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Federal Environment Agency (IBAMA) v. Souza Brilhante EIRELI - decision

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Federal Environment Agency (IBAMA) v. Souza Brilhante EIRELI - petition

statement of reply

Federal Environment Agency (IBAMA) v. Souza Brilhante EIRELI - statement of reply

Filing Year For Action

On December 19, 2018, Brazil’s Federal Environment Agency (“IBAMA”), filed a public civil action (environmental class-action) against Souza Brilhante 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 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 14.90763 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$1,447,650.20. 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 5,471.0892 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 its response, the defendant preliminarily alleged passive illegitimacy due to lack of evidence relating the defendant to the deforestation and the ineptitude of the initial petition. He also claimed the absence of liability for lack of evidence that the defendant was to blame for the damage, in addition to not having any interference over the area where the alleged deforestation was carried out.

Subsequently, a judgment was delivered upholding the claims. The defendant's arguments were refuted and it was affirmed that the infraction notice was coated with the requirements of validity and delineates the environmental damage. The allegation of passive illegitimacy was also refuted, stating that, in the environmental field, civil liability of a purely objective nature prevails. Thus, the defendant was condemned (i) to make an obligation to recover the area, and to prepare and comply with a reforestation project for the deforested area, under penalty of a fine, and (ii) to pay compensation for property damage, in case of impossibility of recovering the degraded area, in an amount to be defined in the settlement phase, by arbitration.

In view of the sentence, IBAMA filed a motion for clarification requesting that the defendant be ordered to pay the amount of R$ 1,447,650.20 related to the social cost of carbon, on which the sentence did not rule.

Subsequently, an integrative judgment was issued in which the court remedied the omission of the previous decision by including in the conviction the obligation to pay for the social cost of carbon.

Federal Environment Agency (IBAMA) v. Souza Brilhante EIRELI

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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

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.

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

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

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

This sector involves activities that impart knowledge and skills to individuals, including formal schooling, vocational training and educational support.

Energy derived from biological compounds that are renewable due to their short life cycle within the carbon dioxide cycle.

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.

Federal Environment Agency (IBAMA) v. Souza Brilhante EIRELI - decision

Policy instrument

Risk

Impacted group

Renewable energy

Economic sector

Finance