3.4 Environment
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All commercial activities related to hydrocarbon production are obliged by law to comply
with the environmental protection legislation. All constitutional, statutory and regulatory provisions concerning the environment apply in this area, as do other legal texts such as international treaties and any contractual provisions on the environment contained in the agreements between PDVSA subsidiaries and private investors (Clause 22 of the Congressional Resolution on the conditions for association agreements under profit-sharing schemes).
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3.4.1 Constitutional Provisions
Article 106 of the Venezuelan Constitution establishes that the state must protect and
conserve natural resources, which can only be exploited for the collective benefit of Venezuelans.
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3.4.2 Organic Law of the Environment
This Law is the basic framework for the protection of the environment in Venezuela. The
Law, enacted in 1976, lays down the general principles for the conservation, protection and improvement of the environment for the benefit of the quality of life. These principles have been developed by other laws and regulations.
The Law has been developed in three areas: the first concerns environmental planning;
the second, defines violations and penalties; and the third creates the national environmental
protection agencies.
Among the guiding principles of the Law are: the principle of sustainable development
as a means of achieving a balance between the right to develop and the preservation of the
environment for future generations; conservation, protection and improvement of the environment as a public utility. The Law also expressly recognizes the principles contained in international
instruments such as the Stockholm Declaration.
Lastly, the Law authorizes the Government to oversee and control activities liable to
degrade the environment which directly or indirectly pollute the air, water, sea bed, soil, subsoil, etc. In the case of energy, mining and hydrocarbon production, this control is exercised by the Ministry of Energy and Mines.
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3.4.3 Penal Law of the Environment
This Law, in force since 1992, creates environmental offenses, which are generically defined as acts that violate legal provisions on conservation, protection and improvement of the
environment, and establishes criminal sanctions for such offenses. The Law also creates a system
of precautionary measures for restitution and repair, aimed at minimizing environmental damage.
A company is guilty of an environmental offense when the act is committed by decision
of its executive bodies. Legal action in relation to environmental offenses are heard by the criminal courts.
Among the main offenses established in the Law are:
- Degradation, poisoning, pollution and other actions or activities capable of causing
damage to waters.
- Deterioration, poisoning, pollution and other activities that cause damage to lake, marine and coastal environments, including (Article 40) the act of disposal of hydrocarbons or mixtures of hydrocarbons directly into the marine environment during exploration or production, and which harm public health, marine fauna and flora and tourist development.
- Degradation, alteration, deterioration, pollution and other actions liable to cause damage to soil, topography and landscape.
- Poisoning, pollution and other actions that alter the atmosphere or the air.
- Destruction, pollution and other damage to the flora, fauna, or areas subject to special
administration.
- Activities related to the processing and mixing of toxic and dangerous waste that pollute the environment.
The penalties established in the Law are prison, confinement considers as a public utility, fines and community work. This latter penalty can be imposed instead of confinement when the judge considers it appropriate.
Accessory penalties for natural persons include: temporary disqualification from public
office or practicing a profession, publication of the sentence in the national press, obligation to destroy the substances or materials liable to damage the environment or public health, a ban on contracting with the public administration for three years, and suspension of permits.
For legal entities, penalties include fines, a ban on the pollution-causing activity for three months to three years, and in cases of serious damage closure of the establishment. Other obligations are publication of the court decision in the national press, destruction of the substances or materials liable to cause damage to the environment or to public health, ban on contracting with the Dublic administration for three years, and suspension of permits.
With respect to the statute of limitations, offenses punishable by prison terms of over
three years are time-barred five years after the offense. Offenses subject to prison terms of less than three years or confinement of over six months are barred after three years. In the case of confinement for less than six months, offenses are barred after one year. Finally, civil actions are barred after 10 years.
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3.4.4 Forest Law of Soils and Waters
This Law, in force since 1966, is intended to promote the conservation of soil and water,
and the use of natural resources and products derived from them. The Law classifies the protection of hydrographic basins, water currents and falls, national parks, natural monuments, protection zones, wilderness and forest reserves as public purposes. Consequently, the exploitation and use of these resources is subject to a concessions system controlled by the state through the Ministry of Agriculture and Livestock.
Sanctions include confinement, imprisonment and fines, depending on the seriousness
of the offense.
Soils must be used in line with their specific agrological capacity. In this respect the
Government is responsible for the classification of land, based on slope, degree of erosion, fertility of the subsoil and climatic factors. The use of the soil must always maintain its physical integrity
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3.4.5 Decree Nº 2.211 - Control of the Generation and Handling of Dangerous Waste
This regulation, effective since April 27, 1992, establishes the conditions for the generation and handling of dangerous waste to prevent harm to health and the environment.
Provisions include a list of dangerous wastes and their characteristics, which contains
some materials used in the production of hydrocarbons:
- Waste composed of mixtures and emulsions of oil and water or of hydrocarbons and
water.
- Waste from the extraction, refining and manufacture of hydrocarbons.
- Tar residues from the refining, distilling or any other pyrolitic processes.
- Waste from the treatment of industrial waste.
The Decree limits the mixtures of dangerous waste, and restricts their transport.
It also establishes a series of obligations for persons and companies that generate dangerous waste, among which are:
- Adoption of measures aimed at minimizing the quantity of waste generated in proportion to the volumes of production.
- Avoidance of mixtures of dangerous wastes incompatible with the prevention of increased danger.
- Packing of wastes in hermetic containers to minimize risk of losses and spills during
handling and transport.
- Storage of wastes in places specially adapted for the purpose.
- Submission of a report on the origin, quality, quantity, characteristics and use of dangerous wastes generated to the Regional Directorate of the Ministry of the Environment. When radioactive waste is involved the report is submitted to the Sectoral General Directorate of Nuclear Affairs of the Ministry of Energy and Mines.
Finally, imports of dangerous waste are prohibited and exports of such waste are only
permitted to countries that allow entry.
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3.4.6 Decree Nº 1.257 - Environmental Evaluation of Activities Liable to Degrade the Environment
This Decree, in effect since April 25, 1996, lays down the procedures for cases when a
prior environmental evaluation of the industrial and commercial activities capable of degrading
the environment is required.
All natural persons or public or private legal entities, interested in developing programs
and projects involving the occupation of land, must give prior notice to the Ministry of the Environment by submitting a Document of Intent, which specifies the actions liable to produce an
environmental impact.
Specifically, companies involved in the exploration and production of hydrocarbons are
required to submit an environmental impact study for the following activities:
- Exploratory drilling programs for hydrocarbons.
- Hydrocarbon production programs.
- Oil refineries and crude upgrading plants.
- Development of petrochemical complexes.
- Cryogenic complexes and any other activities that require studies according to the
technical evaluation in the document of intent, although not specified in the law.
The Ministry of Energy and Mines, the Regional Development Corporations, state governments, PDVSA and its subsidiaries, and any private investor planning activities in the area of hydrocarbons must obtain approval for occupation of the land from the Ministry of the Environment before entering into any concessions and agreements. To do this, companies complete an environmental questionnaire published by the Ministry of the Environment. This questionnaire is the basis for determining the measures needed to reduce the impact on the environment.
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3.4.7 Resolution Nº 57 of July 4, 1996 - Documentation for Environmental Evaluation of Mining Programs and Projects and for Exploration and Production of Hydrocarbons
This Resolution lists the documentation necessary for the environmental evaluation of
mining and hydrocarbon projects, in accordance with Decree Nº 1.257 mentioned above. Under
Article 16, an environmental questionnaire must be completed by companies seeking authorization for the exploration and production of hydrocarbons, or the occupation of the land for
mining.
The requirements for permission to use renewable natural resources in the exploration
and production phase of hydrocarbons, which must be included in the environmental evaluation
questionnaires, are as follows:
- Identification of the applicant, including nationality and address of the company and
the person responsible for the project.
- Description of the proposed project, including:
- name of project and the geographical areas in the concession.
- justification of the project.
- geographical location of the areas to be explored.
- area to be occupied.
- description of activity, according to the rules on environmental evaluation.
- estimated hydrocarbon potential.
- complementary or related projects, such as oil and gas pipelines, refineries,
road and port infrastructure, and supply of services.
- estimated amount of investment in the project and environmental protection
measures.
- Description of the area, including:
- list of relevant aspects of geology, climate, soil, hydrography and topography,
ecosystems, species of flora and fauna, etc.
- degree of environmental degradation.
- socio-economic characteristics of the project, with respect to the ranking of
population centers, cultural heritage, etc.
- Potential effects of the project on the physical-natural aspects of the environment.
- Proposed measures for prevention of environmental pollution.
The Resolution also lists the documentation required for processing the authorization for
use of renewable natural resources during the seismic prospecting phase, including:
- Identification of applicant, the company and the person responsible for the project.
- Description of the proposed program or project.
- Quantification of the affected natural resources, with reference to vegetation, water,
soils, etc.
- Description of the physical and natural aspects of the area, type of geographical area,
socioeconomic characteristics of the area.
- Potential effects on physical-social and socioeconomic aspects of the area.
- Proposed preventive, mitigating and corrective measures.
- Economic cost of such measures.
- Scope of the base line studies to be conducted during the seismic survey of the zone.
- Annex the other documentation indicated, including all the applications submitted by
the interested party and the authorizations obtained in relation to the project; plans of
the zone; Articles of Incorporation and bylaws of the company, etc.
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3.4.8 Decree Nº 883 of December 18, 1995 - Classification and Quality Control for Bodies of Water and Liquid Discharges or Effluents
This decree regulates the quality control in bodies of water, defined in terms of their
present and potential use. Parameters are fixed for liquid discharges and the preparation and
execution of quality control plans for each body of water, following the priorities established for the country's hydrographic basins.
In accordance with the United Nations Uniform International Industrial Classification,
this Decree regulates the following activities in the oil and hydrocarbons industry:
- production of crude oil and natural gas.
- oil refining.
- fabrication of oil products.
- transport by oil and gas pipelines.
- deposit and storage of hydrocarbons and products.
For the monitoring and control of pollution, a register of activities liable to degrade the environment must be kept. Natural persons and legal entities planning to initiate any of these activities must be recorded in the register, (unless previously registered in the register of activities liable to degrade the environment, kept by the Ministry of the Environment pursuant to Decree 1270).
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3.4.9 Decree Nº 1.400 - Regulation and Control of the Use of Water Resources and Hydrographic Basins
This decree, in force since June 10, 1996, regulates the conservation and rational use of
water resources, with the aim of balancing supply with current demand, without compromising
the possibility of satisfying the needs of future generations and improving the quality of life of the population.
The Ministry of the Environment is responsible for planning, granting of concessions and
authorizations, and other functions related to the use and conservation of water resources.
Any use of waters in the public domain must be under concession, which may be either
for payment or free of charge, depending on the circumstances. Such concessions are either
awarded in a bidding process or directly by the Ministry of the Environment.
Any use of existing water must be registered with the regional offices of the Ministry.
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3.4.10 Decree Nº 638 - Air Quality and Control of Atmospheric Pollution
This instrument, in force since April 26, 1995, regulates the control of air quality by
establishing air quality limits, emission parameters for fixed sources and air quality zones.
It also establishes a double list of emission parameters for new activities already installed. This mechanism, commonly used in comparative legislation, is designed to promote progressive environmental control and avoid the import of waste technology from other countries.
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3.4.11 Andean Decision 391
Published in the Official Gazette of the Andean Community of July 17, 1996, this
regulation creates common provisions for access to genetic resources and their derived products inthe member states of the Andean Community, in the framework of the Rio Convention on Biological Diversity.
The Decision applies to genetic resources and their products that originate in the member states. It excludes genetic and biological resources used by indigenous, Afro-American and
local communities in the member states, based on their customary practices.
All procedures for access to genetic resources require the presentation, admission, publication and approval of an application and an agreement with the respective national authority.
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