judgment

Company Workers Union of Maritima & Commercial Somarco Limited and Others v Ministry of Energy - judgment

appeal

Company Workers Union of Maritima & Commercial Somarco Limited and Others v Ministry of Energy - appeal

ruling

Company Workers Union of Maritima & Commercial Somarco Limited and Others v Ministry of Energy - ruling

Company Workers Union of Maritima & Commercial Somarco Limited and Others v Ministry of Energy - Other

Filing Year For Action

On June 4, 2019, the Ministry of Energy, and the energy companies involved in decarbonization process, signed an Agreement on the phase-out of coal-fired thermoelectric power plants. Chile's Energy Sector Decarbonization Plan contains a gradual closure of existing coal-fired power plants at the national level. Coal power plants accounted for 36.7% of energy generation in 2019 and for 25% of greenhouse gas emissions. Chile’s goal is to reach carbon neutrality by 2005. As part of the decarbonization agreement, the government launched the process to elaborate a Just Energy Transition Strategy. 

Within this process, they initiated the discussion to generate local action plans for communities affected by coal-fired power plants. These local action plans may make it possible to diagnose the existing social, productive, environmental and territorial needs to generate actions resulting from participatory processes, with clear goals, indicators, deadlines and responsible parties. The plan seeks to reintegrate affected workers into the workforce. Furthermore, it creates mechanisms to safeguard the rights of workers during the transition process. However, on December 26, 2020, the Ministry of Energy issued the Supreme Decree No. 42, which ordered the implementation of a plan that ensures the reinsertion or reconversion of workers into the labor market without consulting with workers affected by the decarbonization plan.

On January 25, 2021, the three union workers brought a case against the Ministry of Energy. The plaintiffs argued that they were not consulted in the energy decarbonization agreements made between the government and the energy companies. This was in violation of their constitutional guarantees (Art. 19), which recognize the right to equality before the law, freedom of labor, freedom of association, and property rights

On March 26, 2021, the Court of Appeals of Antofagasta rejected the workers’ claims on procedural grounds (Case Rol Nº 318-2021). The Court found that the matter in question was beyond its competence, as it involved the exercise of powers belonging to the executive branch. It added that the Ministry of Energy does not have any labor relationship with the Ministry of Energy but rather with the companies in the energy sector. 

On August 9, 2021, the Chilean Supreme Court (Case No. 25. 530-2021) overruled the decision of the Court of Appeals and upheld the plaintiffs’ appeal. The ruling considered the closure of coal-fired plants as a part of Chile's Energy Sector Decarbonization Plan to achieve carbon neutrality by 2050. The decision specifies that in this context, the agreements adopted by the State of Chile to achieve carbon neutrality require the performance of a just transition strategy both for the workers harmed by the loss of their direct and indirect source of employment and for the communities affected by the loss of services linked to the development of the declining thermoelectric activity, allowing the transition to an environmentally sustainable economy. The lack of consultation was in violation of the government’s obligation to ensure a just transition. The ruling ordered the government authorities to implement a plan for the reinsertion into the labor market of workers affected by the decarbonization process, consulting them in that process, and adopting the control measures to ensure compliance.

In 2021, the Chilean government released a Just Transition Strategy to demonstrate compliance with the court decision. In this plan, they established plans for the remediation of sites affected by coal plant operations, the replacement of coal with renewable energy sources, the expansion of national transmission infrastructure, and an inclusive governance structure that involves local stakeholders. 

Company Workers Union of Maritima & Commercial Somarco Limited and Others v Ministry of Energy

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An aim to achieve a quantifiable outcome within a given time-frame, set by an institution such as a national government.

Policy instruments are techniques or tools used by governing authorities to promote certain policies in order to achieve predetermined goals. Put simply, instruments are how a government tries to achieve its goals, with this taxonomy being focused on national policy instruments.

Risk is the potential for adverse consequences resulting from the dynamic interplay between (climate-related) hazards, exposure, and vulnerability of affected human or ecological systems.

Groups  of people who are adversely affected by climate change or the response to it

A set of principles, processes, and practices that build economic and political power to shift from an extractive economy to a regenerative economy.

Renewable energy means all forms of energy produced from renewable sources in a sustainable manner.

Fossil fuel is a generic term for non-renewable energy sources such as coal, fossil gas, and oil (including crude oil, and petroleum products), that can be used for electricity and heat generation. Fossil fuels are hydrocarbons formed from pressurised and heated organic material buried over millions of years.

Molecules in the atmosphere that play a key role in the greenhouse effect by trapping heat radiating from Earth’s surface.

Area of the economy in which actors engage in identical or related activities.

In human systems, the process of adjustment to actual or expected climate change and its effects, in order to moderate harm, increase resilience or exploit beneficial opportunities. In natural systems, the process of adjustment to actual climate change and its effects; human intervention may facilitate adjustment to expected climate change and its effects.

The management and allocation of funds, assets and investments to meet various objectives

A subsidy is a direct or indirect payment to individuals or businesses, typically provided as a government cash payment or a specific tax reduction.

Coal is a combustible sedimentary rock formed from carbonised plant matter, rich in carbon and hydrocarbons, and occurring in several main types including hard coal and brown coal.

Either money or something of monetary value is transferred between two or more organisations, people or countries.

Social protection systems consist of policies that help people manage social risks in order to prevent poverty and maintain decent incomes and living standards

Aligning the skills of the workforce with the requirements of the just transition.

This sector includes firms and individuals offering specialised expertise in fields such as law, accounting, consulting, science and engineering.

Jobs that contribute to preserving or restoring the environment. We include jobs which require a high amount of green skills or which spend much of their time on green activities, as well as jobs transforming polluting industries.

Work that is productive and delivers a fair income, security in the workplace and social protection for all, better prospects for personal development and social integration, freedom for people to express their concerns, organize and participate in the decisions that affect their lives and equality of opportunity.

woman and genders outside of the gender binary

This sector involves activities that impart knowledge and skills to individuals, including formal schooling, vocational training and educational support.

People who are less able to respond to the effects of climate change due to having limited financial or physical assets

Company Workers Union of Maritima & Commercial Somarco Limited and Others v Ministry of Energy - judgment

Policy instrument

Impacted group

Just transition

Fossil fuel

Economic sector

Finance