“Modernization” or “deconstruction”? From self-declaration to indigenous people, they understand, point by point, the new environmental license

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The only consensus between the federal government and Congress was the Special Environmental Authorization (LAE), created based on an amendment made by the President of the Senate, Davi Alcolombre (União-AP). It provides for a special and accelerated procedure, lasting up to one year, for projects selected as “strategic”, which could benefit, for example, from controversial works, such as the paving of BR-319 (Manaus-Porto Velho) and oil exploration in the tropical margin, for which research has already been approved. The topic was addressed in the temporary measure Lula sent to Parliament, which was approved last Wednesday – below, understand what is included in this text.

The MP was the latest chapter in a journey that began in 2004, when MPs prepared the first reform proposal. However, the Council only approved the order in 2021, and it was voted on in the Senate in May. Due to changes in the text, the project had to be sent back to the chamber for new approval in July.

The Ministry of Environment has long supported the idea that the changes would amount to a “demolition” of environmental licences. The entities supported Lula’s full veto, but the president focused on the sections considered the most sensitive, including several deemed unconstitutional. This, in fact, is the main reason behind the judicialization of various points in the new law.

• As before – States and municipalities issued simplified permits, often through self-declaration, for low-risk projects that cause only minimal pollution. The STF has already blocked state laws that attempted to simplify licensing for medium-sized companies.
• What did the government try? Lula saw violations of the Constitution, objecting to expanding the scope of the Environmental Licensing and Commitment (LAC) to include activities with moderate pollution potential, to prevent projects with relevant risks from obtaining approval without adequate technical analysis, and to limit self-declaration.
• How are you now? A simplified and self-declared Licensing of Attachment and Commitment (LAC) is permitted for works of moderate impact, respecting “necessary environmental control measures”. The Obama Institute estimates that the change could affect up to 90% of businesses in the country.

• As before – States and municipalities can set their own rules, as long as they respect general federal standards – set by CONAMA or through decrees – with specific parameters and standards regarding workload, pollution potential and activities subject to environmental authorization.
• What did the government try? The government vetoed states’ and municipalities’ free definition of licensing standards. Planalto argues that this would ignore the Union’s competence with regard to general rules and encourage “regulatory and anti-environmental competition between subnational entities.”
• How are you now? States and municipalities set their own standards regarding the scale of work and pollution potential, in addition to determining the type of project that needs to apply for a license or not, while respecting a law that sets standards for cooperation with the Federation for Environmental Works.

• As before – Under the Atlantic Forest Act, clearcutting of primary and secondary vegetation subject to advanced restoration requires federal approval, generally from the state of Obama. Furthermore, the State Environment Agency must authorize the municipality to plants undergoing moderate regeneration in the urban area.
• What did the government try? Lula rejected the hypothesis that the need for approval at different levels would constitute a dual analysis. When he objected to the change, he noted that making Atlantic Forest protections more flexible was “contrary to the public interest and unconstitutional.”
• How are you now? The need for approval from a federal agency is eliminated for cutting primary and secondary vegetation in the advanced regeneration phase, and from a state agency in the case of urban vegetation in the intermediate regeneration phase. The intention was to avoid “double analysis”.

• As before – They needed to be legally consulted on impactful projects built on their land, regardless of whether it was officially approved land – as long as it was considered already declared, an earlier stage of demarcation.
• What did the government try? The veto letter highlighted that limiting consultation to approved lands would be contrary to the “public interest” and would be “unconstitutional,” as these residents must be heard regardless of the completion of the land formalization process.
• How are you now? With the presidential veto overturned by Congress, there will be no right to consultation with traditional residents except in the case of companies located on already approved indigenous lands or in quilombola communities that hold title.

• As before – A rural producer needs to have his or her Rural Environmental Register (CAR) validated and approved to request an exemption from environmental licensing for its activity – as long as its nature also allows for this exemption.
• What did the government try? When objecting to this provision, President Lula said that changing this section of the legislation would prevent effective control of environmental impacts. Therefore, only rural landowners whose capital adequacy ratio has been properly analyzed will be exempt from licensing.
• How are you now? Once again, under the pretext of reducing bureaucracy in licensing processes, exemption from environmental licensing is now permitted even for rural producers who have “registration in the Central African Republic pending approval”.

• As before – Indirect impacts – which include, for example, impacts on fauna and flora or increases in deforestation in subsequent years – were an essential part of the environmental analysis, which made it necessary to introduce constraints and mitigation measures.
• What did the government try? Lula objected to the changes on the grounds that “the existence of a project could increase demand for public services or create effects that, although caused by third parties, are a consequence” of the existence of that project.
• How are you now? The new legislation removed the requirement to mitigate or compensate for “environmental impacts caused by third parties.” It will also no longer be necessary to note the impacts on public services that have been exacerbated by the implementation of the project.

Conservation units

• As before – Any authorization relating to actions or interventions within the conservation unit is based on the “binding nature” of its administrative bodies. In other words, they had the final say on the matter, with veto power.
• What did the government try? The President also considered it unconstitutional to change the current rule. By vetoing the removal of the binding nature of the statement from governing bodies, he reinforced the importance of specialized technical assessment in the protection of environmentally sensitive areas.
• How are you now? The binding nature of statements issued by the administrative bodies of conservation units in the licensing process for works within these spaces has been abolished. Participation will now be only advisory, without veto power.

Special environmental license

• As before – In the previous version of the legislation, there was no provision, in an organized manner, for a rapid and special process for environmental licensing of works considered strategic for the current government.
• What did the government try? The government acknowledged the creation of the device, but blocked licensing at one stage. To this end, a deputy was introduced to organize the private license, coordinated in three stages and with an analysis period not exceeding one year.
• How are you now? The first version of the text proposed a “one-stage” process, that is, in only one stage of submitting documents and studies. But in analyzing Lula’s proposal, Congress passed a three-stage model of strategic business “prioritization,” which lasts for one year.

Fiduciary responsibility

• As before – Financial institutions that grant credit, such as banks, must request an environmental license for the projects they finance. These entities could even be held jointly responsible for any environmental damage caused.
• What did the government try? Using its veto power, the government sought to keep funding conditional on environmental factors. Lula claimed that this change could “generate insecurity and serious legal disputes in cases of environmental damage that are subject to judicial review.”
• How are you now? The contractor’s duty to monitor environmental regularity has been removed. Therefore, the law stipulates that banks cannot be held responsible for any environmental damage that occurs as a result of the implementation of the activity or facility.

What has changed since the interim measure?

The federal government sent an interim measure to Congress to structure the establishment of a special environmental permit (LAE) in a three-stage model, rather than the previously proposed single-stage model. However, when considering the MP, parliamentarians not only supported the new licensing formula for projects deemed strategic, but also re-evaluated some points of environmental licensing as a whole. See below what was decided in the vote in the House of Representatives and the Senate, where the text was approved last Wednesday.