Economic Freedom and Property Rights Under the Chilean Constitution
Freedom to Develop Economic Activities and Economic Amparo
Freedom to develop economic activities, also known as Economic Amparo, was conceived as an instrument to provide protection to economic freedom, just as economic freedom is also protected by another resource called the writ of protection. (1) Both instruments aim to protect economic freedom, but a distinction must be made. While Economic Amparo has only been designed for economic freedom, the writ of protection has been designed for the protection of all constitutional rights, except for those of personal freedom and individual security. The latter are protected by the writ of habeas corpus, as enshrined in Article 21 of the CPR. Social rights are not protected by the writ of protection. (2) The broad-spectrum nature of the writ of protection means it protects most of the constitutional rights enshrined in the CPR, as set out directly in Article 21. On the other hand, Economic Amparo is enshrined in Law 18,971 of March 1990. (3) While there is no doubt that the provisions of either paragraph of Article 19 No. 21 are covered by the writ of protection, regarding Economic Amparo, there has been doubt as to whether it served to protect the provisions of both paragraphs of No. 21 or only those of the second paragraph. Why is there a problem? Originally, Economic Amparo was part of a bill that also dealt with the business activities that the state could validly assume or exploit under quorum law. This bill contained provisions that created Economic Amparo, and other provisions that dealt with the economic areas that the state could operate by establishing public enterprises, with the permission of a quorum. A committee formed by the military government to discuss draft laws, including this one, divided the bill into two projects. While the Economic Amparo bill survived, the other one did not and was never adopted. Some have reasoned that since Economic Amparo was part of a project aimed at establishing the business areas that the State could address, it was designed to prevent the State from addressing business areas other than those established in this project, or from doing so without the sanction of quorum law. In any case, this action was related to the business of the State, and it appears that the business of the State covers only the second paragraph of Article 19 No. 21 of the CPR. Therefore, they conclude that Economic Amparo serves only to protect individuals against violations of the provisions of the second paragraph of No. 21, which would restrict the scope of Economic Amparo. This action would be inappropriate to protect individuals against violations of the first paragraph of Article 19 No. 21. However, this interpretive question is now resolved. The practice of our courts has reasonably concluded that Economic Amparo, as a remedy for protection, protects individuals against violations of the provisions of both the first and second paragraphs of No. 21, for the simple reason that the two clauses are closely linked logically. It is not possible to establish a clear distinction between them, and also because Law 18,971, which created Economic Amparo, makes no distinction. If the law does not distinguish, the interpreter cannot do so. Therefore, the case law that previously held that Economic Amparo applied only to the second clause was incorrect.
Differences Between the Writ of Protection and Economic Amparo
Purpose of the Remedy
(4) When a writ of protection is filed for the protection of a right, the aim, as provided in Article 20 of the CPR, is to establish the rule of law and due protection of the affected party. Therefore, it empowers the competent court to take all steps it deems necessary to restore the rule of law and provide the individual with adequate protection. The competent court is not limited to noting the existence of an irregularity; it must act appropriately to adopt measures to protect the affected party. With Economic Amparo, something strange happens. Initially, it was accepted that the purpose of Economic Amparo was similar to that of the writ of protection. However, today things have changed. Case law on Economic Amparo has unfortunately concluded that the court should confine itself to establishing the existence of a violation of either paragraph of No. 21 but may not take steps to restore the rule of law and provide proper protection to the affected party. The person who wins the appeal for protection will have to initiate new procedures for the restoration of the rule of law and to ensure due protection.
Filing Deadlines
(5) The protective action is brought within 30 days from the time of the act or omission involving the arbitrary or unlawful exercise of a right, or from the time that the party concerned becomes aware of the act or arbitrary or illegal omission. In contrast, Economic Amparo must be lodged within 6 months from the time the violation of one of the two aforementioned paragraphs occurs.
Appeals Process
(6) Both Economic Amparo and the writ of protection are heard in the first instance by the respective Court of Appeals and on appeal by the Supreme Court. In both cases, the deadline for filing the appeal and moving from the first to the second instance is 5 days.
Procedure
(7) The application for protection is a procedure that undergoes its own processing, established in Article 21 of the CPR itself, in an auto acordado (court order) of 1992, amended in 1998 and 2007. In contrast, Economic Amparo is subject to a procedure that is not its own but is the same procedure used for the conduct of regular amparo, also called habeas corpus. This is why Economic Amparo is so-called because it uses the same request. (8) The writ of protection may be filed by the affected party or anyone acting on their behalf. However, in the case of Economic Amparo, the appeal may be filed by any person, whether or not affected by the action. This means there is a public or popular action, and it can be brought even by people who have no current interest in the case reported.
Consequences of Losing the Appeal
(9) The party who loses a writ of protection pays the legal costs. However, the party who loses Economic Amparo may be liable to compensate for all damages caused by their irresponsible actions.
Article 19 No. 23: Freedom to Acquire All Kinds of Goods
This right, as well as economic freedom, is inseparable from a neoliberal market economy. It is a necessary prerequisite that enables the development of economic freedom. It is important to emphasize that we are facing an individual right, not the right to property as embodied in the CPR of the Soviet Socialist Republics. In those CPRs, the right to property was a social right, where people owned property without the State obtaining the minimum needed to survive with dignity. The right referred to in our CPR is also known as the right to property (hence the distinction with the Socialist CPRs). It is an individual right, as it is the right of all persons to acquire property as they see fit, using the modes of acquiring ownership. Do not confuse freedom to purchase all kinds of goods with the right “of” ownership or control, because the latter only comes into play when the good has already been incorporated into the estate under a mode of acquisition. In contrast, the right “to” property is exercised in an unspecified manner over any kind of property to be incorporated into the heritage of the people. The right to property is exercised before the right of property; it is a prerequisite to becoming an owner. You have the freedom to acquire ownership of any property. Instead, you have the right of property over ownership that is already within a person’s heritage. The right to property makes the difference between a liberal and a socialist state, where in the latter, all goods belong to the State, and people are not free to buy all sorts of goods.
Limitations on Acquisition
Under the 1925 CPR, the State could reserve for itself the domain of a certain class of goods (natural resources or capital goods) as decided by law. Under the 1980 CPR, the state cannot do this because it is inconsistent with economic freedom and the right to acquire all kinds of goods. Besides, the goods that people cannot afford are exhaustively listed in the CPR.
Goods Not Likely to Be Acquired
(a) Assets that nature has made common to all men. Examples: sea, air, celestial bodies, interstellar space.
(2) Property belonging to the nation or national property for public use. Examples: streets, plazas, avenues.
(3) Property that other CPR standards, other than those contained in Article 19 No. 23, establish as non-transferable. Example: Article 19 No. 24, which states that mineral deposits belong to the State and groundwater is for public use. Example 2: Article 103 – weapons that are not susceptible to being acquired by individuals, as determined by a qualified quorum law (LQC).
Goods Available but Restricted
There are goods that are available but narrowly. They can be purchased in the national interest and by LQC. Examples:
- Under the military government, there was a rule contrary to the market economy. It was in the law relating to banks, the Bank Act, which prohibited a natural person from acquiring more than 1.5% of all shares of a bank and a legal person more than 3%. In that case, the shares could be bought but were limited.
- For a long time, Peruvians could not acquire property in Arica and Tacna, which was the same ban for Chileans. However, a reform of the Civil Code allowed it.
- The Mining Code stated that no judge within their territorial jurisdiction could obtain a mining concession, neither they, their spouse, their ancestors, descendants, nor collaterals up to the 2nd degree, and they are the ones that grant mining concessions.
- Judges also cannot buy goods at issue. The law of the Organic Court Code (COT) is a fictitious LQC, which can only be modified by another LQC. Restricting certain goods can only be done by LQC. Article 4 Transitional of the CPR.
Article 19 No. 24: Right of Ownership or Control
As befits a neoliberal regime, the right of ownership or domain is the most complete real right you can have over a thing, without regard to a particular person. The CPR states, “The Constitution guarantees all persons… 24.- The right of ownership in its various forms…” Any kind of property is covered by the CPR: individual property, community property, corporate property, bare ownership, fiduciary property, mining property, water rights, forestry rights, agricultural rights, etc. All present and future forms of property are covered by the CPR. The CPR then adds, “…over all kinds of tangible and intangible assets.” The 1980 CPR is the first to expressly recognize the right not only over tangible property but also intangible property, which are real and personal rights, according to the civil conception. From a constitutional point of view, it is related to any benefits of economic substance capable of assessment.
Examples of Ownership
- Ownership of a profession, employment, or position, professional prestige, or grades (for students). The right to education is not likely to be covered by the writ of protection directly. Students unfairly expelled could not defend themselves by appealing to their right to education. Therefore, they resorted to a ruse: the person claiming the right to education could claim the property right over the right to education, which indirectly protects the social right.
- Ownership of any economic or pecuniary benefit, more or less direct. The lessee does not own the property but does have the right of use and enjoyment of the leased property for the duration of the lease. The landlord cannot violate the home.
- The beneficial owner is not the owner of the property they enjoy but does own the right of usufruct. The owner is the bare owner. Ownership of the rights arising from a contract, which enter into the person’s assets.