Environmental regulations for mining activities in Ecuador

Environment

What are the principal environmental laws applicable to the mining industry? What are the principal regulatory bodies that administer those laws?

The principal environmental laws applicable to the mining industry in Ecuador are:

• the Constitution;
• the Environmental Act;
• the Mining Environmental Regulations; and
• the Water Act.

The regulation and control bodies are the Ministry of the Environment and its regional environmental offices and, with regard to water resources, the National Secretariat of Water.

What is the environmental review and permitting process for a mining project? How long does it normally take to obtain the necessary permits?

Through amendments to the Mining Law introduced on 16 July 2013, the process for obtaining the environmental permits was simplified. With the new regulations, environmental permits can be summarised as follows:

• for artisanal mining - environmental fact sheets need to be approved;
• for small-scale mining - environmental licences allow concessionaires to carry out exploration and exploitation activities simultaneously; and
• for medium- and large-scale mining:
• environmental fact sheets must be approved for the initial exploration stage, which is a different and much simpler process than the environmental impact assessments required in the past;
• an environmental declaration will need to be approved for the advanced exploration stage, instead of the more complicated environmental impact assessment; and
• an environmental licence will need to be approved for the exploitation on the basis of an environmental impact assessment.

When the concessionaires have completed all the requirements for the approval of the environmental licence, this must be granted within six months of the presentation of the required documentation. Should the competent authority fail to respond within this time frame, this shall be taken as tacit agreement to the commencement of mining activities. In other words, the law establishes positive administrative silence for the approval of environmental licences.

What is the closure and remediation process for a mining project? What performance bonds, guarantees and other financial assurances are required?

All environmental impact studies must contain an environmental management plan, which in turn must contain a plan for the partial or total closure of the mining operations. Among other details, the plan must contain details regarding the dismantling of facilities, remediation and rehabilitation of affected areas, etc. The concessionaire must provide an annual budget for these closure activities, approved by the environmental authorities.

With regard to guarantees, the concessionaire is required to provide a bank guarantee or take out an insurance policy, which must remain in force until the total closure of mining operations, in order to guarantee compliance with the environmental management plan.

What are the restrictions for building tailings or waste dams?

There are no restrictions for building tailings or waste dams. Nevertheless, according to the Mining Act, Environmental Act and Environmental Mining Regulations, it is necessary to have an environmental licence prior benefiting from tailing ponds and waste piles. Added to that, the mining concessionaire must comply with the regulations and technical specifications contained in the Mining Act and Environmental Act (see question 40). The company in charge of the operation and management of dam waste must demonstrate technical evidence and credentials to support its experience in this kind of infrastructure. Inspections of mining projects by local authorities are really common. An alarm system is not mandatory, but according to the legal framework it is advisable to prevent environmental disasters - a common practice within private mining companies operating in Ecuador. In terms of responsibilities for a dam failure, the immediate action is to prevent any human or infrastructure loss, thus, the government will use all their resources in that line. There is a specific government entity that deals with any kind of natural disaster. As a common practice, companies must also provide all the necessary support to the above-mentioned end.