On February 7, 2018, the Chico Mendes Institute for the Conservation of Biodiversity ("ICMBIO") the federal agency empowered to manage Preservation Units in Brazil published Ruling Ordinance No 3, of February 2, 2018, regulating the procedures necessary to execute Environmental Compensation Agreements to be settled with entrepreneurs who develop economic activities with significant environmental impacts.
By supplementing the provisions set forth by Provisional Measure No 809, of December 1st, 2017, the new Ruling Ordinance clarifies that entrepreneur may choose between the following procedures to execute its legal obligation of environmental compensation:
- Directly, whereby the entrepreneur directly executes by himself the environmental compensation measures set forth in the Environmental Compensation Plan proposed by the environmental agency; or
- Indirectly, whereby the entrepreneur pays the environmental compensation fee to a private fund designated by the environmental agency and responsible to manage and distribute such resources to Federal Preservation Units, with attention to the minimum amounts to be deposited in the first installment year, or integrally.
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