Introduction
Background
Law in brief
Constitutional challenges to enforceability
Towards a sustainable future
Argentina has hundreds of glaciers within its borders, including the largest ice mantle on Earth outside Antarctica in Parque Nacional Los Glaciares, located in the south Andes region of Patagonia. The federal government recently enacted the Glaciers Law,(1) which aims to preserve glaciers(2) and periglacial areas(3) for strategic reserves of water resources, the protection of biodiversity and as points of scientific and touristic interest.(4)
The area primarily affected by the legislation, along the Andean border with Chile, is also the country's richest source of natural resources. Already, three cases emanating from the province of San Juan have been brought before the Supreme Court, challenging the constitutionality of the Glaciers Law. That each applicant in those cases has an interest in the resources industry is unsurprising, given the targeted nature of the Glaciers Law.
The Argentine legislature and executive have been considering introducing glaciers legislation for several years. An earlier bill on the topic was first passed by the Congress and Senate in 2008.(5) However, President Cristina Fernandez vetoed the bill on two main grounds. Firstly, the veto stated that the bill created an excessive ban on certain activities of significant importance to the development of the economy of the Andean provinces, in particular mining and drilling for oil and gas in areas bordering glaciers. Secondly, it was stated that the bill overstepped the legislative competence of the Congress and Senate because it encroached on the provinces' constitutional right to determine the use of the natural resources within their respective territories.(6)
Amendments were made to the legislation before the more recent Glaciers Law was enacted. Specifically, a combined federal and provincial enforcement system was introduced(7) and a provision stating that no new activities could be commenced on glaciers or periglacial areas until certain protection measures in the legislation were introduced was deleted by the Senate.(8) As a result of these amendments, the current Glaciers Law is not as onerous for persons conducting activities on and around glaciers as was originally proposed, but it still affords an increased level of protection for Argentina's glaciers and periglacial areas.
The Glaciers Law and Regulations(9) establish glaciers and periglacial areas as public property in Argentina. The sections of relevance to the resources industry are as follows.
Prohibited activities
Under the Glaciers Law, resources companies (and others) are prohibited from building any architectural or infrastructural works, or undertaking any industrial works on glaciers. They also cannot release any contaminants, chemical products or waste of any nature or volume on glaciers or periglacial areas. The most significant restriction on resources companies, however, is the prohibition against undertaking oil and gas and mining exploration or exploitation activities on glaciers or periglacial areas.(10)
Notably, the Glaciers Law prohibits only activities actually occurring on glaciers. The legislation does not prohibit activities that may have a similar negative impact on glaciers, but do not actually occur on them (with the exception of those specific activities listed in relation to periglacial areas). Article 6 of the Glaciers Law was not supplemented by the regulations. It appears that the prohibition on exploration and exploitation activities on glaciers and the currently indeterminable periglacial areas is a significant impediment to such activities in the Andes and to the development of the affected provinces' economies. However, as is set out below, it may be impractical to enforce those restrictions in the short term. There are also significant concerns as to whether the Glaciers Law was passed in accordance with the Constitution.
Inventory of glaciers
Articles 3 to 5 of the Glaciers Law require the Institute of Nivology, Glaciology and Environmental Sciences (IANIGLA) to create an inventory of glaciers and periglacial areas in Argentina so that they can be protected, controlled and monitored.
Article 15, a transitional provision of the Glaciers Law, provided that IANIGLA must submit a timeline for the preparation of the inventory to the Department of Environment and Sustainable Development by the end of November 2010.(11) Although the Glaciers Law gives IANIGLA until September 2015 to complete the inventory, it also sets out that the inventory with respect to priority areas - that is, those areas where work referred to in Article 6 was being carried out - had to be completed by the end of March 2011.(12) If a significant impact on a glacier or periglacial environment was identified, an order was to be made for the termination or relocation of the activity and for the implementation of pertinent protection, cleaning and remediation measures.(13) To date, no results have been published.
According to statements made by government officials, the first data on glaciers and periglacial areas will be obtained by around February 2012 and the necessary information to complete the inventory is expected to be obtained by around the end of 2015.(14) However, critics of the legislation in its final form have said that Article 15 should have been regulated to provide further clarification of the definition of 'priority areas'. Critics have claimed that the regulations in this respect are deliberately incomplete and in effect give resources companies up to five years of uninterrupted mining and drilling.(15)
Environmental impact assessment
With few exceptions, all activities to be performed on glaciers and periglacial areas that are not prohibited by the Glaciers Law are subject to an environmental impact assessment and strategic environmental impact procedure.(16) The assessment has been added as a new requirement with which individuals and companies performing activities on glaciers or in the periglacial environment must comply in addition to existing requirements under the federal Environment Act(17) and relevant provincial legislation and regulations. However, as the assessment applies only to activities to be performed on glaciers and periglacial areas, and resources companies are effectively prohibited from engaging in any activities in those places, it is unlikely that this new requirement will affect them.
Sanctions
If a company violates the Glaciers Law, its management or direction officers will be held jointly and severally liable together with the company. The relevant authority in the province can impose a sanction ranging from a warning to a fine of up to AR$240,000 or the cancellation of activities.(18)
Constitutional challenges to enforceability
Argentina is a federal state comprised of 24 provinces, with legislative powers divided between the federal state and the provinces. Under the Constitution, the provinces are the original owners of the natural resources within the boundaries of their respective territories.(19) This means that the provinces are exclusively empowered to determine the use of their natural resources. However, the Constitution also enables the federal government to make minimum requirements regimes, which are sets of rules granting common environmental protection for the national territory and setting the conditions for environmental preservation and sustainable development, which was the basis for enacting the Glaciers Law. These potentially competing powers of the provinces and the federal state have provided the basis for three constitutional challenges to the enforceability of the Glaciers Law with respect to plaintiffs with interests in San Juan's resources industry.
Cases in San Juan
Since the Glaciers Law was enacted, three challenges have been made in the Federal First Instance Court in San Juan to the applicability of the legislation to the named plaintiffs.(20) The most prominent case is that involving Barrick Gold. Its Pascua Lama project, being carried out on both sides of the Argentine-Chilean border, has been a source of contention in Argentina and in many respects provided the political impetus for the enactment of the Glaciers Law. In each case the province of San Juan was summoned to submit its grounds on the unconstitutionality of the Glaciers Law as an interested third party.
Facts
The arguments put forward by the three plaintiffs in their respective cases were essentially that the Glaciers Law:
- was not enacted in accordance with constitutional procedure - as the Senate removed Article 17 and did not return it to the Congress, the same legislation was not passed by both the Congress and Senate and is therefore invalid;
- prevents the plaintiffs from engaging in lawful trade;
- violates the constitutional autonomy of the provinces to make laws protecting the environment and concerning the use of their natural resources; and
- does not accord with the Mining Integration and Complementation Treaty between Argentina and Chile, which is of higher constitutional significance.(21)
Barrick Gold also argued that it would subject the company to a new environmental audit even though it already held an environmental impact assessment approved by the province of San Juan.(22)
Decisions
In each of the three cases the province of San Juan was summoned as an interested third party to submit its grounds on the unconstitutionality of the Glaciers Law. The involvement of the province of San Juan enlivened the original jurisdiction of the Supreme Court and meant that the first instance court did not have the competence to continue hearing the cases. Before transferring the cases to the Supreme Court, and without determining whether the Glaciers Law was unconstitutional, the first instance court made interim orders that effectively suspended the operation of the Glaciers Law with respect to the plaintiffs' interests in San Juan.
The first instance court found that the prohibitions set out in Article 6 of the Glaciers Law, mainly concerning mining in glacial and periglacial areas, and the requirement for the inventory to be carried out with respect to priority areas by the end of March 2011 caused an unjustifiable state of uncertainty for the plaintiffs. Further, it held that the Glaciers Law exceeded the content of a minimum requirements regime and that provincial environmental legislation sufficiently safeguarded the public interest of protecting the glaciers.
In June 2011 the Supreme Court determined that the three cases fell within its jurisdiction and that it would hear the cases.(23) Under Argentine law, even if the legislation is determined to be unconstitutional, this will not result in the invalidation of the legislation as a whole, but only in respect of the successful plaintiffs' activities. Other parties affected by the legislation would need to obtain similar orders to have the effect of the Glaciers Law nullified with respect to them. However, if the Supreme Court rules that the Glaciers Law is constitutionally invalid, for any reason other than the procedural error of the Senate not returning the amended legislation to Congress, this would place significant pressure on the legislature to repeal the Glaciers Law. If this occurs, it would obviously be beneficial to resources companies on some level, at least in the short term.
Glaciers and periglacial areas are integral to Argentina's environment. Equally, utilising Argentina's natural resources through mining and drilling for oil and gas is essential to the country's continuing economic development. The federal government has sought to establish a regime which balances these competing, but not mutually exclusive interests. It would appear that the legislation ultimately adopted is not as onerous as that which was vetoed by the president in 2008 and provides businesses with an opportunity to adapt to the new legislation. What is apparent is that the body of law created to protect glaciers and periglacial areas is not yet fully developed in Argentina. The true scope and bounds of the law will become more apparent once the inventory has been completed, the Supreme Court has considered the three San Juan cases and a line of precedents has developed from there.
For further information on this topic please contact Federico Godoy at Beretta Godoy by telephone (+54 11 4326 7386), fax (+54 11 4326 7396) or email ([email protected]).
Endnotes
(1) Law 26,639, October 28 2010 [32016] BO 7.
(2) Defined as any perennial mass of ice, whether stable or flowing slowly, with or without interstitial water, formed by the crystallisation of snow, located in several ecosystems, irrespective of their shape, dimension and state of preservation. The detritic rocky material and the internal superficial watercourses are deemed part of each glacier; Glaciers Law, § 2.
(3) Defined as, in the high mountain area, frozen soil acting as regulator of the water resource and, in average and low mountain areas, the area acting as regulator of water resources with ice-saturated soils; Glaciers Law, § 2.
(5) The legislation originally recorded under Law 24,618 was filed by Deputy Marta Mafei and subsequently approved by the Senate on October 22 2008.
(6) This was established in the recitals of Executive Order 1837/2008, November 11 2008 [31529] BO 4, by means of which the president vetoed the original Bill of Law Regarding the Minimum Standards for the Protection of Glaciers and Periglacial Areas. See also Iván Ruiz, "Ley de glaciares: el sinuoso camino de un proyecto con múltiples polémicas", La Nación, July 14 2010, available at www.lanacion.com.ar/nota.asp?nota_id=1284392.
(9) Decree 207/2011, March 1 2011 [32102] BO 1.
(14) "El Gobierno avanzó en la reglamentación de la Ley de Glaciares", Press Release, Secretaría de Medios de Comunicación Jefatura de Gabinete de Ministros Presidencia de la Nación, February 28 2011, available at www.prensa.argentina.ar/2011/02/28/17060-el-gobierno-avanzo-en-la-reglamentacion-de-la-ley-de-glaciares.php.
(15) "Glaciares: se reglamentó la ley, pero en forma parcial", Clarin, March 2 2011, available at www.clarin.com/sociedad/Glaciares-reglamento-ley-forma-parcial_0_436756408.html.
(17) Law 25,675, November 28 2002 [30036] BO 2.
(20) AOMA, Juzg Fed 1ª Inst de la Prov de San Juan [unreported] [2010]; Barrick Exploraciones Argentina SA, Juzg Fed 1ª Inst de la Prov de San Juan [unreported] [2010]; and Minera Argentina Gold SA, Juzg Fed 1ª Inst de la Prov de San Juan [unreported] [2010].
(21) Barrick Exploraciones Argentinas SA, CSJN [140-B] L XLVII.
(23) Barrick Exploraciones Argentinas SA, CSJN [7 June 2011] 140-B L XLVII; Minera Argentina Gold SA, CSJN [7 June 2011] 185-M XLVII; and Asociación Obrera Minera (AOMA), CSJN [7 June 2011] 138-A XLVII.