Case Name: IBAMA vs. Madelin Madeireira Linhares LTDA (Illegal logging in Rorainópolis and climate damage)

Summary

This is a Public Civil Action (ACP), with a request for urgent relief, filed by IBAMA against Madelin Madeireira Linhares LTDA seeking compensation for environmental and climate damages based on an infraction notice for the storage of logs 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 associated 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 43.2727 hectares, and (ii) an obligation to pay for climate damage based on the Social Cost of Carbon (SCC). Based on the polluter-pays principle, the author argues that the negative climate externality represents an external social cost that was not internalized by the illegal vegetation suppression activity. 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 15,881.0809 tons of carbon. The author 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 author requests, as an urgent measure: (i) suspension of financing, tax incentives, and access to credit lines for the offender, (ii) freezing of assets in the estimated amount for the obligation to restore vegetation and the obligation to pay for climate damage, and (iii) a court order to halt the illegal polluting activity. The author further 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 emissions.

The defendant filed a response alleging, preliminarily, the court's lack of jurisdiction, IBAMA's lack of standing, and the occurrence of lis pendens. On the merits, it argued the existence of an ongoing administrative process, the lack of proof of causality, and disagreement regarding IBAMA's calculation methods for identifying the volume of seized timber and the collective environmental damage (CSC).

A judgment was issued dismissing the case without prejudice due to IBAMA's lack of standing. According to the decision, based on the principle of the predominance of interests in the distribution of environmental responsibilities, there was no federal interest involved that would justify IBAMA's intervention.

In response to the ruling, IBAMA filed an appeal, arguing its standing to sue based on an express legal provision. In its counter-arguments, the appellee company reiterated its arguments contesting the decision and requested that the appeal be dismissed.

Subsequently, the court overturned the lower court's decision and recognized the standing of IBAMA (Brazilian Institute of Environment and Renewable Natural Resources) to file the class action lawsuit for environmental damages, as well as that of the Federal Public Prosecutor's Office. The case was then remanded to the lower court for proper processing.

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Main norms mobilized

• Article 225 of the Federal Constitution (CRFB/88)
• National Environment Policy Act - PNMA (Federal Law 6.938/1981)

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