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Environmental protection

Authorisation
What preliminary environmental authorisations are required before commencing oil and gas-related activities?

Under National Council for the Environment (CONAMA) Resolution 23/1994, the following environmental licences apply to oil and natural gas exploration and production:

  • the previous licence for drilling;
  • the previous licence for research production;
  • the installation licence; and
  • the operation licence.

In addition to the above, CONAMA Resolution 350/2004 sets out the rules for the obtainment of the licence for seismic research, which is a specific licence for the acquisition of seismic data in maritime waters and transition zones.

As regards the resale of fuel, CONAMA Resolution 273/2000 provides rules regarding the procedures and documents required for the issuance of the relevant authorisations – namely:

  • the previous licence;
  • the installation licence; and
  • the operation licence.

Brazilian Environment Institute Normative Instruction 05/2012 regulates the transportation of oil and natural gas and their by-products. Under the instruction, companies engaged in such activities must obtain an environmental authorisation for the transportation of dangerous products whenever such transportation encompasses more than one state. In the case of intrastate transportation, the environmental body of each federal state will regulate the activities. 

Requirements
What environmental protection requirements apply to the operation of oil and gas facilities?

The Federal Constitution and several other pieces of federal, state and municipal legislation set out the rules for environmental protection. Besides the general rules, there are specific provisions that address oil and gas exploration and production.

For instance, the Federal Constitution provides that parties that exploit mineral resources must restore the environment following any degradation, as required by the relevant government body.

In addition, Federal Law 9.966/2000 deals with the preservation, control and supervision of pollution caused by oil and other harmful or dangerous substances in Brazilian territorial waters.

Further, the National Agency of Petroleum, Natural Gas and Biofuels has issued several administrative rules concerning environmental aspects of the oil and gas sector, which cover matters such as:

  • contamination caused by operations accidents;
  • remediation of damaged areas;
  • the final destination of solid wastes; and
  • the recycling of lubricant oil.

As regards environmental licences, CONAMA Resolution 23/1994 sets out specific rules for the exploration and production of oil and natural gas.

Consequences
What are the consequences of failure to adhere to the relevant environmental regulations and to what extent can operators be held liable for environmental damage?

The Federal Constitution provides that individuals or companies that cause damage to the environment are subject to criminal and administrative penalties and must repair the damage.

The penalties for environmental damages are consolidated by Law 9,605/1998 (the Law of Environmental Crimes) and Decree-Law 6,514/2008, which regulates the Law of Environmental Crimes. This legislation covers aspects relating to crimes against the environment and administrative assessments.

The Law of Environmental Crimes defines companies’ liabilities – whether they be administrative or criminal – and provides the circumstances in which an individual can be held liable for damage caused.

Specifically in regard to the failure to obtain the relevant environmental licences, applicable penalties may include:

  • the suspension or cancellation of the registry, authorisation or licence;
  • the cancellation or restriction of fiscal benefits; and
  • the cancellation or restriction of financing programmes.

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