Significant Changes to the Federal Environmental Sanctioning Administrative Process

On September 20, 2024, the Brazilian government published Federal Decree No. 12,189/2024 (the “Decree”), significantly amending Federal Decree No. 6,514/2008, which provides for administrative penalties for environmental infractions, as well as regulating the federal environmental sanctioning process.

The Decree specifies that an embargo may only be imposed with the following objectives: (i) to prevent an infraction and damage to the environment; (ii) to prevent the transgressor from profiting from environmental infractions; (iii) to prevent future infractions; (iv) to ensure environmental rehabilitation; (v) to promote the recovery of environmental damage; and (vi) to ensure the effectiveness of administrative penalties. 

Conversely, the Decree prohibits the application of an embargo whenever illegal  deforestation or fires occur outside of permanent preservation areas or legal forest preserves, unless the infraction involves native vegetation.

The Decree also increases the potential duration of certain penalties and restrictions, from a three-year maximum to five (e.g., the ban on contracting with the administration) or 10 years (for other penalties, such as suspension or cancellation of licenses and loss or restrictions on certain tax benefits).

The Decree creates three new administrative infractions: (i) causing a fire in a forest or any form of native vegetation; (ii) causing a fire in a cultivated forest; and (iii) failure to implement actions to prevent and combat forest fires. Although each of these infractions are directly linked to recent fires that have been occurring in Brazil, the third deserves special attention. In addition, fines for infractions against vegetation committed with the use of fire—which had previously been increased by half—will be doubled.

Finally, the Decree also introduced an infraction that increases the risk of liability in value chain-management scenarios, extending the penalty to those who finance or facilitate products produced illegally. Likewise, it created the administrative infraction of “failing to repair, compensate or indemnify environmental damage,” which seems questionable, as it invades matters that are governed by the civil liability framework. In this respect, the Decree also provides that claims for reparation of environmental damages are not subject to statutes of limitations, which has already been upheld multiple times by Brazil’s Superior Courts.

The Environmental, Climate Change and ESG practice of Tauil & Chequer Advogados in association with Mayer Brown is available for further clarification on this topic.