Judge rules in favor of controversial LNG terminal in the Port of Santos; Public Prosecutor set to appeal

A recent dispute over a liquefied natural gas (LNG) regasification terminal in the port of Santos has evidenced the complexities of balancing public interests and private enterprise in Brazil. The case, which saw a legal challenge from the Public Prosecutor’s Office (MP) against the authorization granted to the terminal, sheds light on the intricate relationship between regulatory oversight and economic development.

Public officials should not dictate the activities of private businesses that have already met the requirements established by law, “under penalty of administrative chaos, legal uncertainty, and immeasurable losses both to the entrepreneur and to society, due to the economic and social impacts on the enterprise.”

Judge André Luís Maciel Carneiro, of the 2nd Public Finance Court of Santos, adopted this understanding when ruling as unfounded a public civil action in which the Public Prosecutor’s Office requested the annulment of licenses and authorizations granted to a liquefied natural gas (LNG) regasification terminal at the port of Santos. The Public Prosecutor’s Office has appealed.

“The State is not the entrepreneur, and it has no say in defining the business strategies of private agents, nor in deciding the use of its resources, given that the economic risks are not shared,” highlighted the judge.

According to the ruling, it is “irrefutable” that the project complied with the administrative legal requirements under the terms set forth by Resolution Conama (National Council of the Environment) 237/1997 and other applicable norms, obtaining the necessary authorizations from all due authorities.

The heart of the controversy lies with a maritime terminal for the reception, storage, and regasification (vaporization) of LNG in the Santos estuary region, as well as a maritime and land gas pipeline for the transportation of the natural gas to the City Gate, located in Cubatão, for distribution.

In the lawsuit filed against the LNG Regasification Terminal of São Paulo (TRSP), the municipality of Santos, and the São Paulo State Environmental Company (Cetesb), the Public Prosecutor’s Office requested the urgent suspension of the enterprise’s authorization to operate.

Regarding Cetesb, the plaintiff requested the suspension of the terminal’s environmental licensing and deforestation authorizations and refrained from issuing new licenses or authorizations. The TRSP was asked to prohibit the start of construction works or their cessation.

The Public Prosecutor’s Office requested in the merits the confirmation of the urgent measures and the condemnation of the defendants for material and moral damages. The case was valued at R$ 1 billion (with R$ 350 million being the approximate cost of the work and R$ 700 million being the claim for moral damages).

According to the initial complaint, environmental damages arise from the interventions made. In contrast, the collective moral damages stem from the loss of quality of life for the population near the enterprise and the tension generated for the population due to the risks of full operation, labeled by the Public Prosecutor’s Office as a “ship-bomb.”

Studies under scrutiny

The Public Prosecutor’s Office pointed out alleged irregularities in the administrative acts of approval of the EIA/Rima (Environmental Impact Study and Environmental Impact Report), including the lack of adequate analysis of the locational alternatives for the installation of the terminal, which is planned to operate in the Santos estuary region.

The plaintiff also added that several environmental and social risks were ignored with the pipelines passing through vital ecosystems for the region.

The initial complaint also warned of the risk of large-scale deaths in the event of an accident or operational failure at the terminal or in any related activity, such as a collision between vessels.

The TRSP argued, preliminarily, the impossibility of reviewing administrative acts by the Judiciary. In the merits, it defended the analyses that supported the approval of the EIA/Rima, as they contemplated several other locational alternatives for the installation of the terminal and pipeline.

According to the company, the choice to install the terminal in the sheltered waters of the Port of Santos was made after the evaluation of various criteria.

The TRSP informed that the studies concluded the unfeasibility of offshore operations, away from urban areas, due to adverse ocean conditions, such as large and continuous waves.

In an appeal filed by the MP, the Court of Justice of São Paulo (TJ-SP) suspended the effects of the preliminary and installation licenses granted by Cetesb to the project, with the consequent suspension of the start of works. However, this decision was revoked by the Superior Court of Justice (STJ).

For Minister Humberto Martins, there was undue interference by the São Paulo court in the administrative sphere, disregarding the presumption of legitimacy of the administrative act regarding the public policy of cleaner and more sustainable energy production through the availability of natural gas by the private enterprise.

Work continues

Martins’ decision guarantees the installation and operation of the project until the final ruling is issued. In ruling the claim unfounded, Judge André Carneiro highlighted that the expert report appointed by the court confirmed the formal and material regularity of the enterprise.

Regarding the alleged failure to present locational alternatives mentioned by the Public Prosecutor’s Office, the judge argued that that was not true, and the choice is up to the entrepreneur, as long as it is accompanied by inspection and verification of technical feasibility by the competent bodies.

“The alternative chosen by the entrepreneur received the technical analysis required by law and was approved, with emphasis on the motivated rejection of the solution sought by the Public Prosecutor’s Office, following the recommendation of its technical sector, the CAEx (Support Center for Execution),” observed Carneiro.

The judgment was issued on January 22. In 68 pages, the Public Prosecutor’s Office presented its reasons for appeal on February 1. According to prosecutors Almachia Zwarg Acerbi and Carlos Cabral Cabrera, environmental licenses are not untouchable and do not override factual reality.

According to the MP representatives, in the case at hand, “the fundamental pillars of Constitutional Environmental Law were neglected — the principles of prevention and precaution — and, consequently, the infraconstitutional rules that seek their validity grounds, whose violation stains the licensing process.”

Source: Conjur

Click here to read the original article: https://www.conjur.com.br/2024-fev-20/juiz-autoriza-operacao-de-navio-bomba-no-porto-de-santos-e-mp-recorre/

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