Legislative rider
Organizations call for veto of article inserted into Order 752/16 that exempts banks from environmental crimes
Environmental and human rights organizations today called for a presidential veto of the article of Provisional Executive Order 752 that exempts banks from responsibility for environmental crimes resulting from the projects they finance. The text was approved by Congress on May 3. The Presidency has until June 5 to sign it into law.
In article 35 of Order 752, on public concessions in the transport sector, it states that banks and government development organizations may only be held liable for environmental damage in partnership contracts if there is willful misconduct or negligence and a causal relationship between their conduct and the damage caused.
In a technical report released on Thursday, June 1, the organizations Amigos da Terra, Conectas Human Rights, Greenpeace and Instituto Socioambiental claim that this unrelated rider inserted into Order 752 promotes the financing of illegal and environmentally damaging activities, encourages deforestation and impedes the implementation of environmental and social responsibility policies in the financial sector.
According to the organizations, the article violates the precautionary principle and the principles of polluter pays, full reparation for environmental damage and non-regression – all of which are protected by the Constitution and by international treaties ratified by Brazil.
Read the technical report in full
The organizations also point out that the insertion of unrelated riders into legislation has been expressly forbidden by the Supreme Court in its ruling of Direct Action of Unconstitutionality No. 5.127/DF of 2015.
According to the technical report, if the Order is signed into law with this article, it has the potential to undermine the entire system of environmental civil liability in Brazil and it would set a precedent of exception to the rules of joint liability, which could have a ripple effect on other economic sectors.
“The immediate impact of this measure will be for financial institutions to take on greater social and environmental risks […] thereby increasing the risk of the system as a whole with harmful consequences on the pricing of credit and the economic growth of the country,” said the organizations. “The measure will create a permissive environment for banks, development agencies and other financial institutions to become accomplices and instigators of human rights violations and environmental damage caused by their commercial partners.”
