Sustainable Industry

Brazil’s Forest Code faced with continued challenges as it approaches its 10th anniversary

As rural properties become environmentally compliant, the Forest Code plays a key role to support the fight against illegal deforestation and help Brazil to fulfill its commitments undertaken under the Paris Agreement

In May 2022, Law No. 12,651/2012, also known as the Forest Code, will be celebrating its 10th anniversary. Although it is modern and is one of the strictest pieces of legislation in the world, its implementation still faces various challenges. Key issues include the urgent need to review the data reported in the Rural Environmental Registry (CAR) in order to identify overlaps with public lands, protected areas and indigenous lands.

According to the National Confederation of Industry’s Executive Manager for Environment and Sustainability Davi Bomtempo, it is essential that Brazil makes every effort to implement the Forest Code, which is an important instrument for forest conservation and for combating illegal deforestation.

“Rolling the Forest Code out is an urgent and strategic step for the country to be able to live up to its commitments under the Paris Agreement,” he says. “Environmental compliance of rural properties also helps to enhance Brazil’s reputation with its primary trade partners,” he adds.

According to the Rural Environmental Registry System (SICAR), rural properties covering nearly 5.5 million hectares overlap with protected areas, which accounts for 2% of these lands. When it comes to indigenous lands, the overlap with rural areas reaches 12.3 million hectares, i.e., 10.4% of the areas available. “This is the source of significant legal uncertainty for businesses and jeopardizes environmental conservation,” says Bomtempo.

The Annual Report on Deforestation in Brazil 2020, published by the Climate Observatory’s MapBiomas, shows that in 2019-2020 less than 1.5% of deforestation alerts were related to properties registered with the CAR, which is a reminder that implementation of this piece of legislation will help to reduce deforestation.

“A review of these areas with overlapping registry entries is urgently needed in order to fast-track environmental compliance of properties, while rehabilitating and restoring degraded areas,” adds Bomtempo.

By joining the CAR, farmers have easier access to credit and are able to access agricultural insurance and. Those farmers whose preserved area exceeds legal requirements are able to market their credits through the environmental reserve quota (CRA) with farmers from areas with a shortage of preserved areas.

Brazil’s Forest Code is unique in the world
The Forest Code is among the most discussed pieces of legislation of all times in the country. It went through a broad review process that lasted about five years and involved various segments of society; the previous code dated back to 1965. The 2012 code introduced protection of native vegetation, which is an issue of national and global relevance, in particular due to the importance of forest conservation to reduce greenhouse gas emissions.
The Code was mentioned in a 2020 study conducted by the London School of Economics and Political Science as a major initiative that contributed to the decline in deforestation in Brazil in 2004-2012.

Forestry engineer Raimundo Deusdará works as an analyst with the Brazilian Forest Service (SFB) and was in charge of the negotiations for the development of the Forest Code. He recalls the process to put together a piece of legislation that reconciled the views of all stakeholders.

“There were countless public hearings and debates, and a heated process of developing this environmental policy,” he recalls. “If politics is the art of the possible, as some authors say, the Brazilian Forest Code is the culmination of this. It was the Code of the possible, with no hard feelings, since there were no losers or winners.”

In addition, Deusdará points out that this law preserved the principles of the first law on forest conservation (dating back to 1934), including the maintenance of permanent conservation areas and legal reserves.
Improvements of this law in relation to the previous laws are: encouragement to area boundaries, sustainable forest management and combating deforestation; strong buy-in of the agricultural sector to the Rural Environmental Registry (CAR); management of environmental compliance at the state level; and payment for environmental services, which has recently been regulated.

“If the world wants the Amazon forest to receive compensation, for farmers to be compensated to keep it standing, the Forest Code does reflect this concept and principles for this mechanism to work,” says Deusdará. “The Code is extremely topical against the backdrop of climate change.”

Deusdará also describes the industrial sector as a strong driver of forestry regulations. For instance, the 1965 law regulated eucalyptus-based reforestation and helped Brazil shift from the position of importer of paper and cellulose to becoming the largest exporter of these items.

“Today we are the industry leader and holder of the best technology for mass forest production, which also contributes to carbon capture,” says Deusdará.

Government should fast-track CAR review
Of the more than 7 million entries in the Rural Environmental Registry System (SICAR), only 3% have been reviewed. According to João Adrien, head of Environmental Compliance at the SFB, land overlapping issues affect around 20% of entries, not to mention errors in the reported data – which are much more significant.

“We need to complete these reviews by December 2022, which is the time-limit for farmers to join the Environmental Compliance Program (PRA),” he says. Landowners who fail to register with the PRA may be fined for illegally removing vegetation from permanent preservation and legal reserve areas before July 22, 2008.
Mauren Lazaretti, president of the Brazilian Association of State Environmental Entities (Abema), believes that registration in the CAR was expected to be a more straightforward process. “The system is quite complex and involves multiple steps, actions, layers, and data so that it could simply become a self-reporting tool as originally proposed,” he explains.

Mauren also acts as Secretary of the Environment for the State of Mato Grosso, and says that in 2014 the state government decided to transfer CAR entries to the federal SICAR, but they decided to revert to the state system in 2016 because the local platform was able to prevent overlapping entries from being made. Mato Grosso is the state with the most CAR entries reviewed up to date – 40% of entries have been checked.

“SICAR came to the point of having overlapping entries for as many as 85% of properties, an unreasonable rate that makes no sense since this is not consistent with land-related litigations in the state,” she says.
Most states rely on the federal system for the environmental registration of rural properties. Fifteen states and the Federal District use the SICAR; five states have tailored it to their needs and only Tocantins uses a hybrid system. Another five states have their own registration system.

CAR review technology needs to enhance environmental databases
An additional challenge facing the system is that the environmental database – containing data on water sheds and types of vegetation, for instance – maintained by the Brazilian Institute of Geography and Statistics (IBGE) and used by the states is inconsistent with actual data on the ground, especially in transition zones between biomes.

In view of this, Mauren says that manual correction of entries is frequently requested by teams in the states, which are underequipped and understaffed to ramp up the review process. “This is a major bottleneck for states that have more than one biome. And we are talking about many states, such as Mato Grosso, Bahia, São Paulo, Minas Gerais, and more,” she says. “It is important to invest in the construction of reference databases with better quality and a higher degree of accuracy.”

The Ministry of Agriculture, Livestock and Food Supply (MAPA) recently launched AnalisaCAR, a streamlined review platform that uses remote sensing to verify the geographic data reported by rural landowners. The environmental status of a rural property is instantly checked for Permanent Preservation Areas, legal reserves and areas of restricted use and, where applicable, areas with surplus native vegetation.

A total of 11 states are expected to start using the system this year and another 11 by the end of next year. So far, Amapá, Paraná and the Federal District have deployed the AnalisaCAR, and Amazonas and Sergipe are in the process of implementing it.

In Mauren’s view, although the streamlined review should significantly increase the number of entries checked, it is not expected to solve the issue of lands with overlapping reports, which will require human review.
Another recent initiative is the Environmental Compliance Module, which helps farmers to become compliant with regulations. The Brazilian Forest System will use this tool to monitor forest rehabilitation on rural properties and will have information on things such as the types of species used, locations where forest recovery and compensation is being carried out, in addition to best experiences.

“With the CAR and the PRA, we started to plan this economy based on forest recovery, which will be so vital not only for the forestry adaptation of farmers, but also for supporting the country to achieve its goals under the Paris Agreement,” says Adrien.