Environmental Law 2023 Comparisons

The most relevant environmental law is Law 99 of 1993, along with the 1974 Code of Natural Resources. Law 99 of 1993, which created the Ministry of the Environment, reorganised the public sector in terms of responsibility for environmental management and conservation. It also established environmental principles for the generation of public policy.

Another relevant norm is Decree 1076 of 2015, a regulatory decree that compiles all the rules on environmental matters and regulates everything from environmental licensing to the efficient use of water. In addition, the jurisprudential case law developed by the high courts concerning environmental principles has a lot of impact. Specifically, the elaboration of the precautionary principle, the prevention principle, and the “polluter-pays” principle has been a key element of their work. Relevant policies include the National Climate Change Policy, the National Policy for Integrated Water Resource Management, and the national policy to control deforestation.

The national environmental licensing agency and regional autonomous environmental corporations are responsible for the formulation, control, and monitoring of environmental licences and permits at a national and local level. The Ministry of Environment and Sustainable Development is responsible for issuing regulations and guidelines on environmental, biodiversity, marine resources and water resources.

The Co-ordination and Articulation Group of the National Environmental System (Sistema Nacional Ambiental, or SINA) is in charge of leading, guiding and co-ordinating the articulation of the spaces, mechanisms and entities that make up the SINA, as well as monitoring the planning instruments and preparing reports and other documents required for this purpose. (The authorities mentioned in 2.1 Regulatory Authorities are part of this system.)

Together with the other areas of the Ministry, the SINA articulates and co-ordinates the technical and administrative support actions to be provided to the regional autonomous corporations, sustainable development corporations, urban environmental authorities, territorial entities, and affiliated and related institutions.

Natural resources have broad constitutional and regulatory protection that materialises in the restriction of the use and exploitation of natural resources. Some of these restrictions translate into the need to process environmental authorisations (such as environmental licences or permits) when the activity being developed has a high risk of environmental impact.

Failure to comply with these provisions may result in administrative, criminal and civil liability. For further detail, please see 5.1 Key Types of Liability.

When the activity to be carried out requires environmental authorisation, the authorised environmental authority may carry out on-site monitoring and control. It may also request additional information periodically from the developer of the work or project. In the event that the pollution generated does not have an environmental management instrument, the environmental authority also has police powers that allow it to investigate.

The enforceability of the environmental licence is regulated in Decree 1076 of 2015, which specifically provides the activities and projects by sector that require environmental licence. Generally, risky activities that may have a high environmental impact (eg, hydrocarbon exploitation, mining, and infrastructure) require an environmental licence. In order to obtain the environmental licence, an environmental diagnosis of alternatives must be made, and an environmental study must be prepared to specifically determine the environmental impacts of the project, work or activity. Both instruments must be approved by the environmental authority.

The regulator is increasingly inclined to protect the environment ‒ not only by legislative initiative but also by the many commitments that Colombia has acquired in terms of environmental protection at the international level, as well as the compliance with judicial orders that are increasingly responsible for imposing more protective measures for the environment.

The beneficiary of the environmental licence or permit may assign it totally or partially at any time, which implies the assignment of the rights and obligations derived from it. In such cases, the assignor and the assignee must request the assignment to the competent environmental authority in writing, identifying whether it is a total or partial assignment. The environmental authority will then pronounce the transfer and issue the administrative acts necessary for such purpose. The assignee then assumes the rights and obligations derived from the administrative act or acts that are the object of total or partial assignment in the state in which they are.

Failure to comply with an environmental authorisation will imply a possible civil, administrative or criminal liability (as described in 5.1 Key Types of Liability), depending on whether the infraction resulted in environmental damage or in a regulatory infraction that did not necessarily generate an environmental impact.

As mentioned in 3.2 Breaching Protections, failure to comply with these provisions may result in administrative, criminal and civil liability. Administrative liability is contemplated in Law 1333 of 2009 and may involve penalties such as the payment of fines, the closure of the project, or the revocation of the environmental licence or permit. The polluter’s conduct may also fit into criminal offences that exist in Colombia today ‒ for example, ecocide or deforestation. Finally, in terms of civil liability, this may result in additional costs associated with the damages caused to an individualised legal or natural person.

Environmental damage must be reported immediately to the environmental authority (ie, within 24 hours). Failure to report damage may result in an administrative sanction. There are forms to report environmental incidents or contingencies that must be submitted through a platform called VITAL (Online Environmental Proceedings Platform). Seven days after submitting this document, any actions, activities and steps that have been taken to mitigate or resolve the situation must be notified to the authorities through the same platform. Once the contingency is solved, there is a final report due within 30 days and the authority may make some final recommendations to ensure the recovery and restoration of the affected area.

Currently, the Environmental Liabilities Law is about to be enacted, which aims to account for the damages generated historically and which have not been adequately managed environmentally. There is a risk that the current operator or owner will be identified as the generator of the damage, in case their activity coincides with the damage generated. The owner or operator must establish the damage prior to the acquisition of the property or the concession through careful due diligence.

The environmental reporting requirements depend on the obligations established in the environmental instrument (ie, licence or permit). Generally, reporting obligations are periodic during project execution. This is without prejudice to the fact that environmental authorities can ask individuals and companies to provide environmental information directly and often do so. In this case, it will be necessary to respond.

In Colombia, liability for environmental damage may be civil, criminal or administrative (see 5.1 Key Types of Liability). In the case of administrative liability, under the provisions of Law 1333 of 2009 – which, again, establishes the environmental sanctioning regime in Colombia – environmental authorities are empowered to impose and execute preventive and sanctioning administrative measures against environmental offenders. Under Colombian administrative procedural law, negligence and wilful misconduct of the individual or entity causing the environmental infringement are presumed.

Having an administrative sanction imposed does not exempt from possible convictions in the matter of civil liability, particularly in the event that an eventual environmental infraction causes damage to third parties ‒ namely, the company’s workers or employees. On the other hand, non-compliance with environmental requirements may also lead to the initiation of public prosecutions (ie, constitutional actions) for violation of the collective right to enjoy a healthy environment and class actions by third parties. However, three defences may be invoked to be free from liability: force majeure, fortuitous event, and third-party actions.

Last but not least, a criminal procedure may be initiated against any individual who commits one or more criminal conducts against the environment described in the Colombian Criminal Code, which could be any of these conducts either by action or omission:

• illegal use of renewable natural resources (Article 328);
• damage to natural resources (Article 331); and
• environmental contamination (Article 332).

First, Law 99 of 1993 and Decree 1076 of 2015 provide the legal framework for breaches of environmental law and classify environmental violations into two categories. They can be a normative violation, which will be less severely punished than actual environmental damage occurring. The environmental sanctioning procedure is detailed in Law 1333 of 2009, which enables authorities to impose and execute preventive and sanctioning measures in environmental matters. In the case of an environmental incident or breach that implies tort liability, the proceeding and investigation must follow civil law procedural rules and the trial will be conducted by a judge of the civil branch of the judicial power.

There are currently three types of environmental taxes in force in Colombia:

• national carbon tax ‒ “a levy that falls on the carbon content of fossil fuels, including all petroleum derivatives and all types of fossil gas that are used for energy purposes, provided they are used for combustion” (see 19.1 Green Taxes for further details);
• national tax on the consumption of plastic bags – a tax that seeks to discourage the consumption of plastic bags and protect the environment; and
• tax on motor vehicles – the ownership or possession of vehicles is taxed according to Article 141 of Law 488 of 1998.

As decarbonisation becomes more and more of a priority, incentives, exemptions and penalties are being put in place more and more to nudge the behaviour of both companies and citizens. Examples include economic incentives for citizens to buy electric cars and a number of incentives for companies to invest in renewable energy through tax exemptions on income tax, VAT, and tariffs. On the other hand, further examples of incentives are taxes imposed on plastic bags or even the National Carbon Tax (Law 1819 of 2016 (Structural Tax Reform)) imposed on firms. At the same time, emitters have the option to meet their carbon tax liability by using offset credits generated from domestic projects. Indeed, there is political will to install mechanisms for nudging people towards a responsible use of resources.

Shareholders or a parent company are not liable for environmental damage or breaches of environmental law under Colombian law. This is because whoever has either a permit or a licence is the person who will be liable for the activity permitted by that title and its breach.

For the most part, Colombian companies implement ESG standards privately. Mechanisms have been put in place to oversee whether the information is reliable and standards are met – for example, when shares are being issued or the company is seeking to certify a particular process (such as becoming carbon neutral). For this, there are governmental certification mechanisms in place that have public oversight. This is an example of carbon bonds, the market for which is becoming increasingly important in Colombia. The Ministry of Environment and Sustainable Development has put in place a platform for accounting carbon credits called RENARE. However, the platform is currently disabled.

Companies are not per se subject to periodic audits, as there is no law that requires them to do so. However, environmental authorities exercise monitoring and control functions following licences and permits in the form of follow-up visits and also legal obligations on the company to answer information requirements from environmental authorities. These visits are done at the authority’s discretion. The authority verifies that the commitments established in the environmental instruments are being complied with.

Additionally, when there are breaches of environmental and administrative norms (or in the case of environmental damage), part of the administrative process is following up on the environmental impact and the compensation measures that were established.

Officers and directors of a company that causes severe damage to natural resources or the environment or affects human health may be subject to criminal liability. Individuals who directly participate in any events leading to environmental damage may be held liable from a criminal law perspective. This can happen if the protection of a legal asset was within their responsibility, if there was damage to natural resources (eg, pollution), or where an area of special economic importance has been invaded ‒ among other conducts established by the criminal law.

Whenever an environmental criminal offence takes place, the Specialised Unit of Environmental Crimes of the General Attorney’s Office of Colombia will conduct the proceeding and investigation under current criminal law and the procedural and material regulations in force. Although the risk of criminal responsibility is low, civil and administrative responsibility is entirely possible. Both entail fines as well as the possible dismantling of the project, either partially or in its entirety.

Although it is not possible to insure against a criminal offence, there are insurances that cover legal representatives and administrators’ responsibility up to certain point. Environmental liability can be complicated, as the amount of the damages can vary greatly or can be very significant, depending on the damage that was done. This is why insurance will only cover up to a certain point.

The Colombian market offers various environmental insurance policies, as follows.

• Extracontractual civil liability insurance covers compensatory convictions arising from ecological damage, indemnifying damages to specific individuals or groups affected.
• Compliance policies address contract or legal provision breaches, with applications in environmental sectors such as mining.
• Property insurance safeguards against environmental defects affecting property value, compensating for loss caused by such defects.

Although policies are offered for non-contractual civil liability in environmental matters, it is very important to review the scope of coverage of these policies, as the “damage” or “contamination” is difficult to quantify and determine.

It is possible for financial institutions or lenders to be liable for environmental damage or breaches of environmental law, as projects with high environmental impact truly are socio-environmental conflicts in Colombia. This is down to, among other things, the lack of early and prioritised measurement of social and environmental risk. This has been the case in Colombia with infrastructure projects and has shown the importance of requiring environmental impact assessments (EIA) for certain projects and the so-called social licence to operate.

Colombia’s Financial Superintendence (Superintendencia Financiera de Colombia, or SFC) has issued requirements for integrating ESG and climate risks in the investment policy and governance arrangements of pension funds and insurance companies. It has also increased disclosure requirements for funds with ESG, sustainability and/or green claims, set ESG and climate risk reporting requirements for listed companies, and published supervisory expectations on climate risk management for banks.

As environmental responsibility is a tort, whereby a person who commits an injury or damage that causes harm to another person is obliged to pay the damage they have caused. When the elements for tort liability ‒ that is, a conduct that is attributable to a person (who was either negligent or acted with wilful misconduct), the existence of a material or personal loss, and a nexus between the conduct and that damage – are reunited under Colombian law, then civil liability is indicted and damages awarded. Also, Article 16 of Law 23 of 1973 establishes that individuals will be liable for damages caused to man or natural resources due to actions generating pollution or detriment to the environment, soil damage or inadequate use of the State’s natural resources.

Colombian law provides for full compensation as a prevailing principle under which there are no punitive damages. However, criminal cases do envisage punitive damages as part of the damages awarded should there be criminal environmental responsibility.

Class actions are a suitable action for the protection of environmental-related civil claims as they are intended for the protection of collective rights (such as the right to a healthy environment) – although compensation cannot be sought. This is different from class actions, in which civil claims can be made. While they are both suitable for protecting the environment, they are different in this respect.

One of the most recent and significant cases in Colombia was a class action against aerial spraying with glyphosate. Whether aerial spraying should be done to eradicate illegal drug crops has been one of the most controversial debates in recent decades. In 2014, the Council of State determined the State has guardianship duties over substances such as glyphosate, whose aerial spraying generates risks to the environment. This means that the obligation from the State to compensate for damages caused by glyphosate exists because aerial spraying is a dangerous activity.

Another landmark case is that of decision T-090/15 by the Constitutional Court. In that case, a chemical spill gave rise to a claim by the community asking the court to protect the bay of Cartagena.

Contractual agreements can be used to transfer liability for incidental damage or breaches of law, as there are no legal prohibitions. Law 2327, on environmental passives, established that whenever a company generates environmental damage they are responsible for its remediation even after transferring the title unless the contractual agreement explicitly says otherwise. If an administrative process started before transferring the title, the one to respond to authorities would be the company that caused the damage.

Environmental insurance is available in Colombia. These insurances typically cover:

• damages caused to third parties as a result of accidental or gradual contamination caused by emissions or discharges;
• waste management costs for the contingency;
• compensation payments to those affected; and
• mitigation costs for the contingency to be controlled.

Law 2327 provides for the existence of environmental liabilities affecting soil and groundwater. Therefore, the responsibility of the generator is to remediate the affected natural resources through a remediation plan according to this law.

Once an environmental liability is identified, an Environmental Liabilities Intervention Plan is established for the management of environmental liabilities. This contains intervention oriented towards the rehabilitation, remediation, restoration or isolation of the area.

The generator of the damage must be responsible for remediating or mitigating the contamination, according to Law 2327. However, this task may be delegated if the generator does not have the economic capacity, the generator cannot be determined, or whenever an environmental liability comes into play. In this case, the responsible party will be the State when there is an “orphan liability” or a third party that assumes this obligation as a form of compensation. It is important to note that there are some cases in which the buyer of a property assumes the costs of decontamination, by contractual determination, in order to start its commercial activity.

In cases where more than one party has contributed to the contamination, the liability is joint and several. Thus, the State may take action against the two or more responsible parties jointly, or against any one of them at its discretion.

If the damage violates a fundamental right, such as the right to prior consultation, the plaintiffs may use tutela (a constitutional claim) as a means of protection. On the other hand, if the claim is for pecuniary damages, it is necessary to resort to extra-contractual civil liability by means of a civil lawsuit, proving injury or damage, causation, and liability. In the first case, it will be necessary to prove a direct violation of a fundamental right. Meanwhile, in the second case, it will be necessary to prove the existence of damage due to the fact of environmental affectation.

First, it is important to note that the environmental management of waste depends on the legal classification given to the waste. In Colombia, the legal evolution of the concept has been developed as a function of the provision of sanitation services.

The provisions of the sanitation service are in line with the interests of the service providers to eliminate all waste generated by users in homes and industries that is classified as sanitary rather than environmental. Consequently, most of the obligations related to waste management fall on national and local public service providers.

In administrative matters, the process of investigating environmental accidents in Colombia begins with a preliminary inquiry stage carried out by the environmental authorities to determine whether there is merit in initiating a formal investigation. If the merit is determined, an investigation is opened, in which the environmental authority may impose preventive measures while the investigation is being carried out. Once the investigative stage is completed, the environmental authority determines whether or not the offender is responsible; if so, the sanction is imposed.

National government policies aimed at mitigating the effects of climate change have been progressively implemented. One example is the so-called National Climate Change Policy created through Decree 298 of 2016, which established the organisation and operation of the National Climate Change System (Sistema Nacional de Cambio Climático, or SISCLIMA). Thie purpose of this system is to achieve inter-institutional co-ordination between the central and territorial levels in promoting policies, strategies, plans, programmes, projects and actions to mitigate greenhouse gases.

The most recent strategies include proposals in the National Development Plan for the National Disaster Risk Management Unit to co-ordinate the national strategy for resettlement, urban legalisation, improvement of human settlements, and land management as a direct action to mitigate climate change. Likewise, there are bids to update the National Registry for the Reduction of Emissions and Removal of Greenhouse Gases for the transaction of carbon credits.

By the end of 2020, Colombia committed to reduce greenhouse gas emissions by 51% by 2030. This is one of the most ambitious environmental goals in the world.

In 2019. Colombian government passed Law 1968, whereby “the use of asbestos is prohibited in the national territory and guarantees for the protection of health are established”. The Ministry of Labour created the National Occupational Health Commission for the Asbestos Sector (Resolution 935 of 2011, repealed by Resolution 1458 of 2008), whereby asbestos-related issues (including asbestosis, malignant mesothelioma, and laryngeal diseases) are included into work-related illnesses – meaning the employer would have greater responsibility.

The District of Bogotá recently published a guide to good practices for the management and prevention of risks associated with the exposure of materials and waste containing asbestos in Colombia. This guide is a document of orientation and consolidation of information in order to prevent the risks associated with asbestos.

In Colombia, waste is governed by the following key laws and regulatory controls:

• Law 430 of 1998, whereby prohibitive norms are dictated in environmental matters, referring to hazardous wastes and other provisions are enacted;
• Decree 1079 of 2015, which is a regulatory decree for transportation;
• Decree 1076 of 2015, which is the main legal framework for environmental law;
• Resolution 1362 of 2007, which establishes the requirements and the procedure for managing hazardous waste; and
• Resolution 372 of 2009, which establishes how to manage lead acid batteries and envisages their return to the import-production-distribution-commercialisation chain, in order to protect human health.

Also, the Basel Convention relating to hazardous wastes was adopted by Colombia and is governed by these laws, decrees, and resolutions.

According to Decree 1076 of 2015, where there is hazardous waste, the manufacturer or producer’s liability subsists until the hazardous waste is either used as an input or finally disposed of in deposits designed for them or disposed of in systems that do not represent risks to human health or the environment.

Under Decree 1076, there is an obligation for producers to have a plan whereby they classify and manage the production of waste. Waste may be classified and managed differently depending on whether it is ordinary waste, electronic waste, or dangerous waste. In the latter case, waste must be disposed of by a third party that is authorised to do so.

Colombian law states that any company whose activities or projects are dealing with an environmental contingency must fill out and submit a single report form to the competent environmental authorities within 24 hours of the occurrence of the emergency.

In Colombia, environmental information is public. First, it is important to mention the SINA in charge of the Ministry of Environment and Sustainable Development. Additionally, through the right of petition (a constitutional right), citizens are entitled to receive information from public authorities. With the ratification of the Escazú Agreement, access to environmental information acquired greater relevance and standardised the protection and mechanisms of enforcement of rights.

Particularly in the area of environmental information, the agreement seeks the consolidation of better information systems to identify relevant information, as well as better standards of documentary archiving, and indicates the ideal means of publication of said information. As this information can be highly technical, obscure and difficult to interpret, authorities have to find a way to adequately inform the public.

Companies do have an obligation to report certain information. The way in which they will do this depends on whether they have a license, permit, and the kind of activity the company executes. There is a national platform called the RUA (Registro Único Ambiental), in which companies must periodically update environmental information such as company information, environmental authorisations, fixed sources that generate atmospheric emissions, fuel storage, environmental noise emissions, waste, and environmental management actions (among other things).

In Colombia, the government has fostered the development of a local green bond market as a public funding tool to meet the country’s environmental targets through Circular 028 of 2020. On the other hand, the SFC’s External Circular 031 of 2021 adopts the parameters of the 2017 Task Force on Climate-related Financial Disclosures guide and imposes disclosure obligations on financial institutions with investment portfolios in activities with high environmental impact. As stated in 10.2 Lender Protection, the SFC has issued requirements for integrating ESG and climate risks in the investment policy and governance arrangements of pension funds and insurance companies.

Environmental due diligence is typical in M&A, finance, and property transactions, especially in a country such as Colombia, where natural resources are as prevalent as they are. In September 2023, a law regarding environmental liabilities was approved, which makes the due diligence process more conscientious – given that the omission of effectively balancing the responsibility for an environmental liability may entail costly measures to prevent further damage.

Typically, an environmental due diligence would examine:

• the scope of the environmental permit or licence;
• the limitations or restrictions of the permit or licence (ie, environmental zoning and prior consultation);
• whether there is an administrative sanctioning process or environmental litigation;
• whether there are any protected areas;
• compliance with environmental obligations and requirements; and
• the existence of environmental liabilities.

A seller is only required by law to disclose all possible defects that are not recognisable in the examination of the object of purchase the time of delivery ‒ namely, hidden defects. Failure to disclose will result in the purchaser having the right to either terminate the agreement or modify its conditions and compensation. Also, certain private agreements create disclosure obligations.

Green taxes are an important state policy in Colombia and are assuming particular relevance in Congress. Following the ratification of the Paris Agreement, Colombia has introduced several green taxes – as well as incentives – as part of a more general green policy and approach to the economy.

There are currently three types of green taxes currently in force in Colombia, including a national carbon tax that was introduced in 2016. Emission prices are set, and the market reacts given the price of the carbon tax with the appropriate quantities. The tax rate is calculated based on the amount of carbon dioxide generated by fossil fuel combustion. Please refer to 7.2 Environmental Taxes for details of the national tax on the consumption of plastic bags and the tax on motor vehicles.

Contracts normally include arbitration clauses that provide for arbitration mechanisms for resolving disputes. It would be interesting to see ESG arbitration methods that are being implemented in other jurisdictions ‒ for example, dispute boards.

There is enormous potential, along with many opportunities, that should be taken advantage of in Colombia. There is a need for an optimisation of the licensing process, as well as a need for clearer playing rules and more involvement from the government in the prior consultation process. This would make projects much more effective and easier to implement while complying with environmental regulations.