New Forestry Code Establishes Protections for Native Forests
The new Forestry Code (Federal Law No. 12.651/2012)
significantly modifies the laws governing specially protected
areas, such as "Permanent Preservation Areas" and
"Legal Reserves". Furthermore, it harmonizes the legal
regime applicable to areas of consolidated use, creates a new
"Rural Environmental Registry"
("Cadastro Ambiental
Rural" - "CAR"),
abolishes the requirement to register "Legal Reserves" in
the Real Estate Registry, and restricts access to rural
credit
2012 was a year of important changes for the environmental legal
regime in Brazil. On May 28th, the new Brazilian
Forestry Code took effect. While the new Code brings welcome
certainty to a number of areas, uncertainties still
persist.
The new Forestry Code is the result of contentious debates between
rural interests and environmentalists. After a lengthy legislative
process in Brazil?s House of Representatives and Senate, President
Dilma Roussef vetoed a portion of the bill, changing the vetoed
points through Provisional Measure No. 571/2012, which was later
converted into Federal Law No. 12.727/2012.
Based upon the new Forestry Code, permanent preservation areas are
now calculated in a different way, and restricted areas are now
smaller. Another innovation brought by the new law is greater
inclusion of permanent preservation areas within legal reserve
areas ("legal reserves"), which varies among 20%, 35%,
and 80% of the real estate in question, depending upon where the
biome is located.
Regarding legal reserves, certain types of undertakings are exempt
from being classified as legal reserves, such as hydropower
facilities and the construction and expansion of roads and
railways. Moreover, the areas where legal reserves may be
augmented were increased, as the new law establishes that
such areas can be expanded using any other areas located within the
same biome.
The reclassification of rural areas into urban areas by municipal
laws does not exempt them, automatically, from the obligation to be
maintained - exemption occurs only at the time of the
registration of the land division. Moreover, legal reserves of
former rural areas may be transformed into allotted green areas or
commercial undertakings, or used for infrastructure
projects.
The new Forestry Code authorizes the federal executive branch to
create incentives for environmental protection and environmental
remediation by charging for environmental services, and allowing
environmentally sensitive lands to be deducted from the calculation
base of the Rural Property Tax ("ITR"), among other
mechanisms.
Moreover, by no later than March 28, 2014, the federal government,
states, federal district, and municipalities must initiate the
"Environmental Regularization Program" ("PRA"),
which seeks to implement the new Forestry Code. Since the enactment
of the new Forestry Code and the implementation of the PRA in each
state and federal district, owners or possessors of rural areas may
not be fined for infractions related to irregular deforestation of
permanent preservation areas, legal reserves, or other restricted
areas that occurred before July 22, 2008. In order to benefit from
such treatment, interested parties must participate in the program
and comply with its terms.
Regarding the Rural Environmental Registry, it is a public
registry for environmental information pertaining to rural
properties - legal reserves no longer need to be registered
with the Real Estate Registry. Enrollment with the Rural
Environmental Registry may be requested within one year of the date
that it is implemented.
However, between the date upon which the new Forestry Code was
enacted and the date of registry with the Rural Environmental
Registry, owners or possessors of rural areas may register a legal
reserve with the Real Estate Registry, free of charge. Registry
with the Rural Environmental Registry is mandatory for all rural
properties and must be effectuated within one year of the Rural
Environmental Registry?s implementation.
Certain Brazilian states (Amazonas, Bahia, Mato Grosso,
Pará, Rondônia, and Acre) had registries that were
similar to the Rural Environmental Registry that pre-dated the new
Forestry Code, and now need to be adapted. In the State of
São Paulo, the state environmental agency and the federal
government signed a technical cooperation agreement on February 20,
2013, to implement the Rural Environmental Registry.
Another important point in the new Forestry Code is the
prohibition against obtaining credit from official financial
institutions with respect to any property not registered with the
Rural Environmental Registry by May 28, 2017.
The new Forestry Code has been subject to criticism. On the one
hand, environmentalists believe that the flexibility brought by the
new Code is harmful to environmental preservation. On the other
hand, rural interests advocate maintaining the law, for the
necessary improvement of agribusiness activities in
Brazil.
The general view is that the new Forestry Code is an evolutionary
progression given that the old code, which was enacted in 1965, had
many gaps.
Nonetheless, disagreements over the new Forestry Code remain. The
Code is currently being reviewed by Brazil?s Supreme Federal Court,
which is assessing the constitutionality of certain articles
pertaining to the Rural Environmental Registry, legal reserves, and
amnesty granted to owners and possessors of rural areas that
deforested land prior to July 22, 2008.
If the articles under review are declared unconstitutional, the
Supreme Federal Court may restrict the effects of its decision, for
example, it will only take effect after a certain
period.
Despite the fact that certain portions of the Code are currently
the subject of litigation, the law remains in full force and
effect, and is noteworthy for its creation of the Rural
Environmental Registry and legal reserve areas. Until the
uncertainties are resolved, however, the new law must be analyzed
on a case-by-case basis in order to accurately assess potential
risks.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.