Case Name: IBAMA vs. Seringal Indústria e Comércio de Madeiras EIRELI (Timber deposit in Monicore and climate damage)

Summary

This is a Public Civil Action (ACP), with a request for urgent relief, filed by IBAMA against Seringal Indústria e Comércio de Madeiras EIRELI, seeking compensation for environmental and climate damages based on an infraction notice for the storage of timber without an environmental license. This ACP is part of a set of 9 actions filed by IBAMA with the same grounds, but against different defendants, to challenge illegal timber storage and climate damage. The plaintiff alleges that the storage of timber without proven origin is associated with illegal deforestation and predatory exploitation in the Amazon biome. Thus, it seeks compensation for resulting environmental damages, including (i) damage caused to flora and fauna, (ii) soil erosion, (iii) contribution to global warming. Regarding climate damage, it claims that the illegal conduct not only removed carbon sinks from the forest but also caused the release of carbon into the atmosphere. The author seeks to have determined (i) an obligation to restore vegetation in an area equivalent to that estimated by IBAMA, based on the volume of seized logs, totaling 39,412 hectares, preferably in an area of the same biome within an Indigenous Land, Conservation Unit, or Agrarian Reform Settlement Project, and (ii) an obligation to pay for climate damage based on the Social Cost of Carbon (SCC) in the amount of R$ 3,827,228.38. Based on the polluter-pays principle, the author argues that the negative climate externality represents an external social cost that is not internalized by the illegal vegetation suppression activity, leaving it to society. The author maintains that climate damage can be identified on an individual scale by multiplying the estimated GHG emissions from the activity by the SCC. In this specific case, IBAMA uses the Amazon Fund methodology to estimate emissions based on the area of the Amazon biome considered deforested, totaling 14,464,204 tons of carbon. It expressly mentions environmental justice and argues that accountability for climate damage consists of legally affirming the correction of the distortion of environmental burdens and benefits. The plaintiff requests, as an urgent measure: (i) suspension of financing and tax incentives and access to credit lines by the offender, (ii) freezing of assets in the estimated value for the obligation to restore vegetation and the obligation to pay for climate damage, and (iii) judicial embargo of the illegal polluting activity. It also asserts the need for reversal of the burden of proof and, definitively, requests that the defendant be ordered to restore an area equivalent to the deforested area and to pay the amount corresponding to the social cost of carbon.

The court ruled in favor of the preliminary injunction, finding that there was no urgency in granting the relief or danger in delay.

The defendant filed a response alleging, as a preliminary matter, the inadequacy of the initial pleading, arguing that the facts had not been proven, presenting them as mere unfounded presumptions, as well as his lack of standing to be sued. He also alleged that there was a nullity in the evidence and the absence of a causal link connecting the environmental damage to any kind of conduct on his part, whether by action or omission. He therefore requested the dismissal of the case without prejudice or a judgment of dismissal for lack of merit.

In their closing arguments, the Federal Public Prosecutor's Office and IBAMA requested that the civil public action be judged entirely in their favor, while the defendant reiterated its request for a judgment of dismissal, arguing that it has nothing to do with the facts mentioned, and that there are no relevant documents in the entire procedural record linking the defendant to the facts.

The judgment upheld the initial request and ordered Seringal Industria e Comércio de Madeiras EIRELI (i) to restore the degraded area described in the initial pleading, of 39.412 hectares, (ii) subsidiarily, in case of impossibility of restoring the area subject to the litigation, to pay compensation in the amount of R$ 423,363.70 and (iii) to pay compensation corresponding to the social cost of carbon (CSC) in the amount of R$ 3,827,228.38 (three million, eight hundred and twenty-seven thousand, two hundred and twenty-eight reais and thirty-eight cents).

The defendant company filed an appeal alleging a lack of evidence, since the causal link to the damage is presumed without mentioning the date of the deforestation, which was verified through remote systems (geoprocessed images), without on-site inspection.

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Main norms mobilized

• Article 225 of the Federal Constitution (CRFB/88)
• Article 5th of the Federal Constitution (CRFB/88)
• National Environment Policy Act - PNMA (Federal Law 6.938/1981)
• National Policy on Climate Change Act - PNMC (Federal Law 12.187/2009)

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Case documents