This month’s tracker reflects key initiatives from October 16, 2017 – November 15, 2017.
This month brings us a heavy environmental regulatory agenda in Latin America. Brazil aimed to close loopholes on take-back agreements, introduced a new “Green GDP,” and proposed new energy efficiency regulations for household electronics. Chile began implementing its Recycling and Extended Producer Responsibility Law with the introduction of its Recycling Fund Regulation, while its draft GHS regulation − which also proposes a TSCA-like chemicals inventory system − is now open for public comment, and a draft 2018-2030 National Waste Policy has been proposed. In Colombia, a new air quality standard and a compliance points system for battery waste management have been finalized. Costa Rica has a proposed a new bill that would impose responsibilities on producers of priority products and packaging. Mexico moves forward at a breakneck pace, finalizing new energy efficiency standards, proposing environmental and safety rules for hydrocarbons, and potentially moving to increase fines for environmental regulations.
Last month, B&D hosted a successful client seminar on Chemicals in the Americas in Houston, Texas that featured a presentation on chemicals regulation in Latin America. For copies of slides, please visit the conference website. For your convenience, we are including links for final laws and resolutions. If you would like copies of proposed initiatives, please contact me or Tiffany Carlson. We welcome your questions, comments, and suggestions.
Bill Promoting the Domestic Manufacture of Lithium Batteries Proposed
A bill proposed in the Chamber of Deputies would promote the domestic production of rechargeable lithium batteries by setting the following incentives: (i) import of inputs, technology, and capital goods used in the production of rechargeable lithium batteries would be exempt from paying any customs duty for a period of 10 years from the time the Bill goes into effect, and (ii) income tax payments for companies that manufacture batteries or rechargeable lithium batteries would be reduced by 35% for a period of 10 years from the time the Bill goes into effect. The Bill would enter into force 90 days following its publication in the Official Gazette.
Green GDP Index Finalized
A law (No. 13.493) published in the Official Gazette calls for the calculation of the national ecological heritage through the so-called Green Gross Domestic Product (GDP) (officially “Green Internal Product” or "PIV"). The Green GDP will be calculated by the Brazilian Institute of Geography and Statistics (IBGE), which already annually publishes the traditional GDP of the country. The calculation of the index will take into account similar national and international initiatives, so that there can be comparison with the numbers of other countries. The Law also establishes that the methodology for the calculation of the Green GDP should be widely discussed with society and public institutions, including the National Congress, before being officially adopted.
New Regulation Addresses Free Rider Problem Under Take-Back Agreements
The Brazilian government has issued a regulation (No. 9177) that extends the obligations of reverse logistics agreements under the National Solid Waste Policy Law (No. 12305/2010) to companies that manufacture, import, distribute, or sell covered products but fail to sign the agreements in effect for their products. The Decree is intended to address the problem of competitive disadvantages against non-participating "free riders" by providing legal parity in the obligations of similarly situated companies. It also resolves potential ambiguities by clarifying that adherence to similar agreements on the state or municipal level does not constitute compliance with the federal Law, and requiring compliance with the amended terms of federal agreements. The Decree went into effect upon its publication in the Official Gazette.
Fines Can Be Converted into Environmental Services Under New Decree
The Brazilian President, Michel Temer, has signed a decree (No. 9.179) into law, establishing the Program for the Conversion of Environmental Fines, which provides for the conversion of fines in favor of environmental services. With this conversion, administrative fines applied by the Brazilian Institute of Environment and Renewable Natural Resources (IBAMA) and the Chico Mendes Institute for Biodiversity Conservation (ICMBio) can be converted into environmental services with discounts of up to 60%. The Brazilian government estimates that approximately 4.6 billion Brazilian Real in resources tied to infractions under the Environmental Crimes Law can be applied to projects for the revitalization of springs, reforestation, and recovery of degraded areas.
New Compliance Deadline for Revised Dangerous Goods Transport Regulations Goes into Effect
The Brazilian National Land Transport Agency (ANTT) published a resolution(No. 5377) extending the compliance deadline of the revised Dangerous Goods Transport Regulations by five months, pushing the effective date from July 16, 2017 to December 16, 2017. The new rules are mandatory for companies transporting or consigning dangerous goods by road or rail in Brazil.
Draft Energy Efficiency Regulations for Air Conditioners, Refrigerators, and Freezers Proposed
The Ministry of Mines and Energy has published two separate draft energy efficiency regulations—one that would establish new targets for energy efficiency coefficients for air conditioners, and another that would establish new targets for maximum consumption levels for refrigerators and freezers. The draft regulation on air conditioners would apply to monoblock air conditioners, window or wall, single body or split system hi-wall, floor-ceiling and cassette types, from a single evaporator unit to a single condenser unit, domestically manufactured or imported for sale and use in Brazil. The draft regulation on refrigerators and freezers would apply to the following product categories: minibars, refrigerators, frost-free refrigerators, combined, combined frost free, side by side, vertical freezers, frost-free vertical freezers, and horizontal freezers.
State-Industry Terms of Commitment Signed for Domestic Electronic Product Reverse Logistics Systems in São Paulo
São Paulo’s Secretariat of Environment (SMA), the State’s environmental enforcement agency (CETESB), the Brazilian Electrical and Electronics Industry Association (ABINEE), and the Federation of Goods, Services, and Tourism in São Paulo have signed terms of commitment for the reverse logistics of domestic electronic products. The commitment, which is to last four years, will allow companies and stores to receive electronic equipment, such as cell phones, printers, and laptops, directly from consumers and deliver them to an appropriate destination where they can be prepared for reuse or recycling. The company, Green Electron, created by ABINEE, will be the management entity that will operate the reverse logistics system, allocating the collected waste to company disassemblers licensed by CETESB.
Chilean President Signs Law that Prohibits Plastic Bags in 102 Coastal Cities
Chilean President Michelle Bachelet signed a law that would prohibit the delivery of plastic bags in commercial establishments in 102 coastal cities and would allow non-coastal cities to be added to the list of cities to which the restriction applies through municipal ordinances. In covered cities, biodegradable bags, certified by the National Standardization Institute according to Ministry of Environment quality technical standards, would be used in the place of plastic bags. The law would also establish that inspection and verification be the responsibility of the municipalities and that a detected breach in compliance be sanctioned with a fine of up to five monthly tax units per bag, applied by the corresponding local police courts. The United Nations highlighted the example of Chile as the first country in the Americas to establish a measure of this magnitude.
Recycling Fund Regulation Finalized
The Recycling Fund Regulation has been published in the Official Gazette, the first of three implementing regulations to the Recycling and Extended Producer Responsibility Law (No. 20.920) to be finalized. The new Regulation creates a recycling fund that will finance municipal and municipal association projects aimed at preventing generation of waste and promoting waste separation, reuse, and recycling. The Ministry of Environment is currently in the process of developing the general rules that will allow the fund to operate and should complete this task within one year of the Regulation’s publication.
Draft GHS Regulation Open for Public Comment
The Ministry of Health has published a Draft Regulation based on the Globally Harmonized System for the Classification and Labeling of Chemicals (GHS) that would establish the criteria for the classification, labeling, notification, and risk assessment of hazardous substances and mixtures, which would need to be adhered to by chemical manufacturers and importers. It would not apply to a range of listed products materials, including “articles that contain hazardous substances or mixtures.” While it is unclear how Chilean authorities would interpret "articles," the term would allow a broad range of consumer products containing hazardous substances to be exempt from the rules. The Draft Regulation is open for public comment until January 5, 2018. Parties interested in submitting comments who are located in Chile should send comments via the public comment form to [email protected], while those located outside of Chile should send comments to [email protected]
Draft 2018-2030 National Waste Policy Proposed
The Ministry of Environment has published a draft 2018-2030 National Waste Policy that would, most notably, outline actions to implement the Recycling and Extended Producer Responsibility Law (No. 20.920), including the development of decrees establishing collection and recovery goals specific to each priority product defined by the Law. The proposed deadlines for developing such decrees would be as follows: 2019 for containers and packaging, tires, and oils, and 2020 for batteries and electrical and electronic equipment. The Ministry would aim to conduct evaluations to determine the need to introduce additional priority products by 2021. Lastly, the Draft Policy would include plans for the development of other waste prevention and recovery instruments, such as a National Eco-Design Plan, to be finalized by 2022.
Finalized Compliance Points System Aims to Strengthen Producer Battery Waste Management Systems
The Ministry of Environment has finalized an amendment (Resolution No. 2246) to a producer battery take-back regulation (Resolution No. 1297/2010) establishing a points system to ensure that producer-established battery Waste Collection and Environmental Management Systems are carrying out certain activities that increase their overall effectiveness. Specifically, the new rule defines five management indicators which have individual compliance targets linked to a point value: 1) collection and management, 2) information and consumer awareness, 3) increase in geographical coverage, 4) direct consumer stimulus, and 5) applied research and experimental development in the use of waste. Management Systems must demonstrate full compliance with management indicators by obtaining at least 70 points until 2021, when full compliance will require at least 75 points. Although not indicated in the new rule, this scoring system could be made more stringent over time. The Amendment went into effect upon its publication in the Official Gazette.
New Air Quality Standard Finalized
The Ministry of Environment and Sustainable Development published a resolution (No. 2254) finalizing maximum permissible limits for certain atmospheric contaminants and establishing framework criteria for managing air emissions in the country. The resolution will take effect on January 1, 2018.
Minamata Convention Ratification Nearing
A bill ratifying the Minamata Convention on Mercury was unanimously approved in a third-round debate held in the Second Commission of the Chamber of Deputies. While the Convention’s ratification remains pending, Colombia has already put various instruments in place to regulate mercury within the country, such as the National Mercury Plan, the Mercury Law (No. 1658/2013), and Decree No. 2133/2016, which establishes control measures for the import and sale of mercury and products that contain it, among others.
Air Quality Improvement Draft Decree Proposed in Capital District
The Bogotá District Secretary of the Environment (SDA) has published a draft decree that would adopt measures to improve and/or manage air quality in the Capital District, including prioritizing particulate matter; classifying source areas of pollution; strengthening, unifying and/or harmonizing the regulatory framework governing air quality in the Capital District; and expanding the capacity and coverage for the control and management of atmospheric emissions in the city. The Draft Decree would be applicable to the different emission sources and/or actors responsible for their generation and/or mitigation.
Regulation for the Registration, Import, and Control of Hazardous Chemicals Finalized
The Ministry of Health has published a Regulation (No. 40705-S) finalizing Technical Regulation RTCR 478:2015, which adopts the sixth edition (2015) of the United Nations Globally Harmonized System for Classification and Labeling of Chemicals (GHS) and establishes the requirements and procedure for the registration, import, and control of hazardous chemicals. The Regulation applies to all potentially hazardous chemicals used in the stages of production and storage, as well as in places of work and consumption, and in the presence of the environment. The new rule repeals and replaces the Regulation for the Registration of Hazardous Products (Executive Decree No. 28113-S/1999). It goes into effect six months after its publication on May 3, 2018.
Proposed Modifications to Waste Law Would Impose New Responsibilities on Producers of Priority Products and Packaging
A bill proposed in the Legislative Assembly would modify the Law for the Integrated Management of Wastes (No. 8839) to introduce several new general principles, definitions, and infractions to accommodate new provisions imposing responsibilities on producers, distributors, and sellers of six “priority products” (ielectrical and electronic equipment, cells and batteries, containers and packaging, lubricating oils, and tires). Notably, producers of priority products would be required to: (i) organize and finance the collection of priority product waste throughout Costa Rica, and adhere to storage, transport, and treatment requirements established in the Law; (ii) comply with collection and recovery goals and other associated obligations established in implementing regulations; (iii) ensure that the management of priority product wastes is carried out by authorized and registered waste managers; and (iv) conduct other activities deemed appropriate.
Draft Water Law Would Replace 75-Year-Old Predecessor
A Draft Law for the Integrated Management of Water Resources has been approved in a first-round debate in the Legislative Assembly. The proposal aims to better protect and manage water resources in Costa Rica by filling in perceived gaps within the current law, which has been in effect since 1942. Specifically, the Draft Law would promote watershed planning and research, strengthen institutional action, declare water a public good and access to potable water a human right, control the use of water, penalize the illegal drilling of wells and the contamination of water sources, and encourage citizen participation.
Energy Efficiency Standard for External Power Supplies Finalized
The National Advisory Committee on Standardization for the Preservation and Rational Use of Energy Resources (CCNNPURRE) has finalized a technical standard (NOM-029-ENER-2017) for external power supplies (Spanish acronym FAEs) that establishes minimum energy efficiency requirements for operation, maximum electrical power limits for stand-by mode, testing methods, and marking and labeling specifications. The Standard applies to individual FAEs or those part of a final use product that are imported, manufactured, sold, distributed, or supplied for promotional purposes in Mexico, and are designed to convert an alternating current into a continuing current with a maximum output power of 250 W or less. The Standard will go into effect 180 days after is publication in the Official Gazette.
Classification Standard for Special Management Waste in the Hydrocarbons Sector Finalized
The National Agency for Industrial Safety and Environmental Protection in the Hydrocarbon Sector (ASEA) has finalized a technical standard (NOM-EM-005-ASEA-2017) that establishes classification criteria for special management waste produced in the hydrocarbon sector, determines which wastes are subject to Management Plan requirements, and specifies the elements and procedures for developing Management Plans for hazardous and special management wastes. The Standard is applicable to large generators of hazardous and special management wastes, defined as those people or entities that generate ten tons or more of waste per year while carrying out hydrocarbon sector activities.
Updated Catalog of Energy Consuming Equipment Published
As established by the Energy Transition Law, the National Commission for the Efficient Use of Energy (CONUEE) has published an updated catalog listing equipment and devices on which manufacturers, importers, distributors, and sellers must provide energy consumption information, as well as the forms in which such information must be presented. The new Catalog lists a total of 44 products, a significant reduction from its 2010 predecessor, which lists 186 products. The updated Catalog only applies to new equipment and devices and does not apply to those that fall within the scope of an energy efficiency Official Mexican Standard (NOM) currently in force. The new Catalog and its corresponding forms will go into effect 60 days following their publication in the Official Gazette.
ASEA Draft Standard for On-Shore Hydrocarbon Storage Facilities Proposed
The National Agency for Industrial Safety and Environmental Protection in the Hydrocarbon Sector (ASEA) has published a draft technical standard that would establish specifications and technical criteria for the design, construction, pre-operation, operation, maintenance, closure, and dismantling of on-shore storage facilities for petroleum and petroleum products, except for liquefied petroleum gas. It would also outline requirements for reception and delivery areas within such facilities, as well as the storage areas that are to house additives, oxygenating components, and biofuels linked to the process of mixing or preparing gasolines. If adopted as proposed, the draft standard would go into effect 60 days following its publication in the Official Gazette.
ASEA Draft Standard for the Integrity of Pipelines Used for the Collection, Transport, and Distribution of Hydrocarbons Proposed
The National Agency for Industrial Safety and Environmental Protection in the Hydrocarbon Sector (ASEA) has published a draft technical standard that would establish requirements that must be met to ensure the integrity of pipelines or pipeline segments or sections throughout their life cycle, used for the collection, transport, and distribution of hydrocarbons, petroleum products, and petrochemicals. If adopted as proposed, the draft standard would go into effect 180 days following its publication in the Official Gazette.
Fines for Environmental Violations Could Increase
The Senate passed a bill that would amend the General Law for Ecological Equilibrium and Environmental Protection to increase fines for environmental violations under the Law. Specifically, the bill would set a new maximum fine amount of 7.5 million times an UMA (measurement and updating unit) or approximately $31 million U.S. dollars—a substantial rise from the current maximum fine amount of 50,000 times an UMA or approximately $225,000 U.S. dollars. The Bill would also introduce: (i) new rules for conducting regulatory inspections, (ii) guidelines for administrative procedures more in line with the Federal Liability Law, and (iii) new criteria on how companies may be liable for environmental harm. If adopted as proposed, the Bill would go into effect 180 days following its publication in the Official Gazette.
Mexico Accepted as a Member of the Extractive Industries Transparency Initiative
The International Council of the Extractive Industries Transparency Initiative (EITI), an international standard for transparency and accountability in the extractive industries, has accepted Mexico as a member country after determining that it has complied with all the requirements for membership established in the Initiative. Mexico initially made a declaration of its intention to join EITI in 2015. In 2016, the National Multi-Participatory Group (GMN), comprised of representatives of the Mexican government, industry, and civil society, was formed to facilitate the implementation of the Standard. Mexico will present its first EITI report in the last quarter of 2018.
Mexico City Waste Law Reforms Call for Special Management Waste Generators to Consider Post-Consumption Programs
A decree has been published in Mexico City’s Official Gazette modifying the City's Solid Waste Law to require generators of special management wastes to not only implement management plans authorized by the City’s Secretariat of Environment (SEDEMA), but also to consider post-consumption programs. The amendments also: (i) specify that management plans must include concrete actions that ensure that special management wastes are properly treated, and (ii) call for SEDEMA to conduct public education and awareness campaigns aimed at preventing the generation of special management wastes and environmental contamination caused by their improper disposal. The Decree went into effect on the day following its publication.