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Litigation

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Federal Environment Agency (IBAMA) v. Madelin Madeireira Linhares Ltda. - petition

reply

Federal Environment Agency (IBAMA) v. Madelin Madeireira Linhares Ltda. - reply

decision

Federal Environment Agency (IBAMA) v. Madelin Madeireira Linhares Ltda. - decision

Filing Year For Action

On December 20, 2018, Brazil’s Federal Environment Agency (“IBAMA”), filed a public civil action (environmental class-action) against Madelin Madeireira Linhares 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 43,2727 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$ 2,871,489.47. 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 15,881.0809 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.

The defendant filed an opposition claiming the incompetence of the court, the active illegitimacy of IBAMA and the occurrence of lis pendens. On the merits, it argued the existence of an ongoing administrative proceeding, the failure to prove the causal link, the disagreement regarding IBAMA's calculation methods for identifying the volume of seized wood and collective environmental damage (CSC).

The Court ruled dismissing the action on the grounds of IBAMA's active illegitimacy. According to the decision, under the principle of predominance of interests in the distribution of environmental jurisdiction, there was no interest of the Union involved to give rise to IBAMA's action.

Subsequently, IBAMA filed an appeal defending its active legitimacy in view of the express legal provision. In its counter-appeal, the appellant company insisted on the arguments for dismissal of the appeal.

In November 2024, a ruling annulled the judgement and determined that IBAMA and the Federal Public Prosecutor's Office have standing to file a public civil action for environmental damage. As a result, the case was sent back to the original court for regular processing.

Federal Environment Agency (IBAMA) v. Madelin Madeireira Linhares Ltda.

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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.

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.

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.

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

Actions or measures to adapt terrestrial systems to climate change.

Production of electricity and heat from solar irradiation.

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.

Dedicated pool of financial resources for climate-related projects.

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.

The activities of industries involved in the production, distribution, and sale of energy, including electricity, gas, and renewables.

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

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

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

A financial institution that manages a country's currency and can promote climate-related initiatives through green monetary policy and other means.

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

Federal Environment Agency (IBAMA) v. Madelin Madeireira Linhares Ltda. - decision

Policy instrument

Risk

Renewable energy

Greenhouse gas

Economic sector

Adaptation/resilience

Finance