July 23, 2009

The Chilean government has made a new proposal for aquaculture concessions, with the salmon industry blasting the proposal's terms.

 

The government wants current titleholders of aquaculture concessions to forfeit their 'indefinite' status so they can opt for the development measures referred to in a new law that is in debate in the Senate.

 

Minister of Economy, Hugo Lavados, said a bill amendment allowing current concession holders to opt for a fixed-term concession will be introduced in late July. He said it could be, for example, for 40 years, renewable 10 years before expiration.

 

César Barros, the president of the Chile Salmon Industry Association (SalmonChile), stated that it is frivolous to change the rules in an election year.

 

Barros said if the Executive branch passes the proposal, it would not be respecting its initial offers to grant Production Development Corporation (CORFO) guarantees to the sector without conditions.

 

The current law, which gave an indefinite term to aquaculture concessions has helped develop the industry, he said.

 

But the new law, Barros continues, will break the industry into two: companies that are in trouble with the banks and which are likely to yield, and those that are not but tend to be foreign companies and would continue with their indefinite concessions.

 

Barros said the proposal will also lead to discrimination as a fixed-term concession has a different value from an indefinite one.

The director of the Liberty and Development Environment Programme, Ana Luisa Covarrubias, said that "on the one hand, benefiting the banks is being sought with the CORFO guarantee before the banks, but, on the other hand, it puts a limit to the duration of the concession, deducting stability from the system and diminishing the value of the concession."

 

In her opinion, this contradicts the primary goal of the bill, which meant to grant economic value to the concession, facilitating the constitution and execution of guarantees on the same.

 

Covarrubias said there is no technical reason to justify limiting the period of the concessions, as the environmental and sanitary risks decline with zoning and increase with supervisory and sanction authority, which allows the industry to cover the cost of the eventual external issues produced from the activity in question.

 

Covarrubias said the imposition of fixed terms to the concessions will not solve any of the environmental and sanitary problems of the industry but in fact, could make its reconstruction difficult, maintaining a state of uncertainty while harming the competitiveness and the image of Chile abroad.