Environmental Law

Law Nº 20.920, extended producer responsibility

Producer responsibility: The new Law Nº 20.920, enacted by the Chilean Congress, establishes a legal framework for waste management, regulating the so-called “Extended Responsibility of the Producer”, and thus imposing a new burden on producers or first importers of products included on a new list of priority products. Furthermore, it introduces some new concepts for product design, such as Ecodesign, and implements the Basel Convention, which regulates the import, export, and transit of hazardous waste.

Priority Products

The law defines 6 products that are considered a priority and thus are submitted to regulation. New products can be added via a regulatory process, via the enacting of a Supreme Decree from the Environment Ministry.

The products included on the law specifically are the following:

• Lubricating Oil
• Car Batteries
• Electrical and Electronic Products
• Tires
• Batteries
• Wrappings and Packages

Extended Responsibility of the Producer (producer responsibility)

The law’s main regulated party is the manufacturer or importer that introduces a priority product for the first time on the Chilean market. The criteria used for the drafting of the law considered that the regulated entity must be the one that has the best position on the chain of command of the product.

To determine the obligations that are imposed on the producer, the Environment Ministry makes use of the information sources that are listed in the law to enact Supreme Decrees that establish the main responsibilities of the producer, which will basically consist of finding the waste of the products entered into the local market, recollecting and valorizing them, process that is called “Extended Responsibility of the Producer”.

The enacting of the aforementioned Supreme Decrees is submitted to specific regulations that will establish the process for their enactment, and they must be revised at least every 5 years. Each Supreme Decree will regulate a specific priority product and can distinguish categories and subcategories of each product.

In addition to the Extended Responsibility of the Producer, there are other associated regulations, such as product labeling, information that must be given to distributors and retailers, preventive measures, among others, that are mentioned as aspects that can be regulated by the law, and must be specified on the corresponding Supreme Decree.

Waste Management Systems (producer responsibility)

The way established by the Law to guarantee the fulfillment of the regulations established by each Supreme Decree is by applying a Waste Management System, either individual or collective.

Individual Waste Management Systems are applied by the producer, who develops the way to comply either directly or hiring a third party that manages the compliance. Collective Waste Management Systems are organized by a group of producers that associated via a separate legal entity, who is charged with the obligations imposed on the producers as if they were a single producer. The legal entity involved is not required to be any specific kind of organization, so it can be incorporated as a non-profit or a for-profit. For the former, the law exceptionally permits the payment of a salary to its directors.

Waste Management Systems are regulated on the Law on the following way:

• They must be authorized by the Environment Ministry.
• To acquire this authorization, a Waste Management Plan must be presented.
• Regarding Collective Waste Management Plans, the entity must post a bond, insurance or other securities. This, as a way to guarantee the payment of the fines that could be imposed, which are charged to it.
• The entity must deliver reports regarding the achievement of goals.
• The law contemplates protections to free competition from the effects that the Collective Waste Management Systems could cause. To this end, it is necessary to request a report from the Court for Free Competition and interested third parties must be accepted into the organization.

Distributors and Retailers

The law also regulates distributors and retailers. Among other regulations, they must admit the installation of waste reception and storage facilities and must accept for no charge to hand over the waste to the waste management systems.

The roles of distributor and retailer are not incompatible, and companies can be both.

Oversight and Sanctions for the producer responsibility

Additionally, the new law introduces a framework for oversight and sanctions. The infractions to the law are punished with fines up to 10.000 UTM, that is applied by the Environment Superintendence, in addition to the civil liability that could apply due to the damages caused by the handling of hazardous waste. There is also criminal liability for the traffic of hazardous waste, applied to whom exports, imports or handles hazardous waste that is prohibited or without the respective authorizations.

Entry into effect

Regarding the entry into effect of the law, it is deferred. It depends on the time required to enact the regulations to enact Supreme Decrees, other administrative regulations and the Supreme Decrees themselves. For this reason, the exact entry into effect day cannot be known exactly, though the law establishes a due date of one year to enact the required regulations. However, there is an obligation that can be applied before the law’s entry into effect, that establishes that the Environment Ministry can require certain information from the producers, using the Emission and Transferals Registry (RETC, for its initials in Spanish).

Last modified: 06/05/2020