BRAZIL Law and Practice Contributed by: Roberto Panucci, Tiago Severo, Diogo Nebias and Guilherme Teles, Panucci, Severo e Nebias Advogados
8.8 Environmental, Health and Safety Laws Environmental, health and safety compliance in Bra- zil follows the National Environmental Policy and the National Environmental Council ( Conselho Nacional do Meio Ambiente , or CONAMA) rules. Projects usu- ally require a three-phase licensing process often supported by environmental impact assessments (EIAs) and public hearings. State agencies issue most licences, whereas the federal environmental authority – the Brazilian Institute of Environment and Renewable Natural Resources ( Instituto Brasileiro do Meio Ambi- ente e dos Recursos Naturais Renováveis , or IBAMA) – oversees projects of federal impact. The National Mining Agency ( Agência Nacional de Mineração , or ANM), water-basin authorities, and municipalities may impose additional requirements. Key statutes include the Forest Code, the Water Law, the Solid Waste Poli- cy, and labour safety norms ( Normas Regulamentado- ras , or NRs). Projects affecting indigenous communi- ties require involvement from the National Indigenous People Foundation ( Fundação Nacional dos Povos Indígenas , or FUNAI) and consultation under ILO Con- vention 169, and those in or near protected areas face stricter conditions and compensatory obligations. Most private banks in Brazil require compliance with the Equator Principles, a baseline and risk manage- ment framework for financial institutions to identify, assess and manage environmental and social risks in projects.
Private credit funds and institutional investors provide unitranche loans, mezzanine financing or tailor-made facilities, generally co-ordinated under intercreditor agreements to align priorities. Alternative financing techniques include: • offtake prepayments, where future production is prepaid by a buyer; • streaming or royalty arrangements in mining, where investors finance development in exchange for a portion of future output or revenues; and • equipment leasing. A common trajectory involves bank-led construc- tion financing followed by refinancing with long-tenor debentures or a BNDES take-out loan once the pro- ject is completed and operation. 8.7 Natural Resources Exports are generally permitted, with royalties such as CFEM ( compensação financeira pela exploração mineral ) (mining royalty) in mining and profit oil in oil and gas forming part of project economics. Domestic supply obligations are rare and local content rules in oil and gas – though relaxed – still feature in bidding. Licensing is rigorous, requiring community consultation under ILO (International Labor Organiza- tion) Convention 169 as well as compliance with strict safety standards. Logistics infrastructure (rail and port terminals) is often critical to bankability. Mining rights must be held by Brazilian-incorporated entities, which may be foreign-owned, whereas nucle- ar resources remain state-controlled. Lenders empha- sise ESG performance, export and logistics stability, and policy risks affecting cash flows.
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