On December 2018, Brazil’s Federal Environment Agency (“IBAMA”), filed a public civil action (environmental class-action) against Silmar Gomes Moreira seeking compensation for environmental and climate damages based on an infringement notice for illegal wood storage without an environmental license.
This public civil action is part of a set of 9 lawsuits brought by IBAMA on the same grounds, but against different defendants, to question illegal wood deposit and climate damage.
The plaintiff alleges that the storage of wood without proven origin is associated with illegal deforestation and predatory exploitation in the Amazon biome. Thus, it seeks reparation for environmental damages provoked by it, including (i) the damage caused to flora and fauna, (ii) soil erosion, (iii) contribution to global warming. As for the climate damage, it claims that the unlawful conduct not only removed carbon sinks from the forest, but also caused the release of carbon into the atmosphere.
The plaintiff seeks redress through the determination of (i) an obligation to restore the vegetation in an area equivalent to that estimated by IBAMA, based on the volume of logs seized, amounting to 20.6365 hectares, ideally in an area of the same biome in Indigenous Land, Conservation Unit or Agrarian Reform Settlement Project and (ii) an obligation to pay the climate damage based on the Carbon Social Cost (CSC) in the amount of R$ 2,003,973.37. It claims, based on the polluter pays principle, that the climate damage represents an external social cost that is not internalized by the illegal deforestation, leaving it to society. It also argues that climate damage can be quantified on an individual scale by multiplying the estimated GHG emissions of the activity by the CSC. In this case, IBAMA uses the Amazon Fund methodology to estimate emissions based on the area of the Amazon biome considered deforested, summing up to 7,573,5955 tons of carbon.
The plaintiff requests, as an injunction: (i) suspension of financing and tax incentives and access to credit lines by the offender, (ii) unavailability of assets in the estimated amount for the obligation of the vegetation restorage and the obligation to compensate the climate damage, and (iii) judicial restraint order of the illicit polluting activity. On the merits, it requests the defendant's conviction in the obligation to do - to recover an area equivalent to that deforested - and the obligation to pay - in the amount related to the social cost of carbon.
In a preliminary decision, the court rejected the injunction, considering that there was no urgency of the provision or danger of delay.
The defendant filed a defense arguing that the initial complaint showed no evidence relating the facts to the alleged environmental damage. He affirmed the insignificance of the deforestation caused, which, in his words, only had occurred to ensure the survival of his family. Silmar Gomes also stated the irrelevant extension of the area deforested when compared to the total area preserved. On the merits, he questioned the infraction notice that supports the complaint, stating that it would be fairer to apply a milder penalty of recomposition of the vegetation cover. He claimed that the infraction notice issued by IBAMA would be illegal and that the right to an adversarial proceeding and a broad defense would have been violated; in addition to abuse of the inspectors involved. It claimed the absence of the elements necessary to characterize strict liability, alleging the absence of specific and consequential environmental damage (to fauna, flora, soil erosion and global warming). Finally, it asserted that the preliminary injunctions and the reversal of the burden of proof were not appropriate.
The plaintiff, IBAMA, submitted a reply challenging the points raised by the opposition, and attached Technical Information No. 10/2019-COREC/CGBIO/DBFLO, which explains how the calculation is made to arrive at the amount of compensation sought in relation to the application of the Social Cost of Carbon (CSC).
A judgment was issued partially upholding the claims. The defendant's arguments were refuted and it was stated that the notice of violation was covered by the requirements of validity. It was held that both the environmental damage and the causal link necessary for liability were demonstrated in the document. Thus, it condemned the defendant in the obligation to establish the recovery in natura, and must elaborate and fulfill a reforestation project of the deforested area, under penalty of a fine. It was also determined the unavailability of the defendant's assets to ensure compliance with the sentence, and the suspension of credit, incentives and tax benefits granted by the Public Power, until the full repair of the damage is proven. However, the request regarding the obligation to pay for climate damage was not accepted. The court held that the payment based on the CSC was not a feasible obligation, stating that there was no delimitation due to lack of expert evidence.
Subsequently, IBAMA filed an appeal, reiterating the argument of the need for compensation based on the CSC. It asserted that the initial petition indicated and demonstrated the probable amount of GHG emissions that the suppression carried out by the defendant caused, as well as indicated pecuniary values for its due compensation. It stated that the values presented are estimates of reasonable accuracy based on scientific data. The judgment, however, despite having condemned the defendant for the damage and to restore the area, denied the request regarding the payment of climate damage. The appellant also emphasized that, since the damage is certain and proven, it cannot be allowed to go unrepaired, and the sentence should be reformed in this regard. The appealed party, Silmar Gomes, filed counter-appeals defending the maintenance of the sentence and the appeal is still pending.