CHILE AUSTRALIA CHAMBER OF COMMERCE 34th Edition - 2017, Santiago de Chile.
Executive Director of the Fleischmann Group New Royal Adelaide Hospital “ I am very proud that as the Fleishmann team we were able to contribute to this important project.”
AUSTRALIA – CHILE - SPIC in talks with Latin America Power to buy Chile assets. assets - Chile’s Admiralty requests permit for Mariposa project. project 1
06 INTERVIEW Jorge Fleischmann, Executive Director of the Fleischmann Group “With significant economic activity and high growth rates, Australia is a country full of opportunities for Chilean companies.”
22 14 REPORT The Public Market: Another business alternative for Australian companies in Chile.
Editorial Director: Melchor Alegría Ramírez Contents: Mkopro - Auscham Interviews and Features: Mkopro Art and Design: Mkopro Digital Post-production: Mkopro Cámara Chilena - Australiana de Comercio AG 2800 Isidora Goyenechea Street, floor 43. Las Condes, Chile. Fono: (56-2) 25706090 - firstname.lastname@example.org
AUSTRALIACHILE: -SPIC in talks with Latin America Power to buy Chile assets. -Chile’s Admiralty requests permit for Mariposa project.
EDITORIAL Dear Members and Friends, Welcome to our latest edition of the Auscham Magazine. First of all, I would like to highlight the growing support from our members for each new edition. We are very grateful for your interest and collaboration, which has allowed Auscham Magazine to become an important communication channel for both associates and friends of the Chamber in Chile as well as in other countries. The Chamber has some important activities planned for the next few months. These start in July with an event that has arisen from an alliance with other chambers of commerce and involves a meeting with the economic advisors of the various presidential candidates. It will provide a clear vision of each of their programs for government in the run up to the presidential elections to be held this November. We will be announcing more details very shortly. We would also like to highlight an initiative from the new Innovation and Technology Committee, which
is organising workshops aimed at changing the way the Committee works. The idea is to increase participation and also to provide more and better access to updated information, studies and tendencies in topics related to innovation and technology. Furthermore, there are plans to integrate the work of the Committee with initiatives from entrepreneurs, Start-Up Chile, Prochile and Auscham Australia. Additionally, we would like to offer very special thanks to our dear friend Arturo Troncoso Valle, who participated on our Board of Directors for almost ten years. During that time, he worked with great enthusiasm and commitment to Auscham. His present endeavours now prevent him from continuing. We wish him all the very best in his new challenges and thank him for all the hard work he did for Auscham. Paulina MartĂnez Gili General Manager Auscham. 3
NEW AUSCHAM MEMBERS
Industry: Innovation and Technology Website: www.hikey-resources.com
Munita & Olavarria Abogados Industry: Law Firm Website: www.munitaabogados.cl
Industry: Hotels and Tourism Website: www.hotelkennedychile.com
Industry: Foreign Currency Transfers Website: www.hifx.com
Industry: Mining Website: www.duratray.com
Individual Members Ignacio Gaueca Reza Cameron Frederic Wales Lorenzo Boccabella 4
The best of Australia starts with Qantas With four weekly nonstop ďŹ‚ights from Santiago to Sydney, Qantas connects South America with Australia, New Zealand and Asia. Call Center 800 835 882.
INTERVIEW Jorge Fleischmann,
Executive Director of the Fleischmann Group
“With significant economic activity and high growth rates, Australia is a country full of opportunities for Chilean companies.” Following a long track record in South America, the Fleishmann Group now has a successful venture in Australia. The country’s Executive Director told us about his experience in the Australian market, the present projects being undertaken and projections for the future.
engineering professionals. It currently has nine business areas which are focused on electrical installations, heating and air conditioning, centralised control, communications and security.
1. In 2016, Fleishmann decided to break into the Australian market with specialised engineering Fleischmann S.A. was formed 75 years ago to services in electricity, HVAC (heating, ventilation, provide high quality electrical installation air conditioning), BMS (buildings management services with a team of highly committed systems) and piping. How did you get started
with your operations in Australia? Encouraged by its attractive market and the current construction boom, we decided to analyse possible opportunities for us in Australia. The vast experience gained in Latin America over 75 years meant that after a very short time we were invited to participate in a large-scale project. 2. How do the Australians perceive Chilean companies? Australians are quite open and they are used to working side by side with people from different cultures and nationalities. However, it was a surprise for us to discover that the team we were joining up with had never worked with a Chilean company. As in any professional relationship, at the outset there was a period of validation, particularly since we were in a country that takes professionalism very seriously. Nevertheless, Australians are very warm people and quickly recognise when a company is complying well with expectations and making a true contribution to a project or
business. Therefore, in short time we had become a hundred percent part of the team. Even now, several months after the job has been finished, we are still in contact with the team, providing consultancy from a distance in several matters and evaluating future projects where we could work together again. I am not sure about the general perception held by Australians of Chilean companies, but I think that the impression we left will certainly help Chilean companies and professionals to be well evaluated in Australia. 3. We have heard about your participation in the construction of the New Royal Adelaide Hospital in the city of Adelaide. This is an ambitious project aimed at making it the most technologically advanced hospital in the country. What can you tell us about this? I would be bold enough to say that the New Royal Adelaide Hospital will become a benchmark for any hospital to be built. The complexity of
of a bidding process. One of the directors of the project knew about engineering our track record and experience in the construction of large-scale projects. In an effort to speed up the work and ensure a systematic integration of all the specific aspects of HVAC, centralised control, the fire The New Royal Adelaide Hospital, for example, systems and the special hospital operations will manage to continue operating without systems, we were invited to participate in the having to evacuate its patients, even in the case most important stage of the project, the commissioning. of a fire. This is thanks to its complex systems of compartmentalisation and pressurisation for the 5. What were the services provided by Fleischmanagement of fire and smoke, making this one mann S.A. to this project? of the safest hospital infrastructures in the world. We provided several services, but our principal I am very proud that as the Fleishmann team we task was to ensure that the building would were able to contribute to this important project. operate as one large integrated system. To achieve this, we defined and designed protocols 4. How was the bidding process and what was for the integration and quality revision of the it like to be involved in this significant project? various areas and systems, so that the hospital To be honest, our participation was not the result could be completed in the least time possible. its systems designed to give operational continuity â€“ similar to those of a data centre in terms of electrical systems, that is to say systems with 100% redundancy â€“ will establish a new standard for this industry.
INTERVIEW This implied designing a work methodology that allowed the efficient testing of the integration of the systems from the 214 zones inside the hospital, including the electromechanical systems, the systems for the detection of fire, the centralised control, and others. We played the role of technical directors for these specific aspects of the building, as well as having a direct relationship with the independent supervisors from the state of South Australia.
engineering and commissioning consultancy services are an asset that we can present in any part of the world, with the support of our engineering hub based in Chile. In this context, we are on the lookout for new projects that could arise in Australia. 9. What message would you give to Chilean businesses intending to enter the Australian market? With significant economic activity and high growth rates, Australia is a country full of 6. How did you put together the work team in opportunities for Chilean companies. I think that Australia and what was the execution deadline the decision to take the leap into a new market for the services you provided? is in the entrepreneurial spirit of each company. As a company, we form a multidisciplinary team with wide experience in design, installation and To any Chilean company wanting to venture into commissioning of complex infrastructure projects. this great country, I would say that it is a very So, we put together a team based on the size and serious market, with regulations and standards complexity of the job, with the necessary skills to different from those in the Chilean market, in make a real contribution to a world-class project. how a company is made up for example. Once this is clear, I believe that the key to success is in We worked for seven months up to the point the professionalism and quality of the products where the state of South Australia gave its and services offered. technical approval, certifying that the hospital was ready. For my part, I would be delighted to speak to Chilean companies wanting to know more about 7. In addition to your participation in this our experience in Australia. emblematic project, do you have any other jobs in the pipeline? We are very interested to maintain our operations in Australia and we plan to continue with this type of project. At present, we have a list of projects that we are evaluating. If we can comply with the requirements, we will be very happy to participate in the bidding processes. 8. Following this experience, what are your future projections in Australia? With this experience at the New Royal Adelaide Hospital, we were able to verify the tremendous capacity of our company to face challenges in the international market . We know that our
How the Chilean Pension System Works: the Role of the AFPs, the Legal Framework and Improvements to the System For further information, please contact: email@example.com
CURRENT EVENTS Investigation and Studies in Australia
The challenges that Australia has faced and continues to encounter are not so unlike those faced by Latin America. The search in Australia for solutions has encouraged the development of a solid education system and innovative investigation focused on results. These go hand in hand with strategic collaboration and alliances among the government, the academic world and industry. Without a doubt, the economic and social progress achieved by Australia over the last few
decades have been supported by the strengths of its education system and the quality of the investigation carried out in the country. Australia stands out on a world level for the multidisciplinary focus placed on many of the problems and challenges that arise. Australian higher education institutions stand out in a wide range of disciplines and offer diverse academic programs. These have become consolidated over the years, but very important-
CURRENT EVENTS ly, the programs are continually revised according to the prevailing needs of industry. Study programs are focused on permanent investigation and practical experience, so that they reflect the changing requirements of industry. The latest version of the Quacquarelli Symonds (QS) World University rankings 2018, published on 8 June, showed that 7 Australian universities remain within the 100 top world universities, with several gaining a higher ranking than last year.
Australian National University (ANU)
The University of Melbourne
The University of New South Wales
The University of Queensland
The University of Sydney
The University of Western Australia
Note: QS ranked a total of 700 universities worldwide. Released 08 June 2017 Ranking Criteria are available at https://www.topuniversities.com/university-rankings
This demonstrates the growing interest from students all over the world in higher education, principally post-graduate degrees, in Australia. It reflects the fact that investigation and the permanent updating of the courses have allowed many professionals to develop successfully their knowledge and skills in specific areas, supported by the prestige and reputation of Australian educational establishments.
Itâ€™s Always Best to Travel in a Group Mauro Mezzano Founding Partner, Vantaz
To leave the comfort zone and take a risk. That was our decision ten years ago, when we decided to take Vantaz global and cross frontiers. In an interconnected world that might sound simple: a few em ai l s and t here yo u are. Experience, however, has shown us that success depends on how well prepared you are when you step onto the plane. When we started, the logical destination was Australia. Not only was it a mining country, but, just as the Australian Ambassador to Chile, Robert Fergusson, told us, it was a place that also had advantages and challenges in common.
Nevertheless, it has also been complex. We Chileans have a lot to offer in Australia, but we have to be well prepared and very aware that it is a competitive, meritocratic country where concrete results and a differentiated product offering are important. It should be viewed as a long-term destination and part of the global strategy of each company. Without a doubt, experience and networks, both in the business world and also in the area of innovation through the University of Queensland, are some of the assets that we felt could help others on the same path.
Today we have offices in Australia and many of our team have worked there on a temporary basis and some have stayed there. I lived there myself for two years with my family. The experience has been intense and very satisfying. We never imagined that the Australia-Latin America Business Council (ALABC) would recognize our efforts in promoting interchange between our regions by giving us the Latin America Business Excellence Award 2016.
For this reason, through Endeavor Chile and Corfo, we implemented the Program for Skills Levelling for the Internationalisation of Co m p a n i e s in METS (Mining, Equipment, Technology and Services). We have just carried out a second trade mission within the framework of this Program with 18 Chilean businessmen. As one of the participants commented, â€œsimply knocking on doors is not the same as being able to take advantage of the synergies and dynamics that this type of mission providesâ€?.
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The Public Market: Another business alternative for Australian companies in Chile.
A market with an annual turnover of USD$ 12,000 million.
By: Gabriel Arancibia G. and Joaquín Vicuña D. Alessandri y Cía
services in nearly all countries, as well as being probably the most important client of the private sector.” This statement remains true, with little variation, until today. Following nearly four years of discussion, in 2003 Parliament passed Law 19,886 on “The Basis of Administrative Contracts for the Procurement of Goods and Services”. A year later, the Law’s more details regulations were also passed.
It is almost 18 years since a Bill was sent to Parliament by the then Chilean President, Eduardo Frei Ruiz Tagle, introducing a transcendental m o d i f i c a t i o n to the way in which State Administration would acquire the goods and services required for its proper functioning. The public sector, as clearly stated in the Bill, “is the most important sector in many economies and is the largest acquirer of goods, civil works and The new way of contracting goods and services
REPORT h a s a l l owe d, am ong ot her su ccess es, greater r e s p o n s i b i l i t y in public spending, better management of the procurement of goods and services, and most importantly, savings in public spending. Key factors in achieving this have been the principles underlying the Law. In varying degrees, these include: t r a n s p a r e n c y, com p et i t i on, ef f ic ienc y, effec t i ve n ess, equal access for Chilean and foreign companies, suitability of the contracting parties, and strict compliance with the law. According to this Law, State Administration bodies, and therefore parties obliged to make acquisitions according to its precepts, include practically all state institutions (of which there are more than 850), expressly excluding only a handful. The case of public companies such as Codelco is different, since it was forced by the Comptroller General of Chile to be included in the system. In this enormous market, it is projected just for the year 2017 that transactions will be made for the procurement of goods and services amounting to more than 12 thousand million dollars. Among some of the goods and services most frequently acquired are surgical supplies, chemical products, and materials for the maintenance and repair of property. However, thousands of products and services are required by State Administration and these requirements can be viewed openly by anyone who wishes to do so, thereby allowing access to this huge market to anybody who wants to participate. Over the almost 14 years it has been operating, this public procurement system has had significant success. More and more natural persons and legal entities, both Chilean and foreign, see in this market a real option to offer and sell goods and services in an satisfactory manner. The system’s regulations and common tools are managed by a specially created entity called the Government P r o c u r e m e n t D i r e c t o r a t e
( D i r e c c i ó n d e C o m pras y Contratación Pública) and better known as “ChileCompra”. The system h a s a n e l e c t r o n i c p l a t f o r m ( w w w . m e r c a d o p u b l i c o . c l ) where transactions for the procurement of products and services are carried out on a permanent basis, amounting to 7,000 business operations per day. Gaining access to this market of more than 60,000 registered suppliers, which moves a large part of total public resources, could represent an important step for Australian companies wishing to diversify into new sectors. Up until now, Australian companies in Chile have worked almost exclusively in the mining sector, but by accessing the public sector, they could gain an option to successfully increase commercial interchange. Participation of foreign suppliers in the public purchasing system Even though foreign persons and entities can form subsidiaries in Chile to participate in the public purchasing system, the law expressly allows foreign persons and companies to participate directly. Specifically, Article 4 of the Procurement Law states that natural and legal persons, both Chilean and foreign, may enter into contracts with Public Administration, as long as they provide evidence of their financial standing and technical suitability, in accordance with pertinent regulations, and comply with other requirements of general law. In the specific case of contracts for the acquisition of goods and services that are committed to being provided over a period of time, however, tendering entities are authorised to establish a specific mandate at the time the bid is awarded. This corresponds to the requirement to form a Chilean company or agency in Chile of a foreign company, through which the respective contract
REPORT will be entered into. Nevertheless, this obligation must be stated in the invitation to tender, so that before a specific public tender process, the bidders may be totally clear about what is required and whether they can comply with requirements. With regards to the protection of the rights of participants in these State Administration procurement processes, it is important to note that within the system created by law, a special tribunal was established. This is the Public Procurement Tribunal (Tribunal de la ContrataciĂłn PĂşblica) that handles in the first instance any legal actions deriving from acts or omissions, whether illegal or arbitrary, that have occurred during public procurement processes. Its decisions may be revised by the Santiago Court of Appeal. This Tribunal, therefore, provides protection for the rights of bidders in public procurement processes, when these rights have been violated. It should also be pointed out that the Department of the General Comptroller also plays two roles in this system. It both controls the general legality of Public Administration acts, ensuring compliance with public procurement regulations in those cases submitted to is competence, and also issues judgements that are binding for all Public Administration entities.
The four mechanisms for the acquisition of goods and services established by the Procurement Law The Law and its respective regulations establish an obligatory system for Public Administration entities based on four mechanisms for the
procurement of goods and services: 1. Public tender. This is the administrative procedure based on a competitive process whereby a public tender, issued to all interested parties, invites offers based on the terms of the tender, from which the most suitable will be chosen and accepted. 2. Private tender. This is the administrative procedure based on a competitive process, following authorisation through a reasoned resolution, whereby only certain persons and entities are invited to present offers based on the established terms, from which the most suitable will be chosen and accepted. 3. Direct Procurement. Given the nature of the negotiation involved, this is the contractual process that is carried out without requiring a public and/or private tender process. In this case, the purchasing entity makes a direct choice of the supplier of the goods or services. It should be highlighted that the use of this mechanism is restricted, and that it operates only for expressly designated cases, including in emergency and unforeseen situations, or in cases where only one supplier exists in the market for a particular product or service. 4. Framework Agreement. This is the procurement procedure carried out, not by each purchasing entity, but by the Government Procurement Directorate, for the direct acquisition of goods and/or services for each of the entities, in the form, within the term and under other conditions established in the Framework. Given the importance of this topic, in our next edition we will go more deeply analysing some successful cases where international companies have used this platform.
The Annual Meeting of Members 2017, held on 3 May, was well attended by Auscham members and friends. It included a report of the activities that had taken place during 2016 and the respective results. Sincere thanks were also given to all associates and sponsors who were so significant in the success of the various events. An important mention was also made of the collaboration between Auscham and other entities in relation to communication, working meetings, schedules for visits to Australia and networking. The voting for the election of Directors and Presidents of Committees was not formally required at this year’s Meeting. However, exceptional voting did take place due to vacancies on the Board of Directors following the resignations of Messrs. Nicolai Bakovic and Arturo Troncoso. Furthermore, a vote was needed to fill a vacancy for President of the Information Technology Committee. The Meeting also approved a change of name for this committee, now known as the “Innovation and Technology Committee”. Following the respective voting processes, the two vacancies on the Board were filled, and the President of the Innovation and Technology Committee elected, as follows: Directors: Mr. Jorge Delpiano, Lawyer and Partner, Guerrero Olivos Mr. Ricardo Vasquez, Lawyer, Baraona Abogados President of the Innovation and Technology Committee: Felipe Villarino, Co-Founder of Fidias Chile.
The discussion “Social Licence and Productive Projects: Lessons Learnt” was organised with great success by the Auscham Sustainability Committee. Prestigious speakers and experts on the topic from the public and private sectors spoke about their experiences. They also entered into a d i scuss i o n with participants about the fundamental principles for the development of productive projects that are in harmony with, and show commitment to, the whole of society as well as particular groups.
In a pleasant atmosphere of camaraderie and motivation, the initial kick-off was given to the “METS Trade Mission to Australia”. Participating in the Mission was a group of Chileans associated with the areas of Innovation and Technology who were interested to find out more about the development of these areas in Australia, while at the same time exploring new business opportunities in the Australian market. Mauro Mezzano, Partner and Director of Vantaz and Gerald Wood, Founding Partner of Bluefield, each made a presentation at the event about the experience of setting up a business in Australia and the challenges presented by the Australian Market respectively. Also collaborating and participating in the event, which was organised by Endeavor Chile and Vantaz Group, were Auscham and Trade & Investment Queensland (TIQ). It was also supported by Corfo.
At the invitation of the Universidad del Bío Bío, in the city of Concepción, the President of the Education Committee, Kenneth Maclean and Ximena López, in charge of Public Relations at Auscham, held a meeting with teaching staff at the university to discuss possible joint activities and to explore options for setting up exchange programs and research projects with Australian universities.
Auscham General Manager, Paulina Martínez, met with Alejandro Hughes, General Manager of Hotel Kennedy to define the details of an agreement that will give exclusive tariffs to members of the Chamber in services related to events, conferences and overnight accommodation for executives.
Auscham met up with representatives from the Chilean German Chamber of Commerce, the Chilean Spanish Chamber of Commerce and the Canadian Chilean Chamber of Commerce in order to evaluate and develop an inter-chamber alliance to promote joint activities. During the positive encounter details of the first activity were discussed. This will take the form of a panel discussion with the participation of the economic advisors for the presidential candidates in the run up to the November elections in Chile.
30 de Mayo
The Commercial Area of Liebherr held a meeting with Paulina Martínez in order to commit its support for the Auscham activities that will take place during the second half of the year and to define the calendar of events in which the company will be present.
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Dreams, Wishes and Hypothetical Thinking in English Where do non-native speakers tend to make mistakes with their English? Often, the errors appear when the grammar is very different from in their own language or where there seems to be no logic. Dreams, wishes and hypothetical sentences fall into both these categories, making them very difficult indeed! Dreams and wishes are unreal situations and do not refer to something that actually happened in the past. However, in English we use the Simple Past tense to express these situations, which seems a little odd. Eg: If I had ten children I would buy a van. (Hypothetical condition: If + Simple Past tense followed by “would” + verb.) Eg: I wish I could speak fluent English. (Wish: expressed in Simple Past tense.) The rules get stranger still for the verb “to be”. For hypothetical situations and wishes, the Simple Past for the “I”, “he”, “she” and “it” forms is “were” not “was”: Eg: If I were younger, I would go and study abroad. (“Were” is used instead of “was”.)
(Hypothetical condition in the past: If + Past Perfect tense followed by “would have” + past participle. Sounds complicated, doesn’t it! Probably best just to keep the example itself in your head!) Eg: I wish I had studied more. (Looking back and wishing it were different: Past Perfect tense.) Even native speakers frequently manage to make mistakes with these hypothetical past situations. It is very common to hear “would OF/could OF/should OF” rather than the correct “would HAVE/could HAVE/should HAVE”.
For those of us that can remember the musical and film “Fiddler on the Roof”, we can think of the song “If I Were a Rich Man” to ensure we use the correct part of the verb “to be” for the “I”, “he”, “she” and “it” forms.
Eg: If you had arrived on time, we could OF seen the start of the match. WRONG!
We sometimes do talk in the hypothetical past, when we wish that something had happened differently. In this kind of situation, English uses what is known as the Past Perfect (or “past-inthe-past”) tense to express the unreal event:
For unreal situations, Spanish uses what is known as the Subjunctive Mood (Si yo fuera…, ojalá yo tuviera…). For both forward and backward looking dreams and wishes, it i s i m p o r t a n t not to try to translate, but to remember the specific rules for English, even if they are a little tricky!
Eg: If you had studied harder, you would have got a better mark in your exam!
If you had arrived on time, we could HAVE seen the start of the match. CORRECT
AUSTRALIA - CHILE
SPIC in talks with Latin America Power to buy Chile assets According to Reuters, State Power Investment Corp (SPIC), one of the top five power generators in China, is in exclusive talks with Latin America Power to acquire the latter’s Chilean asset for $325-$400 million. In December 2015, SPIC purchased Pacific Hydro for $2.5 billion from Australia’s largest pension fund investor IFM Investors. Pacific Hydro had almost one gigawatt of wind and hydropower assets at the time of acquisition, located in Brazil, Chile, and Australia. Latin America Power has more than 300 megawatts of wind power and hydropower assets in Chile
and Peru, with 250 megawatts being located in Chile, including two large wind farms near Chile’s capital Santiago. In 2015, bankrupt US solar company SunEdison agreed to buy Latin America Power for $700 million. However, SunEdison later halted the deal, resulting in a court battle. Last year, SunEdison paid $28.5 million to reach a settlement. If the acquisition succeeds, it will mark another major stride for SPIC into the Latin American renewable energy market.
AUSTRALIA - CHILE
Chile’s Admiralty requests permit for Mariposa project Chile’s Admiralty Minerals, the local unit of Australia’s Admiralty Resources, has filed an environmental impact assessment for the construction of the Mariposa iron ore project in the Atacama region.
The project includes the processing of the ore at a magnetic recovery plant with a feed rate of 167,000t/m, producing some 64,260t of 65% iron ore concentrate per month. Annual output is expected to be 771,000t over a planned 18 years.
The US$70mn project entails construction of an open pit mine with projected annual output of 2Mt/y, according to documents submitted to regional environmental evaluation service SEA.
The iron ore concentrate will be transported for shipment to Punta Totoralillo port located near the town of Caldera. If approved, work is expected to start in February 2018.
The company had originally submitted the project in December last year, but it was rejected by environmental authorities in January.
On 12 June, the Innovation and Technology Committee organised a workshop designed specifically to come up with ideas and initiatives that will be part of the Committeeâ€™s agenda for 2017-2018. This event resulted in important agreements, as well as excellent initiatives to be developed during the second half of this year. This new type of event, which allows better interaction between the committees and members, seeks to renew the traditional working practices of the Auscham committees. We are grateful to all the participants at the workshop for their valuable contribution. Very shortly, the agreements and the new agenda will be published to inform all Chamber members and to motivate them to support the Committeeâ€™s future activities.
CORPORATE SOCIAL RESPONSIBILITY
Toki Rapa Nui The ONG Toki Rapa Nui was formed so that children and young people from Rapa Nui (Easter Island) could develop their talents without having to leave their marvellous island. The organisation offers free classes in piano, ukulele, violin, cello, musical theory, ancestral singing, hook takona and Rapa Nui dance to more than 80 children. The school (covering 750 square meters) was built with the help of more than 400 volunteers from all over the world. It was based on the “Earthship” model by architect Michael Reynolds and used recycled materials such as 1,500 tyres, 30,000 cans, 20,000 bottles, 12 tons of cardboard and more than six tons of plastic. The building, which is self-supporting and autonomous, has an organic vegetable garden in its grounds. In 2015, it won the National Environmental Prize given by the newspaper El Mercurio, the Universidad Católica de Chile and Fundación Recyclápolis. We invite you to be part of the TOKI dream and to help maintain our music and Rapa Nui culture classes for children and young people living on Chile’s Easter Island! firstname.lastname@example.org Tel:+569 56281600
WINDS OF CHANGE IN CHILEAN CAPITAL MARKETS By Luciano Aguilera and Reiner Baack
Chile has experienced substantial changes in its capital market system since the early 80s, with an increase in the number of market participants, product offerings and market depth in part due to the role played by the pension funds. Although Chile has one of the highest market capitalisation levels in Latin America, the overall market equity liquidity has remained relatively low given that the pension funds generally act as buy-hold investors and there is a predominant presence of conglomerates. Chileâ€™s capital market w a t c h d o g , the Securities and Insurance Superintendence (SVS), is a single-member
governmental agency affiliated with the Ministry of Finance whose main responsibility is to enforce the securities laws and regulations by monitoring all activities and participants involved in the securities and insurance markets. There are three active stock exchanges in Chile. The Santiago Stock Exchange is the main securities exchange, with a market capitalisation of over US$ 209 billion at the end of 2016, and 214 listed companies. Chilean stock exchanges operate as self-regulatory organisations. Their main exchange functions consist of establishing
MARKETS and stability of the Chilean capital markets by creating and enforcing rules that govern market participants, facilitate market participation, and improve the transparency standards. The FMC will maintain all of the SVS’s powers and will enjoy new attributions granted by the FMC law. The most noticeable features of this law are the following: (i) The FMC will be managed by a committee comprised of 5 members (the Committee), who must have certain professional or academic recognition in the financial system, and who will serve for a 6-year term.
and enforcing trading rules and regulations that govern and monitor their participants in order to (ii) The FMC will have greater monitoring prevent abuses. authorities and, subject to previous court approval, will be able to require banking Following the trends shown by developed information, even when subject to secrecy or economies, during the course of this year we confidentiality, gain access and enter private have witnessed substantial legal changes that property, and intercept communications, as well have been made with a view to strengthening as other powers. Chilean capital markets. These reforms include the creation of the Financial Markets Commission (iii) While a prosecutor appointed by the Committee (FMC), which will eventually replace the SVS, and will be in charge of investigating violations to the demutualisation of the Santiago Stock Ex- capital markets rules and regulations, the change. Committee will be in charge of imposing the The Financial Market Commission The SVS, led by a Superintendent, currently monitors over 7,000 entities. Although the SVS enjoys good prestige at a local and international level, Chilean lawmakers sought to improve the rulemaking procedure, and the agency’s monitoring, due process and transparency standards. In February, Law No. 21,000 was published (FMC Law), creating a multi-member body called the ‘Financial Markets Commission’, which is expected to replace the SVS within 18 months of the law’s publication. This statute provides that the FMC will secure the proper functioning, development
sanctions for such violations. These sanctions include censorship, fines, and the termination of a corporation’s existence.
(iv) There will be two types of proceedings before the Committee, general and summary proceedings. The former aims to review most cases brought before the Committee and the latter will review the cases that will be s p e c i f i e d in a forthcoming general rule. Prosecutor and committee resolutions are subject to an appeal for reversal and a claim of illegality before the Court of Appeals of Santiago. If the Court of Appeals rejects the claim of illegality,
such judgment will be subject to an appeal before Demutualisation of the Santiago Stock Exchange the Supreme Court. The Santiago Stock Exchange was formed in 1893 and as a floor-based exchange had limited space, (v) The statute includes a leniency program that so it only allowed a limited number of members. rewards self-reporting and cooperation, where This meant that brokers had to be members of an offender can obtain a reduction of up to 100% the exchange in order to be on the floor and trade. of the applicable fine provided that the offense involves two or more participants and if such Competition among local and international offender is the first person to come forward and exchanges has been constantly increasing and voluntarily provide background information. The the electronic communication network and remaining offenders can only obtain up to a 30% technological advances in data processing have reduction. If only one person is involved in the developed significantly. These factors have offense, he or she may obtain up to 80% reduction. required stock exchanges to operate efficiently The FMC also contemplates exceptions to criminal in a globalised market. liability in certain cases. Following international trends, Chileâ€™s leading (vi) In view of tighter corporate governance standards, stock exchange, the Santiago Stock Exchange, market players are required to self-regulate by finally demutualised on 12 June 2017. This issuing their own rules and codes of conduct. converts a mutually owned organisation into
MARKETS a for-profit company owned by investors. This is expected to create a new competitive environment among brokers, increase the transparency and efficiency standards, and facilitate access for new market players. Although recently consummated, the stock exchange’s demutualisation was approved at a shareholders’ meeting held on 17 March 2016, where the shareholders also approved, among other things: (i) to establish a ownership threshold in which no person, individually or jointly with other related persons, may hold, directly or indirectly more that 25% of the company’s capital stock; (ii) to include the concept of ‘unrelated director’ where at least 3 of the 11 board members of the stock exchange must be unrelated to the stock exchange, of which 1 director must be unrelated to companies listed on the stock exchange ; and (iii) new bylaws and internal regulation for the stock exchange.
Conclusion With the FMC playing a crucial role in improving monitoring and transparency standards and the stock exchange’s demutualisation leading to a more competitive market, we expect that these winds of change will boost Chilean capital markets over the short term.
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General Manager of Ward Van Lines assumes the presidency of Lacma During the recent convention held in Puerto Vallarta, Mexico, Sebastián Laporta assumed the presidency of the Latin American and Caribbean Association of Removal Companies (Asociación Latinoamericana y del Caribe de Mudanzas Internacionales – LACMA) for the period 2017 and 2018. LACMA is the leading association in the regional removal company industry. It was founded in 1969 in order to bring together the best companies in the international removal and relocation services industry in Latin America and the world, as well as to establish quality norms and standards for associated companies. It should be noted that the current president, Sebastián Laporta, has been involved in LACMA since 2006, first as the president of the industry young executives group, then in various positions such as treasurer, secretary, vice president and now president.