RESOLUTION OF DISPUTES AMONG MINING CONCESSION HOLDERS AND LANDOWNERS: A REVIEW OF RECENT JURISPRUDENCE (ENGLISH VERSION)

• Jurisdiction: Derecho Internacional

Mining And Oil & Gas Development In Latin America
(2001)
CHAPTER 16C
RESOLUTION OF DISPUTES AMONG MINING CONCESSION HOLDERS AND LANDOWNERS: A REVIEW OF RECENT JURISPRUDENCE (ENGLISH VERSION)
Rafael Vergara G.
Carey y Cía. Ltda.
Santiago, Chile

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I. INTRODUCTION

The relationship between the mining concession holder and the landowner has not always been peaceful. This is because although the object of the right of each is different, the mining concession holder needs to use the land to perform mining work which often conflicts with the legitimate interests of the landowner.

Even though the large majority of the mining activity in the country is concentrated in the northern regions comprised of mostly desert lands where the State is the principal landowner — which accounts for there not being a significant interest in occupying the surface land and using it in the development of a productive activity — this situation does not occur in other regions where the government and private persons may or do have an interest in making use of the land.

The conflicts between those landowners and the mining concession holders have been put before the courts for resolution, leading to certain jurisprudence and doctrine that I will address in this paper.

First I will provide a brief explanation of the legal and regulatory principles governing this matter.

II. LEGAL FRAMEWORK

The legal rules that deal with this matter are contained basically in the Political Constitution of the Republic of Chile (CPR), in Law No. 18,097 of 1982 Constitutional Organic Law of Mining Concessions (LOC) and in Law No. 18,248 of 1983, as subsequently amended, which contains the Mining Code (CM).

First of all, it must be established as a general principle of Mining Law that "The State has absolute, exclusive, inalienable and perpetual domain of all mines...despite the ownership of individuals or legal entities regarding the land below which they are situated."¹

As can be observed, the CPR separated ownership of mines as compared to surface land "because the mine (or ore, in technical language) and the surface land are different assets."²

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Therefore, the CPR "ratified the criterion of separate domains based on the historical experience derived from decades of mining exploitation."³

Due to this separation of domains, and taking into account that the mining concession holder necessarily needs the surface land to access his mine, it is not difficult to foresee that conflicts will arise among the holders of these diverse domains. In this regard, the CPR established the principle that should govern the resolution of these disputes: "The surface lands will be subject to the obligations and limitations indicated by law to facilitate the exploration, exploitation and beneficiation of such mines" (article 19, No. 24, subparagraph 6, final part, CPR). These obligations and limitations are special and are in addition to the general ones affecting any type of domain, including that of a mining concession holder, and "which derive from its social use. This shall include all that is required by the general interests of the nation, the national security, the public health and utility, and the conservation of the environmental resources" (article 19, No. 24, subparagraph second, CPR). In view of the existence of the special obligations and limitations that only affect surface land and which are established in favor of mining concessions, some authors⁴ have sustained the supremacy of mining concessions over surface lands, a position that I do not share since they are, by constitutional mandate, merely different domains, both protected by the same constitutional guarantee in article 19, No. 24 of the CPR.⁵

Together with making a distinction between the aforesaid domains, the CPR provides that "the law must determine which substances, of those to which the preceding subparagraph refers (meaning fossil substances or mines) can be the subject of exploration or exploitation concessions. Such concessions shall always be constituted by judicial resolution and shall have the duration, shall confer the rights and shall impose the obligations stipulated by the law, which shall have the nature of a constitutional organic law." (article 19, No. 24, subparagraph 7, first part). In this way, mining concessions⁶ will be the ones that grant the right to explore and exploit mineral substances and consequently obtain the "facilities" (paraphrasing the aforesaid subparagraph 6) to which surface lands are subject.

In summary, "from the moment that the juridical independence of mines with respect to the land where it is located was consecrated, the constituent had to admit the possibility that an opposition of interests could occur between the State or the mining concession holder, on the one hand, and the landowner, on the other. Therefore, together with recognizing such possibility, in order to resolve the problem, it provided that surface land is subject to the obligations and limitations that the law shall establish to facilitate the exploration, exploitation and benefit of the mines."⁷

In compliance with the provisions of the CPR, the law acknowledged that a mining concession holder has the right to impose easements, to which it assigned the nature of legal, meaning that the serving landowner is obligated to tolerate them, even against his will. Hence, the LOC established that "holders of mining concessions have the right to

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establish easements that may be convenient to mining exploration and exploitation" (article 8, subparagraph 1, LOC).⁸

Together with acknowledging the right to impose legal easements, the LOC established other rights in favor of mining concession holders with certain limitations or reaches that also bear on easements, as an accessory right of the mining concession: "All mining concessionaires have the exclusive right to prospect and excavate in lands of any domain with mining purposes, located within the boundaries of the territorial extension of their concession. This right shall be exercised in accordance with the provisions set forth in this law, and shall be subject to the limitations established in the Mining Code. The limitations shall always be established to prevent damages to the owner of the land or to protect public interest purposes; will consist in the need to obtain authorization from the owner of the land or from the pertinent authority, as the case may be, to exercise the right to prospect and excavate in certain lands. The Code shall establish a concentrated, economic and expeditious procedure to obtain such authorization in the event of refusal of the party who must issue it. However, only the owner of the land can authorize prospection and excavation in houses and appurtenances thereof or in lands containing trees or vineyards." (article 7, LOC).

Articles 10 and 11 complete the legal framework of the LOC with respect to the subject matter of this report, both of them recognizing in their respective first numerals the exclusive right of mining concession holders to freely dig test pits and perform other mining exploration, in the case of an exploration concession, and to freely explore and exploit the mines encompassed by the concession, in the case of the claim, in both cases "subject to the observance of police and safety regulations and the provisions in articles 7 and 8." This proviso is undoubtedly a framework for — and a limitation to — the exercise of the rights of the concession holder.

In turn, the CM reproduced and developed in different titles the juridical statute of the LOC, as outlined above. Thus, Title VIII on the rights and obligations of mining concession holders establishes that "Only after the concession is created may a titular perform the work he deems necessary for exploration and, as the case may be, also for exploitation of the

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mine according to the type of concession in question" (article 107); "The concessionaire shall be entitled to impose the easements referred to in paragraphs 1st and 2nd of Title IX" (article 109). With regard to the exploration concession, it provides that "Only the titular of a concession shall be entitled to freely make prospecting pits and other exploration work within the limits thereof during the term of the concession. The exercise of this right shall be subject to the obligations and limitations set forth in articles 14, 15, subparagraph second and subsequent subparagraphs, 16, number third, and 17, this paragraph and the rules on mining police and safety" (article 113); and, with regard to the exploitation concession or claim, "A concessionaire has the exclusive rights to freely explore and exploit his exploitation concession without any limitations other than those set forth in articles 14, 15, final subparagraph, 17, in paragraph 2nd of Title IX and in the rules on mining police and safety" (article 116).

Title IX of the CM, entitled "Mining Exploration and Exploitation," addresses in its first paragraph "Easements that Encumber Surface Land."

Considering the object of this paper and the necessary limitation of its extension, we will only outline the rules of this first paragraph and will not discuss the juridical statute of the rights, obligations or limitations of mining concession holders contained in the CM, except to the extent it may be useful in explaining the foundation, scope or content of judicial rulings that we will refer to hereinbelow.⁹

The purpose of legal mining easements is to facilitate the mining concession holder the convenient and easy mine exploration and exploitation as from the constitution of the concession (article 120, CM).¹⁰ The same easements may be imposed in favor of mineral beneficiation establishments (article 121, CM).

Easements may not be used for purposes other than those specific to the respective concession or establishment and for which they have been...