Given Brazil's strict liability regime, special care must be taken when evaluating environmental liabilities in relation to mergers and acquisitions.
The liability regime applies to any environmental damage, meaning that owners of polluted land are subject to environmental civil liability. As such, a new landowner can be held jointly liable for repairing environmental damage caused by the polluter. The obligation to repair any environmental damage may be enforced by the public prosecutor or the Ministry of Environment, at the judicial or administrative level and against both the polluter and landowner.
In this context, most cases of environmental liability involve environmental permits held by former landowners and previously contaminated areas. For this reason, a purchaser should analyse the former owner's environmental records and perform due diligences check before concluding a merger or acquisition in order to evaluate the environmental liabilities that it will eventually assume. In addition, an environmental clearance certificate should be obtained from relevant environmental bodies and public attorneys, as clearance certificates help purchasers to become aware of any remaining environmental issues.
Brazil has laws regarding public access to information filed with environmental agencies, which can be disclosed to the public on request. As such, any previous analyses and environmental data on acquired land or assets should be obtained.
Federal Law 10,650/2003 grants all individuals access to any documents or administrative procedures regarding environmental matters from any agency that is part of the National Environmental System. Data may include information regarding:
- environmental quality;
- toxic and dangerous substances;
- biological diversity; and
- genetically modified organisms.
Further, Federal Law 12,527/2011 establishes the right to access information from any public institution, setting specific deadlines for the disclosure of information by government authorities to the public, except where disclosure may jeopardise national defence, life, the health and safety of the population, the stability of the monetary system or other national interests.
Regardless of liability, new landowners still have the right to claim any expenses incurred for environmental recovery by filing a private suit against the landowner that caused the damage.
For further information on this topic please contact Maria Alice Doria at Doria, Jacobina e Gondinho Advogados by telephone (+55 21 3523 9090) or email (email@example.com). The Doria, Jacobina e Gondinho Advogados website can be accessed at www.djga.com.br.
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