Nova Austral might have close operations if Chile pushes ahead with sanctions

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Chilean salmon farmer Nova Austral has warned in the country’s Third Environmental Court that it might have to close down if the the Superintendency of the Environment (SMA) proceeds with planned sanctions.

Documents filed by Nova Austral’s lawyer Julio Recordon in court state that the sanctions would “quite possibly” lead “to the closure of its operations in Chile, as the impossibility of operating three of its salmonid grow-out centers will necessarily lead to an unsustainable adverse financial situation.”

Last month, the SMA accused Nova Austral of overproduction between 2015-17 at three sites in the Alberto de Agostini National Park. As a result, the authority has sought to strip the company of its environmental licences for those locations, as well as issuing a fine.

If the court upholds the sanctions, it would be the first time that the SMA has removed a company’s environmental permit since it was established.

“Since the SMA has disregarded Nova Austral’s delicate and adverse financial situation, the imposed sanction of revocation completely disregards the efforts and concrete measures that the company has adopted to guide its behavior towards full compliance of environmental regulations,” Recordon said in the court document.

“In this sense, the SMA has overlooked the fact that the sanction of revocation undoubtedly constitutes the ‘ultima ratio’ of the environmental sanctioning power, leaving my client in an unrecoverable situation, in circumstances that, as has been analyzed, the infraction charged does not merit the application of a revocation of the environmental license…[making] its operational continuity impossible,” Recordon added.

Nova Austral has been wrestling with a challenging financial period, according to the court filing. The company had reportedly experienced losses for the first half of 2022 of €35.2 million, following losses of €53.2 million in 2022 and €79.8 million in 2020.

In May, Nova Austral was hit with a €1.5 million fine by the SMA over five breaches reportedly committed by the company at one of its sites in 2017.