvements in management: simplifying and digitizing procedures, implementing single windows, and strengthening internal state coordination. It is also necessary to move toward risk-based regulation, as recommended by the OECD.”
He further notes, “currently, the permit requirements are so imbalanced that a massive festival with complex electrical connections like Lollapalooza does not require a specific electrical permit (only a declaration); meanwhile, installing a guard booth in a rural area requires at least five sectoral permits.” In Herrera’s view, “providing certainty means reforming the recursive environmental system that leads to extreme cases like Dominga, which has remained unresolved for more than a decade, seriously affecting national investment.”
Fiorella Ulloa, head of policy and regulatory affairs at consulting firm Plusmining
According to the political scientist from UC, “the main bottleneck in the current permitting system for mining projects lies in the excessive duration and complexity of the processing. A new metallic mining project, involving tailings or other major hydraulic works, can take up to 138 months to complete if it requires an Environmental Impact Assessment (EIA), due to sequential procedures, high rejection rates for certain permits—such as from CONAF and the regional health authority—and risks such as archaeological findings or legal challenges to the environmental resolution (RCA).”
Ulloa suggests that a potential solution “requires a comprehensive approach, given that multiple state agencies are involved at different stages of the process, even after the environmental qualification resolution is obtained. One of the main recommendations is to reduce processing times by prioritizing simplification and standardization of key permits.”
She adds, “it is important to understand that 20% of Chile’s GDP and 10% of its employment are directly and indirectly linked to mining. Six percent of the country’s tax revenues come from mining, and 18% of investment is mining-related, with over US$10 billion invested annually. As a result, these delays negatively affect the country’s economic development by curbing investment, employment, and tax collection. Streamlining the process would help attract capital, stimulate growth, and better leverage the opportunity offered by the global energy transition.”
Winston Alburquerque, partner at law firm Vergara, Galindo, Correa (VGC)
The UC law professor and natural resources expert explains that “if we could classify the stages required to develop a mining or energy project, they would fall into three categories: mining and electrical concessions (the ‘what I exploit’), land use and environmental and sectoral permits (the ‘how I exploit it’). The first two stages function relatively smoothly, but the bottleneck arises in the third: the main environmental permit, which is the Environmental Qualification Resolution (RCA), and the sectoral permits that depend on it.”
Regarding solutions to the problem, he argues that “the natural regulatory evolution in high- standard countries like ours is to continuously add more permits. It is very difficult to go backward and reduce the number of authorizations. The only way for this excess of permits to generate positive outcomes is by creating management mechanisms that use technology. The focus should be on establishing faster and more efficient mechanisms through digital platforms within the administration that allow for expedited processing.”
According to the expert, “permitting itself is not the problem. What is harmful is the lack of appropriate mechanisms for processing and oversight, which generates uncertainty and is highly detrimental to economic development.” However, he highlights that one of the core issues with excessive bureaucracy lies in the “lack of coordination and attitude among public agencies. For instance, a change in the water intake point on public land (in the country’s desert) must be processed by the General Water Directorate but cannot begin until prior authorization is obtained from the Ministry of National Assets, which can take around a year. A matter of attitude: the approval of a major hydraulic work can easily take three years.”
Rodrigo Ropert, senior counsel at Aninat Abogados
“The majority of projects entering the Environmental Impact Assessment System (SEIA) are processed within reasonable timeframes and without major complications. Environmental assessment is an efficient mechanism for improving project design and introducing community- oriented enhancements. In this regard, the so-called permitting crisis is not the general rule,” notes Rodrigo Ropert. However, he adds, “some large-scale projects, particularly in the mining sector, face extremely complex assessments, which drive up both costs and processing times. If community opposition is added to the mix, this results in administrative and legal litigation, and the timeframe to have certainty that the environmental permit won’t be revoked can lengthen significantly—discouraging investment.”
He highlights the case of the Los Bronces Integrados project in the Metropolitan Region, “which aims to convert one of Chile’s largest open-pit copper mines into an underground mine, involving a US$2.5 billion investment. This is an example of complex, uncertain, and costly processing.” Ropert recalls that “the project’s EIA was submitted to SEIA in 2019, initially rejected in 2022, and then overturned and approved by the Council of Ministers in 2023. However, multiple legal challenges from communities are still pending resolution by the council, which could pose political costs for the government in an election year.”
María Luisa Baltra, lawyer and professor at UC and Finis Terrae University
The extensive number of permits “required for various activities affects the country’s investment and production growth. There are situations where the process becomes slow, and the resulting impacts affect multiple projects and sectors, especially mining,” says the lawyer, in reference to the current system’s permitting bottlenecks.
A recurring problem, in her view, is that “some of the proposed regulations have been developed without understanding the realities of different regions of the country. It seems that changes are designed with large companies and high profile projects in mind, rather than the people carrying out small-scale economic activities that contribute to national growth—who may not even require these permits but are still affected by regulatory changes.”
To address this, she argues, “a deeper review is needed: analyzing how the institutions involved in environmental permitting are functioning, whether they have sufficient personnel, budgets to improve infrastructure, and a clear understanding of their needs. Only then can appropriate changes be made—because modifying regulations without fully understanding the problem may not achieve the intended objectives.”
Source: La Tercera