Company Workers Union of Maritima & Commercial Somarco Limited and Others v Ministry of Energy
Jurisdiction: Chilean Supreme Court; Court of Appeal of Antofagasta
Side A: Commercial Somarco Limited and Others
Side A: Company Workers Union of Maritima
Side B: Ministry of Energy
Core objectives: Whether the government's energy decarbonization plan failed to include the participation of workers and violated their human rights under a just transition.
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.