August 18, 2017 / 1:50 AM / 3 months ago

Brazil to swap environmental fines for recovery works

BRASILIA (Reuters) - Brazil will allow environmental transgressors to exchange millionaire fines for recovery works at a discount, the environment minister said on Thursday, in a bid to reduce litigation and raise funds for projects in times of austerity.

A decree to be published next week will allow environmental offenders such as oil company Petrobras to swap their fines for investments in projects, with a discount of up to 60 percent of the original penalty, minister José Sarney Filho said.

From the 23 billion reais ($7.24 billion) in environmental fines imposed between 2011 and 2016, federal agency Ibama has received just 605 million reais as most transgressors appealed against the penalties in courts, ministry data shows.

State-run oil producer Petróleo Brasileiro SA, as Petrobras is formally known, is expected to be one of the first companies applying for the swap, Sarney Filho said. Petrobras could cut its debt with Ibama to about 380 million reais from 950 million if the full discount is applied.

Ibama expects about 4.6 billion reais in investments under the new rules. Brazil’s government has frozen about 45 billion reais in spending this year in order to meet its budget target.

Sarney Filho said the swap will not be available for cases such as the 2015 Samarco disaster, in which the deadly collapse of a tailings dam owned by the mining company killed 19 people, destroyed a village and polluted an interstate river.

Writing by Silvio Cascione; Editing by Sandra Maler

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