Challenges To Chile's New Fishing Law

Congress passed the controversial law in early March in an effort to help Chile's ailing salmon industry, once a US$2 billion industry, get back on its feet. The law provides special credits for the salmon industry and – most controversially – provides salmon companies 25-year concessions to coastal waters where salmon farms are located, reports The Santiago Times .

Critics note that the extremely lengthy concessions can be mortgaged and used as collateral for bank loans. The new law, they say, amounts to the "privatisation" of sovereign waters that belong to all Chileans, not to private companies, and is a giveaway to the banking industry. They want the TC to strike down the law as unconstitutional.

"The only thing that this legal challenge by 34 deputies does is delay the law coming into effect," said Carlos Odebret, CEO at Salmon Chile, one of Chile´s largest salmon farm operators based out of Puerto Montt. "The challenge will have a negative effect on our effort to bring jobs back to this sector. These legislators should know what they are doing – they are delaying the recuperation of our salmon industry."

Mr Odebret vehemently denied that the new law amounts to the privatisation of Chile’s national waters.

The challenge to the Fishing Law was led by Senator Guido Girardi, one of Chile´s most aggressive environmental advocates, with the support of the 31 deputies. Among the sponsors of the challenge is Deputy Rene Alinco, who represents the Region of Aysen, where there is a growing concentration of salmon farms.

Deputy Alinco challenged the way the law was pushed through Congress at the very last minute before President Michelle Bachelet left office.

Deputy Alinco beleives that the law amounts to the privatisation of Chile’s coastal waters and does nothing to safeguard workers´ rights or the environment.

Environmentalist Juan Carlos Cardenas echoed Deputy Alinco’s criticism. "Our fight against the destruction of the environment and the expropriation of our coastal resources continues," said Mr Cardenas. "The new salmon law is shameful and unconstitutional. It was tailored to the salmon industry´s immediate needs and to the needs of the banks that lend them money, and was passed in the final 24 hours of the governing Concertación administration."

Although exact figures are hard to come by, most industry observers agree that as many as 10,000 jobs have been lost in the salmon industry this past year as a result of an ISA infection that spread rapidly throughout the densely packed, unregulated industry. The salmon companies have been urging help from the government to get out of a hole that critics say they dug for themselves.

Pablo Galilea, Chile’s newly appointed undersecretary in the nation´s fishing oversight agency, appears to favour the industry’s position.

"The new law changes industry production models, creating more community within the industry. Logically, a company that has cash flow problems, resulting from the decline in production, needs financing. And this will be done by a system of guarantees that creates flexibility in the industry, but never amounts to ownership of the sea, because there are expiration dates set for all the concessions," Mr Galilea told The Santiago Times.

"This law was introduced by the government of President Bachelet and was supported by all sectors because we believe that it is necessary to try to generate jobs for people who need it most in a country where there are not many productive alternatives," continued Mr Galilea, who noted that the salmon industry is not expected to recover until 2011.

"The recovery of the salmon industry depends on preventing other diseases by regulating the import of eggs, and those are issues addressed in the law, with the enactment of regulations and adequate monitoring by the State.”