Chile introduced a major piece of legislation in April that requires all branches of government to publish up-to-date information on expenditures, salaries and subsidies.

The legislation, entitled ‘Ley de Transparencia de la Función Pública y Acceso a la Información del Estado’ (Law for the Transparency of Public Administration and Access to State Information),  forms part of a larger government accountability agenda which was announced by president Michelle Bachelet in January of 2007. 

Chile has traditionally received high marks for transparency, ranking 23rd in Transparency International’s 2008 corruption perceptions index (tying it with France). However, Chile’s reputation was tainted in August of 2006 when it was discovered that 90% of the budget of the governments’ sports organization, Chiledeportes, had been diverted to non-existent projects and entities. A subsequent investigation concluded that most of the funds were being used to fund political campaigns.

The Chiledeportes scandal was followed by other high-profile corruption cases which prompted Bachelet’s accountability agenda. 

Chile risked “losing the great capital” it had built up in the area of government accountability, said Andrés Pavón of Chile Transparente, the Chilean branch of Transparency International, in an interview with Subsidy Watch. Pavón believes the new transparency legislation will prove to be a powerful tool in preventing corruption.

An autonomous four-person Transparency Council has been established to oversee implementation of the new transparency laws.  Transparency Council member and vice-dean of the Law School at the Pontifical Catholic University of Chile, Roberto Guerrero, said that the new legislation creates both passive and active transparency obligations for state agencies.

Active transparency requires that state organs keep up-to-date websites providing the public with details on the design of subsidies, amounts granted, criteria for qualification, and information on recipients, said Guerrero.

Subsidy recipients will be identified by name and subsidy program, unless doing so would reveal sensitive information pertaining to physical or moral characteristics, as in the case of subsidized medicine for HIV patients.

Passive transparency enshrines access to information principles, providing citizens the right to make information requests to public bodies, and receive replies within 20 working days.  Information requests can only be denied on limited grounds, such as when information affects third parties who are opposing the requests, or when information is related to the security of the state or the national interest.

According to Guerrero, the Transparency Law’s requirements will be applied to all ministries, regional governments, administrative divisions, municipalities, the armed forces, public service organs, the Central Bank of Chile, General Controller’s Department of the Republic, public companies and state enterprises, organizations in which the state has a 50% or more participation, the National Congress, and the courts.

In order to enforce these rules, the Transparency Council has powers to enact regulations, require applicable public bodies to adjust their procedures in order to abide by the law, and sanction the heads of public bodies found in violation of the law by handing down suspensions, fines of 20-50% of their salaries, or both, confirms Guerrero.

Days after the legislation came into force, information released under the new law to local newspapers led to accusations that the Bachelet government had provided funds under no-bid contracts to political groups, such as the Salvador Allende and Eduardo Frei foundations, which are associated with the Concert of Parties for Democracy (Concertacion), a coalition of centre-left parties which have dominated Chilean politics since military rule ended in 1990.

At an April 23rd press conference, government spokesperson Carolina Tohá said the funds provided to political groups were less than the amount which would require a competitive bidding process.  According to Tohá, the press was reporting incomplete information on government subsidies, and a complete look at the data confirms that organizations from all groups, not just those affiliated with the Concertacion, were receiving benefits as long as they met the requirements of the law.