| Legal and regulatory framework
1. Is there a constitutional background for the environmental regulation in your jurisdiction? |
Yes, the main principles and instruments that guide environmental regulation in Brazil are integrated in the 1988 Federal Constitution.
The Constitution dedicates an entire chapter (chapter 6 - article 225) to address the environment, which establishes the public's right to a balanced environment and a general duty for the government and citizens to protect and defend the quality of the environment for present and future generations.
The Constitution also sets forth the government's specific powers and duties to assure effectiveness of the right to a balanced environment, and the basis for the triple level of environmental liability, namely, administrative, civil and criminal.
Besides the specific chapter on the environment, there are other important provisions that set the constitutional background for environmental regulation in Brazil, such as that of article 170, which deems environmental protection as an underlying principle of the Brazilian economic order.
In addition, article 23 establishes the federal government, the states and the municipalities' common administrative competence to protect the environment, to guard against pollution and to preserve forests, fauna and flora. Article 24 establishes the federal government and the states' concurrent competence to create laws and regulations on environmental subjects. The exclusion of the municipalities from this list has created uncertainties in the legitimacy of environmental regulation by local authorities in Brazil.
| 2. What are the basic environmental statutes and regulations in your jurisdiction? |
Historically, Brazilian laws and regulations aimed at environmental protection have been created to address specific issues. As a consequence, enactment of the first basic environmental statutes in Brazil have been scattered and related to the regulation of exploitation of specific types of natural resources, such as water (Water Code of 1934 - Decree No. 24.643/1934), forests (Forest Code of 1965 - Law No. 4.771/1965) and minerals (Mining Code of 1967 - Decree-law No. 227/1967).
Integration came later, with the development of environmental awareness worldwide. This has influenced the adoption of a new set of environmental rules in Brazil, which impose a more integrated approach to environmental protection and establish coordination among government agencies in charge of specific institutional duties to implement such environmental rules.
The enactment of a National Environmental Policy in 1981 (Law No. 6938/1981) resulted in systematisation of government bodies and their respective institutional powers and duties, such as the Federal Environmental Agency (IBAMA, in charge of law enforcement), the National Council for the Environment (CONAMA, in charge of creation of regulatory standards) and several state environmental agencies. The National Environmental Policy has also defined the main instruments of environmental policy, such as environmental standards, zoning, licensing, environmental impact assessments and penalties for non-compliance with environmental provisions.
In 1985, another important federal law was enacted creating the so-called 'Public Civil Action' (Law No. 7347/1985). Similar to class actions in the United States, under the Civil Public Action both the Public Prosecutor's Office and civil associations are conferred standing to bring lawsuits to enforce environmental laws and regulations in Brazil.
In 1998, a law was enacted in Brazil establishing criminal penalties for individuals and corporations that commit environmental crimes (Law No. 9.605/1998). In 2008, a federal decree was enacted to further regulate this law, establishing administrative sanctions for violations against the environment (Decree No. 6.514/2008). This decree also establishes the legal procedures to be followed by the environmental agencies for enforcement of environmental laws and regulations.
At present, environmental laws and regulations in the country abound. They range from nuclear damages to coastal management, from creation of conservation units to requirements to implement environmental education systems in schools, from establishment of environmental quality standards for water, effluents, air emissions to post-consumption liability. In addition, provided certain competence requirements for law-making are fulfilled, both the states and the municipalities throughout the country are empowered to implement their own regulations regarding environmental protection and use of natural resources at regional and local levels.
| 3. What environmental civil liabilities apply in your jurisdiction in the case of environmental damages or torts? |
Under Brazilian law, environmental liability may apply in three different and independent spheres, namely, administrative, civil and criminal.
It is said that these three spheres of liability are different and independent because, on the one hand, one sole action by an offender may create environmental liability in all three spheres, and the application of all three different sanctions. On the other hand, absence of liability in one of these spheres does not necessarily exempt the offender from liability in the other spheres.
Environmental civil liability applies in case of an action or omission by an offender that results in environmental damage of any type, and is characterised as strict liability. Such liability results in the civil penalty of repairing the damage caused to the environment and indemnifying either the environment or affected third parties.
Characterisation of environmental civil liability as strict liability means that ascribing it to an offender depends only on the verification that an action or omission resulted in damage to the environment, irrespective of fault (negligence, misconduct or recklessness) on the part of the offender. Accordingly, environmental civil liability is ascribed, in principle, to the offender who gave direct cause to the environmental damage, but it may also extend to those who may be deemed as indirect polluters.
Aspects related to liability in the administrative and criminal spheres are addressed in question 8.
| 4. What is the role of the courts in protecting the environment (constitutional remedies, civil and criminal procedures)? Please describe any noteworthy judgments issued by a court in your jurisdiction related to environmental issues. |
In Brazil, the Federal Constitution establishes that no threatened or actual violation of rights may be excluded from examination by the courts.
Therefore, any environmental damage that may represent a threatened or an actual violation of rights may be addressed by the courts, with any party who had a right directly and individually affected having standing to sue.
However, given the fact that the environment is legally deemed as an asset of common use by the people, several specific legal instruments are also available to assure enforcement of environmental laws and regulations through public participation, such as the Ação Direta de Inconstitucionalidade (lawsuit aimed at declaring a statute as invalid for violation of the Constitution), the Civil Public Action, the Popular Action, the Collective Writ of Mandamus and the Writ of Injunction.
| 5. Please identify the major public agencies involved in environmental matters in your jurisdiction. What (briefly) are their respective roles and environmental law enforcement jurisdictions? |
The National Environmental Policy establishes and describes the National Environmental System (SISNAMA) as a set of agencies and entities of the gederal government, states, federal district, territories and municipal governments, as well as the foundations established by the public authorities responsible for the protection and improvement of environmental quality.
The SISNAMA is formed by the following bodies, with the following duties:
• Government Council: advises the president of the republic on the formulation of national policies and governmental guidelines for the environment. This Council is formed by the Ministries of the Presidency of the Republic;
• National Environmental Council (CONAMA): advises the Government Council, studies and proposes government environmental policies and guidelines to said Council, and resolves on environmental rules and standards;
• Ministry of the Environment: environmental preservation, conservation and inspection and implementation of international environmental agreements;
• Brazilian Institute for the Environment and Renewable Natural Resources (IBAMA): execute, within the federal sphere, governmental policies and guidelines established for the environment, as well as execute, inspect, control and promote federal environmental rules;
• Institute Chico Mendes of Biodiversity Conservation (ICMBio): execute actions under the National Policy of Conservation Units, as regards the federal duties related to the proposal, implementation, management, protection, inspection and monitoring of the conservation units set up by the federal government;
• Direct and indirect public administration entities dedicated to environmental protection: definition of policies and regulations within the specific areas of interest (eg, Ministry of Agriculture, Treasury, Navy, Mining and Energy, Health, Science and Technology, etc);
• State agencies (Sstate environmental agencies and related bodies): state agencies responsible for the execution of programmrs, projects and control and inspection of activities likely to cause environmental degradation; and
• municipal agencies (local environmental agencies and related bodies): municipal agencies or entities responsible for the control and inspection of such activities, in their respective jurisdictions.
| 6. What is the role of non-centralised (local, municipal, regional, departmental, etc) government in environmental protection? |
The organisation of the Brazilian state follows its own decentralised federal regime, and the 1988 Federal Constitution established a three-level federation, namely, the federal government, the states and the federal district and municipalities.
Pursuant to this model, there was an effort to implement a mixed system of central control and local autonomy, so as to locally implement uniform national policies, in harmony with the country's regional peculiarities.
As to the implementation of environmental protection measures, this organisation has effects on two areas, namely, the administrative and legislative competence.
As to the administrative competence, which is to be understood here as the competence to implement environmental protection measures, the Federal Constitution sets forth that such competence is common to all federation levels. Through the common competence, the three federation levels are granted police powers, which in practice often causes conflicts of authority, such as in the definition of which bodies must enforce environmental rules, impose administrative penalties and issue environmental licences.
As to the legislative competence, that is, to legislate on environmental matters, the Federal Constitution sets forth that such competence is concurrently held by the federal government and the states. The exclusion of the municipalities from this list has created uncertainty on the legitimacy of the environmental regulations by local authorities in Brazil.
| 7. What administrative penalties may be imposed when an environmental law is violated? What, if any, are the criminal penalties? |
Under Brazilian law, environmental administrative liability results from an action or omission by the offender that results in violation of an environmental protection rule, irrespective of the occurrence of actual environmental damage. Offenders are subject to the following administrative penalties: warning; fines (of up to 50 million reais); seizure of illegal earnings, products and means employed to commit the offence; suspension of activities; closing of premises; demolition of works; and restriction of rights.
Environmental criminal liability results from an action or omission by the offender (individual or legal entity) which is typified as a crime by federal law and depends on the verification of the offender's fault or malice. Criminal liability may extend beyond the legal entity and reach management and technical or legal consultants who contributed towards committing the offence. Offenders are subject to the following criminal penalties: warning; fines; seizure of illegal earnings, products, and means employed to commit the offence; suspension of activities; closing of premises; demolition of works; and restriction of rights.
| 8. How may decisions regarding breaches of environmental law be appealed? |
Brazilian law assures both the litigants to judicial or administrative proceedings and the accused in general to the right to counterclaim and full defence resorting to the appeals inherent thereto.
Therefore, within the administrative sphere, a decision by an environmental body may be, as a rule, the subject of defence and administrative appeal on the terms of the law applicable to the (gederal, state or municipal) environmental body handing down the subject matter of the defence.
Within the civil sphere, article 496 of the Civil Procedure Code lists all the appeals applying to a handed-down decision, namely: appeal; interlocutory appeal; appeal against interlocutory decision; request for reconsideration of non-unanimous decision; motion to clarify; ordinary appeal; appeal to the Superior Court; extraordinary appeal; and motion for resolution of the conflict in the Superior Court decision on appeal and on extraordinary appeal.
Within the criminal sphere, it is not possible to appeal decisions that are still within the police inquiry stage because that stage aims at investigating the crime against the environment, with due observation of the right to full defence but not that to counterclaim. As to decisions in criminal lawsuits, the right to both full defence and counterclaim is assured, according to the procedure described in Penal Procedure Code.
| 9. Does your jurisdiction allow environmental class actions? |
Yes. In 1985, a federal law was enacted creating the so-called 'Public Civil Action'.
Federal Law No. 7.347/1985 regulates the Public Civil Action for damages caused to the environment, consumers, assets and rights having artistic, aesthetic, historic or touristic value, and any other common rights.
Similar to class actions in the United States, under the Civil Public Action both the Public Prosecutor's Office and civil associations are conferred standing to bring lawsuits to enforce environmental laws and regulations in Brazil.
| Environmental impact assessment
10. Is an environmental impact assessment mandatory prior to the execution of a private or public project? What are the main projects and activities subject to environmental impact assessment? |
Environmental studies are designed to support licensing bodies to evaluate the best location and available technology for a venture or activity, so as to prevent and mitigate as much as possible their effects and potential impact on the environment. Thus, environmental studies of different depths are required upon environmental licensing of ventures and activities.
These studies comprise environmental aspects of location, installation, operation and expansion of an activity or venture, which are submitted as elements for analysis of the requested environmental licence. Among the most common environmental studies are the environmental impact study, the plan for recovery of degraded areas, and the simplified environmental report.
Every environmental study has a specific purpose, depending on the kind of venture or activity to be licensed.
An environmental impact study (EIS) is the most complete and complex type of environmental study. It considers the impacts of the venture or activity on the physical, biological, and socio-economic environments and defines the area of influence. The study also addresses the venture's location and available technologies.
Certain activities in which the entrepreneur is required to recover a degraded area, such as mining, the environmental authorities may require presentation of a plan for recovery of degraded areas.
A simplified environmental report (SER), in turn, is a kind of abridged EIS, one of the studies required for simplified environmental licensing of projects with environmental impacts of a lesser degree.
| 11. What are the main steps of the environmental impact assessment procedure, if any? |
The entrepreneur might consult the environmental agency about the right procedure to prepare the environmental impact assessment, considering a specific project. The competent environmental agency will issue a reference term that is a document establishing all the necessary items that this study shall consider.
The EIA must be carried out by a legally qualified professional at the entrepreneur's expense, and must be accompanied by the respective environmental impact statement (RIMA). The RIMA is a summary of the EIA.
The EIA must contain the following minimum requirements, provided for in CONAMA Ruling 01/1986, namely:
• environmental diagnosis of the project's area of influence, before the project's implementation, considering the physical and biological environment and the natural ecosystems, as well as the social and economical environment;
• analyses of the project's environmental impacts and its alternatives;
• definition of measures to mitigate negative impacts; and
• preparation of a positive and negative impacts follow-up and monitoring programme.
The state agency with authority to license the activity will have a term to pronounce on the EIA/RIMA conclusively submitted.
The RIMA will be accessible to the public. Its copies will remain available to the concerned persons, at the State Environment Department (SEMA) and the corresponding state environmental control agency's documentation centres or libraries, including during the period of technical analysis.
Moreover, whenever the appropriate environmental agency thinks it necessary, or when so requested by a civil entity, by the Public Prosecutor's Office or by 50 or more citizens, a public hearing shall be conducted for information on the projects and its environmental impact, and discussion on RIMA.
| 12. How do NGOs and communities participate in environmental impact assessment? Are their observations binding to the authorities? If not, what is the legal value of them? |
NGOs and communities participate in the EIA by means of public hearings as well as access to the information in the RIMA, which shall be made available by the competent environmental agency.
Public hearings are governed by CONAMA Ruling 06/1987 and their purpose is to allow the interested parties to have access to the contents of the product under analysis and its correspondent RIMA, solve any doubts and make criticisms and suggestions in regard thereto. Public hearings may be scheduled whenever the competent environmental agency considers them necessary, or where requested by a civil entity, the Public Prosecutor's Office, or by 50 or more citizens. If any qualified party requests a public hearing and the public agency refuses to conduct the public hearing, then the licence may be considered invalid.
The RIMA will be made accessible to the public and their copies will be made available to the concerned parties at the documentation centres or libraries of the corresponding environmental agency, including during the technical analysis period. In addition, the public agencies that show interest in, or are directly related to, the project will receive a copy of the RIMA for knowledge and comments.
| 13. What is the main legal feature of the environmental impact assessment approval? Does it operate as an 'umbrella environmental licence'? |
An environmental impact survey is mandatory and required from certain undertakings or activities regarded as agents potentially or actually causing significant environmental degradation.
It is only for orientation of the environmental body during the licensing of the intended activity, which is subject to the body's prior approval. Accordingly, preparation and delivery of the survey by the undertaking and approval of the survey by the environmental body do not pre-authorise the undertaking to operate the activities, because such authorisation is conditional on the environmental licence itself.
It is worth mentioning that according to the procedures under the Brazilian environmental law, specially Law No. 6938/1981 and CONAMA Resolution No. 237/997, the licensing process involves three consecutive phases, each corresponding to the issuance of three different licences:
• preliminary licence (LP): granted during the preliminary planning phase, whereby it approves the enterprise or activity location and project, attests the environmental feasibility and establishes the basic and conditional requisites to be met during the next implementation phases according to the environmental impact assessment;
• installation licence (LI): said licence authorises the enterprise or activity pursuant to the specifications in the approved plans, programmes and projects, including the environmental control measures and all other conditional requirements, which determine the grant of the licence; and
• operating licence (LO): the licence authorises the operation of the activity or enterprise, after verification of compliance with the conditions set forth in the prior licences with the environmental control measures and conditions required for the operation.
| 14. What are the legal consequences of implementing an activity without performing a mandatory environmental impact assessment? |
In principle, the lack of the environmental impact assessment for the activities regarded as potential or actual agents of significant environmental degradation, whenever enforceable, would prevent the environmental licensing of the activity because the survey to be submitted by the undertaking will be the grounds for the environmental body's review of the licence request.
In the event the undertaking begins the activities without the environmental impact survey required (and, consequently, lacks the environmental licence), such undertaking may become answerable for environmental liability within administrative spheres (fine of up to million reais, under article 66 of Decree Law No. 6.514), civil liability (remediation and indemnification for any environmental damage) and criminal liability (penalties provided for in Law No. 9.605/98, namely fines to the limit of 50 million reais, discontinuation of activities, bar to contracting with public administration and detention of the managers, among others).
| Natural resources, wildlife and protected areas
15. What is the legal regime applicable to protected areas in your jurisdiction? What are the main categories or units of protection (national parks, reserves, etc)? Is it legally possible to develop activities such as mining, logging or electric generation within the boundaries of a wildlife protected area in your jurisdiction? |
The legal regime applicable to protected areas is provided for in the 1988 Federal Constitution, which lists certain areas (the Amazon Rainforest, the Atlantic Rainforest, the Mountain Range of the Sea (Serra do Mar), the Wetland crossing the States of Mato Grosso do Sul and Mato Grosso (Pantanal Matogrossense) and the Coastal Zone) as national heritage areas, and stipulates that it is incumbent on the state to define the territorial spaces to be especially protected.
Also, in 2000, Law No. 9985/2000 was enacted, which established the National System of Conservation Units. A conservation unit is defined as the territorial space and its environmental resources, including the jurisdictional waters, with significant natural characteristics, legally established by the state, with conservation purposes and defined limits, under a special administration regime and, finally, to which appropriate protection guarantees are applied.
This law establishes the use types and restrictions that apply to each category of conservation unit.
The system divides the conservation units into two large groups: complete protection units, basically intended to protect the nature and admitting only the indirect use of their natural resources, except for the cases provided for in that Law; and sustainable-use units, basically intended to reconcile the conservation of nature with the sustainable use of a portion of its natural resources.
The complete protection units are, in turn, subdivided into environmental protection area, significant ecological interest area, national forest, extractive reserve, fauna reserve, sustainable development reserve, and natural heritage particular reserve, whereas the sustainable-use units are subdivided into ecological station, biological reserve, national park, natural monument and wild life refuge.
The implementation of economic activities in those areas will depend on the conservation unit category in question, the respective uses permitted by law and by its managing plan. It is also necessary to obtain a specific authorisation from the authority in charge of the protection unit.
| 16. Does your jurisdiction protect private land? Is it possible to establish conservation easements to protect private lands? |
Yes it is possible. Article 21 of Law No. 9985/2000 establishes the possibility of a natural heritage particular reserve. The natural heritage particular reserve is created in private land and it is registered in the real estate certificate. The use of land with this characteristic cannot be modified after the registration by the owner of the property.
The Forest Code (Law No. 4771/1965) establishes areas of environmental interest within private properties, such as the legal reserve (RL) and permanent conservation areas (APP), as follows:
Legal reserve
An area located on a property or small rural family property, except for permanent conservation areas, required for the sustainable use of natural resources, conservation and rehabilitation of ecological processes, conservation of biodiversity, and conservation and protection of native flora and fauna. Depending on their location in the country, an RL may correspond to 20 per cent to 80 per cent of the venture's property (80 per cent in Amazon forest area, 35 per cent in cerrado areas and 20 per cent in the rest of the country).
Permanent conservation areas
Areas protected pursuant to articles 2 and 3 of the Forest Code, whether covered or not by native vegetation, whose environmental function is to preserve water resources, the landscape, geological stability, biodiversity, the genetic flow of fauna and flora, as well as to protect the soil and ensure the well-being of human populations.
Upon environmental licensing, an entrepreneur must identify such areas so as to protect them from direct and indirect impact caused by the implementation of the venture or activity.
In some exceptional cases (public interest, social interest or low impact intervention) provided for in environmental legislation (CONAMA Resolution No. 369/2006), competent agencies may permit the occupation or installation of a venture or activity in such areas of environmental interest, for example, in the case of implementation of wind power stations in certain permanent conservation areas (dunes).
As to easements, the Brazilian Civil Code establishes that an easement is imposed by one property over another pertaining to a different owner. Through the easement, the owner of the servient estate loses the exercise of some of its property rights, or becomes obligated to allow the use by the owner of the dominant estate for certain purposes. This civil law provision for easements may be adapted for conservation purposes. However, such traditional easements have not actually been employed for conservation purposes in Brazil.
| 17. What are the main regulations applicable to flora and fauna? Are endangered species protected? |
The Federal Constitution provides that it is incumbent on the Public Authority to protect fauna and flora and bars practices endangering fauna's and flora's ecological function, causing the extinguishment of species or subjecting animals to cruelty.
As to flora protection, among the main laws applying thereto, Law No. 4.771/1965 stands out, as it deals with the protection of forests and other vegetation forms, and so does Law No. 9.985/2000, which formed the National Conservation Units System (SNUC) and which aims at contributing towards the preservation and restoration of natural ecosystems diversity.
With respect to fauna protection, Law No. 5.197/1967 protects wild fauna, and Laws No. 7.679/88 and No. 7.643/1987 in addition to Decree Law No. 221/1967 govern fishing activity.
Beyond the aforementioned laws, the set of penal and administrative sanctions applying to infringements against flora and fauna are also provided for in Law No. 9.605/1998 and Decree No. 6.514/2008.
| 18. How is the use of genetically modified organisms regulated? |
The use of genetically modified organisms is regulated and inspected by specific agencies of the Ministry of Agriculture, Livestock and Supply (MAPA) and the Brazilian National Biosafety Commission (CTNBio).
In Brazil, the seed segment is regulated and monitored by means of several of MAPA's agencies and, where the seeds are classified as GMOs, concurrently by CTNBio, an agency of the Ministry of Science and Technology, with competence to assess the environmental impacts caused by the introduction of GMOs into the environment.
In biotechnology, any products (including seeds) classified as GMOs are required to comply with the provisions in Law No. 10711/2003 and Decree No. 5153/2004, and to obtain prior authorisation from CTNBio to produce and market the products. Among CTNBio's competences, we particularly mention the examination of requests for technical reports for commercial release of genetically modified seeds. CTNBio considers whether the pertaining rules and laws intended to secure the biosafety of the environment, agriculture, human and animal health are met.
The procedures for GMOs approval by CTNBio are set forth in Law No. 11105/2005 (Biosafety Law) and Decree No. 5591/2005.
| 19. How are marine ecosystems are protected? |
Marine systems are acknowledged by the Federal Constitution and governed by Law No. 8.617/1993. Accordingly, the territorial ocean is a federal government domain and comprises a 12 mile-wide marine strip. Nonetheless, the Constitution sets forth that the Public Authorities benefit from (and have equity in) the results of exploitation of oil or natural gas, water resources for generation of electric power and other mineral resources in the continental slopes and in the exclusive economic zone.
The protection of marine environment is provided for in Brazilian law and in international instruments such as conventions and treaties. Such international instruments must be approved through legislative decree, enacted and published in order to be held as valid within Brazil.
Some of the rules specifically dealing with protection of the marine ecosystem include:
• Law No. 7.643/1987 barring the fishing of cetaceans in waters within Brazil's jurisdictional range;
• Law No. 7.661/1988 setting forth the National Plan of Coast Management;
• Legislative Decree No. 74/1976, enacted through Decree No. 79.437/1977, and whose applicability is ruled by Decree No. 83.540/1979, approving the wording of the International Convention on civil liability for damages caused by oil pollution; and
• Legislative Decree No. 4/1987 approving the International Convention for prevention of pollution caused by ships, of 1973.
It is important to mention Law No. 9.966/2000 providing for the prevention, control and inspection of pollution caused by discharge of oil and other hazardous or dangerous substances into water within the national jurisdictional range.
Furthermore, the National Environmental Policy authorises the creation of extraction reserves, located in marine or land areas, whose purpose is the self-sustainable exploitation and conservation of natural resources population engaging in extraction activities. Exploitation of mineral resources and amateur or professional hunting are prohibited.
| Pollution control
20. What regulations apply to air pollution control (point sources and non-point sources)? |
The main legal instruments to control air pollution in Brazil are based on the establishment of emission standards for both point sources and non-point sources, by the environmental authorities.
Within the federal sphere, the National Environmental Council (CONAMA) handed down Resolution CONAMA No. 05/1989 setting forth the National Programme for Air Quality Control (PRONAR). Said programme is one of the basic environmental management tools for protection of the health and well-being of the population and for improvement of life quality by limiting the levels of pollutants emission discharged by air pollution sources. In this regard, Resolution CONAMA No. 03/1990 established as quality air standards the concentration of air pollutants that, if exceeded, may affect the health, safety and well-being of the population and cause damage to fauna and flora, matter and the environment in general.
In 2006, Resolution CONAMA No. 382/2006 was enacted and it set forth the cap limit of air pollutants emission for point sources. Point sources are any installation, equipment or process located at a fixed place and releasing or emitting matter into the air by means of fugitive or point emission. The cap limit is set forth according to the pollutant and source type.
With respect to emissions through moving sources, we have Law No. 8.723/1993 providing for the reduction of emission of pollutants by vehicles and Resolution CONAMA No. 418/2009. This Resolution establishes criteria for the outline of the Vehicle Pollution Control Plan (PCPV), for the implementation of the Inspection and Maintenance Programme for Vehicles being Used (I/M) by the State and Municipal environmental bodies, and determines new emission limits and the procedures for evaluation of the maintenance conditions of the vehicles being used.
The penal and administrative sanctions applicable are provided for in Law No. 9.605/1998, and Decree No. 6.514/2008.
Without prejudice to the above, state laws may establish their own standards provided they do not conflict with federal law provisions.
| 21. How is the generation, transportation, treatment and disposal of industrial solid waste regulated? |
Brazilian Technical Rule No. 10.004:2004 defines solid waste as any solid or semi-solid waste resulting from industrial, domestic, hospital, agriculture, services and sweeping activities. This regulation classifies waste in two classes: class I - hazardous waste; and class II - non-hazardous waste. Non-hazardous waste is further divided into two categories: class II-A - non-inert and class II B - inert.
Hazardous waste receives special treatment and its storage, transportation, treatment and final destination is subject to specific requirements, including the obtaining of environmental licences and permits.
In addition, certain products considered as having a high polluting potential, such as the packaging of agriculture pesticides, tires, fluorescent lamps and domestic and general-purpose batteries are more strictly regulated and their manufacturers are subject to post-consumption liability.
As a rule, generators are liable for the final disposal of waste. Therefore, the outsourcing of waste treatment or disposal to a third-party contractor does not exempt the generator from environmental joint and several liability.
Finally, it is worth mentioning the Bill on the National Policy on Solid Waste Management, which was approved by the Brazilian House of Representatives in March 2010 and is pending on the Senate's voting and the president of the republic's approval. Once said Bill is enacted, the National Policy on Solid Waste Management will establish the shared liability of manufacturers of products considered as having a high polluting potential for the life cycle of the products and the obligation to implement reverse logistics systems for collection and environmentally appropriate disposal of the wastes resulting from their products.
| 22. How do the water pollution control regulations operate (BAT, quality or emissions standards, both)? |
The main legal instruments to control water pollution in Brazil are based on the establishment of emission standards by the environmental authorities.
The release of liquid sewage is governed by three CONAMA resolutions: Resolution No. 357/2005 applying to surface water; Resolution No. 397/2008 including new inorganic substances and the maximum limits allowed for emission thereof into water bodies; and Resolution No. 396/2008 establishing the classification of groundwater into classes.
As to the provisions of such federal resolutions, one must become aware of the state law determinations. Only for the sake of example, in the state of São Paulo we have State Law No. 997/76, ruled by State Decree No. 8.468/76, which establishes the emission standards to be observed in the state of São Paulo.
| 23. Are there any special regulations on cleaning up contaminated sites or reclamations? |
The first specific rules on soil protection in Brazil were predominantly correctional, without addressing many of the preventive aspects intended to prevent future contamination and to ensure the environmental quality of the soil and groundwater.
Recently, with the classification of soil as an asset to be protected, the government has enacted laws designed to protect the environment with pre-established quality criteria and measures intended for soil and groundwater clean-up.
The National Environmental Policy abides by the following principles: recovery of degraded areas; and protection of areas under threat of degradation.
The state of São Paulo was the first in Brazil to provide for treatment of contaminated areas. Initially, management of contaminated areas was subject to the application of administrative rules laid down by the São Paulo State Environmental Agency (CETESB). At this point CETESB created the Board of Directors Decision No. 103/2007, which approved the contaminated areas manual of CETESB. Later, in 2009, such procedures were almost entirely encompassed by a state law (Law No. 13.577/2009), which laid down procedures for identification and mapping of contaminated areas and implementation of mechanisms for remediation purpose.
Pursuant to the aforementioned law, not only the agent causing the contamination and the owner of the contaminated property may be held liable for the investigation and remediation thereof, but also the tenant; the holder of the effective title over the area, and whoever benefits economically with the area.
Within the federal sphere, the specific rule dealing with the recovery of contaminated areas is Resolution CONAMA No. 420/2009, which provides criteria and amounts for orientation of soil quality as regards the presence of chemical substances and establishing guidelines for environmental management of areas contaminated with such substances as a result of man-related activities.
| 24. When real estate is acquired, what liability do the previous and new landowners have for polluted land? |
In Brazil, environmental civil liability is characterised as strict and joint and several.
The characterisation of environmental civil liability as 'strict' means that ascribing it to the offender depends only on the verification that an action or omission resulted in damage to the environment, irrespective of fault (negligence, malpractice or recklessness) on the part of the offender.
Joint and several liability applies in civil cases where two or more parties are found liable for damages. In these cases, each liable party may be held individually responsible for the entire obligation, until damages are totally recovered. In any case, the paying party has a right of contribution and indemnity from the non-paying party (right of recourse).
Moreover, Brazilian Law defines 'polluter' as the 'individual or legal entity, private or public, who is directly or indirectly responsible for an activity that causes environmental damage' (Law No. 6.938/1981, article 3, IV).
As a result of these provisions, the new owner may be held jointly and severally liable in an environmental civil liability suit, and may be compelled to restore the contaminated area. However, the new owner is entitled to exercise its right of recourse against the party that had caused the contamination, that is, the former owner.
| Environmental management
25. Are there any market-based instruments, such as environmental taxes or tradable permit systems that aim to improve the environment in your jurisdiction? Are there any experiences or regulations regarding ecosystem services payments? |
Regulation of the environment in Brazil is mostly based on enforcement and sanctioning.
With regard to punctual situations of indirect participation in market mechanisms (such as the Brazil's participation in undertakings eligible for Clean Development Mechanisms within the Kyoto Protocol), Brazil does not have national-range instruments to solve environmental problems.
It is worth stressing that the definition of an air pollution control system by means of cap-and-trade mechanism, which would apply to industrial regions whose emissions are considered saturated or saturating according to State Decree No. 52469/2007, is currently under discussion in the state of São Paulo.
As to payment of environmental services, there are only punctual provisions, in scattered laws, with regard to the inclusion of costs with such services. For the sake of example, we may mention the adoption of the ecological ICMS (tax on circulation of goods and services) by some of Brazil's states (eg, São Paulo), and also the charge by the National Agency of Waters (ANA) for the use of water resources of the federal government's domain.
| 26. What are the most common environmental matters and conflicts in the major economic activities in your jurisdiction? |
In Brazil, major conflicts arise out of economic activities which demand intense use of natural resources.
Examples are hydropower generation, upon damming of rivers and flooding of forest areas for installation of water reservoirs; and cattle ranching, soybean farming, and illegal logging, upon deforestation of large areas.
Industry-related issues are mostly related to soil and groundwater contamination, air pollution, waste generation and post-consumption liability.
| 27. What are the most relevant issues to consider in a merger or acquisition? |
The performance of environmental due diligence of properties and companies as part of the procedures for identifying liabilities in mergers, acquisitions or joint ventures has become common practice in Brazil. Despite the lack of a nationwide regulation, it has become mandatory in some states, such as Rio de Janeiro and Paraná.
The objective of the environmental due diligence is to evaluate the environmental management of an economic activity, analyse its environmental performance and verify, among other factors, the degree of conformity with the environmental legislation in force.
Usually, the environmental due diligence is conducted by environmental advisers, in coordination with environmental lawyers who carry out legal due diligence to assess:
• the adaptability level of the company or property that is the object of the due diligence to the legal environmental rules, specifically when it comes to environmental licensing, including limits imposed to legal reserve and permanent preservation areas;
• the legal requirements for zoning and possible restrictions for expansion of the production capacity; and
• the legal aspects of the reports prepared by executive and technical consultants of the environmental assessments.
The assessment of the level of adaptability to legal requirements will be the basis for the allocation of possible risks of environmental liability to which interested parties may be subject in case of non-compliance.
Moreover, environmental lawyers play an important role in the verification of the potential contingencies that might be involved in the operation. This is done where the financial amount of any environmental non-compliance may influence the final transaction amount of the intended business.
The assessment is generally conducted with the assistance of a specialised environmental technical consultant firm that investigates the company's or propriety's conditions in loco. The outcomes of the technical inspection analysis are informed trough technical reports which are an integral part of the analysis made by the lawyers in the legal due diligence, as mentioned above.
It is worth stressing that, in relation to the observance of environmental law by active undertakings, the main aspect of legal due diligence is to verify the existence and validity of environmental licences that must cover the whole area where the company's activities are carried out and also the company's adaptation to any existing conditions usually set forth in its environmental licences.
Another important point to be analysed is the existence of any judicial lawsuits or administrative proceedings filed with the competent environmental agencies and the Public Prosecutor Office involving environmental matters, and the contingency that such proceedings represent to the company.
| 28. Do local banks consider environmental risks when financing a project? How do they assess such risks? |
In Brazil, environmental civil liability is characterised as strict and joint and several.
The characterisation of environmental civil liability as 'strict' means that ascribing it to the offender depends only on the verification that an action or omission resulted in damage to the environment, irrespective of fault (negligence, malpractice or recklessness) on the part of the offender.
Joint and several liability applies in civil cases where two or more parties are found liable for damages. In these cases, each liable party may be held individually responsible for the entire obligation until damages are totally recovered. In any case, the paying party has a right of contribution and indemnity from the non-paying party (right of recourse).
Moreover, Brazilian Law defines polluter as the 'individual or legal entity, private or public, who is directly or indirectly responsible for an activity that causes environmental damage' (Law No. 6.938/1981, article 3, IV).
As a result of these provisions - joint and several nature of civil liability and recognition of 'indirect' polluters - under Brazilian law financial institutions may be deemed as indirectly responsible for environmental damages caused by a
borrower within the financed activity and, therefore, be held jointly and severally liable for the obligation to remedy said damages.
In this regard, Law No. 6.938/1981 also establishes that lending by public financial institutions shall be conditioned to the obtaining of the necessary environmental licences, as well as to compliance with other applicable environmental laws and regulations, by the borrower.
The Brazilian Biotechnology Law, which regulates the use of genetically modified organisms (OGMs), among other related topics, is even more specific and establishes that institutions that finance activities involving such use shall verify compliance by the borrower with the obtaining of the necessary registrations and authorisations (represented in this case by the biosafety quality certificate). If verification is not demonstrated, the Biotechnology Law establishes that the financial institution may be held jointly liable for damages that may arise out of the non-compliance by the borrower (Law No. 11.105/ 2005, article 2, §4).
However, it is important to highlight that in practice Brazilian higher courts are still reluctant to recognise the civil liability of financial institutions for environmental damage caused by borrowers by means of the financed activities. As the available case law demonstrates, even when brought to discussion by the Public Prosecutor Offices and confirmed by the lower courts, the issue has tended to be reversed by the higher courts.
Notwithstanding the current status of case law, considering the above stated legal provisions, in order to limit environmental exposure, financial institutions shall actually condition lending to obtaining of the necessary environmental licences; and compliance with other applicable environmental laws and regulations by the respective borrowers, in order to reduce exposure to environmental liability for damages caused by borrowers within the financed activity.
| 29. How are non-conventional renewable energies promoted in your jurisdiction? |
Brazil has been playing a very important role in terms of developing renewable fuels as a sustainable alternative to fossil fuels. The main energy sources promoted are hydroelectric power and ethanol or biofuels.
The reliance on energy generated by hydropower plants is the main factor of Brazil's clean energy matrix (75 per cent of power supply). However, due to expansion of economic growth, a lack of proper infrastructure has shown to be problematic, with the construction of large hydroelectric power plants being considered as the main alternative to solve problem. The downside is the high environmental impact caused by the damming of rivers and flooding of forest areas for construction of reservoirs in the Amazon Basin. Recent bidding processes for the construction of hydropower plants in the Amazon region were delayed by issues related to environmental licences.
The production and use of ethanol is well-established in Brazil. Issues considered as problematic for other countries (ie, good distribution network, need to convert vehicle motors) are solved in Brazil. The background for this successful experience is the governmental programme launched in the 1970s (PROALCOOL) upon the advent of the oil crisis, aimed at substitution of fossil fuel for transportation. Brazil is the major producer and consumer of sugar cane fuel; however, it faces environmental issues posed by the pressure for conversion of agriculture land.
In addition, in 2004, Brazil enacted a regulatory framework to foster investments in biodiesel, which includes as governing principles the consideration of social aspects, use of oilseed according to regional diversity, food security, and competitiveness before fossil fuels. In response to international claims that production of ethanol could threaten food security, Brazil has developed an Economic Zoning for Sugar Cane (recently enacted in 2009 by Federal Decree No. 6.961/09), which map areas considered as environmentally adequate for sugar cane crops and define other areas were planting is forbidden (including Amazon and Wetlands/Pantanal regions).
In addition, Federal Law No. 11.097/2005 provides for the mandatory inclusion of a minimum percentage of biodiesel (ranging from 2 per cent to 5 per cent) to the diesel oil sold to consumers, in any part of Brazil.
| 30. What are the principles or policies underlying the environmental law in your jurisdiction? |
The main principles underlying Environmental Law in Brazil are:
• the principle of the ecologically balanced environment as a fundamental right of human beings, the principle of intergenerational solidarity;
• the principle of the public nature of the environmental protection;
• the principles of prevention and precaution;
• the principle of the state's control over polluters;
• the principle of consideration of the environmental variable in the decision-making process of development policies;
• the principle of the community's participation;
• the principle of the polluter pays;
• the principle of the user pays;
• the principle of the social and environmental function of the property;
• the principle of the right to the sustainable development; and
• the principle of cooperation among peoples.
The basic policies under the Environmental Law are the National Policy on the Environment, the National Policy on Water Resources, the National Policy on Environmental Education, the National Policy on Urban Areas, the National Policy on Biodiversity, the National Policy on Basic Sanitation, the National Policy on the Sustainable Development of Traditional Peoples and Communities, the National Policy on Solid Wastes,and the National Policy on Climatic Changes.
| Cultural heritage
31. How is cultural heritage protected (archaeological, historical, etc)? |
The protection of the historical and cultural heritage was established in Brazil by Decree-Law No. 25/1937. The 1988 Federal Constitution incorporated that Decree and ensured protection of the national cultural heritage by including therein the cultural, touristic, archaeological, landscape and natural relations, for the present and future generations.
In this regard, the Constitution provides that it is incumbent on the state to contribute to and protect the Brazilian cultural heritage by means of inventories, records, surveillance, declaration of cultural heritage and expropriation, among other forms of caution and preservation, and that any damages and threats to the cultural heritage will be punished according to the law.
The damages and threats to the cultural heritage give rise to administrative and legal measures. Within the administrative sphere, the measures against those damages consist in fines, destruction of the unlawful work or the work in disagreement with the protected asset, and the removal thereof. Within the legal sphere, those measures are represented by popular actions, civil class actions and criminal class actions.
| 32. What, if any, are the environmental issues related to indigenous peoples' rights? Are there any restrictions on developing projects in indigenous protected lands? |
The environmental issues related to the rights of indigenous peoples are linked to the lands they occupy, inasmuch as, under the 1988 Federal Constitution, the indigenous peoples are ensured of the exercise of their original rights in the lands they traditionally occupy in the form of permanent possession, and they are entitled to the exclusive enjoyment of the wealth from the ground, rivers and lakes existing therein. The indigenous lands can be neither transferred nor sold, and the rights therein never expire.
In this regard, there are specific legal provisions on the occupation of indigenous lands as, for instance, the constitutional provision on the use of water resources, including power potentials, the survey and mining of mineral resources in indigenous lands can only be carried out upon the Brazilian Congress' authorisation, after consultation with all the affected communities, which are ensured the right to take part in the mining output, as set forth in law.
Concerning the development of projects on indigenous lands, despite the acknowledgment of the Brazilian Indians' rights to survive and preserve their culture as well as the need to protect the Brazilian biodiversity and the respective traditional knowledge, the Brazilian Indians may take part in those
projects, provided, however, that they are conformity with the federal rules. The activities under the project and the consequent economic benefits result from the constitutional right to the exclusive use and sustainable handling of the demarcated lands and the economic benefits stemming from the sustainable use of the lands.
| International treaties
33. What are the main environmental international treaties ratified by your jurisdiction? |
Brazil is an active part in multilateral and international treaty-making forums. It is a party to most of the relevant international treaties, having ratified and internalised them as domestic law.
The main environmental treaties to which Brazil is a party are:
• Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES);
• United Nations Convention on the Law of the Sea (UNCLOS);
• Vienna Convention for Protection of the Ozone Layer;
• Montreal Protocol on Substances that Deplete the Ozone Layer;
• Basel Convention on the Transboundary Movement of Hazardous Wastes- Stockholm Convention on Persistent Organic Pollutants;
• UN Convention on Biologic Biodiversity; and
• UN Framework Convention on Climate Change and its Kyoto Protocol.
| 34. How are the United Nations Framework Convention on Climate Change and the Kyoto Protocol addressed in your nation? Are there any special procedures to promote the Clean Development Mechanism? |
Brazil has been playing an important role in international forums on climate change, and it was the first country in the world to sign the UN Framework Convention on Climate Change on 4 June 1992, which was ratified by the Brazilian Congress on 28 February 1994, through Legislative Decree No. 01/1994.
The federal government agency in charge of coordinating the implementation of the commitments under the UN Framework Convention on Climate Change is the Interministerial Commission for Sustainable Development (CIDES), through its Climate Change Coordination Office, linked to the Ministry of Science and Technology.
The Kyoto Protocol, in turn, was passed in Brazil through Legislative Decree No. 144/2002 and implemented through Federal Decree No. 5.445/2005.
Since Brazil is not a member of the group of countries party to annex I of the Kyoto Protocol, that is, countries that are not compelled to reduce their issuance of greenhouse gases while the Protocol is in effect, the sole possible form of participating in the instruments provided for is by means of the Clean Development Mechanism - CDM, which was created after a proposal presented by the Brazilian entourage during the Kyoto Protocol discussions.
Further to CIDES, which is in charge of preparing Brazil's National Communications at the UN Framework Convention on Climate Change, the Interministerial Commission on Global Climate Change, a federal government body, was created through federal decree of 7 July 1999, with the purpose of articulating the governmental actions under the UN Framework Convention on Climate Change and subsidiary instruments to which Brazil is a party.
That Commission holds the function of National Designated Commission, among other specific duties.
The Interministerial Commission on Global Climate Change enacted several Resolutions regulating the procedures for submission, examination and approval of CDM projects, based on decisions by the Conference of the Parties to the Kyoto Protocol.
Further to the laws regulating these procedures for submission, examination and approval of CDM projects, Brazil has been passing several other regulations and rules on climate change, such as Federal Law No. 12.187/09, which approves the National Policy on Climate Change and establishes voluntary carbon reduction targets of 36.1 to 38.9 per cent of emissions projected for 2020.
Despite the fact that Brazil has this set of national rules and has adopted the major international rules on the Kyoto Protocol, some issues related to certified emission reductions still lack a clearer and more specific regulation. In this regard, it is expected that future legal regulation will:
• define the holder of the certified emission reductions obtained in CDM projects financed by public resources;
• define the legal classification of the certified emission reductions, which will give more clearness in contracts involving its' trade; and
• define the tax aspects of the certified emission reductions.
