{"id":7890,"date":"2022-09-20T17:18:33","date_gmt":"2022-09-20T20:18:33","guid":{"rendered":"https:\/\/www.lembeye.cl\/?p=7890"},"modified":"2024-06-24T17:22:31","modified_gmt":"2024-06-24T20:22:31","slug":"chiles-rejection-of-new-constitution-is-good-news-for-business-say-lawyers","status":"publish","type":"post","link":"https:\/\/www.lembeye.cl\/en\/chiles-rejection-of-new-constitution-is-good-news-for-business-say-lawyers\/","title":{"rendered":"Chile\u00b4s rejection of new constitution is good news for business, say lawyers"},"content":{"rendered":"
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Latin Lawyer spoke to partners and associates at Chilean law firms about what the \u2018no\u2019 vote means far the market and what comes next far the Latin American nation.<\/p>\n

On 4 September, Chileans voted against the passing of a new constitution. Whilst almost 80% of Chileans had previously voted in favour of replacing Une current document in a referendum in October 2020, some 60% of the electorate voted against the new draft in a plebiscite earlier this month. The margin was larger than many polls expected.<\/p>\n

The proposed text would have legalised abortion, created universal healthcare, enshrined gender parity in government bodies and increased mining regulations. It embodied a major departure from the country\u2019s current constitution written in 1980, during general Augusto Pinochet\u2019s regime.<\/p>\n

CERTAINTY OVER EXPERIMENTATION<\/strong><\/h4>\n

Lawyers are certain of one thing: the vote brings both clarity and hope to key sectors of the local economy.<\/p>\n

Despite the country\u2019s booming renewable energy industry, Chile remains reliant on its mining sector, which generated 11% of its GDP last year. The business community was spooked by the election of left-wing president Gabriel Boric, who took office back in March and campaigned on a platform to combat climate change by reforming the mining sector. In the run up to the referendum, investors \u2014 particularly foreign players \u2014 were hesitant to inject funds into Chilean mining projects, which would have faced significant regulatory upheaval had the plebiscite succeeded.<\/p>\n

Rafael Vergara co-head of Carey\u2019s natural resources and environment practice, explains that the proposed draft \u201cgenerated great uncertainty in the mining industry, both for what it regulated -and more importantly -omitted.\u201d The outcome of the vote has, therefore, brought a much-needed sense of calm to the Chilean business environment, according to the Carey partner<\/p>\n

Javier Naranjo, former environmental minister and current head of Jara del Favero Abogados\u2019 natural resources practice, concurs that it was a lack of certainty surrounding the future of the country\u2019s mining sector, as well as more stringent water and environmental rights in the proposed text that contributed to the document being rejected. \u201cMarkets can be reassured that Chile prefers certainty \u2018over experimentation.\u201d Rodrigo Delaveau, a former deputy judge of Chile\u2019s Constitutional Court and now counsel at Morales & Besa agrees: \u201cmarkets should feel relieved.\u201d<\/p>\n

PARTISAN, OVERREACHING AND TECHNICALLY DEFICIENT<\/strong><\/h4>\n

The potential impact of the new constitution on Chile\u2019s economy was certainly a major concern for many, but voters are said to have also struggled with the length and vague nature of the proposed 170-page document, which included 388 articles. Delaveau described the draft as \u201cpartisan, overreaching and technically deficient,\u201d as well as \u201cextensive.\u201d Carey\u2019s Vergara also suggests that the text was too vague: \u201cthe drafting style was unclear, leaving many sensitive issues (including mining concessions) open to interpretation.<\/p>\n

Many Chileans also found the proposed document too radical. The draft included numerous matters that were \u2013 according to Vergara ~ \u201cperceived as controversial by the general public.\u201d For senior associate Alina Bendersky from Bofill Mir Abogados, it \u201cwent too far in certain measures and statements,\u201d whilst Lembeye Abogados partner Rony Zimerman agrees that the text \u201cdid not reflect the hope and objectives of the majority of Chileans\u201d.<\/p>\n

One article included in the document that caused much concern in the electorate would have defined Chile as plurinational, recognising the coexistence of two or more preserved national groups. The same clause referred to the people of Chile as being \u201ccomposed of various nations.\u201d The passage worried voters who believed that the declaration of plurinationalism would divide Chilean society.<\/p>\n

Among other provisions in the draft constitution, it opted to eliminate the senate in favor of a single-chamber legislature. Changes to the judicial make-up of Chile, along with changes in property were also met with scepticism by a large part of the population, highlights Lembeye\u2019s Zimerman. These proposals all appeared too drastic for the largely conservative Chilean population, who rejected the constitution in favour of a new, less divisive second dat.<\/p>\n

IT DOESN\u2019T END HERE<\/strong><\/h4>\n

The vote has been considered a setback for President Boric, who openly backed the new constitution. Some expect the vote to force the president into the political centre, whilst it already prompted a cabinet reshuffle, including a new interior minister.<\/p>\n

Boric has expressed his willingness to repeat the constitutional process, learning lessons from this draft to produce a better document next time round. In a speech following the vote, the president said that he would now work to achieve a \u201ctext that will Incorporate the lessons of the process and win over a broad majority of citizens\u201d and there seems no doubt that a second attempt will be made.<\/p>\n

It is not yet clear what shape the redrafting will take and how long the process will take. Lawyers agree, with Morales & Besa counsel Delaveau calling for a [ more] efficient, shorter and less biased\u201d process next time.<\/p>\n

Carey\u2019s Vergara explains that the new constitution \u201cshould not be a full reset and instead build upon certain parts of the rejected proposal and other past constitutional drafts\u201d According to Bofill Mir\u2019s Bendersky, \u201cthe upcoming weeks will be crucial in defining the future of the process\u201d.<\/p>\n

In the meantime, local law firms expect a higher demand for legal services, particularly from international clients, as the debate surrounding the second attempt begins. Delaveau believes that \u201cpublic law demands are here to stay\u201d, adding that since the constitutional debate Is not yet over, coordinated advice across several practice areas will be needed to best serve clients.<\/p>\n

The constitutional process is expected to be drawn for at least another year, meaning investors will continue to need guidance from their trusted local advisers. \u201cUntil the process is complete, there will remain certainty as to definitive rules for investing here\u201d, Zimerman concludes.<\/p>\n

 <\/p>\n<\/div>\n<\/div>\n<\/div>\n

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SOURCE: LATIN LAWYER, WRITTEN BY LILY SQUIRES<\/a><\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Latin Lawyer spoke to partners and associates at Chilean law firms about what the \u2018no\u2019 vote means far the market and what comes next far the Latin American nation. On 4 September, Chileans voted against the passing of a new constitution. 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