Unenforceability Of Registration By Non-Operator Concessionaires Before IBAMA's Federal Technical Registry And Payment Of The Environmental Control And Inspection Fee (TCFA)

The Brazilian Institute of Environment and Renewable Natural Resources ("IBAMA") Normative Ruling No. 6/2013, recently amended by the IBAMA Normative Rulings Nos. 11 and 12/2018, establishes that individuals and legal entities that are engaged in the performance of potentially polluting activities as well as users of environmental resources, including drilling wells and oil and natural gas production, in accordance with Annex I - Chart of Potentially Polluting Activities and Natural Resource Users, are obligated to register with the Federal Technical Registry ("CTF"). In addition, the individual or legal entity involved in the potentially polluting activity, according to Article 17-C of Federal Law No. 6,938/1981, amended by the Federal Law No. 10.165/2000, is subject to payment of the Environmental Control and Inspection Fee ("TCFA").

With regard to the activity of oil and natural gas exploration and production, it is necessary to evaluate the status of "operator" and "non-operator" for the purpose of enforcing registration with the CTF and consequent payment of the TCFA. The drafting of the concession agreements signed with the National Agency of Oil, Natural Gas and Biofuels ("ANP") determines that the operator is responsible for the conducting and execution of all operations and activities provided for in the concession agreement. It is indeed true that the environmental license for the exploration and production of oil and natural gas is always owned by the concession operator.

Therefore, for all intents and purposes, the operator concessionaire is the one who effectively carries out the potentially polluting activity, which is why the registration before the CTF and the consequent quarterly payment of the TCFA is required. However, and according to what is identified by market practice, the non-operator company also decides to carry out the registration before the CTF, which entails the issuance and collection of the TCFA. However, the non-operator companies do not effectively engage in the potentially polluting activity, but only enters into the Joint Operating Agreement ("JOA") for the division of the high costs involved in the exploratory activity and the resulting legal responsibilities.

For this reason, the required registration before the CTF and the consequent payment of the TCFA by the non-operator concessionaires would not be applicable, given that the potentially polluting activity allegedly practiced by both operator and...