Mexico: Environment Review 2017
Mexican Federal Law of Environmental Responsibility, by Sergio B Bustamante of Counselors International Abogados
Mexico has assumed several international commitments in relation to the establishment of domestic legislation regarding liability arising from damage caused to the environment.
Article 4, paragraph 5 of the Mexican Constitution states: “Every person has the right to a healthy environment for his or her own development and wellbeing. The State will guarantee the respect to such right. Environmental damage and deterioration will generate a liability for whoever provokes them in terms of the provisions by the law.”
The Mexican government has thus enacted a new Federal Law of Environmental Responsibility (LFRA), which will determine the mechanisms to repair, compensate or restore environmental damage. The LFRA offers assurances to the government and society, under the principle that whoever damages the environment must repair it, in accordance with the Mexican Constitution and in compliance with Principle 13 of the Rio Declaration.
The LFRA was published in the Federal Official Gazette on 7 June 2013 and came into effect on 7 July 2013.
The provisions of this statute are for public order and social interest. Its purpose is to protect, preserve and restore ecological equilibrium and the environment, so as to guarantee the human right to a healthy environment for the development and wellbeing of all individuals, as well as liability generated by environmental damage and impairment caused to the environment.
What does it regulate?
The LFRA creates a legal framework to regulate environmental liability derived from damage caused to the environment. This includes: restoration and compensation of said damage through federal judicial proceedings; alternate dispute settlement proceedings; administrative procedures; and proceedings related to the perpetration of crimes against the environment and environmental management.
The environmental liability regime acknowledges that damage caused to the environment is independent from patrimonial damage suffered by the owners of the natural elements and resources, regardless of applicable administrative law liabilities and procedures, or civil and criminal actions.
Definition of “Damage to the Environment”
Damage to the environment constitutes adverse and measurable loss, change, deterioration, impairment, affectation or amendment of habitats, ecosystems, natural elements or resources, or of their chemical, physical or biological conditions, the relationships interacting between them, or the environmental services they provide.
The term “environmental damage” does not apply when the impairment, loss, affectation, modification or deterioration is not deemed adverse if: the limits set forth by the provisions contemplated by environmental Laws or Mexican Official Standards were not exceeded; or there was an express statement by the responsible party, and the impact was explicitly identified, delimited as to scope, evaluated, mitigated, compensated and authorised by the Ministry of Environment and Natural Resources (SEMARNAT), prior to the activity in question, by means of an environmental impact evaluation or a preventive report, granting authorisation to change the use of forest soil or any other comparable authorisation issued by SEMARNAT.
The latter exception shall not apply in the case of non-compliance with the terms or conditions of the permit issued by SEMARNAT.
Any individual or company whose acts or omission shall cause damage to the environment, directly or indirectly, shall be liable for the damage and shall be required to repair it. If no repair is possible, the party shall be responsible the environmental compensation according to the terms set out in the LFRA. In addition, the individual or company shall carry out such acts as may be required to avoid increased damage to the environment.
Liability under the LFRA
Liability may be either subjective or objective.
Liability for damage caused to the environment shall be subjective (civil liability with fault: analogous to the American concept of tort) where it arises from illicit acts or omission, except for instances cited in the LFRA. Whenever the damage is caused by deceitful acts or omissions, the responsible party is required to pay economic sanctions.
A person is deemed to have committed an illicit act whenever he or she is engaged in an act or omission in contravention of legal and regulating provisions, Mexican official standards, authorisations, licences, permits or concessions issued by SEMARNAT or other authorities.
Environmental liability will be objective (strict liability: liability without fault) whenever the damage caused to the environment is a direct or indirect result of:
- an act or omission that relates to hazardous materials or waste;
- the use or operation of vessels in coral reefs;
- engagement in activities considered highly hazardous; and
- premises and actions contemplated by article 1913 or the Federal Civil Code.
Article 1913 of the Federal Civil Code states that when an individual, without acting unlawfully or illicitly, uses substances, machines, instruments or devices that are dangerous in themselves, or dangerous due to the speed at which they develop, their explosive or inflammable nature, the power of electricity which they conduct or any other similar cause, and in so doing creates damages and/or injuries to third parties, said individual is liable for the damage, unless it is demonstrated that the damage was produced by fault or contributory negligence of the victim.
Repair of environmental damages
The repair of damage caused to the environment shall consist of restoring the environment to its base state.
Definition of “Base State” according to the LFRA
“Base state”, as defined by the LFRA, is any condition prevailing in the habitats, ecosystems, natural elements and resources, as well as the relationship between them and the environmental conditions immediately preceding any damage caused.
This will occur when the repair of the damage is materially or technically impossible, or when several instances contained in the LFRA are met. The environmental compensation can be partial or total. It shall consist of the investment or actions enacted by the responsible party to generate an environmental improvement, in substitution of the total or partial repair of the damage caused to the environment, and it shall be equivalent to the adverse effects caused by the damage.
Corporate Entity Liability
A corporate entity shall be liable for damage to the environment caused by their representatives, administrators, managers, directors, employees or those who may exercise the functional dominium of their operations, if they (i) are negligent in representation, or under their protection, or to the benefit of the corporate entity; or (ii) have ordered or consented to the execution of harmful acts. Those who have used, assessed or contracted a third party to carry out the action that created the damage shall be jointly liable, except in cases of hazardous waste confinement services provided by SEMARNAT-authorised companies. There shall be no liability where the damage to the environment was originated exclusively by acts of God or force majeure. The damage caused to the environment is attributable to the individual or corporate entity that failed to prevent them, if persons had the legal obligation to avoid them.
Who can sue for Environmental Liability?
The suit can be filed by:
- inhabitants of the community adjacent the area whose environment was damaged;
- a Mexican non-profit corporate entity representing a community inhabitant;
- The Federation, via the Environmental Protection Agency (PROFEPA); and
- environmental protection agencies or institutions engaged in the environmental protection of the states and the Federal District, within the sphere of their territorial jurisdiction jointly with PROFEPA.
Statute of Limitation
The suit can be filed within 12 years from the date on which the damage and its effects were caused.
Economic sanctions are additional to the repair or compensation established by the judge to individuals or the corporate entity. A reduction in the economic sanctions may be given if at least three of the following conditions are met:
- the corporate entity has not been sentenced previously in accordance with the LFRA, nor is it a recidivist (repeater infractor) pursuant to environmental laws;
- the employees and representatives of the corporate entity have not been sentenced for environmental crimes;
- the corporate entity has insurance for high-risk activities;
- the corporate entity has both an internal controlling body that supervises, on a permanent basis, environmental compliance, and an internal system, in permanent operation and of at least three years’ standing, for environmental management and training; and
- the corporate entity has a Clean Industry certificate.
Environmental Liability Judicial Process and Judgment
The LFRA contains specific substantive and judicial procedure, or elements established for civil claims, on the matter of environmental liability (such items are also contained, in a supplementary manner, in the Federal Code of Civil Procedures). It also contains early legal relief and provisional remedies whereby the judge will instruct SEMARNAT and PROFEPA to immediately implement preventive and corrective measures, as contained in the LFRA.
The court may gather ex officio evidence as deemed necessary. The judge may also require SEMARNAT and PROFEPA to provide such evidence as, inter alia, expert studies, testimonials, documents and photographs.
Besides the requirements contained in the Federal Code of Civil Procedures the judgment for the plaintiff must detail:
- the obligation to repair the relevant environmental damage;
- the total or partial compensation arising from the actions;
- the measures and actions necessary to avoid the damage caused to the environment from increasing;
- the amount of the economic sanctions, as well as the reasoning that justifies them;
- the amount to be paid by the prevailing party or parties, who shall have proven their claim for the expenses disbursed to prove the liability; and
- the deadline by which the responsible party obligations must be complied with.
Once the judgment is to be executed, the judge will serve notice to the parties so that within the term of 30 days they shall declare: (i) the form, terms and levels of environmental reparation; (ii) the partial or total impossibility of a material repair, and thus the details regarding the compensation that will be performed; and (iii) the proposed deadlines for compliance. Once the judge receives the proposals for repair of the damage, or else compensation, it will give SEMARNAT 10 days to deliver its opinion. The period required for compliance with the repair and/or compensation obligations will be set by the judge.
Environmental Liability Fund
The LFRA established the Environmental Liability Fund (FORA), whose funds should be used for the repair of damage caused to the environment in cases named by SEMARNAT as being of an emergency or high priority. The funds should also be used towards studies and research by SEMARNAT or PROFEPA as required by the judge during the judicial process.
Alternative Mechanisms for Dispute Settlement
Alternative mechanisms for dispute settlement are available. These include mediation, conciliation and those enabling the prevention of conflicts or, when applicable, resolution without the need for intervention from the jurisdictional entities except to guarantee the legality of the agreement reached by the participants.
If there is an agreement between the parties during the judicial procedures, before a final judgment is made, the judge shall acknowledge said agreement on damage repair and issue a judgment. If the agreement is incorporated in the judgment, the responsible party shall not be commmitted to the payment of the economic sanctions.
Criminal Liability in Environmental Matters
The LFRA shall apply to criminal conflicts, as well as the procedures derived from the perpetration of crimes against the environment and the environmental management in terms of the provisions of the Federal Criminal Code and the Federal Code of Criminal Procedures.
Every inhabitant of the community with the possibility to have been affected by the unlawful act shall be deemed a victim of crimes against the environment, provided a complaint is filed with the Public Prosecutor.
The LFRA has established the authority of environmental judicial courts, a measure effective as of 7 July 2015.