appeal

Federal Environment Agency (IBAMA) v. Madeira Nova Aliança Ltda. - appeal

Litigation

Sabin

Sabin Litigation

petition

Federal Environment Agency (IBAMA) v. Madeira Nova Aliança Ltda. - petition

reply

Federal Environment Agency (IBAMA) v. Madeira Nova Aliança Ltda. - reply

decision

Federal Environment Agency (IBAMA) v. Madeira Nova Aliança Ltda. - decision

Filing Year For Action

In January 2019, Brazil’s Federal Environment Agency (“IBAMA”), filed a public civil action (environmental class-action) against Madeira Nova Aliança Ltda. 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 the climate damage, it claims that the 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 30.46 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$ 2,957,915.77 . 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 11,178.82 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 partially granted the injunction, considering that the danger of delay was evident, especially in view of the fragility of the ecologically balanced environment. Thus, it granted and ordered (i) the suspension of the right to participate in financing lines offered by official credit establishments and (ii) the restriction of access to tax incentives and tax benefits offered by the Government in the three spheres of the Federation. However, the Federal Judge stated that, for the time being, the use of the Social Cost of Carbon (SCC) for the purposes of decreeing the unavailability of assets was not feasible due to the lack of technical subsidies, and that the amount requested was, at first glance, disproportionate.

IBAMA then filed an interlocutory appeal (AI 1005432-51.2019.401.0000) requesting the inclusion of the amount related to the CSC in the declaration of unavailability of assets, considering the soundness of the methodology used as a reference for its quantification. It argues that in order to fully recover the environmental damage caused, it is necessary to include the social cost of carbon, which appears as "residual damage" or "permanent damage".

In response, the defendant alleged the ineptitude of the initial petition as well as the incompetence of the court, which they mention should be the same as the place of the damage. It also claimed the absence of a causal link between its conduct and the alleged damage.

IBAMA filed a reply challenging the points raised in the opposition, and attached Technical Information No. 10/2019-COREC/CGBIO/DBFLO, which explains how the calculation is made to arrive at the amount of compensation sought in relation to the application of the Social Cost of Carbon (CSC).

 In October 2024, a partial judgment was handed down ordering the defendant company to (i) present a Degraded Area Recovery Project (PRAD); (ii) pay material damages in the amount of R$327,201.32; (iii) suspend the Rural Environmental Registry (CAR) of the area until the damage has been fully recovered; and (iv) maintain the suspension of participation in financing lines. In summary, the ruling confirmed the preliminary injunction without, however, addressing the requests for payment of compensation for the social cost of carbon.

Federal Environment Agency (IBAMA) v. Madeira Nova Aliança Ltda.

The Climate Litigation Database

Find climate change litigation data and indicators for {text}.

{text} litigation

Sabin Center for Climate Change Law provides Climate Litigation Database, a comprehensive database of US and Global climate change caselaw

Quickly and easily search through the complete text of thousands of climate change law and policy documents from every country.

Search the Climate Litigation Database

An aim to achieve a quantifiable outcome within a given time-frame, set by an institution such as a national government.

Policy instruments are techniques or tools used by governing authorities to promote certain policies in order to achieve predetermined goals. Put simply, instruments are how a government tries to achieve its goals, with this taxonomy being focused on national policy instruments.

Risk is the potential for adverse consequences resulting from the dynamic interplay between (climate-related) hazards, exposure, and vulnerability of affected human or ecological systems.

Groups  of people who are adversely affected by climate change or the response to it

A set of principles, processes, and practices that build economic and political power to shift from an extractive economy to a regenerative economy.

Renewable energy means all forms of energy produced from renewable sources in a sustainable manner.

Fossil fuel is a generic term for non-renewable energy sources such as coal, fossil gas, and oil (including crude oil, and petroleum products), that can be used for electricity and heat generation. Fossil fuels are hydrocarbons formed from pressurised and heated organic material buried over millions of years.

Molecules in the atmosphere that play a key role in the greenhouse effect by trapping heat radiating from Earth’s surface.

Area of the economy in which actors engage in identical or related activities.

In human systems, the process of adjustment to actual or expected climate change and its effects, in order to moderate harm, increase resilience or exploit beneficial opportunities. In natural systems, the process of adjustment to actual climate change and its effects; human intervention may facilitate adjustment to expected climate change and its effects.

The management and allocation of funds, assets and investments to meet various objectives

A long-lived, colourless gas, chiefly emitted from fossil fuel combustion, deforestation and cement production.

This sector involves the wholesale and retail selling of goods.

Terrestrial means "of the earth" and relates to the risks to ecological system that includes all living organisms and their interactions within land-based environments, such as forests, grasslands, and deserts.

Any compulsory, unrequited payment to the government levied on corporations or individuals. This can be for environmental reasons, such as introducing a Carbon tax to set a price that emitters must pay for the greenhouse gases they emit.

Actions or measures to adapt terrestrial systems to climate change.

This sector includes firms and individuals offering specialised expertise in fields such as law, accounting, consulting, science and engineering.

Financial actors and resources that are primarily directed towards climate change mitigation, adaptation and compensation.

Activities of businesses and institutions that provide financial services and products to individuals and organisations.

A tax advantage is an economic benefit applied to certain accounts or investments that are, by law, tax-reduced, tax-deferred, or tax-free. This can apply to investments in areas such as green energy projects or the agricultural sector, where tax advantages can help manage financial risks.

Air pollution involves harmful contaminants in the air, affecting both indoor and outdoor environments. It can lead to health issues like respiratory diseases and heart problems, and climate impacts such as global warming. Pollutants can damage plants, trees, habitats, and water bodies like rivers and lakes.

Activities that relate to the production of goods and services from forests.

The release of heat-trapping gases, primarily from human activities such as burning fossil fuels, agriculture and industry.

This sector involves managing waste treatment, sanitation, pollution control and environmental cleanup.

People who are less able to respond to the effects of climate change due to having limited financial or physical assets

Slow onset events evolve gradually from incremental changes over many years or from increased frequency or intensity of recurring events. As defined in the Cancun Adaptation Framework (2010), slow onset events include risks and impacts from rising temperatures, desertification, biodiversity loss, land and forest degradation, glacial retreat, ocean acidification, sea level rise, and salinization.

People who have left their homes, whether through force, voluntarily, or a mixture of both

Either money or something of monetary value is transferred between two or more organisations, people or countries.

Activities that involve planning, designing and building infrastructure, residential, and commercial structures.

Dedicated pool of financial resources for climate-related projects.

This sector provides communication services, software development, and IT solutions.

Zoning and spatial planning are both methods for guiding the distribution of people and activities in a space, and are regulatory restriction.

Codes and standards are regulatory instruments that specify minimum standards to protect health and safety. This ranges from performance standards, which prescribe outcomes while allowing flexibility to achieve compliance, to the more prescriptive approach of technology-specific standards.

A potent, short-lived greehouse gas, largely released from livestock, fossil fuel extraction and waste management.

Activities of government agencies and institutions that provide public services, enforce laws and manage public resources.

The processes through which enterprises can identify, prevent, mitigate and account for how they address their actual and potential adverse impacts. Due diligence is the idea that reasonable precautions should be taken to avoid causing harm to people, the environment, or society. It also involves identifying and mitigating risks before they occur.

Fossil gas, commonly known as natural gas, is a fossil fuel consisting chiefly of methane with smaller amounts of other hydrocarbons and trace gases, found in underground deposits.

Federal Environment Agency (IBAMA) v. Madeira Nova Aliança Ltda. - appeal

Policy instrument

Risk

Impacted group

Just transition

Fossil fuel

Greenhouse gas

Economic sector

Adaptation/resilience

Finance