* Supreme Court doesn't halt coal-fired Bocamina
* Local court had already frozen one of Bocamina's plants
* Fishermen say marine life harmed, water polluted (Adds Endesa comment)
SANTIAGO, Jan 10 (Reuters) - Chile's supreme court has ruled in favor of local fishermen who say Endesa Chile's Bocamina coal-fired facility kills marine life and pollutes ocean water, but it said halting its operations was a decision for environmental authorities.
An appeals court in December halted operations at the 350 megawatt Bocamina II plant in Chile's southern Bio Bio region. The 128-megawatt Bocamina I plant is still operating.
"The company can only operate Bocamina I and II if ... water suction doesn't threaten nor harm species and hydrobiological resources, and strictly abides by its environmental license," the supreme court said in a Jan. 9 ruling.
If that wasn't the case, the ruling continued, "all corresponding measures have to be adopted, including the stopping of the plan until the faulty operations are repaired."
It was not immediately clear how or when state environmental authorities would evaluate the plants and make a decision. It was also unclear how tricky or costly fixing the suction system might be.
Local fishermen say suction pipes at the complex draw in crabs, sardines and other marine life and expel dead organisms back into the ocean. They also say the water flows back into the ocean warmer and contaminated.
Endesa says the plant has not had environmental effects beyond those detailed in its permit and that Bocamina provides crucial energy during an ongoing drought that has hit hydropower generation.
"Endesa Chile has implemented a plan to eliminate the risk that organisms be sucked up," the company said in a statement later on Friday. "Authorities have been informed of the plan and the plan will be inspected in consequence."
Bocamina is one of several energy and mining projects that has come under fire in recent years in Chile, which is struggling to find a balance between its mining-dominated economy and environmental protection.
Unclear regulations have contributed to surprise setbacks to billion dollar investments in the world's leading copper producer.
Lorenzo Soto, one of the lawyers representing the local fishermen in the Bocamina case, said the ruling marked a legal precedent in terms of who in Chile is in charge of halting investments that are or could be polluting.
"This is the first time (a ruling) draws a line between the reach of the courts in relation to the new (environmental) regulator," Soto said. "This is very relevant."
The ruling could help clear up Chile's notoriously nebulous regulatory framework, and provide clearer guidance for investors and communities at loggerheads over megaprojects. (Reporting by Erik Lopez, Alexandra Ulmer and Fabian Cambero; Writing by Alexandra Ulmer; Editing by Paul Simao and Nick Zieminski)
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