Throughout my life as an executive and consultant, I was approached several times by CEOs and foreign investors (and Brazilian too) completely lost while trying to understand the mechanisms of functioning of an environmental licensing agency in Brazil. At any governmental level. “Talk to their boss! Let’s schedule a meeting with the President / Governor / Mayor to resolve this matter once and forever!” they say. Whenever this happened, I had to show them a presentation I prepared especially for these occasions. It graphically describes the points listed below.
- The President, the Governor and the Mayor are elected office holders. Top level in the public administration, they believe in command and hierarchy. They have the power to dismiss (and sometimes they do) their immediate subordinates, who are entitled in commissioned positions. Once lower levels of decision exist, they are less subject to be prosecuted by the Public Attorneys. Focused on development, they usually have the mindset that the environmental permit should be granted, and that it is just one additional step in the installation process of a venture. For these reasons, they are more able and inclined to understand the language of business.
- The Minister and Officers for the Environment, in general, follow the line of his or her boss. They usually have in mind that they should grant the environmental license, since it does not cause major crisis with the press, or legal disputes in Court. More technical than their political leaders, they will seek to make licensing roll, ensuring the shortest time possible, protecting the interests of the government and trying not to put their subordinates in risk.
- The President of the Licensing Agency and its Director of Licensing are strongly pressured by the upper hierarchy, as they hold positions of political statement. They may be dismissed of their function. On the other hand, they are rather subjected to the pressure from the media and prosecutors. They are at personal risk of criminal prosecution involving their decisions on licensing. In a way, they understand they must grant the environmental license according to the interest of the Government, but they take strong care to preserve themselves. At the same time they suffer pressure from the upper hierarchy, they cannot disregard the technical opinion of their teams, over which they haven’t full control. The most charismatic ones influence the opinion of their teams. However, they do not have the authority to simply ignore a technical report produced by any member of their teams.
- Technical coordinators and teams that analyze the previous environmental impact studies are career employees hired after a public exam. They are granted with functional stability, i.e., they cannot be fired – unless in cases of proven misconduct or in a few instances in which the dismissal is carried out “for the sake of public administration”. This stability gives them technical independence, practically disengaging them from the hierarchy. If they are pressured by bosses to change their technical advice, they may report this to the prosecutors, with the consequent risks for their chiefs. Managers usually do not confront subordinates. There is a rule in the government: “the subordinate of today can be the boss of tomorrow”… The mindset of this group is, therefore, to give assent only if everything is perfect, all information available, all impacts assessed and mitigated – which sometimes is not the practice among entrepreneurs.
- The prosecutor of the Public Attorney Office is fully independent, and oversees with magnifying glass the licensing of all large ventures.
Given this situation, what can I recommend to my clients? First, give up the “pressure roller” approach. If you ask straight for the intervention of the “Almighty”, he or she will put top-down pressure, and say to you that everything is under control. But any pressure on the Head of Government, on the Environmental Minister or Officer or on the President of the Licensing Agency will not have the power to define or expedite the issuance of an Environmental Permit. The recipe for the success is based on an adequate professional relationship with the Licensing Agency technical teams, who evaluates the environmental studies. These technicians need to be well informed (and to be confident and comfortable with the information) about the project, its impacts and the efficiency of installed controls. Ultimately they are personally accountable on guiding licensing process to an “yes” or “no”.
Current “turn-key” type of contracts (in which the project and the solutions vary from supplier to supplier participating in a bidding process, and are defined only after the hire) are driving permits to be requested prior to defining what will be built, and – in some worse cases – even where! “Environmental impact” is the effect of the implementation of a defined set of objects over a particular site. By changing what will be built or the implantation site, the impacts will be different! I have always recommended that the environmental studies necessary to request Provisional License (LP) are carried out only after a certain stage of maturity of the project (what we might call “advanced conceptual design”), when location and some fundamental definitions on technology have reached a freezing point. Minor changes may occur, and they will be addressed in studies preceding the Installation License (LI), the second stage of the environmental licensing. But conceptual or geographic radical changes do not fit anymore. In case of occurring, the entrepreneur must understand that licensing returns to the first step. It is good to remember: the more detailed the design, the easier to get a license for it.
Finally, I recommend you never put pressure on the top levels to expedite the licensing process while the project is under review by the technical staff of the Licensing Agency. At this stage, the entrepreneur and their consultants can (and shall) put themselves at the disposal of the technical group, to provide clarification or supplementary information. This availability helps analysis. The pressure, however, can lead the technician of the Licensing Agency to request additional data, simply to procrastinate, or even to decide by radically rejecting the license. Some kind of pressure can only be put to solve bureaucracy bottlenecks, only after the completion of the technical assessment of the design and the environmental studies. In this case, starting with lower levels and gradually rising up. After all, would you like if someone complains on you to your boss? Following this line improves the chances of licensing, in less time and with the best available legal certainty.