Federal Decree No. 9,177/2017: a step towards greater compliance with waste regulations

In Brazil, Federal Law No. 12,305/2010 establishes the National Solid Waste Policy (NSWP). It requires manufacturers, importers, distributors and sellers of certain products and packaging to take back and recover/dispose of the products and/or packaging they place on the market at end of life in an environmentally sound manner. Following the NSWP terminology, take-back and recovery/disposal mandates are known as ‘reverse logistics’.

The definition of how reverse logistics systems are to be structured and operationalised for each product or packaging group may occur by state-issued regulations or agreements concluded by manufacturers, importers, distributors and sellers, on the one hand, and the government, on the other hand. Said agreements are called ‘sectoral agreements’.

So far, reverse logistics systems have been established by either regulations or sectoral agreements for pesticides and their packaging, batteries, tyres, lubricants and their packaging, lamps and packaging in general. Sectoral agreements are being negotiated for electric and electronic equipment and medicines.

Reverse logistics systems are usually implemented collectively as a means of generating scale and thus reducing costs. Collectivisation means that manufacturers, importers, distributors and sellers fulfil their obligation together, regardless of which individual manufacturer, importer, distributor or seller has placed the product or packaging on the market.

A particular problem that has arisen in the implementation of reverse logistics in Brazil – as it has worldwide – is that of free riding: those not fulfilling their obligations under the NSWP have competitive advantage over compliant companies. In relation to those products and packaging for which reverse logistics systems have been introduced by sectoral agreements, it is particularly difficult to tackle free riding because sectoral agreements are contracts and therefore not legally binding upon non-signatories.

In order to ensure greater equality in terms of compliance with the NSWP, Federal Decree No. 9,177/2017 has been enacted. It requires manufacturers, importers, distributors and sellers who are obliged by the NSWP to implement reverse logistics systems but have nonetheless not entered into sectoral agreements yet to fulfil their take-back and recovery/disposal obligations on the same terms as the signatories to those agreements. In other words, non-signatories must meet the same obligations that sectoral agreements impose on signatories.

Federal Decree No. 9,177/2017 calls on federal, state and municipal environmental authorities to enforce the obligations stipulated in sectoral agreements. In case of non-compliance, the penalties provided for in the environmental legislation in force shall be imposed on both signatories and non-signatories.

This is another update on Brazilian waste law from Felsberg’s Department of Environment and Sustainability.

Contact: fabriciosoler@felsberg.com.br | tassocipriano@felsberg.com.br

FELSBERG ADVOGADOS

 This article is intended exclusively to provide information and does not contain any opinion, recommendation or legal advice from Felsberg Advogados in relation to the issues addressed.