February 2009


Change in Chile: new law recognizes the role of “competent persons”

By D. McCombe

International and Chilean professionals share experiences at Santiago seminar.

One of the requirements of being a Qualified Person (QP) under Canada’s National Instrument 43-101 Standards of Disclosure for Mineral Projects is membership in a professional association. A professional association is defined as a self-regulatory organization of engineers, geoscientists or both engineers and geoscientists that:

  • is given authority or recognition by statute in a jurisdiction of Canada, or a foreign association listed in Appendix A to NI 43-101;
  • admits individuals on the basis of their academic qualifications and experience;
  • requires compliance with the professional standards of competence and ethics established by the organization; and
  • has disciplinary powers, including the power to suspend or expel a member.

If you are a member of one of the provincial or territorial professional associations of engineers and/or geoscientists in Canada, you would fulfill the first requirement. Professional associations of geoscientists and engineers in most countries meet the last three components of the definition but are not always recognized by statute. The intent of NI 43-101 was to allow geoscientists or engineers who are members of professional associations in foreign jurisdictions to be recognized as QPs; however, many foreign professional associations are not able to meet the Canadian definition of recognition by statute. A list of Recognized Foreign Associations is appended to NI 43-101. This list is also law, so it can only be amended when NI 43-101 is amended. Currently, there are no South American countries on this list.

On December 31, 2007, a law that established the concept of a Competent Person in Mineral Resources and Reserves in Chile came in to effect. This was a result of a five-year effort to parallel the system that other mining countries have already set up to improve investor confidence and support financings in the mining industry.

The Chilean law (20.235) authorizes the Institution of Mining Engineers, the Association of Geologists, the Association of Engineers, the Mining Conseil (Consejo Mineral) and the Society of National Mining (SONAMI) to set up the Chilean Commission for the Qualification of Competencies in Mineral Resources and Reserves (Comisión Minera) that includes one representative from each of the five organizations. The Comision Minera will be responsible for the registration and handling of all matters related to the Competent Persons in Chile.

The law also includes the principle of reciprocity such that foreign Competent Persons (or Qualified Persons) will have automatic registration in Chile on the condition that similar privileges are provided to Chilean professionals in these foreign countries.

Mining, Capital Markets and the Role of the Competent Person in Chile Seminar

In order to highlight the opening of the Registry of Competent Persons in Mineral Resources and Reserves in Chile, the Comisión Minera scheduled the Mining, Capital Markets, and the Role of the Competent Persons Seminar, held November 26, 2008 in Santiago. The seminar provided a networking venue for national and foreign professionals in the mining/financial industries. It was an opportunity for international and Chilean professionals to share issues and experiences and to consolidate relationships between both the professionals who will qualify to inform and report on the mineral resources and reserves in the capital markets and those professionals who develop their activities in these markets. The seminar was also concurrent with the annual meeting of the Committee for Mineral Reserves International Reporting Standards (CRIRSCO) technical task force of the International Council on Mining and Metals (ICMM).

Approximately 126 participants attended the seminar, which was a success in terms of organization, themes and speakers. Speakers from Australia, Canada, South Africa, the United States, Ireland, England and Chile acknowledged the international importance of this event. CIM representatives on CRIRSCO, John Postle and Deborah McCombe, attended the seminar. I gave a presentation on Canadian mining disclosure standards and Janis Koyanagi of the TSX presented a paper on the Canadian financial markets.

Edmundo Tulcanaza, corporate vice president of development for CODELCO and president of the Mineral Resources Committee of the Institution of Mining Engineers of Chile, was a driving force in establishing the Comisión Minera. He will continue to lead the organization as president and to participate in CRIRSCO as a representative from Chile. The Ministry of Mines of Chile recently presented the Alexander Sutolov 2008 Award to Tulcanaza in recognition of his outstanding contributions to the Chilean mining industry.

Deborah McCombe, executive vice president of Scott Wilson Roscoe Postle Associates, is a consulting geologist who is strongly involved in Canadian disclosure standards for the mining industry.

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