Federal Environmental Agency (IBAMA) v. Gabriel Indústria e Comércio Madeiras EIRELI.

On December 19, 2018, Brazil´s Federal Environment Agency (“IBAMA”), filed a Public Civil Action (environmental class action), with a request for urgent relief, against Gabriel Indústria e Comércio Madeiras EIRELI, seeking compensation for environmental and climate damages based on an infringement notice for illegal wood storage without an environmental license. This public civil action is part of a set of 9 lawsuits brought by IBAMA on the same grounds, but against different defendants, to question illegal wood deposits and climate damage. The plaintiff alleges that the storage of wood without proven origin is associated with illegal deforestation and predatory exploitation in the Amazon biome. Thus, it seeks reparation for environmental damages provoked by it, including (i) the damage caused to flora and fauna, (ii) soil erosion, (iii) contribution to global warming. As for climate damage, it claims that unlawful conduct not only removed carbon sinks from the forest, but also caused the release of carbon into the atmosphere. The plaintiff seeks redress through the determination of (i) an obligation to restore the vegetation in an area equivalent to that estimated by IBAMA, based on the volume of logs seized, amounting to 22.14 hectares, ideally in an area of the same biome in Indigenous Land, Conservation Unit or Agrarian Reform Settlement Project and (ii) an obligation to pay the climate damage based on the Carbon Social Cost (CSC) in the amount of R$ 2,149,975.55. It claims, based on the polluter pays principle, that the climate damage represents an external social cost that is not internalized by the illegal deforestation, leaving it to society. It also argues that climate damage can be quantified on an individual scale by multiplying the estimated GHG emissions of the activity by the CSC. In this case, IBAMA uses the Amazon Fund methodology to estimate emissions based on the area of the Amazon biome considered deforested, summing up to 8,125.38 tons of carbon. The plaintiff requests, as an injunction: (i) suspension of financing and tax incentives and access to credit lines by the offender, (ii) unavailability of assets in the estimated amount for the obligation of the vegetation restorage and the obligation to compensate the climate damage, and (iii) judicial restraint order of the illicit polluting activity. On the merits, it requests the defendant's conviction in the obligation to do - to recover an area equivalent to that deforested - and the obligation to pay - in the amount related to the social cost of carbon. In a preliminary decision, the court rejected the injunction, considering that there was no urgency or danger in delay - given that two years had already passed since the assessment-, nor even sufficient probative ballast to justify a restrictive measure without prior contradiction, stating that there was no minimum evidence that the services performed by the defendant would compromise the environment. The Judge also understood that IBAMA's sampling measurement technique could cause inaccuracy, thus emptying the "probability of the right''. The court handed down a judgment in which it found that the damage mentioned in the initial petition had been proven. The court argued that the propter rem obligation to repair environmental damage applies to the case. The court ordered the defendant to recover the deforested areas or, if the measure was not complied with, to pay the sum of R$ 237,827.88, based on studies by IBAMA's Directorate for the Sustainable Use of Biodiversity and Forests. The court ordered the conviction to be recorded in the property register. It discussed the social cost of carbon, but failed to grant the request, as there was no consensus or legal parameters for setting the damage. The plaintiff and defendant filed appeals.