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Santo Antônio Energia S.A. vs. SEDAM (Administrative fine for illegal burning) - decision

Filing Year For Action

In March 2018, Santo Antônio Energia S.A. filed a Claim for the Annulment of an Administrative Act, with a request for injunction, against the State Agency for Environmental Development of Rondônia (SEDAM). The Santo Antônio Hydroelectric Plant (UHE Santo Antônio) operates a large hydroelectric plant located in the Amazon region. Construction activities required the removal of vegetation along the banks of the Madeira River, for which subcontractors were hired. During the vegetation clearance, the Environmental Commission of the Rondônia State Legislative Assembly received complaints that the subcontractors were setting fires in areas of the Santo Antônio and Jirau Hydroelectric Plants. SEDAM issued an infraction notice, alleging that the subcontractors burned 2,280 hectares of vegetation (1,750 hectares belonging to Santo Antônio S.A.) and imposed a fine of R$10,000,000.00. In its claim, the plaintiff asserts that the fires in question were criminal and that it took all necessary preventive measures. It seeks recognition of the statute of limitations or, alternatively, the annulment of the administrative act on the grounds of defects and the absence of elements necessary to establish administrative liability. As an injunction, the company requests the suspension of the enforceability of the fine and an order for SEDAM to refrain from taking any action that would require payment of the fine. On the merits, it requests the annulment of the infraction notice, or alternatively, an adjustment to the applied penalty or reduction of the fine amount.

The state of Rondônia filed a defence contesting the arguments presented in the initial claim and requested that the claim be dismissed.

The court issued a judgment partially upholding the initial claim to adjust the fine to R$5,000,000.00.

Both the plaintiff and the state of Rondônia filed appeals.

On September 22, 2023, the Court dismissed both appeals. The dissenting vote granted the state of Rondônia’s appeal to reinstate the original fine, considering that the amount imposed by SEDAM was reasonable, given that the fire affected 1,750 hectares of the company's land and lasted for 15 days. It argued that Federal Decree 6,514/2008 states that, when grading the penalty, the extent of the damage and its environmental impact must be taken into account. The dissent emphasized that one hectare of burned forest equates to hundreds of tonnes of CO₂ released into the atmosphere, contributing to Brazil's high GHG emissions. It highlighted the provisions of CNJ Resolution 433/2021 and the targets Brazil has committed to under the Paris Agreement. The opinion argued that, given the climate crisis and current regulatory standards, the environmental authority's discretion to set the amount of fines imposed cannot be restricted.


Santo Antônio Energia S.A. vs. SEDAM (Administrative fine for illegal burning)

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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.

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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.

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

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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.

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.

A drought is an extended period of unusually dry weather marked by a significant and sustained lack of precipitation, falling below a specific threshold over a large area for more than a month

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

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.

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

A commitment to balance GHG emissions with removal by a certain point in time, effectively reducing the net emissions to zero

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

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

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

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

Electrical energy generated from mechanical devices driven by flowing fresh water.

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Dedicated pool of financial resources for climate-related projects.

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

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

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Extreme weather refers to events where a weather variable exceeds (or falls below) a threshold. Meaning it is significantly different from the average or usual weather pattern.

Santo Antônio Energia S.A. vs. SEDAM (Administrative fine for illegal burning) - decision

Target

Policy instrument

Risk

Impacted group

Just transition

Renewable energy

Greenhouse gas

Economic sector

Adaptation/resilience

Finance