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Annex 3-1: Individual Economy Reports on Regulatory Reform Framework | 73 Chile: Developments in Regulatory Reform 1. Key features Since the mid-1970s, Chile has adopted a programme of economic reforms that has led to a significant deregulation of the economy, establishing a new development model. As a result the role of the state in the economy was drastically transformed and reduced, particularly with the privatisation of all major state-owned enterprises. Most of the regulatory reforms were introduced in the late 1970s and throughout the 1980s. Since 1990, successive governments have maintained the reforms introduced, although in some cases their focus has been sharpened. As a result, currently Chile does not have an explicit regulatory reform programme as such. There is no particular institution in charge of designing the regulatory reform policy or evaluating new reforms and controlling the quality of the current ones. However, individual government entities may propose or introduce regulatory reforms in their respective areas of competence. 1.1 Legislation, policy and principles The term "regulation" is used broadly to include both laws approved by Congress and norms issued by the Executive. The role of these two types of regulation is defined in Chile’s Political Constitution. The latter specifies the matters which must be regulated by law and, on all other matters, allows the Executive to exercise its regulatory powers autonomously. In addition, the President of the Republic can issue decrees for the implementation of regulation established by law. There are important differences in procedures for drawing up laws and those for issuing decrees: i) New legislation can, in general, be proposed by either house of Congress, by any of their members, or by the President of the Republic. In each of these stages, a bill is studied, debated and improved in order to ensure that the problem is correctly defined. ii) Norms and decrees issued by the President of the Republic must be signed by the President and the relevant minister, while decrees and instructions issued by other parts of the Executive Branch require only the signature of the responsible minister. In general, norms and decrees issued by the President, when applicable, are referred to as "rulings" and, because the signature of all the relevant ministers is required, usually involve the participation of more than one ministry, thereby ensuring a multidisciplinary approach. The Ministry of the Presidential Secretariat is responsible for coordinating the different ministries involved. It is common for representatives of civil society to be invited to participate in the government’s discussion of proposed norms. iii) In addition, advisory committees, bringing together leading economy experts on a subject, are often convened to assist in the definition of a problem and its possible regulatory solutions. These committees are usually multidisciplinary and of the highest professional level. As regards the possible international effects of Chilean regulation, it is important to note that, when necessary, the Ministry of Foreign Affairs participates in the process of drawing up new laws or norms and is responsible for ensuring their compatibility with the economy’s international obligations. 74 | 2009 APEC Economic Policy Report 2. Mechanisms and institutions to oversee regulatory reform 2.1 Institutions The institutions that participate in the regulatory process are: - Tribunal Constitucional (Constitutional Tribunal), an autonomous body responsible for ensuring that legislation and norms do not violate the Constitution, that has defined the limits of regulatory intervention in its many rulings. - Contraloría General de la República (Comptroller General’s Office), is the autonomous body responsible for reviewing the legality of government measures and also examines the legal basis for these measures. - Tribunal de Defensa de la Libre Competencia (Tribunal for the Defence of Free Competition) is a judicial autonomous entity that assesses the claims and the non-contentious presentations from the competition agency and private and public entities. It is composed by five members, its President must be a lawyer and appointed by the President of the Republic from nominees proposed by the Supreme Court through public competition. The other members (two lawyers and two economists) are either chosen directly by or selected by the President of the Republic from nominations from the Central Bank selected through public competition. There are also institutional incentives for using measures other than regulation: a) Regulatory measures, particularly those requiring legislation, have the disadvantage of a relatively long implementation period. b) Specialised and technical regulatory bodies, known as Superintendencias (Superintendencies), have powers to intervene more quickly in the markets with which they have direct contact. Superintendencies currently exist for Banks and Financial Institutions, Pensions, Health Services, Securities and Insurance, Social Security, Electricity and Fuels, Water Services, Casinos, and Bankruptcies. 2.2 Awareness and support The Political Constitution ensures all persons (Chilean or foreign) the right to present petitions to the authorities about any subject of public or private interest without other limitation than to proceed in a respectful and appropriate manner. So, interested foreigners may comment or consult about regulatory proposals (but this does not oblige the authority to give them an opportunity to listen to them before passing a law). In Chile, all laws and norms must be published and, for this purpose the Diario Oficial (Official Gazette) is published daily. Once a law or norm has appeared there, it is considered to be universally known. 2.3 Transparency and predictability Transparency is ensured through a series of laws and regulations. Among them is the Base Law on State Administration (Ley de Bases de la Administración del Estado) to ensure that government work and procedures are carried out with transparency so as to promote the awareness of the procedures, contents and foundations of the decisions of government agencies. Another law that promotes transparency of technical regulations and standards is Decree 77, which obliges ministries and agencies with regulatory power to publish, through a notice placed in a communication medium with national distribution or on its website, the draft technical regulation or conformity assessment procedure it is proposing to adopt. Annex 3-1: Individual Economy Reports on Regulatory Reform Framework | 75 3. Improving the quality of regulation 3.1 Regulatory tools, systems and processes for improving the quality of new regulations (Flow) Recently, a new law that reinforces the aim of transparency in governmental actions and therefore improves the quality of new regulations has come into force. On 20 April 2009, Law 20,285 came into effect. The law’s objective is to regulate public sector transparency, the right to access information from the State Administration, the procedures for exercising that right and the exceptions to the obligation of publication of information. Since the promulgation of this law, public entities must provide a copy of decisions and documents and publish all the information regarding their structure and activities on paper or on their websites (active transparency). They also have to answer the specific information requests that any citizen can make (passive transparency). If any public entity denies access to information, citizens can complain to the Consejo para la Transparencia (Transparency Council), an autonomous institution created to supervise the correct execution of the law.