Brazilian Federal Environmental Agency Adopts Changes to Environmental Sanctioning Procedure

On June 7, the Brazilian Institute of the Environment and Renewable Natural Resources (Instituto Brasileiro do Meio Ambiente e dos Recursos Naturais Renováveis, “IBAMA”) published Normative Ruling ("NR") No. 19/2023, introducing significant changes to administrative procedures for investigating environmental infractions. Subsequently, on June 12, IBAMA published NR No. 21/2023, adjusting procedures for reducing fines by converting them into provision of environmental services. These regulations align IBAMA’s normative rulings with provisions established by Federal Decree No. 11,373, issued on the first day of the current federal government's mandate (please refer to our Legal Update on the Decree).

Regarding NR No. 19/2023, the main innovation is that settlement hearings are no longer part of the administrative sanctioning procedure within IBAMA. However, pending hearings may still take place, seeking to achieve one of the alternatives provided in the regulation (i.e., payment of the fine with discount, payment in instalments, or conversion of the fine into environmental services). The discussion of other aspects of the fine during hearings has been prohibited by the ruling. NR No. 19/2023 also introduced changes to the jurisdictional regime regarding the agents with authority to decide administrative appeals, as well as other procedural rules adopted by IBAMA.

NR No. 21/2023 provides that the application to convert the fine and obtain a discount must be filed no later than the closing arguments petition. The discounts are:

• In cases of direct conversion (i.e., when the transgressor is responsible for carrying out the environmental service): 40% if the application is filed before the defense, 35% if the request is filed prior to, or with, the closing arguments petition.
• In cases of indirect conversion (i.e., when the transgressor deposits funds to be used by IBAMA in the execution of the environmental service): 60% if the application is filed before the administrative defense, 50% if the application is filed prior to, or with, the closing arguments petition.

NR No. 21/2023 also establishes administrative procedures for project approval, addressing guidelines and rules for IBAMA to receive, review, and approve projects for environmental services eligible to receive funds from the fine conversion mechanism.