Newsletter Environmental | Impacts of COVID-19 on the Environmental Law

This newsletter aims to analyze the impacts of the pandemic caused by COVID-19 on the Environmental Law, highlighting the main measures that have been adopted by public sector and their potential relevant impacts.

SUSPENSION OF ADMINISTRATIVE DEADLINES

Aiming to minimize the risk of transmission of COVID-19, most environmental agencies have suspended public attendance or reduced the working hours, activities performed and the number of employees.

In this context, at the federal level, the Brazilian Institute for the Environment and Renewable Natural Resources (IBAMA) and the Chico Mendes Institute for Biodiversity Conservation (ICMBio), through Ordinances No. 826/2020 and No. 226/2020, respectively, have ordered the suspension of all proceedings deadlines for an indefinite period. IBAMA also determined that its servers should perform the work remotely, except for essential, strategic and police power activities (IBAMA Ordinance No. 827/2020) and suspended as well, for an indefinite period, the environmental conciliation hearings.

It is also worth mentioning, the Federal Law No. 13,979/2020 (published on February 7, 2020, as amended by Provisional Measure No. 928/2020 of March 23, 2020), which determined the suspension of deadlines (i) in administrative proceedings for an indefinite period, while the state of calamity persists, and (ii) the statute of limitations for the application of administrative sanctions provided for in Federal Law No. 9,873/1999.

Most states have also enacted rules suspending the deadlines in progress in administrative proceedings. However, there are states and several municipalities that do not have rules determining the suspension of deadlines, although they already have rules determining the suspension of public attendance or reduction in working hours, activities performed and number of employees.

From the point of view of administrative processes in general, the situation is even more critical, since few environmental agencies have so far issued rules dealing with the deadline extensions for compliance with obligations (e.g. compliance with environmental licenses´ technical conditions, draft and submission of studies and reports, management of contaminated areas, completion of decommissioning activities, compliance with terms of commitment etc.), permit requests and/or the renewal and extension of the validity period of environmental licenses and authorizations.

At the federal level, we highlight the recent publication, on April 3, 2020 (retroactively to March 12, 2020), of IBAMA´s Notice No. 7337671/2020-GABIN, which sets forth temporary guidelines related to the companies’ compliance with obligations regarding measures for the treatment and compensation of environmental impacts caused by the activities and enterprises licensed by IBAMA.

Among the guidelines established by IBAMA, the following should be highlighted: (i) maintain legal obligations, to the extent possible; in this case, compliance with obligations which do not prevent nor minimize environmental impacts must be assessed and adjusted as necessary in the specific case; (ii) maintain mandatory environmental measures linked to the maintenance of adequate levels of environmental quality (e.g., treatment of liquid effluents, soil stability, environmental safety and control of accident risks, etc.); (iii) minimize the effects and duration of identified non-conformities, when compliance with any environmental measure or obligation is not operationally possible due to the COVID-19 pandemic, with due communication to IBAMA for its analysis; and (iv) communicate IBAMA in cases of risk to the safe operation of activity or undertaking and to the environmental quality and public welfare.

Among the state environmental agencies that have already adopted initiatives in this regard, the following stand out:

•   The Environment and Water Resources Institute of Bahia – INEMA, the State Superintendence of the Environment of Ceará – SEMACE, the State Environmental Agency of Pernambuco – CPRH and the Secretariat of Environment and Water Resources of Piauí – SEMAR have automatically extended the validity period of environmental authorizations and licenses until, at least, the second half of April;

•   The Brasilia Environmental Institute – IBRAM, the state environmental agency of the Federal District, in addition to automatically extend the validity period of environmental authorizations and licenses until December 30, 2020, extended until May 31, 2020 the deadline for compliance with environmental technical conditions and for resolving procedural issues;

•   The Henrique Luis Roessler State Foundation for Environmental Protection – FEPAM of the State of Rio Grande do Sul, has suspended, until April 30, 2020, the deadlines for presenting documents and reports in relation to environmental licensing processes, regardless of the phase in which they are found (application, under analysis or licenses issued), provided that they do not affect the condition or may harm the environment, and monitoring should be maintained in case of operation of activities; and

•   The State Environmental and Water Resources Institute of Espírito Santo – IEMA and the Environmental Institute of Santa Catarina – IMA have suspended the deadlines for presenting evidence of compliance with technical conditions in relation to environmental licensing.

The legal uncertainty and lack of clear standards may trigger, in a near future, a series of questions as to the effective compliance with obligations and deadlines by the entrepreneurs, whether in the scope of sanctioning processes or environmental licensing processes, which may subject them to administrative sanctions, directly impact the operation of activities and cause (further) associated financial losses for companies.

For this reason, it is recommended that companies maintain the compliance with obligations that can be fulfilled and submit technical arguments and/or formal requests for deadline extensions before environmental agencies when their compliance is not possible.

SUSPENSION OF DEADLINES FOR COMPLIANCE WITH LEGAL OBLIGATIONS

In addition to the above considerations, there are also uncertainties related to the suspension or relaxation of legal deadlines and time limits set out in specific agreements, due to potential difficulties in their implementation and the suspension of deadlines of administrative proceedings.

Among the legal obligations, the following should be highlighted:

•   Reverse Logistics (Take-Back system) – National Policy on Solid Waste (PNRS): (i) reverse logistics goals established by specific agreements and rules (e.g., reverse logistics of electronics) in compliance with the PNRS, in all spheres of public administration; and (ii) deadlines for implementation of the reverse logistics system in the environmental licensing established by the Environmental Agency of the State of São Paulo – CETESB. These obligations will suffer impacts due to the same reasons that led to the suspension of recyclable waste collection in several municipalities (as will be discussed below) and even by the suspension of this service itself;

•   Conversion of environmental fines: companies have until July/2020 to observe the transition rules related to requests for conversion of environmental fines into environmental services at the federal level;

•   Environmental Regularization Program (PRA): according to the new provision included in Federal Law No. 12,651/2012 (Forest Code), only the owners of rural properties that enroll them in the Rural Environmental Registry – CAR until December 31, 2020 will be entitled to participate of PRA;

•   Submission of annual reports: several rules are being enacted extending the deadlines for submission of annual reports, such as, for example, IBAMA Normative Instruction No. 12/2020, which extends until June 29, 2020 the deadline for submission of the Annual Report on Potentially Polluting Activities and Users of Environmental Resources – RAPP for base year 2019 (as a rule, must be submitted by March 30 of each year regarding the previous year), and the IBAMA´s Notice No. 7307782/2020-GABIN, published on March 30, 2020, which extends the deadline for submission of the Annual Tire Report and the Montreal Protocol Annual Report for the year of 2020 (base year 2019) to June 29, 2020.

If the deadlines for compliance with legal obligations are not extended, and their compliance suffer direct impact by the measures adopted in relation to the pandemic caused by COVID-19, entrepreneurs may lose benefits and even be subject to administrative sanctions.

IMPACTS ON PUBLIC SERVICES AND ESSENTIAL ENVIRONMENTAL ACTIVITIES

On March 21, 2020, Federal Decree No. 10,282/2020 (amended by Federal Decree No. 10,292/2020 of March 25, 2020) was published, defining the public services and essential activities that should be ensured at this time of crisis.

In particular, the following environmental activities can be highlighted:

•   Health care, including medical and hospital services;

•   Water collection, treatment and distribution;

•   Collection and treatment of sewage and waste;

•   Generation, transmission and distribution of electricity, including the supply for the operation and maintenance of power plants and transmission and distribution systems, in addition to the production, transportation and distribution of natural gas;

•   Environmental inspection; and

•   Oil production and production, distribution and trade of fuels, liquefied petroleum gas and other petroleum products.

Despite the determination of the Federal Government for the maintenance of these activities, impacts on their continuity have already been observed, for example:

•   Health care, including medical and hospital services: in the State of Rio de Janeiro, conditions were established for issuing an Environmental Operation License for hospital facilities and other emergency works to combat COVID-19 (State Decree No. 47,008/2020);

•   Sewage and waste collection and treatment: several states and municipalities have suspended the recyclable waste collection due to the risk of transmission and contamination of COVID-19, being the population oriented to dispose their waste through the common waste collection (as a rule, disposed in licensed landfills). There are direct impacts on the obligations foreseen in the PNRS, as mentioned above;

•   Generation, transmission and distribution of electric energy: IBAMA’s Environmental Licensing Board informed that the deadline for sending suggestions, contributions and critics to the draft of the Term of Reference that will guide the preparation of Environmental Impact Studies of Offshore Wind Complexes was extended until April 30, 2020 (IBAMA´s Notice published on March 27, 2020);

•   Environmental inspection: the suspension of public attendance by environmental agencies and the reduction of employees directly impact the inspection activities, already conducted by environmental authorities in a precarious manner due to the insufficient budget allocated for this purpose;

•   Oil production and production, distribution and trade of fuels, liquefied petroleum gas and other petroleum products: Petrobras announced cuts in operation expenses initially forecast for 2020 (e.g. hibernation of platforms operating in shallow water fields), as well as a reduction in oil production. In the same context, in the State of Rio de Janeiro, for example, a specific decree was published on the subject (State Decree No. 47,002/2020), which, despite of authorizing the operation of onshore oil and gas industry activities during the state of public calamity, prevents the agglomeration of people in the performance of activities, i.e., requires a reduction in the number of employees. At the federal level, a new rule established conditions in which workers are not allowed to be selected to work by the Manpower Management Body, which is obliged to forward to the port authority an updated list of port workers prevented from work (risk groups, suspected cases and confirmed cases of COVID-19) (Provisional Measure No. 945/2020).

TRIAL OF RELEVANT LAWSUITS

During the crisis caused by COVID-19, with the suspension of proceedings deadlines and several activities, the Supreme Court (STF) has been maintaining the trial of lawsuits under its authority.

In the environmental law sphere, the trial of the requests for injunctions in judicial proceedings No. 658 and No. 656 (Arguições de Descumprimento de Preceito Fundamental – ADPFs), which question the Ordinance No. 43/2020 of the Ministry of Agriculture, Livestock and Supply (MAPA), started on March 20, 2020.

According to the plaintiffs, in general, Ordinance No. 43/2020 would facilitate the registration of new agrochemicals and related products by establishing tacit approval of requests not analyzed by the competent authority within 60 days, and would, in principle, take effect from April 1, 2020.

Justice Ricardo Lewandowski, reporting justice, voted on March 20, 2020, in favor of suspending the ordinance. In a virtual plenary session held on March 26, 2020, Justices Dias Toffoli, Edson Fachin and Alexandre de Moraes also voted in favor of the suspension of MAPA Ordinance No. 43/2020 by granting the injunction sought. However, the trial was suspended for an indefinite period, upon request of Justice Roberto Barroso.

However, considering the reporting justice’s competence to grant an injunction monocratically, on April 1, 2020, Justice Ricardo Lewandowski suspended the effects of the ordinance in question, insofar as it establishes deadlines for the tacit approval of agrochemicals. In his decision, the Minister highlighted the danger of serious injury to public health that the indiscriminate release of agrochemicals could cause, a situation that is further aggravated by the current COVID-19 pandemic.

Theo Keiserman de Abreu
Partner
T: +55 21 3262-3021
E: theo.abreu@cmalaw.com

Gabriela de Carvalho e Mello
Associate
T: +55 11 3077-3568
E: gabriela.mello@cmalaw.com

Bruna Faviere Lustoza Pinheiro
Associate
T: +55 11 3077-3543
E: bruna.pinheiro@cmalaw.com