Brazil Advances International Environmental Regulations
 
January 16, 2004
 

Environmental issues have always been a critical issue for Brazil, in particular because of the Amazon and its other notable natural resources. However, as a result of the Rio 92 commitment and, later, the Kyoto Protocol, international investors and multinational corporations, as well as Brazilian entrepreneurs, private and public companies, scholars and the federal government, all have been giving extra attention to various environmental projects, especially those that might be Kyoto-compliant (even if the Kyoto itself takes years to come into play).

For example, the Chicago Climate Exchange (CCX), a self-regulatory exchange that administers a voluntary, binding pilot greenhouse gas emission reduction and trading program for North America, has chosen Brazil (and its projects) as its key partner in this new greenhouse reduction and trading process.

Another sign of Brazil’s ascendancy in the environmental arena is that, under the Kyoto Protocol and the Marrakech Agreement (2001), a non-Annex 01 party should have a local government body approve the project nationally before going to the Bonn Secretary appraisal. Since 1999, Brazil has had an Interministerial Commission on Climate Change (the Commission) for the specific purpose of studying and enacting national regulations that would comply with Kyoto considerations.

Project specialists today assert that Brazil, together with China and India, will be the major hosts of environmental and alternative energy source projects for all developing countries. For this to become a reality, all involved entities must ensure that a great deal of planning is done and a number of tasks and projects are completed. Ideally, the basic rules for business success in the international environmental arenas are regulatory transparency, social responsibility (in its broad meaning), government (including multilateral institutions), and private partnership and participation.

Accomplishing one of its tasks through its Commission, Brazil has enacted Resolution Number 01 (drafted by its past government and now revised by the new government), in which it has approved the procedures and modalities of projects to be Kyoto-compliant.

The Commission is now officially in charge of receiving and approving national projects, regardless of whether the owners or investors are foreign or national. Therefore, in order to obtain national approval, project owners or developers must submit a project document that includes a description of the project’s contribution to sustainable development. In order to comply with national legislation and give the public a voice in the development of the project, municipalities, environmental, state and local entities, non-governmental organizations, community associations, and the state’s attorneys all must have the opportunity to provide comments to the project owner. Additionally, documents that evidence compliance with national labor and environmental legislation must be provided, as well as a statement signed by the participants designating a responsible party and the way they will communicate with the commission. Finally, a report of the Operational Designated entity authorized to operate in the country should be provided to the Commission.

Notwithstanding the hurdles facing these environmental projects (whether Kyoto or non-Kyoto compliant), and whether the projects are already established or planned, Brazil is taking concrete steps to create a better regulatory and technical environment for national and foreign investment in climate change projects (such as forestry and energy efficiency projects). Academics, the government and private parties are all working together towards developing an open arena, having as their goal the enhancement of sustainable development worldwide. n

For more information, e-mail Leticia de Lara Cardosa, lawyer trainee, at leticia.delaracardoso@hklaw.com or call toll free, 1-888-688-8500.