A Chilean court of appeals in the city of Punta Arenas has confirmed a fine of some CLP 153 million (USD 217,000, EUR 177,000) against salmon farmer Nova Austral for falsifying mortality reports at centers in the Magallanes region, and has extended the sanction to include the suspension of one production cycle at the company’s Aracena 3 center.
Alicia Gallardo Lagno, national director of Chile’s National Fisheries and Aquaculture Service, Sernapesca, celebrated the ruling as “historical and exemplary.”
Charges were originally filed against Nova Austral in 2019 for the false reporting of mortality figures, and in June 2020 Chile’s Council for the Defense of the State (CDE) filed a criminal lawsuit against former company executives, forcing an investigation into their responsibility for fraud.
In July 2020, the Chilean courts ordered Nova Austral to pay the maximum fine allowed by law for falsifying mortality reports, but at the time Sernapesca said it would look to increase sanctions as the country’s fisheries law also allows for punitive actions of suspension of operations for up to two production cycles.
The latest ruling "is a tremendously relevant precedent, [demonstrating that] informing the authority is for the public good, for the sustainability of resources, and that not doing so has a cost, a high cost, as established by the Court of Punta Arenas," Gallardo Lagno said in a Sernapesca release.
The fishery service called the ruling “a milestone,” saying these types of exemplary sanctions are the most effective tool against companies that try to deceive the supervisory body.
“The suspension of operations is a sign that for those companies that fail to care about the sustainability of their activity and the conservation of resources, the authority will not allow them to continue operations,” it noted.
In response to the misconduct, Nova Austral implemented executive changes in April last year, looking to bolster administration, with management saying it is “committed to steer the company through its pending legal and regulatory matters, and at the same time create a better company for the future.”
In December, the company announced it had achieved Aquaculture Stewardship Council (ASC) certification at two farms – Aracena 1 and Aracena 5 – and is working to extend certification to its entire operation.
“The certification is one more step in the trust-building process Nova Austral initiated and part of the founding cornerstones of its aim to achieve the highest standards of sustainability, compliance, and respect for the environment,” Nova Austral said at the time. The company also highlighted its restructure, together with higher standards of compliance, ethics, and corporate governance – including a crime prevention manual, a new code of ethics, and a whistleblower channel.
