DOMINICAN REPUBLIC Law and Practice Contributed by: Guillermo Estrella Ramia, Yamel Llenas Lajud, Mariela Santos Jiménez and Valentina Gallo Botero, Estrella & Tupete
• damages resulting from deliberate non-compli- ance. In practice, environmental insurance functions as a voluntary risk management and compliance tool, complementing the legal remediation obligations and the conditions of the environmental licence.
mental liabilities, and compliance with management plans approved by MIMARENA, in line with the Green and Social Taxonomy of the Dominican Republic, the Central Bank’s standards, and the Superintendency of Banks’ recommendations on environmental risk management. Loan agreements typically include clauses that: • require the maintenance of valid environmental permits; • expressly assign compliance responsibility to the borrower; • obligate the reporting of any non-compliance or environmental incident; • allow suspension of disbursements or acceleration of repayment in case of violation; and • authorise the bank to conduct environmental audits or inspections. Additionally, some lenders require environmental lia- bility insurance or remediation guarantees as a pre- condition for financing. In the Dominican Republic, civil actions for environ- mental damages may be filed when ecological, pat- rimonial or moral harm results from a polluting activ- ity or any act contrary to environmental regulations. Such actions may be brought by affected individuals or legal entities, recognised environmental associa- tions, or by the state itself, through the Ministry of Environment and Natural Resources or the Special- ised Environmental Prosecutor’s Office. Since liability is objective and joint, the claimant does not need to prove intent or negligence, but only the existence of damage and its causal link to the defend- ant’s activity. Courts may order the following: • monetary compensation; • restoration measures; • suspension of harmful activities; or • in natura reparation. 10. Civil Liability 10.1 Civil Claims
9. Lender Liability 9.1 Financial Institutions/Lenders
In the Dominican Republic, financial institutions and creditors are not automatically liable for environmen- tal damages caused by the projects they finance. However, Law No 64-00 on Environment and Natural Resources allows liability to be extended to any per- son who causes, tolerates or benefits from environ- mental harm, which could include a creditor exercising effective control or direct involvement in the project’s management. In practice, banks and investors implement environ- mental due diligence (ESG due diligence) policies, requiring environmental licences, impact studies and regulatory compliance as conditions for financing. Institutions operating with multilateral funds also apply the Environmental and Social Performance Standards and include risk mitigation clauses in their contracts. Although there is no jurisprudence holding lenders directly liable, the Dominican regulatory framework promotes preventative co-responsibility, particularly where there is operational control or clear economic benefit. 9.2 Lender Protection Lenders and financial institutions in the Dominican Republic manage their environmental risk exposure through a combination of the following:
• pre-financing due diligence; • contractual guarantees; and • continuous monitoring.
Before financing, banks conduct an environmental and social (ESG) due diligence to verify the validity of the environmental licence, the absence of environ-
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