More Changes at CETESB (Environmental Agency of São Paulo State – Brazil)

After the issuing of the the new Board of Directors Decision (DD 038/2017) on February 07, 2017, with important changes on the way CETESB manages the contaminated areas in the São Paulo State, CETESB issued the Technical Instruction 39 on December 2017, with the detailing of administrative procedures to apply all São Paulo State regulation.

The main change on this document is the significative increase of triggers for the issuing of fines: reports not adequate, site classified as Contaminated Area under Assessment and Contaminated area with confirmed risk, not present or not comply with the decommissioning plan, not communicate CETESB in case of dangerous situation (as free-phase), etc.

These fines can be reduced in case of extenuating situations or increased in case of aggravating and recidivism.

If for one hand, the increase of fines intend to discipline compliance with environmental guidelines, some of which are poorly met, such as plans and reports on decommission of industrial facilities, on the other hand, the lack of clear criteria, with much room for interpretation by the technicians of this agency raise questions about what will be considered as a complete report and as how communication will be made about what was considered flawed, since by DD38 / 17, it will be necessary to pay to obtain an technical opinion letter on the processes.

The document informs that a transition period will be consider: reports submitted to CETESB until February 10, 2017 or with the filed work conducted before this date will be analysed for the previous directive (DD 103/2007).

IT39/17 also clarifies when the document to guarantee the remediation (financial guarantee, environmental insurance or guarantee insurance), if applicable, should be presented: in the first Remediation System Performance Evaluation Report or when the remediation measures were not applied, in the first Report of Monitoring of Engineering or Institutional Control measures. It is important to highlight two points: (i) the environmental insurance market in Brazil is beginning and the products required by CETESB are not fully designed and (ii) the costs of this guarantee will increase the general remediation costs in the State of São Paulo (not good news on a crises time).

The increase of triggers for fines, combined with the increase of prices of licenses or for waste disposal will significantly impact the industrial sector in Brazil, which is trying to show some recovery in 2018. The largest and best environmental agency of Brazil is seeking other resources to continue its activities, but with a small contingent, the price to be paid is high and without any deadlines to receive responses.