In Canada, however, there is no cooperation between the national government and the Provinces for assessing environmental impact, and authorities responsible for decision-making have enormous power; comparison made during RCGI event

Meeting during the Workshop on EIA and Environmental Licensing in the Petroleum and Natural Gas Industry: Brazil and Canada, attorneys, engineers, and experts in the area of natural gas had an opportunity to learn of a comparison between the environmental licensing procedures, in both countries, for enterprises with possible impacts on the environment. The event was organized by Prof. Hirdan Katarina Medeiros Costa and held on April 26. Presentations were made by researchers Flora Stevenson, from the Canadian Institute of Resources Law, and Mariana Miranda, member of Project 21 of the FAPESP Shell Research Center for Gas Innovation (RCGI), which is organizing an annotated digital repository of Brazilian legislation regarding natural gas.

Flora Stevenson, who was the first to speak, stated that, different from Brazil, in Canada the Environmental Impact Assessment of enterprises covers only the biophysical aspect. “Social, economic, and cultural aspects are not taken into consideration…. None of this is considered. Which I believe is setback in the law,” she states, referring to the approval of the Canadian Environmental Assessment Act of 2012 (CEAA), which substituted the previous 1995 law.

Flora Stevenson, from Canadian Institute of Resources Law

 

Canada is the sixth largest petroleum producer in the world and the fifth biggest producer of natural gas. It has the second largest petroleum reserves in the world, including oil sand (also called tar sand: bituminous sand). “As for natural gas, a large part is shale gas, so much fracking is necessary. Some provinces are beginning to impose restrictions on fracking, but I don’t believe it is a trend,” says Ms. Stevenson.

According to her, one of the changes in the CEAA was to cease cooperation between the national government and the Provinces (equivalent to Brazil’s States) from jointly assessing environmental impact. “If the national government is doing the assessment, the Province cannot be involved. And vice versa.” That means that the environmental impact assessment of a project with possible negative effects on several areas might not deal with impacts that are the responsibility of the national or provincial government, depending on the level of the assessment done. “Since Federalism is strong, most of the analyses will occur on a Provincial level.”

Process – Ms. Stevenson points out the amount of discretionary power conferred upon the authority who is responsible for analyzing environmental impact. She explains that the projects on the Federal level need to be registered with the Canadian Environmental Assessment Agency (CEAA) and, once registered, the Minister can decide, discretionally, which project does or does not need an environmental impact assessment. In the case of the petroleum and natural gas sector, the processes go to the National Energy Board (NEB). The environmental impact assessment of those projects is required and carried out by the NEB. “The one who is responsible for the environmental impact assessment is not an environmental agency, as in Brazil, but rather an energy agency. It is like Brazil’s National Petroleum Agency (ANP) doing the environmental impact report,” she explains.

The final decision regarding these processes is instructed to say if the impact is significant and, if it is, whether or not it is justified. If it is justified, there could be conditions for installing the enterprise. “But, even if an environmental impact is identified, the agency in charge could deem that, in the economic or public interest, the project should move forward, anyway.” Prof. Stevenson also explained that, different from our Environmental Impact Report (RIMA), in Canada, the justification of the impact report is short and comes with few details.

“An important thing about Canadian law is the possibility of a judicial review of administrative decisions. There is not a very strong possibility of a judicial review, because the courts have great respect for the image of the executive. Then a standard review analysis is done, in order to know how much deference must be conferred by the judiciary to the administrative decision.”

But the Canadian process for assessing environmental impact will soon change direction. Prime Minister Justin Trudeau and Minister of the Environment and of Climate Change Catherine McKenna recently established an expert panel to develop fair and robust procedures for analyzing environmental impact in Canada, which incorporate scientific evidence, protect the environment, respect the rights of indigenous people, and support economic growth. “They went around the country gathering suggestions and the report was delivered at the beginning of April 2017. It is open for public comments until May.”

Brazil – Here, according to the Constitution of 1988, protecting the environment and combatting pollution, as well as protecting flora and fauna, are competencies shared by the Federal, State, and Municipal governments. “The law that rules over this shared competence is Complementary Law 140 (2011). The licensing that comes under Federal competence is well-defined: it licenses activities located or developed within ocean territorial limits, on the continental shelf, on in the exclusive economic zone; on indigenous lands; in conservation units that the government itself institutes, except for Environmental Protection Areas (APA); and those located or developed in two or more States,” Ms. Miranda explains.

Mariana Miranda, member of project 21 by RCGI

 

She says that Decree 8.437 (2015) established regulations according to types. “The Decree says that for activities involving the production and exploration of natural gas and other hydrocarbons, IBAMA (Brazilian Institute for the Environment and Renewable Natural Resources) has the competence for licensing: exploration and assessment of deposits, taking in activities of seismic acquisition, collection of data on the ocean floor, well drilling, and long-term testing within the marine environment and in transition zones between land and sea; production that takes in the activities of drilling wells, implementing production and flow systems, when done in the marine and production when not performed with conventional resources for petroleum and natural gas, in a marine environment and in transition zones between land and sea, or on land, taking in the activities of drilling wells, fracking, and implementing production and flow systems.”

As for the States, Ms. Miranda says that they play a residual role. All exploration of on-shore deposits is generally licensed also by the State, unless there is an impact in two or more States. “In the case of a pipeline, for example: if it passes through two or more States, licensing will also be a competence of the Federal government, through IBAMA.”

The instrument provided in Brazil for licensing enterprises that could have an environmental and social impact, since 1986, as decided by CONAMA (National Environmental Council), is the EIA-RIMA (Environmental Impact Study, followed by the respective Environmental Impact Report). “Such activities as the extraction of fossil fuel (petroleum, shale, coal), oil pipelines, gas pipelines, ore pipelines, collector trunk lines, ports and terminals for ore, petroleum, and chemical products.”

In these cases, where the EIA-RIMA is done, public hearings must be held 45 days in advance. “The hearing must take place in the places of potential interest, in order to give the public a real possibility to take part. Nevertheless, there are flaws in the process, because 45 days do not ensure access to all interest groups to the public hearings.”

After analyzing the EIA-RIMA, if the enterprise is environmentally viable, it receives a preliminary license from the environmental agency. “The preliminary license includes a series of conditions to be met. When they are met, the enterprise is granted an installation license and, later, an operating license. In all of these stages, the entrepreneur has conditions to meet. That is the overall view for any competence, Federal or State.”

Since the activities of the oil and gas sector have different stages from other activities, a standard was created to take into consideration such phases as the acquisition of seismic data, if it is offshore, test drilling, etc. “Before the installation and operating licenses are granted, there are stages that deal with the license for seismic studies, the preliminary license for well drilling (Lper), licenses for production and flow, and a long-term test license,” says Mariana.

Procedure and practice – Hirdan Katarina de Medeiros Costa, who organized the event, reminds that there is no energy appropriation which has no environmental impact. “Our challenge is how to reconcile maintaining modern benefits while also protecting the environment. These interests could often be conflicting, but we have to look for harmony, reconciliation, and rethink the roles of the players involved,” she says. “According to what we see today, Brazil has aspects that are much more advanced than Canada, in terms of laws and rules for estimating the environmental impacts of enterprises.”

Hirdan Katarina de Medeiros Costa, organizer of the event and coordinator of the project 21 by RCGI

 

Flora Stevenson agrees, but warns of that fact that putting this into practice in Brazil is a problem: “Brazil’s problem is practice, not procedure, which is very advanced. In Canada, the procedure includes more discretionary power and the laws on paper are less advanced, but practice is more advanced.”

Also attending the event was Professor Marilin Mariano dos Santos, who reminded that despite IBAMA being responsible for most of the licensing processes in the area of oil and natural gas, it does not act omnipotently. “In those cases, IBAMA works closely with the State Environmental Department, and listens carefully to the State agency. It’s IBAMA that signs and grants the license. But it is the State that knows the environment where the enterprise is located, as well as the municipalities, and has the competence for this.”

She says that it is necessary to rethink the relations between the parties involved. “Entrepreneurs must change the way they think about the environmental agency, and vice-versa. They cannot see themselves as enemies.”

Geologist and Legislative Consultant of the Federal Senate Israel Lacerda de Araújo calls attention to the fact of the shared responsibility of the public agencies involved in the public bidding processes. “When licensing processes are contested, prosecutors often focus on the environmental assessor, who is a public servant and the weakest link in the chain. For that reason, public servants have a deep fear of positively signing a licensing process, because they worry that they will be held co-responsible. Than does not give incentive to innovation, rather quite to the contrary: it leverages a bureaucratic attitude on the part of the public agent. One of the ways to resolve this issue would be to designate public defenders for the agents, which is not the practice today. The government of the State of Minas Gerais sent a bill for this type of legislation.”

Israel Lacerda de Araújo, geologist and Legislative Consultant of the Federal Senate