In December 2011 a draft bill for the Federal Act for Environmental Responsibility was put before the House of Representatives. The bill is still under consideration before being sent to the Senate. This draft act seeks to regulate liability for harm to the environment and mandate restoration and compensation for such harm, regardless of other sources of liability. The draft act also includes alternative dispute settlement options and sets forth the general rules and requirements to file civil actions.

In a significant step, the act recognises that harm to the environment is independent of harm to the owner of such natural resources or property (regarding the patrimonial damages caused to the owner of the natural resources). To this end, the draft act states that civil action and procedures to allocate environmental liability can be exercised and substantiated, regardless of administrative, civil (ie, involving damages to a person's assets) and criminal liability and responsibilities.

'Harm' is defined in the draft act as :

"[The] loss, change, deterioration, detriment, affectation, or any measurable adverse modification of the chemical, physical or biological make up and interaction with one another of habitats, ecosystems, elements or resources, as well as the environmental services that provide them."

Similarly, it establishes that environmental damage is a concurrent property damage suffered by the owner of the natural resources.

In order to provide a level of certainty and induce economic agents to assume the costs of environmental harm, the Ministry of the Environment and Natural Resources should gradually enact the relevant Mexican Official Standards with the goal of regulating the criteria for the minimum levels of harm, loss, change, and contamination that will be considered adverse and harmful. Such amounts should be significant, taking into account criteria such as the ability to restore and regenerate the natural elements. The lack of specific official standards once this bill is enacted will not exempt the wrongdoer from liability or duty to restore the environment to its natural state.

On the other hand, the draft act states that individuals or legal entities that cause harm to the environment, either directly or indirectly, through action or omission, will be responsible for the repair of the damage; where repair is impossible, they will be required to compensate for the damage.

In this regard, liability for environmental damage will be subjective and borne out of unlawful acts or omissions, and subject to the exceptions listed in the act. Where the damage is caused by an intentional act or omission, the responsible party will be obliged to pay a fine. Liability will be objective where the damage results from a direct or indirect act or omission related to:

  • hazardous materials or waste;
  • the operation of ships in coral reefs;
  • the performance of high-risk activities; and
  • any assumption or conduct outlined in Article 1913 of the Federal Civil Code.

Legal entities will be responsible for environmentally harmful acts performed by their representatives, partners, administrators, directors or employees.

Under the scope of this proposed bill, 'environmental compensation' will refer to any investment or action performed by the wrongdoer that improves the environment, apart from the total or partial restoration of the damage caused, corresponding and equal to the adverse effects caused by the damage. The draft act also considers the following fines in addition to the restoration or compensation for damages:

  • if the wrongdoer is an individual, 300 to 50,000 days of general minimum wage in force in the federal district at the time that the fine is levied (approximately $1,500 to $250,000); and
  • if the wrongdoer is a legal entity, 1,000 to 800,000 days of general minimum wage pay in the federal district at the time that the fine is levied ($5,000 to $4 million). The fine will be based on the extent of the damage.

If the responsible party proves that it has paid the administrative fine imposed by the Federal Environmental Attorney's Office or the National Water Commission for the unlawful conduct that gave rise to environmental administrative liability, the judge will include this payment in the final calculation of the fine to be imposed under the draft act, so that the final amount does not exceed the act's stipulated limit.

The right to file claims by third parties is recognised by the bill. Relevant third parties will include:

  • physical persons living in close proximity of the area where the environmental damage occurred;
  • non-profit entities whose goal is the protection of the environment or elements which act as legal representative of an individual living in close proximity of the area where the damage occurred;
  • the federal government by way of the Federal Environmental Attorney's Office; and
  • state attorney's offices or institutions that exercise environmental protection functions.

The first two of the third parties mentioned above will have the legal right and interest to claim reimbursement for expenditures incurred to find the responsible party. The right to sue will expire 30 years after the date that the unlawful act or omission resulting in the environmental damage ceases.

If this bill is approved, it will also apply to criminal cases and proceedings arising from crimes against the environment and environmental management.

For further information on this topic please contact Juan Francisco Torres Landa, Jorge Yanez, Brenda Rogel Salgado or Jeanett Trad Nacif at Barrera, Siqueiros y Torres Landa SC by telephone (+52 55 5091 0157), fax (+52 55 5091 0123) or email (jftl@bstl.com.mx, mjy@bstl.com.mx, brs@bstl.com.mx or jtn@bstl.com.mx).

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