Chile’s environmental watchdog fines “serial offender” Nova Austral once again

Chile’s environment regulation agency has fined salmon farmer Nova Austral CLP 1.23 billion (USD 1.56 million, EUR 1.32 million) for inadequate mortality and solid-waste management at its Aracena 19 grow-out center, located inside the Alberto de Agostini National Park in Punta Arenas, Chile. It is the highest fine ever levied for environmental rule-breaking in the Magallanes region.

Chile’s Superintendency of the Environment (SMA) levied the fine against the Punta Arenas, Chile-based company for five infractions, the most serious of which had to do with Nova Austral’s failure to send a digitized copy of the center’s daily mortality control log corresponding to its 2016-2018 production cycle, the watchdog reported on its website. Other breaches include insufficient solid waste management, failure to comply with preventive measures outlined in the farm’s contingency planning document, structural damage at its silage platform, and the concealment of information, which prevented SMA from exercising its supervisory power, the agency said.

The fine is the result of an SMA investigation carried out in conjunction with officials from the Fisheries and Aquaculture Service (Sernapesca) and the General Directorate of the Maritime Territory and Merchant Marine (Directemar), according to SMA Director Cristóbal De La Maza.

"This is a company that has 50 percent of its centers undergoing sanctioning procedures – we are in the presence of a serial offender," De La Maza said on Informe Especial (“Special Report”), an investigative television program that has been broadcast by national television station TVN since 1984 and which on the night of Thursday, 9 September featured a report on Nova Austral’s history of compliance issues with Chile’s environmental regulations.

Nova Austral, owned by the equity funds Altor Fund III and Bain Capital, first came under the scrutiny of Sernapesca in 2019 following press accusations of underreporting mortality rates. That scrutiny later resulted in a criminal suit against the company and its former executives, who were fired as a result of the scandal. Those criminal charges, and the subsequent court case, resulted in a Chilean court in Punta Arenas levying the maximum fine possible against the company – a fine that Sernapesca said was too low given the scale of the behavior.

Nova Austral’s entire operations are in the Magallanes and Antarctic region, employing around 800 people. It positions itself as the first Chilean producer to offer premium, “sustainable salmon farmed in Antarctica's pristine and icy waters” year-round, free of antibiotics, operating in the region for more than 15 years.

"This company has about 25 complaints regarding their [grow-out] centers, so we are talking about more than one complaint per center [Nova Austral has 19 centers in the Alberto de Agostini National Park],” De La Maza said. “That is clearly one of the worst environmentally performing behaviors.”

Regarding the latest fine, Nova Austral said it is analyzing the resolution.

“Two years ago, the company completely restructured internal management, adding and gaining back international certifications that guarantee the highest environmental, sustainability, and compliance standards in our operations, which is aligned with the commitment to develop the farming and processing of salmon in harmony with the environment and the communities with which it is related,” Nova Austral said in a statement to SalmonExpert.

Nova Austral has five business days to appeal the SMA ruling and 15 business days to file a claim of illegality with the Chile’s Environmental Court.

At end of August, the company announced it had officially joined the Global Compact Network Chile, which it said made it the second salmon company in the country and the first in the Magallanes region to join the United Nations-sponsored initiative.

“With this incorporation, Nova Austral is committed to integrating the 10 universal principles promoted by the Global Compact on Human Rights, environment, labor relations, and anticorruption into its strategy and all of its operational processes and states that its sustainability efforts will be aligned with the Sustainable Development Goals,” it said. “Therefore, this is a key step in the company´s reconstruction process, which in recent times has developed numerous initiatives that seek to operate with the highest standards of sustainability, environmental responsibility, and good practices in the industry.”

The announcement came just weeks after Nova Austral released its first sustainability report, prepared according to Global Reporting Initiative standards, “as part of its commitment to become a company that operates with the highest standards of good practices, sustainability, and transparency.”

Nova Austral said the SMA allegations were “completely misaligned” with the actions and business ethics of Nova Austral and its shareholders, adding that the board of directors had commissioned an internal and independent investigation to detect and correct the errors that led to the complete renewal of management – evidence, it said, of how Nova Austral is a company that “operates with the highest standards of environmental care, sustainability, and transparency in the industry,” Informe Especial reported.

De La Maza called out Nova Austral’s words as a greenwashing effort.

“They have always declared this remarkable environmental behavior, but I want to be emphatic here – behind this case, what drives Nova Austral is money,” De La Maza said.

According to Informe Especial, the environmental regulator will file further charges against the company for alteration of the seabed at Aracena 14, which is currently not in operation. SMA investigations reportedly discovered various ships that transported up to 200 tons of sand to Aracena 14 without dispatch guides, which SMA said was an attempt to undertake alterations of the site without official permission or awareness. The sand and chemical agents were deposited on the seabed to cover the contamination of microorganisms and to degrade organic material in an attempt to reverse aerobic conditions, SMA said, which would have enabled the new-shuttered site to continue operations. SMA testing carried out on the seabed found a total absence of macrofauna there due to the sand covering.

The Informe Especial team joined one of the SMA’s three Magallanes inspectors on an unannounced on-site inspection of Nova Austral’s Aracena 11 center. After performing audits of the structure positioning, management of mortalities, management of residues, the farm’s feeding system, and contingency plan measures, two irregularities were detected that may lead to new sanctioning processes against Nova Austral.

Other SMA investigations are being performed that could uncover new breaches, leading to further fines and sanctioning, Informe Especial reported.

Photo courtesy of Nova Austral