Environmental Law 2024 Comparisons

In Ecuador, the main environmental regulations include the Constitution of the Republic, the Organic Environmental Code (Código Orgánico del Ambiente, or COA) and its regulations, as well as the Environmental Regulations for Hydrocarbon Operations. Additionally, several high-impact rulings have significantly contributed to the development and optimisation of environmental law in the country, setting key precedents for its effective application.

Administrative Authorities

• Ministry of the Environment, Water, and Ecological Transition (Ministerio del Ambiente, Agua y Transición Ecológica, or MAATE) – at the national and zonal levels; and
• decentralised autonomous provincial and municipal governments.

Judicial Authorities

• Judges specialising in constitutional rights; and
• judges in the administrative litigation courts.

Prosecutorial Authorities

• Prosecutor’s offices specialised in environmental matters.

Decentralised National Environmental Management System

The Decentralised National Environmental Management System (Sistema Nacional Descentralizado de Gestión Ambiental, or SNDGA) facilitates co-ordination between the National Environmental Authority (Autoridad Ambiental Nacional, or AAN), decentralised autonomous governments (gobiernos autónomos descentralizados, or GADs), and other public and private entities.

Unified Environmental Information System

The Unified Environmental Information System (Sistema Único de Información Ambiental, or SUIA) is a mandatory tool for the registration and monitoring of environmental information, used by the AAN, GADs, and entities within the national system.

Citizen Participation

Citizens and GADs are allowed to participate through advisory councils and sectoral citizen councils.

National Environmental Committees

Co-ordination spaces for biodiversity conservation (the Natural Heritage Committee), environmental quality (the Environmental Quality Committee), and biosafety (the Biosafety Committee).

Principles of Co-ordination and Subsidiarity

Interinstitutional co-ordination prevents duplication, and subsidiarity allows the AAN to assume GAD responsibilities in cases of non-compliance.

The Constitution of Ecuador establishes innovative environmental principles, granting the highest level of protection to both nature and the environment. It recognises the State as the primary guarantor of this protection while promoting the active participation of individuals, communities, peoples, and nationalities in preserving a balanced environment and preventing negative impacts. Ecuador stands out as the first country in the world to enshrine the “rights of nature” at the constitutional level, a pioneering approach that redefines the relationship between human development and respect for the natural environment, setting a unique framework for sustainability.

Sanctions

In cases of environmental damage, sanctions can be applied through three channels:

Administrative

According to the COA, environmental infractions are classified as minor, serious, or very serious. Sanctions include fines ranging from one to 200 unified basic salaries (from USD460 to USD92,000 based on the 2024 unified basic salary), as well as additional measures such as partial or permanent closures, suspension or revocation of environmental permits, among others.

Judicial

These depend on the judge’s discretion and may result in compensation or environmental reparations, depending on the case.

Criminal

Under the Organic Comprehensive Criminal Code, environmental crimes can carry prison sentences ranging from one to five years, and fines of between 100 and 1,000 unified basic salaries (from USD46,000 to USD460,000), depending on the severity of the classified offence.

The environmental control system in Ecuador operates under a model of deconcentration and decentralisation, distributing responsibilities as follows:

Ministry of the Environment, Water, and Ecological Transition

MAATE is the central governing authority for environmental matters, responsible for supervising, controlling, monitoring, issuing permits, and enforcing sanctions through its regional or zonal offices. This deconcentrated approach ensures operational coverage across all regions of the country.

Decentralised Autonomous Governments

GADs are divided at provincial and municipal level, and they assume decentralised responsibilities to regulate, control and authorise low and medium-impact environmental activities within their respective jurisdictions.

Unified Environmental Information System

SUIA is a mandatory platform for all environmental authorities, designed to manage regulations, permit issuance, and control activities with an environmental impact. It enables centralised oversight, ensuring transparency, traceability and efficiency in monitoring environmental incidents.

The COA and its regulations establish that, depending on the level of impact of the activity to be carried out, it is mandatory to obtain a specific environmental authorisation:

• an environmental certificate for activities with no significant impact;
• an environmental registration for low-impact activities; and
• an environmental licence for medium or high-impact activities.

Each type of authorisation requires compliance with a specific process. If non-compliance with established parameters or necessary requirements is detected, the competent environmental authority (autoridad ambiental competente, or AAC) may deny the authorisation. Furthermore, in cases of subsequent non-compliance, granted authorisation may be revoked, ensuring adherence to current environmental regulations.

Ecuador adopts a pioneering approach in its environmental policy and enforcement, centred on the “rights of nature”, recognised in its 2008 Constitution as part of a globally unique legal framework. This recognition grants nature the status of a rights-bearing entity, obligating the state and society to ensure its protection, restoration and regeneration, with the possibility of filing legal actions in its defence.

Citizen participation is a cornerstone of environmental management. In line with the Escazú Agreement, Ecuador guarantees access to environmental information, public participation in decision-making, and access to justice, ensuring that communities, Indigenous peoples, and civil society have an active voice in protecting their environment.

Additionally, Ecuador has implemented innovative mechanisms such as debt-for-nature swaps, freeing financial resources to conserve its biodiversity. These policies aim not only to protect the environment but also to make management of the environment financially sustainable.

The regulations to the COA establish two mechanisms for transferring or changing the responsible party in environmental authorisations:

• Change of operator for the project, work, or activity during the environmental regularisation process – this option allows the transfer to occur while the project is still in the process of obtaining environmental authorisation. Relevant justifications must be submitted to formalise the change.
• Change of holder of the administrative environmental authorisation – this mechanism applies when the environmental authorisation has already been granted, allowing the transfer of responsibility to a new holder. The new responsible party must ensure compliance with the obligations previously assumed by the original holder, submitting the corresponding justifications.

Both processes are designed to ensure continuity in compliance with environmental regulations, promoting transparency and accountability in environmental management.

The COA establishes significant legal and practical consequences for failing to obtain environmental authorisations, with sanctions differentiated according to the impact level of the activity, work, or project:

• Low impact – the lack of authorisation is considered a minor infraction, punishable by fines ranging from USD460 to USD1,150, depending on the operator’s gross income.
• Medium impact – the absence of authorisation constitutes a serious infraction, with fines ranging from USD2,300 to USD34,500, adjusted to the operator’s gross income.
• High impact – the lack of authorisation is classified as a very serious infraction, with fines ranging from USD4,600 to USD92,000. Additionally, the AAC may impose a temporary suspension of the activity.

In Ecuador, responsibilities for environmental damage or regulatory non-compliance include administrative, judicial and criminal sanctions, depending on the severity of the case. These may include:

• fines – adjusted based on environmental impact and the offender’s income;
• suspension or revocation of permits and activities – to prevent or halt damage;
• compensation and environmental restoration – obligations to compensate those affected and repair ecosystems; and
• criminal liability – prison sentences in severe cases.

In Ecuador, the legal framework for the disclosure of environmental matters has two main focuses:

• Policy on access to environmental information – The Constitution of Ecuador and the Escazú Agreement, to which the country is a signatory, promote an open policy that guarantees the right of individuals, communities and peoples to be informed about activities that may affect their environment. This strengthens citizen participation and transparency in environmental management.
• Specific reporting obligation – According to Article 291 of the COA, those carrying out projects, work or activities are required to notify the AAC within 24 hours of any environmental damage occurring in their areas of operation. Failure to report is considered a serious infraction and may be sanctioned with fines of up to 75 unified basic salaries (USD34,500), depending on the offender’s gross income.

In Ecuador, environmental liability is imprescriptible, according to Article 305 of the COA. This means that those responsible can be prosecuted and sanctioned at any time, even if the damage occurred before the acquisition of a project or property. 

Article 307 of the same legal framework establishes that an operator can be exempt from administrative sanctions if it can prove that the damage was caused by force majeure or unforeseeable circumstances, and that all reasonable measures were taken to prevent it. Similarly, Article 308 allows for exemption from liability when the damage is caused by a third party with no contractual relationship, provided the operator had taken adequate precautions. 

Given this framework, it is crucial for investors to conduct thorough environmental due diligence before acquiring assets or projects, to identify potential historical liabilities that could pose significant risks to their operations and strategic decisions. 

In Ecuador, the environmental control mechanisms established in the COA enable auditing and monitoring of business activities to ensure regulatory compliance, based on the principles of sustainability and precaution. Depending on the level of environmental impact of the activity, different reporting requirements apply:

• medium and high-impact activities – companies with an environmental licence must submit environmental compliance audits, with the first report due one year after obtaining the licence and subsequently, every three years; and
• low-impact activities – companies with an environmental registration are required to submit annual environmental compliance reports (informes de cumplimiento ambiental, or ICAs), followed by biennial reports.

Additionally, depending on the type of activity, specific reports may be required, such as waste management declarations, monitoring of effluent discharges, air emissions, and noise levels, among others. These mechanisms are designed to adapt to the specific characteristics of each operation, promoting effective and transparent environmental management.

In Ecuador, liability for environmental incidents or damage can be administrative, civil, or criminal, and the defences available vary depending on the nature of the liability and the quality of the evidence presented. An effective strategy combines legal and technical arguments to mitigate risks. Below is a breakdown of each type of liability and applicable defences.

Administrative Liability

Administrative liability arises from non-compliance with environmental regulations and may result in fines, suspension of activities, or revocation of permits. Common defences in this area include:

• Lack of causality – the operator can demonstrate that there is no direct link between their activity and the environmental damage.
• Force majeure or unforeseeable circumstances – this exempts the operator from responsibility when the damage results from unforeseeable and unavoidable events, such as natural disasters.
• Third-party intervention – if an independent third party with no contractual relationship is responsible for the damage, the operator may be exempt if they can prove that reasonable precautions were taken.

Civil Liability

Civil liability seeks full reparation of environmental damage and is objective, meaning there is no need to prove intent or fault. Defences in this context include:

• Causality challenges – demonstrating that the damage is not directly related to the operator’s activity.
• Technical validation – operators can request independent expert assessments to challenge the extent of the damage or the conditions cited by the authority.

Criminal Liability

Criminal liability applies to severe cases, such as irreversible damage to ecosystems, and may involve prison sentences. Defences focus on:

• Absence of intent or fault – demonstrating that there was no intention or negligence in the operator’s actions.
• Procedural flaws – questioning the validity of evidence if legal procedures were not followed.

Technical Defences

Technical arguments are essential to complement legal strategies. Key technical defences include:

• Chain of custody for samples – Environmental regulations require strict protocols for the collection, transport and analysis of samples. If non-compliance is proven (eg, use of improper containers or refrigeration failures), the evidence can be invalidated.
• Independent expert assessments – Hiring impartial experts to evaluate technical aspects of the case. These experts are required to remain objective and can add credibility to defence arguments.
• Compliance with technical standards – The Ecuadorian Standardisation Service (Instituto Ecuatoriano de Normalización, or INEN) establishes procedures for validating environmental evidence. If these are not followed, the evidence lacks validity.

A robust defence against environmental incidents or damage combines legal arguments based on statutory exceptions and technical strategies grounded in impartial expert evaluations, and identifying procedural failures by the authority. This approach not only protects operators but also ensures fair and transparent handling of environmental liabilities.

Liabilility Under the Organic Environmental Code

Article 290 of the COA establishes that companies in Ecuador are subject to strict liability for environmental damage, meaning they must answer for any impacts caused by their activities, regardless of intent, fault or negligence. This is particularly relevant for investors, as the regulation also outlines specific scenarios where liability is expanded.

Extended liability for corporate groups

If a company is part of a corporate group, environmental liability can extend to other companies within the group that have decision-making power over the activities that caused the damage, or if abuses in the name of the group are evident. This includes cases where the group structure is used to evade responsibility.

Shareholder liability

Shareholders may be held responsible if abuse of corporate rights is proven, such as fraud or actions that violate environmental regulations. This introduces an additional level of risk that must be considered in any investment.

Joint liability of administrators

Legal representatives and company administrators are jointly liable for environmental damage caused during their tenure, reinforcing the need for diligent management in compliance with environmental regulations.

Liability Under the Organic Comprehensive Criminal Code

In the criminal sphere, the Organic Comprehensive Criminal Code establishes economic sanctions for legal entities, including significant fines of up to 1,000 unified basic salaries (USD460,000). It also includes measures such as suspension of activities or even dissolution of the company in severe cases. These provisions highlight the importance of conducting thorough environmental due diligence before any acquisition or investment to identify potential liabilities and ensure regulatory compliance.

In Ecuador, environmental taxes aim to encourage sustainable practices and reduce the environmental impact of certain activities or products. Among the main taxes is the redeemable tax on non-returnable plastic bottles, regulated by the Organic Code of Production, Trade and Investment. This tax applies to the sale of non-returnable plastic bottles to promote recycling and reduce their use, at a rate of USD0.02 per bottle, refundable to the consumer upon return for recycling.

Additionally, the Single-Use Plastics Law, in effect since 2020, complements these measures by imposing restrictions on the use of non-biodegradable plastics and taxing products such as bags, straws and non-returnable plastic containers, promoting more sustainable alternatives. This regulatory framework seeks to discourage the use of single-use plastics and encourage their replacement with recyclable or biodegradable materials, thereby contributing to responsible waste management in the country.

Tax incentives in Ecuador, designed to promote environmental responsibility and sustainable practices, are primarily regulated by the Internal Tax Regime Law. The most notable incentives include:

• double depreciation for machinery, equipment and environmental technologies – companies can depreciate an additional 100% for assets that demonstrate environmental benefits, encouraging investment in cleaner and more efficient technologies that reduce environmental impact; and
• additional income tax deduction – an additional deduction is allowed for donations, contributions or investments in projects related to bio-entrepreneurship, prevention, conservation, repair and environmental restoration, financially incentivising companies to support sustainable initiatives.

Parent companies can be held liable for environmental damage caused by their subsidiaries when they are part of a corporate group and have decision-making power over the activities that caused the damage. According to Article 290 of the COA, this liability extends to cases where abuses, fraud, or actions directly contributing to environmental damage are evident, ensuring that corporate-level decisions are not exempt from legal consequences.

For shareholders, their liability is limited to specific situations. The regulations establish that if the legal entity responsible for the environmental damage is dissolved, the partners or shareholders must assume any outstanding economic or financial obligations arising from such damage. Outside of this particular scenario, shareholders are not directly liable for the environmental damage caused by the company.

Environmental, social and governance (ESG) requirements are regulated through a legal framework that promotes sustainability, gender equality, and transparency in corporate management.

Environmental

Regarding the environmental aspect, the COA prohibits unauthorised deforestation and mandates reforestation for activities that impact ecosystems. Companies are required to develop an environmental management plan (plan de manejo ambiental, or PMA) and report compliance through the SUIA, under the supervision of the MAATE.

Social

From a social perspective, the Organic Law to Promote the Violet Economy, in effect since 2023, advances gender equality in the workplace. This law requires companies with more than 50 employees to implement gender equality plans and adopt anti-workplace harassment protocols, with compliance overseen by the Ministry of Labour.

Governance

In terms of governance, companies must establish internal control mechanisms, report their sustainability practices, and undergo periodic audits. Competent authorities, such as the MAATE and the Ministry of Labour, monitor these obligations and enforce sanctions in cases of non-compliance, ensuring transparency and corporate accountability.

In Ecuador, companies are subject to environmental compliance audits and the submission of ICAs, depending on the type of environmental permit granted, in accordance with the COA.

Environmental Compliance Audits

Environmental compliance audits apply to companies with an environmental licence that undertake activities classified as medium or high impact. These audits must be conducted by environmental consultants accredited by the MAATE, who act impartially to identify findings. The first audit is conducted one year after obtaining the environmental licence, and subsequent audits are conducted every three years. Their purpose is to verify compliance with the conditions established in the licence and the PMA, with reports submitted through the SUIA.

Environmental Compliance Reports

ICAs are required for low-impact activities with an environmental registration. These reports must be submitted at the end of the first year and then biennially. They allow companies to demonstrate compliance with their environmental obligations, ensuring continuous and transparent monitoring by the environmental authority.

The COA establishes that any natural or legal person in charge of controlling an activity, under any title, will be held responsible for the environmental damage caused. Additionally, according to numeral 2 of Article 290, administrators or legal representatives of companies assume joint liability for pending obligations related to environmental damage that occurred during their tenure.

This means that while any executive or person in charge of the activity may be held liable for the damage, administrators and legal representatives also bear joint liability. This underscores the importance of proper environmental management and rigorous oversight of activities that may have an environmental impact.

Company directors and administrators can protect themselves against claims for environmental damage through directors and officers (D&O) liability insurance. These policies cover indemnities and legal expenses arising from negligent acts, errors or omissions in the performance of their duties.

Additionally, some insurance companies offer environmental liability policies, which can cover specific risks associated with environmental damage caused by company operations. Coverage varies depending on the insurer and the terms of the contract, making it essential to review exclusions to ensure protection against potential environmental claims.

Companies have access to environmental liability insurance, which covers risks related to pollution and clean-up costs. This type of insurance is optional in most sectors, but in areas such as the hydrocarbon sector, regulations require financial guarantees, which may include insurance, to address environmental damage.

While environmental insurance is not generally mandatory, certain high-risk activities may require it as a condition for obtaining environmental licences.

Some environmental risks are considered uninsurable, such as damages caused by illegal acts, deliberate non-compliance with environmental regulations, or catastrophic events of great magnitude that exceed standard coverage limits. These exclusions should be carefully reviewed when purchasing an environmental liability insurance policy.

Financial institutions and lenders can be held liable for environmental damage or violations of environmental regulations in certain cases. According to the COA, liability can extend to third parties who have decision-making power or control over the activities that cause the damage.

If a financial institution or lender actively participates in directing the operation or makes decisions regarding the activities that cause the damage, it could be considered liable under this assumption. However, if their involvement is limited to providing credit or financing, without control over the activity, liability should not extend to them.

Lenders adopt various measures to protect themselves from the risk of liability for environmental damage. These actions aim to reduce exposure to potential claims and ensure that financed projects comply with current environmental regulations.

Environmental Due Diligence

Before granting financing, lenders conduct environmental audits and risk assessments to identify the potential environmental impacts of the project. This evaluation allows them to understand associated risks and require corrective measures before approving the loan.

Contractual Clauses

Financing contracts include clauses that oblige companies to comply with environmental regulations. These may include requirements to maintain valid environmental licences, submit compliance reports, and undergo periodic audits.

Environmental Guarantees and Insurance

Lenders may require borrowers to obtain environmental liability insurance to cover remediation costs in the event of damage. This protects the lender from potential financial claims arising from environmental violations.

Ongoing Supervision

Financing contracts can include monitoring mechanisms, such as the obligation to submit periodic ICAs. This enables lenders to oversee the project’s environmental performance and take preventative actions if risks arise.

Civil claims for compensation or remediation of environmental damage can be filed in the following cases:

• direct damages – when a person or community suffers harm to their health, property, or livelihood, they can demand full reparation;
• rights of nature – legal actions can be filed to restore affected ecosystems, even if no personal harm has occurred, in accordance with the constitution;
• non-compliance with regulations – failure to comply with environmental licences or PMAs allows communities or the state to seek remediation of damages; and
• prevention of future harm – precautionary measures can be requested to prevent future environmental damage.

Courts may award punitive or exemplary damages in cases of severe or intentional environmental harm. Although this concept is not expressly recognised in the COA, the Constitution of Ecuador allows for full reparation of environmental damage, which includes compensatory, restorative and preventative measures.

The Constitution of Ecuador and the COA allow individuals, communities, peoples and nationalities to file collective lawsuits to demand full reparation for environmental damage.

These collective actions can be brought by affected communities, civil society organisations, or the AAN. Collective lawsuits aim to protect the rights of nature and affected human groups, enabling joint representation of multiple individuals with common interests.

Ecuador has been the scene of landmark environmental cases that have set significant precedents.

• Waorani of Pastaza v Ecuadorian State (2019): The Waorani people sued the state for attempting to auction their ancestral territory for oil exploitation without proper prior consultation. The court ruling halted the auction of approximately 180,000 hectares in the Amazon, strengthening the right to prior consultation for Indigenous communities.
• Yasuní Popular Consultation (2023): In a national referendum, citizens decided to cease oil exploitation in Block 43 of Yasuní National Park, one of the most bio-diverse areas on the planet and home to Indigenous peoples living in voluntary isolation. This decision highlights the importance of citizen participation in environmental protection.
• Defense of Cofán Territory (2022): The Cofán Indigenous community took legal and monitoring actions to protect their territory from illegal gold mining, leading the government to annul mining concessions granted without prior consultation. This case underscores Indigenous resistance to illegal extractive activities.

These cases reflect the growing defence of environmental rights and Indigenous communities in Ecuador, establishing legal and social precedents for environmental protection.

In Ecuador, parties may use indemnities and other contractual agreements to transfer or allocate responsibility for incidental damages or legal non-compliance.

However, there are limits and exceptions to this practice, as such agreements can establish responsibilities between the parties involved, but do not exempt them from complying with environmental regulations or from sanctions imposed by the AAC.

The AAC has the authority to identify non-compliance and impose sanctions regardless of existing private agreements. Additionally, if third parties become aware of environmental damage and fail to act, they may also be held liable.

Therefore, while contractual agreements can distribute responsibility among the parties, they do not restrict the AAC’s ability to enforce the law, or change the rights of affected third parties.

Environmental insurance in Ecuador must cover 100% of the commitments established in the PMA and the environmental licence granted by the competent authority.

The most common risks included in the policy are as follows:

• restoration of environmental damage – covers the remediation of contaminated soils, affected bodies of water, and other natural elements harmed by the company’s activities;
• liability for damages to third parties – covers claims from third parties affected by environmental impacts caused by the company;
• compliance with the PMA – ensures the implementation of prevention, control, mitigation and compensation measures established in the plan;
• commitments of the environmental licence – includes compliance with the conditions imposed by the authority in the environmental licence, such as environmental monitoring, emission and discharge control measures, and response to environmental contingencies; and
• environmental contingencies – covers unforeseen events that cause environmental damage, such as leaks, spills or explosions, ensuring timely action to mitigate negative effects.

The regulation of contaminated land is based on the COA and its regulations. The central approach is governed by the “polluter pays” principle, which requires the person or entity responsible for the contamination to bear the costs of full soil remediation.

Remediation includes identifying the contamination, assessing risks, implementing corrective measures, and verifying the clean-up. It is the obligation of the AAN to oversee the process through the SUIA and to require compliance reports. Non-compliance may result in fines, suspension of activities, or revocation of environmental licences.

The responsibility for cleaning up contaminated land falls on the party responsible for the contamination, in accordance with the “polluter pays” principle established in the COA. This person or entity must bear the cost of full remediation, which includes the identification, assessment and clean-up of the land.

If the responsible party fails to meet this obligation, the AAN may take over the clean-up under the concept of subsidiary liability, allowing the state to recover remediation costs from the original responsible party. The clean-up is carried out through an environmental remediation plan, which must be approved and supervised by the corresponding authority. Although the responsibility cannot be delegated, the responsible party may hire third parties to execute the clean-up actions under their control.

Liability in cases where more than one party has contributed to contamination is governed by numeral 2 of Article 290 of the COA, which establishes that when multiple natural or legal persons are involved in causing environmental damage, liability is joint and several.

Each of the parties involved can be required to cover the full remediation costs, regardless of their degree of contribution to the contamination. The party that has assumed the costs may exercise their right of recourse against the other responsible parties to recover their proportional share, ensuring comprehensive environmental remediation in an efficient and effective manner.

To initiate administrative proceedings against polluters, owners, or occupants of contaminated land, direct harm does not have to be proved. According to the COA, any person, community, people, nationality, civil society organisation, or the AAN may file a complaint or request the initiation of an administrative procedure.

This framework is based on the protection of the rights of nature, recognised in the Constitution of Ecuador, which allows anyone to demand the restoration of affected ecosystems. The MAATE also has the authority to act when the responsible party fails to fulfil its obligations. These complaints are filed through the SUIA and their processing is subject to the rules of common administrative procedures.

The investigation process for environmental accidents is regulated by the COA and its regulations, with the AAN responsible for its execution. The main phases of this process are:

• notification – the operator or any person aware of the accident must notify the authority through the SUIA;
• initial inspection – the authority conducts an inspection to verify the magnitude and causes of the accident, identifying pollutants, impacts and potential responsible parties;
• urgent measures – the authority may order immediate preventative or corrective measures, such as containing contamination or halting activities;
• technical evaluation – a technical analysis is conducted on the impacts caused and the responsibility of the parties involved, reviewing documents, licences, and PMAs;
• determination of responsibility – based on the findings, administrative liability is established, and sanctions such as fines, suspension of activities or the obligation to implement an environmental remediation plan, are imposed; and
• monitoring and control – the authority supervises the implementation of corrective measures and environmental restoration, ensuring the recovery of affected ecosystems.

In Ecuador, climate change policies and laws are structured through the constitution, the COA, and international commitments such as the Nationally Determined Contribution (NDC) under the UNFCCC. The constitution guarantees the right to a healthy environment and recognises the rights of nature. The COA provides tools for mitigation and adaptation, including plans to reduce emissions and promote sustainability.

At the strategic level, the National Climate Change Strategy (Estrategia Nacional de Cambio Climático, or ENCC) defines two priority areas: adaptation and mitigation. Adaptation focuses on vulnerable sectors such as agriculture, water resources, and human settlements. Mitigation prioritises high-emission sectors such as energy and transportation, encouraging the use of clean energy and sustainable practices. These efforts are integrated into the National Plan for Good Living, which promotes using economic diversification to achieve low-carbon, climate-resilient models.

Ecuador has set clear goals to reduce greenhouse gas (GHG) emissions, reflecting its commitment to the Paris Agreement and sustainable development. In its 2019 nationally determined contribution (NDC), the country pledged to reduce 20.9% of its projected emissions by 2025 in sectors such as energy, agriculture, waste, and industrial processes, subject to the availability of resources and international support.

In 2024, the MAATE presented the National Climate Change Mitigation Plan 2024–2070, a long-term strategy to advance towards decarbonisation. This plan prioritises emissions reductions in key sectors such as energy, land use, and waste, promoting environmental, social and economic benefits.

In Ecuador, policies on asbestos and PCBs are designed to protect public health and the environment, aligning with national and international standards.

Asbestos

• The constitution prohibits the import, production, possession and use of persistent organic pollutants, including asbestos (Article 15).
• The Ecuadorian Technical Regulation RTE INEN 052 regulates the manufacturing, import and commercialisation of asbestos-containing products, such as asbestos-cement sheets.
• Ecuador has ratified ILO Convention 162, which requires safe conditions for asbestos use, prioritising the protection of exposed workers.

Polychlorinated Biphenyls (PCBs)

• Ministerial Agreement No 146 establishes procedures for the identification, management and safe disposal of PCBs.
• Ministerial Agreement No 142 classifies PCBs as hazardous waste, regulating their management and final disposal.
• Ecuador is a signatory to the Stockholm Convention, committing to the gradual elimination of PCBs through environmentally sound methods.

Waste management in Ecuador is supported by a comprehensive legal framework that promotes sustainability and environmental protection. The 2008 constitution recognises the rights of nature and establishes the obligation to protect the environment, serving as the foundation for sectoral regulations.

The COA regulates the integrated management of solid, hazardous and special waste, while the Organic Code of Territorial Organisation, Autonomy, and Decentralisation assigns GADs the responsibility for managing solid waste within their jurisdictions. In 2021, the Organic Law on Inclusive Circular Economy was enacted, driving the transition to a circular economy through the regulation of sustainable production, responsible consumption, and inclusive waste management, recognising the role of grassroots recyclers. 

Additionally, Ministerial Agreement No 19 of 2014 establishes specific policies for the reduction, reuse and recycling of plastics. These regulations are overseen by the MAATE, in co-ordination with the GADs, to ensure regulatory compliance and promote sustainable waste management practices.   

The producer or generator of waste may retain responsibility for it even after its disposal by a third party, in accordance with Ministerial Agreement No 142 and the COA. The producer is obliged to ensure the traceability of the waste and its proper final disposal. Additionally, the COA establishes the concept of joint liability, since both the generator and the manager can be held jointly responsible for environmental damage resulting from improper waste management.

In Ecuador, extended producer responsibility (EPR) requires manufacturers, assemblers, importers and distributors to manage their products throughout their entire life cycle, including design, collection, recovery, recycling, and final disposal once they become waste. This responsibility is established in Article 233 of the COA, which states that producers are responsible for managing their products throughout their life cycle, covering everything from material selection and production processes to their treatment or final disposal as waste.

The AAN defines the products subject to EPR and establishes the goals and guidelines for presenting comprehensive management programmes. Currently, in Ecuador, EPR applies to the following products:

• Electrical and electronic equipment (EEE) – according to Ministerial Agreement No MAATE-2022-067, EEE producers must implement programmes for the comprehensive management of waste generated at the end of these products’ life cycles.
• Lead-acid batteries – Ministerial Agreement No MAATE-2021-034 sets guidelines for the management of used batteries, requiring producers to ensure proper collection and recycling.
• Used lubricating oils – under Ministerial Agreement No 042, the management of used lubricating oils and their containers is regulated, assigning producers responsibility for post-consumption handling.
• Discharge lamps and/or unused LED lamps – Ministerial Agreement No MAATE-2022-097 establishes the producers’ responsibility for the comprehensive management of these waste products.

In Ecuador, waste operators must comply with a series of rights and obligations established in the COA, its regulations, and various ministerial agreements. These regulations govern the management of hazardous waste, as outlined in Ministerial Agreement No 026, and non-hazardous waste, under Ministerial Agreement No 061, with the aim of protecting the environment and ensuring public safety.

In this context, operators are required to implement technical standards to prevent, minimise and control the environmental impacts of waste management. They must also obtain the necessary environmental permits to operate, ensure the traceability of waste from generation to final disposal, and submit periodic reports to the environmental authority. These reports must include detailed information on waste management, compliance with established obligations, and the results of measures taken to achieve continuous improvement in environmental management.

Failure to comply with environmental obligations results in a range of administrative, civil and criminal sanctions that may affect the operational continuity and reputation of the companies involved. The main consequences include:

• fines – economic sanctions proportional to the severity of the infraction committed;
• suspension of activities – the environmental authority may temporarily suspend a company’s activities until irregularities are corrected;
• revocation of permits – the competent authority may revoke the environmental permit if serious or repeated violations are detected; and
• criminal liability – in cases of severe environmental damage, criminal liability may be applied under the Organic Comprehensive Criminal Code, with penalties including fines and imprisonment for those responsible.

There is an obligation for self-reporting of environmental incidents under the COA. This obligation applies to operators, environmental licence holders, and those responsible for activities that pose environmental risks.

Article 317 of the COA establishes the duty to immediately notify the AAN of any incident or environmental damage occurring during the course of their activities. The notification must be made through the SUIA.

Access to environmental information in Ecuador is guaranteed by the constitution, the Organic Law on Transparency and Access to Public Information, and the COA. Additionally, Ecuador is a party to the Escazú Agreement, which reinforces the right to access of information, public participation, and access to justice in environmental matters.

The COA establishes fundamental principles such as transparency, participation and precaution, requiring public authorities and environmental oversight bodies, including GADs, to ensure timely, clear and understandable access to environmental information. This includes data on air, water, and soil quality, biodiversity, EIAs, and environmental licences.

Finally, the Escazú Agreement obliges authorities to facilitate access to environmental information and adopt measures to ensure public participation in decision-making that affects the environment. This agreement also protects environmental defenders and establishes mechanisms for access to justice in cases of violations of environmental rights.

Companies in Ecuador must submit ICAs to the relevant authorities, but they are not required to publicly disclose the information contained in these reports.

In Ecuador, green finance mechanisms include debt-for-nature swaps. These agreements allow the country to reduce its external debt in exchange for environmental conservation commitments. In 2024, Ecuador completed a USD1.5 billion debt-for-nature swap, freeing approximately USD460 million for the protection of the Ecuadorian Amazon. This followed a similar agreement in 2023, which allocated over USD1 billion for the conservation of the Galápagos Islands.

The responsibility for overseeing and ensuring compliance with these agreements lies with Ecuador’s Ministry of Economy and Finance, in co-ordination with international financial institutions and environmental conservation organisations. These entities ensure that the freed resources are used in accordance with the conservation commitments established in the agreements.

In Ecuador, environmental due diligence is a key practice in M&A, financing and real estate transactions. This process aims to identify environmental risks that could affect the value of the transaction or create future liabilities.

For buyers, conducting environmental due diligence allows them to understand the risks associated with the company or assets being acquired, facilitating informed decision-making and the negotiation of better terms. The main elements evaluated in this process include:

• an EIA – this analyses how the target’s operations affect the environment, assessing emissions, resource use, and potential impacts on biodiversity;
• regulatory compliance – this verifies whether the company complies with current environmental regulations, helping to identify potential non-compliance or penalties that could pose legal or financial risks;
• identification of environmental liabilities – this assesses possible hidden environmental liabilities, such as soil or water contamination, which may require significant remediation costs;
• review of environmental management systems (EMSes) – this examines the effectiveness of the company’s environmental policies and procedures to identify improvement opportunities and mitigate operational risks; and
• review of environmental permits – this confirms that the company or assets being acquired have the necessary permits, that these are valid, and that they can be transferred in the event of a change in ownership.

The seller must disclose relevant environmental information to the buyer, especially in the sale of real estate or activities subject to environmental regulation, in accordance with the COA and the principle of transparency.

In real estate transactions, the seller must disclose environmental liabilities, such as soil or water contamination, and the existence of remediation plans. For activities with an environmental licence, the seller must provide information on environmental compliance, audit reports and the validity of licences. Failure to do so may result in administrative liability, and even the annulment of the contract if information concealment can be proved.

The most common environmental legal issues in transactions in Ecuador include:

• Hidden environmental liabilities – undisclosed prior contamination of soil, water or infrastructure by the seller, which may create liability for the buyer.
• Non-compliance with environmental licences – absence or expiration of licences, permits or environmental authorisations, which can affect the legal operation of the economic activity.
• Unfulfilled environmental remediation obligations – remediation commitments not met by the seller that may transfer to the buyer under the principle of strict liability.
• Absence of ICAs – lack of access to audits or ICAs needed to verify the legal status of the project or property.
• Transfer of responsibilities for pre-existing damages – regulations allow the buyer to inherit responsibility for prior environmental damages if these are not properly identified and addressed before the transaction.