ENVIRONMENTAL LAW REGIME FOR THE MINING INDUSTRY IN ARGENTINA (ENGLISH VERSION)
| Jurisdiction | Derecho Internacional |
(2001)
ENVIRONMENTAL LAW REGIME FOR THE MINING INDUSTRY IN ARGENTINA (ENGLISH VERSION)
Allende & Brea
Buenos Aires
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I. INTRODUCTION
Since 1993, Argentine mining law has experienced significant changes. Among others, the most important laws enacted by the Argentine Congress are the Mining Investments Act #24,196, the Mining Regime Restatement Act #24,224, the Federal Mining Treaty (Act #24,228), the Mining Revision Act #24,498, and the Environmental Protection for the Mining Industry Act #24,585.
In addition to the economic stability gained over the recent past years, the substantial changes in the mining legal regime resulted in major investments and development of the mining industry. Given the characteristics of the mining activity, the growth of the sector imposed the need for specific environmental protection regulations. The general provision contained in section 282 of the Argentine Mining Code, which only established the obligation to preserve the environment when developing a mine, did not suffice any longer1 .
In response to the need for an environmental regime for the mining industry, in November 1995, the Argentine Congress enacted Act #24,585, whereby a supplementary section on environmental protection was incorporated into the Mining Code. Although before the enactment of Act #24,585 there were other rules that
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contemplated the environmental issue to some extent, Act #24,585 was the first one to regulate the matter in a specific and systematic manner.
This paper will discuss the environmental protection regulations applicable to the mining sector in Argentina. For a better understanding of the importance of this issue, we will describe briefly the evolution and trends of the environmental law for the mining industry, including an analysis of the implications of the liability scheme under the regime of Act #24,585.
II. THE MINING INDUSTRY IN ARGENTINA AND THE ENVIRONMENTAL ISSUE
It is known that mining activities may alter the landscape, change the subsoil structure and disseminate pollutants -including toxic substances- into the air, the water and the soil. Every time an ore is extracted from the topsoil or the subsoil, a structural element is removed. Unless carefully controlled, superficial extraction techniques may cause instability in the soil gradients and erosion. As far as subterraneous mining is concerned, the upper layer of the worked site may move and/or fall down in a geological movement called "collapse"2 .
Other mining-related environmental concerns include noise pollution as a result of explosions and other mining activities, habitat destruction, impairment of the soil production capacity and undermining of landscape appearance3 .
The magnitude of the environmental impact caused by the mining activity depends largely, however, upon (i) the type of ore involved, (ii) the extraction method used, (iii) the mine site or (iv) the stage of the process.
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In Argentina, the concern for the environmental impact of the mining activity has arisen over the past five years in line with the development of the principal mining projects. This reality made it possible to foresee harmful effects and prevent to some extent unwanted consequences from the development of new mining projects.
Projects such as Bajo de la Alumbrera (copper and gold), Cerro Vanguardia (gold and silver) and Salar del Hombre Muerto (lithium), each producing on a worldwide scale, posed the need for Argentina to find environmental solutions at the same time as said projects were set in motion.
Certainly, boosting the enactment of environmental laws applicable to a novel industry such as mining raised doubts and even opposition, and some pointed out that only generic and non-stringent environmental laws should be enacted so as not to discourage foreign investments in the sector.
Instead, those who were more acquainted with the environmental issue maintained that a permissive environmental policy was likely to affect, in the end, the legal security and confidence that the legal framework offers to investors. The lack or instability of environmental rules may be a discouraging factor rather than an incentive, mainly because serious mining companies willing to undertake a medium or long-term activity, which requires a significant initial investment, may not want to take the risk tied to the uncertainty about future environmental laws.
According to estimates, the value of mining production is expected to reach u$s 2,780 million by 2005, representing a 137% increase from 19984 . Therefore, the importance of the environmental issue will undoubtedly continue to grow.
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III. ENVIRONMENTAL PROTECTION RULES IN THE MINING SECTOR
The enactment of Act #24,585 gave rise to a discussion about the convenience of having a specific legal regime setting forth the minimum environmental protection guidelines for the mining activity. Some countries like Bolivia and Chile apply their general environmental rules to the mining activity, since they lack from specific environmental laws for the mining sector5 .
Conversely, other countries such as Peru and Argentina have enacted specific provisions on the matter6 . The implementation of a specific environmental law for the mining industry permits a better adaptation to the reality of the sector and, as well, results in a higher degree of compliance and enforcement on the part of the companies and the authorities, respectively.
Although it was not until Act #24,585 was passed that a comprehensive environmental protection scheme for the mining activity was established, former mining regulations already provided for the environmental matter. For instance, the 1980 amendment to the Mining Code added a clause to the then section 282 setting forth that the mining activity must conform to the safety, police and environmental rules7 .
Later, the Mining Investments Act #24,196, passed on April 28, 1993, established the obligation for mining companies to make a special annual provision to prevent and remedy any alteration that their activity may cause to the environment. As an incentive, the law sets forth that such provision, the amount of which is fixed by each company at its sole discretion, is deductible from the income tax up to the equivalent to 5% of the extraction operating costs. This means that the income tax must be paid only when the environmental provision exceeds 5% of the operating costs. The system proves to be a
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good initiative to encourage companies to allocate funds on environmental protection activities. The Mining Undersecretariat is presently monitoring the companies' degree of performance of this kind of obligations.
The Federal Mining Treaty (passed through Act #24,228) signed by the Federal Government and the provinces on July 7, 1993, provides for the filing by both the public and private sectors of an Environmental Impact Statement, as well as for the development of new rules of promotion for environment-friendly businesses and the allocation of funds to research projects related to the preservation of the environment in the mining industry.
IV. THE ENVIRONMENTAL PROTECTION FOR THE MINING INDUSTRY ACT.
Act #24,585, passed on November 1, 1995, amended section 282 (present section 233) of the Mining Code and added a supplementary section on environmental protection for the mining industry, which was included in the Second Section of Title 13 of the Mining Code (sections 246 through 268)8 .
Under section 233 of the Mining Code, the mining industry is subject to the environmental protection provisions of the Code as well as to any other legal provisions that may be issued in the future pursuant to section 41 of the National Constitution.
Section 41 of the National Constitution calls for the establishment of minimum environmental standards by federal laws. Thus, any environmental law passed by the Congress setting forth basic rules on environmental matters pursuant to section 41 of the Constitution might result mandatory for the mining industry. This would not be reasonable since there already exist specific regulations applicable to the mining industry which establish specific minimum guidelines for the sector. A multiplicity of rules from different sources could, in practice, give rise to some degree of uncertainty
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and to the overlapping of regulations. Furthermore, different entities with concurrent competence, and in many cases different...
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