Menu Search through site content What are you looking for?
Menu

A new Constitution for Chile: result of a plebiscite on 25 October 2020

  • Market Insight 28 October 2020 28 October 2020
  • Americas

  • International Arbitration

After a postponement due to the Covid-19 pandemic, on 25 October 2020, the constitutional plebiscite took place in Chile. The result was unequivocal: a significant majority of Chilean citizens voted in favour of a new Constitution.

A new Constitution for Chile: result of a plebiscite on 25 October 2020

Although Chile has significantly and increasingly reduced poverty in the last 30 years, since October 2019, the country has experienced social unrest. This was chiefly a reaction to what many perceived as rampant economic inequality in the country. The blame was laid by many voices at the door of the Constitution enacted by General Pinochet's Government at the outset of the 1980s, still in force in Chile. Conscious of this perception, Chile's Government decided to put to the people, by way of a constitutional plebiscite, the question of whether a new Constitution was due.

After a postponement due to the Covid-19 pandemic, on 25 October 2020, the constitutional plebiscite took place in Chile. The result was unequivocal: a significant majority of Chilean citizens voted in favour of a new Constitution.

Owing to the outcome of the plebiscite, 155 members of a committee (the 'Convención Constitucional') in charge of drafting a new Constitution will be elected. The committee will have one year to complete a draft. Once the committee completes the draft, it will be subject to another plebiscite for approval ('plebiscito de salida').

Commenting on this development, Alejandro García, a Chilean national and dispute resolution partner at Clyde & Co in London, stated: "This is democracy at work. The democratic legitimacy at the root of the constitutional process and its product, a new Constitution, is likely to give many Chileans a significant sense of empowerment. One would hope that this process renews the country's unity and social stability, which had been the norm for the last 30 years or so. No doubt, like in any constitutional process, questions will be asked, including by investors in key sectors, such as mining. The network of numerous treaties protecting foreign investment concluded by Chile and its track record as a good global citizen will provide significant comfort for the future to existing and prospective investors."

These views are echoed by Juan Turner, managing partner at Grasty Quintana Majlis, one of Chile's leading full-service law firms, with which Clyde & Co established an association at the beginning of 2020. In this respect, Mr Turner considers that "in the last 30 years, Chile has shown a remarkable capacity to resolve its social issues democratically. Now, an overwhelming majority of the country's citizens have agreed on a constitutional change. We do not expect dramatic changes to the fundamentals underpinning the country's economic system, but instead more stability, social cohesion and legitimacy, confirming the role of Chile as a force for democracy in region."

End

Stay up to date with Clyde & Co

Sign up to receive email updates straight to your inbox!