Environmental Law 2023 Comparisons

Brazil has signed and ratified most of the relevant international environmental treaties, conventions, and declarations, which gain status of Brazilian federal law once ratified by the Congress. Therefore, Brazilian environmental law and its regulations follow the same principles of international environmental law, such as, but not limited to, prevention principle, precautionary principle, “polluter pays” principle, and sustainable development.

The key policies and laws governing environmental protection are: Law No 6,938/1981 – National Environmental Policy; Law No 9,433/1997 – National Water Policy; Law No 9,605/1998 – Environmental Crimes Law; Law No 9,985/2000 – Nature Conservation Units National System; Law No 12,305/2010 – National Solid Waste Management Policy; Law No 12,651/2012 – Forest Code (Native Vegetation Protection National Policy); and Law No 11.445/2007 – National Sanitation Policy.

The Brazilian Federal Constitution (Articles 23, 24, 30 and 225) establishes concurrent powers for the federal government, state governments, federal district, and the local government (municipalities) to legislate about environmental protection and for law enforcement. The federal laws set out the general rules, guidelines and legal framework that must be followed by local (state and municipal) legislation.

Complimentary Law 140/2011 sets forth how those concurrent powers should be exercised by the authorities in a co-operative fashion and to avoid overlapping.

At the federal level, the key environmental agencies are IBAMA (Brazilian Institute for the Renewable Resources), ICMBio (Chico Mendes Institute for Conservation of Biodiversity) and ANA (National Water Agency), with the following powers and attributes.

• IBAMA – Environmental Licensing (and oversight) of activities and interventions that might have regional (that surpasses the limits of Brazilian state) potential social-environmental negative impacts, and activities in Indigenous Peoples lands, Brazilian borders, territorial sea, platform or continental shelf, military, or nuclear energy/radioactive activities. To issue regulations for the legislation (resolutions, ordinances, etc) at the federal level.
• ICMBio – Institution, maintenance, and oversight of National Nature Conservation Units (eg, National Parks).
• ANA – Responsible for the oversight, control and evaluation of actions and activities pertinent to the use of water resources; regulation of the instruments of the National Water Resources Policy. Issue water use permits in bodies of water under the Union’s domain (federal rivers).

At the state level, all Brazilian states have their respective State Environmental Agency and authorities, pursuant to local legislation, that are responsible for environmental licensing, oversight and regulation of activities and interventions that might have potential social and/or environmental impacts that surpass the limits of at least one municipality.

Brazilian cities should have their own Environmental Agency with powers to licence and oversight activities with local impacts. If the city does not have an environmental agency duly implemented, the State Environmental Agency shall be the responsible authority.

All environmental agencies in Brazil are a part of the SISNAMA (National System for the Environment). Pursuant to Complimentary Law 140/2011, the public authorities that integrate SISNAMA can make use of the following institutional co-operation instruments:

• public consortia, in accordance with current legislation;
• technical co-operation agreements;
• National Tripartite Commission, State Tripartite Commissions and Bipartite Commission of the Federal District;
• public and private funds and other economic instruments
• delegation of duties from one federative entity to another, respecting the requirements set out in this Complementary Law;
• delegation of the execution of administrative actions from one federative entity to another, respecting the requirements set out in this Complementary Law; and
• integrated databases and software regarding oversight, control, and environmental policies implementation.

All environmental assets have a general protection under the Brazilian Constitution and environmental law. To protect the environment as whole, flora and fauna, air, water (fresh and sea water), soil, etc, Brazilian legislation sets forth special environmental protection, defining quality standards and mechanisms to avoid/prevent, mitigate, control and/or compensate environmental negative impacts, such as:

• mandatory environmental licence to perform any activity or intervention that has potential to cause significant environmental impact;
• mandatory water use permits for relevant water use and/or interventions in water courses;
• obligation to assess (environmental impacts assessment studies or equivalents), prevent, mitigate, control and/or compensate environmental impacts that might flow from intended activities or interventions;
• a very comprehensive list of quality standards for air, water and soil which must be complied with to perform any activity or intervention that might have significant environmental impact, including discharges and disposal of products and residues;
• definition of specially protected areas, such as: Nature Conversation Units (eg, parks, reserves) and its buffer zones, Areas of Special Protection, Areas of Permanent Protection, RAMSAR sites, etc; and
• a comprehensive list of environmental crimes and infractions for non-compliance with environmental law. Non-compliance with environmental law may subject the responsible party to civil, criminal, and administrative liability.

In case of non-compliance with environmental law, legislation establishes criminal, civil and administrative (fines and other sanctions) liabilities.

The Environmental Crimes Law sets forth a list of environmental crimes and infractions.

Environmental criminal liability encompasses felonies, misdemeanours, and infractions that are punished with sanctions that vary from fines, probation, and imprisonment (of all parties that might have practiced or participated in the crime commitment, by action or omission) up to ten years per crime committed.

Administrative liability may result in warnings, fines (up to one billion reais at the federal level), permit/licence revocation or annulment, suspension of activities, product, or equipment apprehension, amongst other sanctions. Only environmental agencies and their inspectors (in some states also the Military Police) have powers to apply fines and other sanctions regarding administrative liability.

Civil liability is strict (regardless of a party’s negligence), joint and several, and encompasses the obligations to clean up, recover, remediate, indemnify, and all necessary measures to return the environment to the status quo, plus the compensation for irrecoverable social and environmental impacts and damages caused.

The public prosecutor’s office, inspectors of SISNAMA (in all governmental levels), Federal Police and Military Police are the main authorities responsible for the inspection, oversight, control, and environmental law enforcement.

The public prosecutor’s office, inspectors of SISNAMA (in all governmental levels), Federal Police and Military Police are the main authorities responsible for the inspection, oversight, control, and environmental law enforcement. Those authorities have access to any business locations to inspect, assess and enforce environmental law. Inspections are exempt to present a judicial warrant (except for residencies or specific restricted areas) for that specific purpose and inspectors may or may not be accompanied by a police authority.

Inspections may take place unannounced, and an inspection report usually is sent to the site operator. If there is a notice of infraction related to the inspection, the inspection report must be issued and made available with the notice of infraction. The access and use of investigative powers must be proportional to the scope of investigation.

To deny access of the competent authority to a site for environmental inspection purposes is considered obstruction and is classified as a crime and an environmental infraction.

All documents presented and filed at an environmental agency are considered public, pursuant to Federal Law 10,650/2003, and authorities have full access to all environmental information filed at the agencies.

To have access to documents and files at private companies, that were not filed at governmental agencies, public authorities need an injunction order issued by the competent court of justice, unless the company voluntary grants them this access. Furthermore, although there is a general legal obligation to co-operate with the authority, legislation protects people from self-incrimination and safeguards the right to remain silent.

An environmental licence is mandatory to perform any activity or intervention that has potential to cause significant environmental impact. Federal, state and local legislation sets forth the lists of projects, interventions and activities that must be licensed, but also establishes that any activity or intervention that has potential to cause significant environmental impact, regardless of being expressly listed, should be licensed, or needs to obtain a licence exemption certificate before the competent environmental authority.

Any decision of the environmental agency, regarding a licensing request or conditions attached to the licences, is subject to administrative appeal to the hierarchically superior authority. In addition, any decision issued by the environmental agency may be challenged in a lawsuit by any interested party.

The regulator’s approach to environmental policy and enforcement in Brazil must follow the guiding principles, general rules and guidelines set forth in federal legislation and complemented at the state, and local level legislation and should always be aligned with those rules.

Pursuant to Federal Law 13,874/2019 and Federal Decree 10,411/2020, since 2019, any relevant environmental regulation must be preceded by a Regulatory Impact Analysis (RIA). Given that this legal requirement is recent, environmental agencies are still in the first stages of RIA implementation and improvement of regulatory processes.

Regarding law enforcement, inspectors and authorities of SISNAMA and the Public Prosecutor’s Offices (federal and state) have a very active role in oversight of activities and interventions with high potential environmental impacts. Because of the limited human and structural resources of the agencies and public authorities, in practical terms, smaller enterprises and activities with medium or small environmental impacts, usually, are less supervised or seldom inspected. For the latter, the environmental agencies and the public prosecutor’s office may receive complaints from NGOs or any interested party and, in this case, will have the duty to inspect and assess the case.

In addition, the use of electronic systems, online registries and other technological means are helping authorities to remotely monitor, control, and inspect a very broad range of activities, for example: (i) electronic control systems for production, processing, consumption and transport of products of forest origin (DOF/IBAMA); (ii) contaminated areas online registry (usually at the state level); (iii) online registry of forest legal reserve and permanent protected areas in private rural properties (CAR); (iv) toxic and hazardous waste control systems; and (v) Federal Technical Register of Potentially Polluting Activities and/or Users of Environmental Resources (CTF/IBAMA), amongst others. It is worth mentioning that to provide false or misleading information in those systems is considered an environmental crime, punished with imprisonment for up to six years (and ten years if the false information leads to environmental harm).

The environmental licence or permit is issued for the intended activity or the intervention, that is the focus. The responsible party or licence holder is considered a secondary aspect.

Therefore, the licence certificate is issued in favour of a company or person, and it is easily transferred to another person by an ownership transfer request filed at the same environmental agency that issued the licence certificate.

The procedure varies depending on the environmental agency responsible (federal, state or municipal), but basically the request must be signed by the previous owner/responsible party and the current owner/responsible party, containing – at least – an affidavit that the activities will be carried on strictly in compliance with the terms and conditions of the licence, documentary evidence of the ownership transfer and indication of a new technical professional responsible for the operation/activities/intervention and information provided to the environmental agency.

Breaching an environmental licence/permit or non-compliance with its terms may subject the responsible party to civil, administrative and/or criminal liability depending on the case. Please see 3.2 Breaching Protections.

Furthermore, as an immediate sanction, the responsible environmental agency must apply a fine (or a warning in case of a minor infraction). In more severe cases, the licence can be revoked or suspended (until conditions are again met), and the environmental agency may define the actions, conditions, or measures necessary to resume operations and cancel the suspension of activities.

The environmental agency also must send a copy of all notices of infractions issued to the competent public prosecutor’s office to assess whether there is civil or criminal liability flowing from the infraction and non-compliance.

See 3.2 Breaching Protections.

Environmental issues, as a rule, must be disclosed and informed to the competent authorities in the licensing procedure or, if there is not one related to the activity or intervention, in an independent procedure.

All the following situations, but not limited to these, must be disclosed, and informed to the competent environmental authority (usually the environmental agency that issued the environmental licence for the intervention or activity), under civil, administrative, and criminal liability, depending on the case:

• environmental accidents with social and/or environmental impacts or harm;
• industrial and mining tailings dams collapse or risks of collapse;
• identification of contaminated areas (soil, water, or underground water) at a person’s property, regardless of a party’s negligence or fault;
• any relevant change in the operations or activities that are subject to environmental licence;
• suspension or shutdown of operations or activities that are subject to environmental licence;
• theft, escape or death of animals under a person’s guard, that is subject to environmental protection or controlled by the competent environmental authorities;
• theft, accident, or loss involving radioactive materials;
• ongoing or imminent fact/action that is considered an environmental crime, when performed in an area or activities under a person/company responsibility; and
• other situations that the laws, regulations or licence certificated expressly request.

Mere environmental incidents that do not cause environmental harm nor represent relevant risk do not need to be informed/disclosed.

Failure to disclose relevant environmental issues, especially those mentioned above, may subject the responsible party to civil, criminal, and administrative liability. The sanctions vary depending on the gravity of the situation and whether the lack of disclosure causes harm or severe risks to the environment and/or to people.

Civil liability for historical environmental incidents or damage (eg, soil contamination) can be imposed on a current (or purchasing) operator or landowner, jointly with the actual responsible party for the environmental harm/damage.

In Brazil, the simple fact of being the owner of an area or facility triggers civil environmental liability (propter rem liability, which is inherent to the land ownership) for recovery, remediation, clean up and a general duty to make the area/land in compliance with environmental law. The current owner may seek redress from the party actually responsible for the environmental harm.

Although there is no law expressly regulating the matter and based on an interpretation of the Federal Constitution, Brazil’s Supreme Court decided that civil liability for environmental harm is not subject to any statutes of limitations.

Criminal and administrative liabilities are limited to the person/people that commit the crime or infraction; thus, the current owner cannot be held liable for crimes or infractions committed by another person. Furthermore, criminal and administrative liabilities are subject to statutes of limitations.

Notwithstanding specific reporting requirements set forth in the environmental licence certificate, in general terms, the operator must periodically:

• report fulfilment of licence conditions and permits throughout all the phases of the project;
• file the environmental monitoring and controls results at the competent environmental agency, especially related to fauna, air/dust, water and residues discharge and disposal; and
• provide an annual update of the Federal Technical Register of Potentially Polluting Activities and/or Users of Environmental Resources (CTF IBAMA), including the Report on Potentially Polluting Activities and use of Environmental Resources (RAPP IBAMA) and the National Register of Hazardous Waste Operators (CNORP IBAMA).

State and local legislation usually sets forth additional mandatory reports for activities and interventions licensed at their respective levels, and such reporting obligation usually is expressly included in the licence certificate.

See 3.2 Breaching Protections.

In general terms, the key defences for criminal and administrative liabilities in environmental incidents/accidents or damages are as follows:

• statutes of limitations;
• challenge to the lawfulness of the manner in which the authority exercised its powers or nullity of the administrative act or process;
• challenge to the evidence of the offence or incident;
• non-existence of causality;
• lack of intent or fault, negligence, or omission;
• force majeure; and
• other defences depending on the actual case.

In the case of civil liability (strict joint and several) the defences are more limited, but usually related to:

• absence of causal relationship between the accident/damage and the person’s act or omission;
• challenge to the evidence or absence of it;
• challenge to the magnitude of the damages; and
• indication of the actual responsible party.

Aside from the above and specific defences on the actual case, the main discussions will often focus on challenging the relevant facts and circumstances and the legal qualification thereof.

See 3.2 Breaching Protections.

In addition to personal liability, in Brazil legal entities are also liable for environmental damages and breaches of environmental legislation including criminal, administrative and civil liability. The criminal liability may subject the legal entity to fines and suspension or limitations of the company’s rights (eg, to participate in public bidding or contracts with the public administration), pursuant Environmental Crimes Law (Article 3, Federal Law 9,605/1998).

The main environmental tax is the Environmental Control and Inspection Fee (TCFA).

Environmental law in Brazil establishes several relevant financial compensations, such as the Financial Compensation for Environmental Impacts, Financial Compensation for the Use of Water; Financial Compensation for Water Usage for Electricity Generation; and Financial Compensation for Mineral Exploration, however they are not considered as taxes in Brazil, pursuant to the Brazilian Supreme Court understanding of the matter.

The incentives may vary in each Brazilian State, but legislation establishes some incentives for good environmental citizenship and voluntary measures, such as:

• payment for environmental services, such as voluntary protection of environmentally relevant areas;
• extension of environmental licence validity due to full compliance and no infractions committed in a specific period;
• carbon credits (voluntary and regulated market);
• lines of credit with reduced interest;
• reduction of the Financial Compensation for Environmental Impacts (“SNUC compensation”) in cases of additional and voluntary adoption and investments in environmental control, mitigation, and environmental performance above legal standards;
• tax exemption (ITR, acronym in Portuguese for rural property tax) for conservation of areas in addition to the legal obligations; and
• tax reduction due to usage of recycled material.

From a civil liability perspective, the shareholders or a parent company can be liable for environmental damage or breaches of environmental law in cases of disregard for legal personality. Brazilian legislation defines a lower threshold for the disregard for legal personality for environmental civil liability, for which it is not necessary to prove misuse or fraud, it being sufficient that the liable company lacks funding to cover the damage recovery.

Regarding criminal and administrative liability, the shareholder or parent company may only be considered liable if they participated in any capacity in the crime or infraction committed.

There is no framework law or national policy specifically defining the concept of ESG or its requirements in Brazil. However, legislation defines a myriad of environmental, social, and governmental standards and requirements that must be complied with by companies.

In addition, the Corporation Law (Federal Law 6,404/76) determines (Article 154) that “the administrator must exercise the powers that the law and statute confer to them to achieve the purposes and in the interest of the company, including the goals and demands related to public and social function of the company”. Furthermore, paragraph 4 of the same Article 154 expressly authorises the company to dedicate reasonable resources to meeting its social responsibilities: “the board of directors or the board may authorize the practice of reasonable gratuitous acts in benefit of employees or the community in which it participates the company, bearing in mind its social responsibilities”.

Federal legislation does not establish a general rule that require companies to contract an external audit report for licensing purposes or licence renewal.

However, specific legislation and legislation at the state and local level may demand external audit for some activities and preparation of specific reports by an independent company, such as: compliance with dam safety policy (specially in Minas Gerais state), laboratorial analysis, activities that use radioactive material/equipment and when the licence certificate expressly requests periodic audit. In addition, environmental permits often contain conditions in relation to monitoring and reporting, whether signed by a technical responsible or an external company with certified technical capability.

Companies voluntarily may opt for certification of their environmental management systems and their inherent audit requirements, for example under International Environmental Management System Standards (ISO 14001).

The Environmental Crimes Law expressly indicates that directors and other company’s officers may be liable for breaches of environmental law committed by the company if: (i) they practised the infraction; (ii) participated in the decision-making that resulted in the violation; or (iii) if they were aware of the violation or risk of violation and did nothing to prevent it (culpable omission).

Brazilian legislation allows directors and other company’s officers to insure against civil and administrative liabilities.

Federal legislation does not establish compulsory environmental insurance for all activities with significant environmental impacts or for licensing procedure purposes.

Federal Law 12,334/2010 (National Dam Safety Policy) sets forth that the environmental agency responsible for the licensing of dams subject to the dam safety policy may request (discretionary power) that the operator responsible for the dam makes a warrant deposit, provides hire insurance, or constitutes other financial guarantees. For example, in Minas Gerais State, very recently, Decree No 48,747, instituted on 29 December 2023, established environmental insurance as a legal requirement for dams licensing.

Moreover, in 2022, a federal bill was proposed and is still under discussion at the Brazilian Senate, which states that companies that use environmental resources shall provide a financial guarantee if there is a medium or high risk of potential damage to the environment associated with the activity or enterprise. This is an ongoing discussion and may be considered a trend in environmental legislation.

Brazilian legislation does not specifically regulate financial institutions/lenders’ environmental liability due to acts or omissions of the loan taker. Therefore, the general rule of civil liability applies to them, it being necessary – for example – for causation to exist, or for there to be an active role/participation in the violation other than the lending itself.

For example, the Federal Regional Court decision interpreted the matter as follows:

“The simple fact that it is the financial institution responsible for financing CMM’s mining activity, in principle, in itself, does not legitimize it to appear as the defendant in the demand. However, if it is proven, during the course of the ordinary action, that the aforementioned public company, even though it is aware of the occurrence of environmental damage that appears to be serious and serious and reflects significant degradation of the environment, or is aware of the beginning of their occurrence, has released intermediate or final portions of the resources for the mining exploration project of the said company, then, yes, it will be up to it to respond jointly with the other defendant entities for the damages caused to the property in question...” (Federal Regional Court of the 1st Region –AG 2002.01.00.036329-1/MG – 12/19/2003).

However, it is important to clarify that there are some conflicting decisions and interpretations in different courts in Brazil and the matter has not yet received a unanimous understanding.

The Brazilian Central Bank issued Resolution 4,327/2014 which provides for guidelines that must be observed in the establishment and implementation of the Policy of Socio-environmental Responsibility for financial institutions and other institutions authorised to operate by the Central Bank of Brazil. It says that the management of the socio-environmental risk of financial institutions should consider implementing:

• systems, routines and procedures that make it possible to identify, classify, assess, monitor, mitigate and control the socio-environmental risk present in activities and institutional operations;
• recording of data relating to actual losses due to damage socio-environmental issues, for a minimum period of five years, including values, type, location and sector of economic object of the operation;
• prior assessment of the potential negative socio-environmental impacts of new types of products and services, including in relation to reputational risk; and
• procedures for adapting socio-environmental risk management to legal, regulatory and market changes.

To mitigate environmental liability risks, financial institutions should adopt, besides contractual protection, good practices, and a minimum due diligence about the regularity of the activities/products that would be financed, and the loan taker.

Article 5 of Brazilian Constitution establishes that the law cannot exclude injury, risks or threat to rights from the judiciary’s review. Thus, the threshold of grounds and legitimacy for a person to file a lawsuit to discuss environmental damages are very low. Any person that has suffered impact or damages may bring a lawsuit for compensation.

Civil liability encompasses the obligations for the responsible party to implement environmental recovery, remediation, clean up, and to pay indemnification for all damages caused, including: 

• moral damages to the person or people affected;
• collective moral damages;
• intercurrent environmental damages (between the damage and the full recovery); and
• loss of environmental services.

All those indemnification obligations should be proportional to the size and severity of the damages caused, because Brazilian legislation forbids the application of other exemplary damages/indemnification that could be considered disproportionate and reflect an unjust enrichment to another party.

In addition, it is worth mentioning that to cause illegal environmental impacts/damages will likely trigger criminal and administrative liabilities, thus, other sanctions may be applicable to the responsible party, such as heavy fines, which must be issued by the environmental authority.

Class or group actions are possible for environmental-related civil claims in Brazil.

Federal Law 7,347/1985 regulates the Public Civil Action (see 20.1 Resolving Disputes). Federal Law 4,717/1965 allows any person or people to file a Popular Civil Lawsuit to demand review or annulment of a government act. Citizens can act as inspectors of legality and environmental protection, seeking to hold authorities or public entities responsible for acting contrary to environmental legislation.

Federal Law 13,105/2015 and Federal Law 8,078/1990 also regulate and make it possible to file class and group actions regarding environmental-related civil claims.

There are some landmark cases regarding environmental civil liability in Brazil, with a final decision of the Federal Supreme Court stating the following.

• The amount of environmental compensation should be set in proportion to the environmental impact. (ADI 3.378, REL. MIN. AYRES BRITTO, J. 9-4-2008, P, DJE OF 20-6-2008).
• The court may determine the obligation to repair the environmental in conjunction with the obligation to indemnify for all damages caused. (Súmula 629 (Supreme Court Binding Precedent)).
• Environmental obligations are propter rem in nature, and it is permissible to demand it from the current owner or possessor and/or from the previous ones, at the creditor’s choice. (Súmula 623 (Supreme’s Court Binding Precedent)).
• The claim for civil reparation of environmental damage is not subject to statute of limitations. (RE 654.833, REL. MIN. ALEXANDRE DE MORAES, J. 20-4-2020, P, DJE OF 24-6-2020, THEME 999. EXTRAORDINARY APPEAL. GENERAL REPERCUSSION. CONSTITUTIONAL. ENVIRONMENTAL DAMAGE. REPARATION).

Contractual agreements to transfer or apportion liability for incidental damage or breaches of law will have legal effects only between the private parties that signed the document, and will not exclude, limit, or change a person’s environmental liability.

Environmental insurance is available in Brazil, however, it is important to remember that no contract can limit or transfer the liability from the person that caused environmental harm.

The key laws governing contaminated land in Brazil are Federal Law 12,305/2010 (National Policy for Solid Waste) and CONAMA’s Resolution 420/2009 which set forth the framework, the general obligations, requirements and procedures for contaminated areas management.

Those responsible for the contamination of an area must submit to the environmental agency a proposal for the intervention action to be carried out under their responsibility, including:

• the control or elimination of sources of contamination;
• the current and future use of the land in the object area and its surroundings;
• risk assessment to human health;
• intervention alternatives considered technically and economically viable and their consequences;
• the programme for monitoring the effectiveness of the actions carried out; and
• the costs and deadlines involved in implementing intervention alternative proposals to achieve the established goals.

Rehabilitation of contaminated areas must include the following actions:

• elimination of danger or reduction to tolerable levels of risks to public safety, human health and the environment;
• zoning and restriction of uses and occupation of soil and surface waters and underground;
• application of remediation techniques; and
• monitoring.

The responsible party may delegate or outsource the implementation of the remediation plan, however, that fact will not limit or transfer any of their own liability as the main responsible party for the remediation obligation.

Only after the full completion of the remediation and a monitoring period, defined by the competent environmental body, confirming the elimination of the hazard or the reduction of risks to tolerable levels, will the area be declared by the competent environmental body as rehabilitated for the declared use.

If it is not possible to identify the party responsible for the contamination, or the owner of the area, Brazilian legislation establishes that the environmental agency shall implement the Environmental Management of Orphan Contaminated Areas, using public resources and environmental funds to pay for the necessary remediation actions.

See 13.1 Key Laws Governing Contaminated Land. 

Environmental liability for contaminated areas is strict, joint and several. However, Brazilian legislation does not regulate apportionment of liability or methods to define the proportional payment or obligations to all responsible parties. Thus, if there is a contamination caused by several responsible parties, authorities may demand any or all of them to implement full remediation and indemnification, and they in turn may seek redress from the other responsible parties.

The lack of methods or regulations regarding apportionment usually causes the company or person with larger funds to bear all the costs for clean-up and remediation.

There are no locus standi requirements for bringing proceedings against polluters/landowners/occupiers of those affected by contamination.

See 3.2 Breaching Protections.

Any environmental accident that causes environmental harm must be immediately informed and disclosed to the authorities. Environmental agencies at federal, state and local levels must maintain a hot line and e-mail for complaints and communication of environmental accidents.

Usually, the environmental agency, upon receiving the information, will inspect the area and prepare a report defining the measures to be adopted by the responsible party, issuing a notice of warning or infraction, depending on the severity of the case, and communicating the occurrence to the public prosecutor’s office for further civil and criminal investigation.

Therefore, after an environmental accident, usually at least three processes will be initiated:

• administrative procedure regarding the environmental recovery actions;
• administrative procedure for sanctions/fines application; and
• civil and/or criminal inquiry, to assess and investigate criminal and/or civil liability.

The key policy relating to climate change in Brazil is the National Policy on Climate Change (PNMC) (Federal Law 12,187).

Although Brazil is a signatory to the UNCCC and related conventions and treaties and even though a National Policy on Climate Change (PNMC) (Federal Law 12,187) was approved and came into force in 2009, Brazilian legislation and implementation of policies aiming to reduce greenhouse gas emissions and defining target/caps are still very incipient. In this current regulatory and implementation gap, the voluntary market, which allows carbon emitters to offset their emissions by purchasing carbon credits, is being more commonly used in Brazil.

The key policies and principles related to asbestos in Brazil are established in Federal Law No 9,055/1995, which defines that the following is prohibited throughout the national territory:

• the extraction, production, industrialisation, use and commercialisation of actinolite, amosite (brown asbestos), anthophyllite, crocidolite (blue asbestos) and tremolite, mineral varieties belonging to the amphibole group, as well as products containing these mineral substances;
• the spraying of all types of fibres, both asbestos/asbestos of the chrysotile variety and those that are natural and artificial; and
• the sale in bulk of powdered fibres, both asbestos/asbestos of the chrysotile variety and those that are natural and artificial.

Article 2 of the above-mentioned law states that asbestos of the chrysotile variety (“white asbestos”), and other natural and artificial fibres of any origin, may be extracted, industrialised, used and marketed in accordance with the provisions and requirements defined in regulations. However, the Supreme Court declared Article 2 unconstitutional, and therefore, all extraction, production, industrialisation, use and commercialisation of any asbestos is banned.

At the federal level, the key legislation on regulatory controls governing waste is:

• Federal Law 12,305/2010 (Establishes the National Solid Waste Policy), which sets forth the legal framework that must be followed by all Brazilian states, which may further regulate the matter;
• Federal Decree 10,936/2022, which regulates the National Solid Waste Policy; and
• Federal Law 11,445/2007, the Sanitation National Policy.

States may regulate the matter and set forth additional rights and obligations, however, pursuant to Article 24 of the Brazilian Constitution, state and local legislation must not be contradictory to federal framework legislation.

Legislation sets forth that the producer is co-responsible and liable for the waste even after its regular disposal by a third party.

Contractual agreements to transfer or apportion liability for incidental damage or breaches of law will have legal effects only between the private parties that signed the document and will not exclude, limit, or change a person’s environmental liability.

The National Solid Waste Management Policy (NSWMP) establishes the reverse logistics system for products and solid waste in Brazil. To comply with the NSWMP, manufacturers, importers, distributors and traders are required to structure and implement reverse logistics systems, through the return of products after use by the consumer, independently from the public urban cleaning and solid waste management service. Federal Decrees 10,936/2022 and 11,413/2023, further regulate the matter.

The NSWMP sets forth an initial list of products subject to the reverse logistics system, as follows:

• pesticides, their residues and packaging, as well as other products whose packaging, after use, constitutes hazardous waste, observing the rules for managing hazardous waste;
• cells and batteries;
• tyres;
• lubricating oils, their waste and packaging;
• fluorescent, sodium and mercury vapour and mixed light lamps; and
• electronic products and their components.

This list of products is periodically reviewed aiming to include other products in the reverse logistic system, especially to extent the list includes products sold in plastic, metallic or glass packaging, and other products and packaging, considering, as a priority, the degree and extent of the impact on public health and the environment of the waste generated. 

See 5.2 Disclosure.

Pursuant to Federal Law 10,650/2003 and Federal Law 12,527/2011, the Public Administration, direct, indirect and foundational members of SISNAMA (all the environmental agencies and authorities) are obliged to allow public access to documents, files and administrative processes that deal with environmental matters and to provide all environmental information that is under their custody, in written, visual, sound or electronic media, except for commercial, industrial, financial secrets or any other confidential information expressly protected by law, as well as that relating to internal communications of government bodies and entities.

See 6.2 Reporting Requirements.

Amongst the relevant initiatives of green finance in Brazil, the Financial Innovation Laboratory (LAB) is a joint initiative of the Brazilian Association of Development (ABDE) with the Inter-American Development Bank (IDB) and the Securities Commission (CVM), with four working groups focused on the following themes.

• Green bonds – deepening of the understanding about the market and development and evaluation of intervention proposals in Brazil.
• Green finance – construction of dialogues with the institutions that make up the National Development System (SNF) to originate, evaluate and test financial innovations that support the sustainable development of Brazil.
• Financial instruments and impact investments – identification of the role that the DFIs and the opportunities to develop the capital market and financial instruments may play in the expansion of the offer of business investments that promote the SDGs.
• Fintech – development of studies and evaluations on the new financial technologies, digital economy and alternative funding trends and mechanisms (impacts, opportunities and challenges); and designing of the proposal of joint action in financial technologies, digital economy and alternative funding mechanisms (governance rules, members, services offered etc), including studies on the feasibility of implementation of a regulatory sandbox project in the capital, insurance and social security markers.

Several Brazilian commercial banks have been developing actions and also making progresses in this area. The National Bank for Economic and Social Development (BNDES) and the Bank of Brazil foster dialogues and initiatives in that regard.

A recent study published by the World Economic Forum (“Finding Pathways, Financing Innovation: Tackling the Brazilian Transition Challenge”, 2023) highlights that “Brazil enjoys a privileged position to become a global hub of green solutions for other countries. On the other hand, the country has important challenges to reduce its emissions and realise its potential. For this to happen, the country needs to establish robust financing structures, such as the development of sustainable financial instruments, the mobilisation of private investments and access to international resources for climate change”. Moreover, regarding particular challenges Brazil faces in financing its 2030 climate goals and suggests potential solutions to closing these financing gaps, key recommended solutions include:

• developing new financial tools and robust financing structures, such as green, social, sustainable and sustainability-linked bonds, to facilitate climate investments;
• policymakers providing clear targets, supporting measures and certainty for industry leaders to move forward with their climate transition strategies; and
• mobilising private funding by tailoring decarbonisation pathways and developing a green taxonomy that fits conditions on the ground in Brazil, following the example of the European Union and countries such as China, Colombia and Mexico, which have already done this.

Usually, for activities and assets that might have significant environmental impacts, the due diligence encompasses, at the least, the verification of:

• licence and permit validity and regularity;
• assessment of notice of infractions; and
• compliance with the most significant environmental obligations and verification of all environmental civil inquiries and lawsuits on the subject matter.

Brazilian legislation (eg, Federal Law 10,406/2002) dictates that parties should negotiate in good faith and failure to disclose environmentally relevant information may cause contract annulment or reduction of the negotiated value.

See 7.2 Environmental Taxes.

The environmental agency and the public prosecutor’s office (PPO) are the key authorities to discuss and deal with administrative (both the environmental agency and PPO), civil (both the environmental agency and PPO), and criminal liabilities (only the PPO).

Brazilian legislation allows the environmental authorities and the public prosecutor’s office (Federal Law 7,347/1985) to install an administrative dispute resolution procedure to avoid judicial litigation, settling issues by defining all the obligations and liabilities by signing a Term of Agreement with the interested party. Many relevant issues are solved in those procedures.

Arbitration is not usual to resolve environmental disputes between a private party and government agencies and public authorities. However, it may be used for dispute resolution between private parties.

Brazilian legislation allows any interested party to file a lawsuit regarding environmental issues. However, only the PPO, the public defender’s office; the Union; the states; the federal district and the municipalities; autarchies, public company, foundation or mixed capital company; and associations and NGOs that have as institutional purposes the protection of public and social heritage, the environment, the consumer and/or the artistic, aesthetic, historical, tourist and landscape and exist for more than one year prior to the filing of the lawsuit, may file a public civil action under Federal Law 7,347/1985. Other private parties may file a class action or individual lawsuit when the have legitimate interest in the matter.

Usually, the PPO will be the authority filing the public civil action in environmental matters in Brazil. The PPO has extensive practice in environmental negotiations and countless lawsuits and environmental disputes end in a judicial settlement agreement signed before the lower judicial court that has made its decision, solving the dispute. Legislation incentivises agreements between parties and a conciliation hearing is a common practice in all courts. If parties cannot reach an agreement, it is expected that a complex environmental litigation shall take more than two decades to get to a final court decision.

In Brazil, projects and activities with medium or high environmental impacts need to obtain three different and successive environmental licences before commencing operations, that being the previous license (PL), installation license (IL) and operation license (OL). The three-step licensing procedure is overly bureaucratic, slow and inefficient. An alternative to that model would be a joint IL and OL, with the responsibility on the operator to communicate to the competent environmental agency, under the law, the completion of the installation and fulfilment of all the conditions and obligations prior to the beginning of operations.