Brazilian Pollution Legislation - Recent Developments

July 2002

As a matter of Brazilian legislation, Law 9.966 of 2000 deals with prevention and control of pollution caused by oil or other hazardous or noxious substances in Brazilian territorial waters. However, a number of its dispositions are quite broad or general and thus depended on further regulation by the Federal Government.

 In some circumstances such legal dispositions were clearly not self-applicable, in which case further regulation was deemed legally required so that the relevant rules could come into effect. It might be mentioned as an example the amount of the fines for violation of the rules of the Law 9.966/2000, the assessment of which was expressly left to the Federal Government by delegation contained in the Law itself. In other cases even though the rules of Law 9.966 could be deemed self-applicable, it was notwithstanding advisable, in the same manner, to have an additional regulation to facilitate the proper application of these dispositions. This regulation now came into force by means of the Decree 4.136, dated 20 February 2002.

 I - BASIC FEATURES

 In respect of those persons legally responsible for the infringement of the law the Decree simply repeats the dispositions of Law 9.966/2000 in. These are:

1. The owner of the vessel, natural person or legal entity, or whosoever legally represents the same;
2. The disponent owner of the vessel or her operator, in case she is not operated by the shipowner;
3. The corporation with delegation or authorisation to carry out off-shore activities;
4. The master or the crewmember;
5. The natural person or legal entity, either a public or private one, which legally represents a port, port facility, platform and its support installations, shipyard, marina, nautical club or similar facility;
6. The owner of the cargo.

 The sanctions applicable for violation of the rules contained in Law 9.966/2000 and regulated in detail in Decree 4.136/2002 are the following:

• Admonition;
• Simple fine, which may be converted into services that preserve, improve or recover the quality of environment;
• Daily fine;
• Apprehension of ships;
• Disposal of the product;
• Suspension or prohibition, totally or in part, of business;
• Restriction of rights, i.e., suspension/prohibition of activities; or prohibition to enter into contract with public bodies or to obtain subsidies, tax exemptions, etc.

 In case of recurrence the Decree contains two basic principles:

• Recurrence in the event that the offender is already enjoying the benefit of conversion of simple fine into services causes the second fine to be double what was the amount of the converted fine;

• It is deemed to be a recurrence, for the purpose of sub-sections VI to XVII of Chapter II of the Decree (discharge of oil/oily mixtures/hazardous or noxious substances/sewage/water used in plants/plastic material/garbage by ships, port facilities, platforms, pipings not associated with platforms) the repetition of the same infraction by the same person within a period of 36 months, in which case the fine applicable, if any, will be three times the amount of the original fine.

 The list of infractions is quite long and is set out in 18 sub-sections containing 38 articles. We can highlight, inter alia:

1. Port facilities and platforms that do not build, within 36 months from the approval of the relevant technical study/procedure manual by environmental authorities, proper residue facilities to receive and/or treat oil and hazardous/noxious substances and installations to fight pollution – Daily fine/Sanction G;
2. Platforms and vessels over 50 GRT which carry oil or use it as fuel and do not have on board the oil record book approved by MARPOL 73/78, with entries concerning all oil, ballast and oily mixtures movements, including those relating to deliveries to residue treatment facilities – Simple fine/Sanction H plus detention of the ship until the irregularity has been corrected (specifically regarding platforms the oil record book shall be replaced by a different type of record as per format approved by naval authorities);
3. Vessels that transport hazardous or noxious cargoes in bulk and do not have on board the cargo record book approved by MARPOL 73/78 – Simple fine/Sanction H plus detention of the ship until the irregularity has been corrected
4. Vessels that transport oil or hazardous or noxious cargoes as breakbulk cargo and do not have, in accordance with Amendment III of MARPOL 73/78, this cargo correctly and accordingly identified/labelled – Simple fine/Sanction I plus detention of the ship until the irregularity has been corrected. The same sanction is also applicable if these cargoes are not properly stowed/lashed and positioned in a compatible manner vis-à-vis other cargoes on board.
5. Vessels that transport oil or hazardous or noxious cargoes as breakbulk cargo and do not have on board, in accordance with Amendment III of MARPOL 73/78, documentation that provides the location of such cargoes – Simple fine/Sanction H plus detention of the ship until the irregularity has been corrected
6. Agents or those persons responsible for the vessel who do not keep a copy of the document which specifies the location of oil or hazardous or noxious cargoes as breakbulk cargo on board – Simple fine/Sanction H
7. CLC/69 vessels that do not have the certificate therein established or equivalent financial guarantee or another certificate providing more extensive or the same coverage – Sanction: prohibition to sail or remain in Brazilian national waters
8. Vessels that discharge hazardous or noxious substances of category A (high risk for human health and marine ecosystem), as well as ballast water, clean tank residues, other mixtures containing such substances or water from a tank right after its cleaning in an amount less than 5% of the tank’s total capacity – Simple fine/Sanction E
9. Vessels and platforms that discharge substances of categories B (middle risk for human health and marine ecosystem), C (moderate risk) and D (low risk), as well as ballast water, clean tank residues and other mixtures containing such substances, unless the discharge is authorised by environmental authorities/is allowed by MARPOL 73/78 and, additionally, the vessel is not within the limits of any ecologically sensitive area – Simple fine/Sanction C
10. Vessels and platforms that discharge sewage, unless the discharge is authorised by environmental authorities/is allowed by MARPOL 73/78 and, additionally, the vessel is not within the limits of any ecologically sensitive area – Simple fine/Sanction A
11. Vessels, platforms and port facilities that discharge any type of plastic material, synthetic lines and fishing nets – Simple fine/Sanction E
12. Vessels, platforms or port facilities that fail to report to the authorities (Port Captaincy, environmental authority and Petroleum National Agency in case of platforms) any incident that may cause pollution in national waters – Simple fine/Sanction J

The table of fines is the following: 

SANCTIONS

FINES (R$)

A

1.000,00 a 10.000.000,00

B

1.000,00 a 20.000.000,00

C

1.000,00 a 30.000.000,00

D

1.000,00 a 40.000.000,00

E

1.000,00 a 50.000.000,00

F

7.000,00 a 35.000,00

G

7.000,00 a 70.000,00

H

7.000,00 a 700.000,00

I

7.000,00 a 7.000.000,00

J

7.000,00 a 1.000.000,00, plus 7.000,00 after the incident

Remark: The dollar exchange rate is presently around US$ 1.00 = R$ 2.91

II – CONTROVERSIAL MATTERS

Some points are however still unclear in the light of the new regulation.

The first one is an important aspect, which was simply left unattended by Decree 4.163/2002. We refer to the rule contained in the unique paragraph of article 23 of Law 9.966/2000, which reads as follows (free translation):

Art. 23. The entity that exploits an organised port or port installation, the owner or operator of platform or vessel and the corporation with delegation or authorisation to carry out off-shore activities, which are responsible for discharge of polluting material in waters under national jurisdiction, must compensate the competent bodies for the expenses the latter ones incur to control or minimise pollution, irrespective of any previous authorisation and payment of fine.

 Unique paragraph. In case of discharge by a vessel that does not have the CLC/69 certificate, the ship will be detained and will only be released after depositing a guarantee as security for the payment of expenses resulting from pollution."

Given its own characteristics this disposition clearly required further regulation by the Federal Government concerning the following fundamental points:

            i.     The precise scope of the expression "vessel that does not have the CLC/69 certificate" — does it mean oil tankers whose "CLC/69 certificate" is expired (restrictive interpretation) or, on the contrary, non-CLC/69 vessels which, precisely because of that, do not have the relevant "certificate" (extensive interpretation);

 

           ii.     The means/procedures to estimate the expenses to fight pollution;

 

          iii.     The type of guarantee acceptable (only in cash or would a letter of undertaking from P&I insurers also suffice ?);

 

          iv.     In case of a cash deposit, how will the guarantee be eventually returned, either in full (in the event that the ship is eventually found not to have caused pollution) or in part (even if the ship is responsible, the guarantee may be in excess of the actual pollution expenses) — it must be noted that this point is of utmost importance since any payment by the Brazilian Government, as a rule, must be included first in the federal budget for the following years, thus causing a delay of not less than 2/3 years until payment effectively takes place.

As a matter of practice, we have not seen naval authorities applying said article 23 of Law 9.966/2000 to any non-CLC/69 vessel even after the recent enactment of Decree 4.136/2002. This may be at least an indication that these authorities consider that only CLC/69 ships are within the scope of the rule, which no doubt would significantly reduce the amount of problems resulting from its enforcement.

The second point relates to the possibility of superimposition of the fines established in Law 9.605 dated 1998 and its relevant regulating Decree (which are presently being applied to discharge of polluting substances) and those contained in Decree 4.136/2002, thus resulting in a duplication of penalties for the same infraction against the legal principle of Brazilian law termed ne bis in idem (never twice in the same thing).

As a matter of fact, article 26 of Law 9.966/2000 expressly stated that the cases involving actual discharge of oil or hazardous or noxious substances into national waters (instances of which are items 8 to 11 of part I above) must be dealt with and punished in accordance with Law 9.605/1998 and its Decree.

Notwithstanding, when the federal Government recently enacted Decree 4.136/2002 for the purpose of regulating Law 9.966/2000, the cases regarding discharge of substances into the waters, as it can be seen from the foregoing, were regulated again when this was expressly prohibited in the very same law being then regulated.

Therefore, it is not quite clear how naval authorities will now deal with this legal impropriety. They may either simply observe the terms of article 26 of Law 9.966/2000 (which is a rule of even higher hierarchy) and thus disregard the excess of regulation brought by the Decree 4.136/2002, or, alternatively, decide to apply both statutes, hence giving rise to an illegal duplication of fines.

In case the latter scenario prevails over the former one, recourse to legal measures no doubt will be required to exclude the double punishment of Decree 4.136/2002.

 

With thanks to Artur R. Carbone and Luís Felipe Galante, Law Office Carbone, Brazil for preparing this article.