Menu
Environmental approval is a necessary prerequisite for any major industrial or developmental activity. This approval takes the form of a Certificate of Environmental Clearance (CEC) issued by the Environmental Management Authority. Obtaining a CEC within a reasonable time frame can be an uncertain and a major hurdle for developmental activity. Unfamiliarity with the procedure also results in the process becoming inordinately delayed.
In this chapter, Gregory Pantin, Partner; and Cherie Gopie, Senior Associate in Hamel-Smith’s Dispute & Risk Management Practice Group provide the overview of the process for obtaining a CEC.
The Environmental Management Authority (“EMA”) and the Environmental Commission (the “Commission”) were established under the Environmental Management Act Chapter 35:05 of the Laws of Trinidad and Tobago (the “EMA Act”).
Subsidiary legislation under the EMA Act currently includes:
The EMA is the body responsible for managing, regulating and coordinating matters related to the environment. The environment includes all land, area beneath the land surface, atmosphere, climate, surface water, groundwater, sea, marine and coastal areas, seabed, wetlands, and natural resources within the jurisdiction of Trinidad and Tobago.
One of the EMA’s major regulatory powers is its authority and discretion to grant a Certificate of Environmental Clearance (“CEC”). This power is derived from the EMA Act and the Certificate of Environmental Clearance Rules passed thereunder. These Rules guide the assessment of small and large-scale developmental projects which may have both positive and negative environmental effects.
The Certificate of Environmental Clearance (Designated Activities) Order, 2001, as amended defines the forty-four (44) activities which require a CEC. However, not all CECs are alike, as the environmental concerns of each are project specific. Whether you are establishing, modifying, expanding, decommissioning or abandoning a project, the CEC Rules clearly lists forty-four (44) activities that by law require a CEC before these projects can begin.
During the assessment of these applications, the EMA takes into consideration foreseeable impacts which may arise out of any new or significantly modified construction, process, works or other activity as outlined by the Order. At the preliminary phase of the assessment of the proposed project, if potential significant environmental and human health impacts have been identified, the applicant may be asked to conduct an Environmental Impact Assessment (“EIA”).
Once an EIA is required, the applicant must consider all the environmental impacts of a project on baseline environmental receptors in detail, by first identifying these impacts and then by using appropriate methods to investigate and predict the extent of these impacts. An applicant is also required to document, through the EIA process, how their project’s negative impacts can be avoided as much as possible through project design. The EIA should also establish mitigation measures where impacts cannot be totally avoided. The process provides an opportunity for all stakeholders, including the public, to participate in the identification of issues of concern, practical alternatives, and opportunities to avoid or mitigate adverse impacts. At the end of the process, the findings are compiled into an EIA Report and submitted to the EMA.
Applications for CECs are usually made directly to the EMA by submission of the prescribed form together with the applicable fee. The application should include detailed information on both technical and non-technical terms, in addition to maps and illustrations that clearly describe the proposed activity.
For activities requiring the express grant of planning permission under the national legislation dealing with planning, the application must be lodged with the relevant government.
Applications are screened on both an administrative and technical level. Within ten (10) working days of receiving the application the EMA ought to acknowledge receipt of a CEC application and may:
Where the EMA determines that a CEC is required, the timeframe for a determination of whether or not to grant the CEC primarily depends on whether the EMA determines that:(a) a CEC is required but an EIA is
(a) a CEC is required but an EIA is not; or
(b) both a CEC and EIA are required.If an EIA is required for processing a CEC application for any of the designated activities
If an EIA is required for processing a CEC application for any of the designated activities, then the applicant is so notified and the process for establishing the terms of reference for the EIA begins.The EMA prepares Draft Terms of Reference (TOR) for the EIA and provides same to the applicant within twenty-one (21) working days of notification by the EMA of the requirement for the EIA. The applicant must then engage in consultations with stakeholders as may be appropriate based on the draft TOR and make any representations for amendments to the draft TOR within twenty-eight (28) working days. At the end of that period, the EMA has a further ten (10) working days to issue the final TOR which will guide the EIA.
The EMA prepares Draft Terms of Reference (TOR) for the EIA and provides same to the applicant within twenty-one (21) working days of notification by the EMA of the requirement for the EIA. The applicant must then engage in consultations with stakeholders as may be appropriate based on the draft TOR and make any representations for amendments to the draft TOR within twenty-eight (28) working days. At the end of that period, the EMA has a further ten (10) working days to issue the final TOR which will guide the EIA.
However, depending on the nature of the designated activity or activities, the time frame for a determination may also be significantly impacted by the applicant’s ability to provide requested information to the EMA. The EMA, when considering applications, is entitled to request further information which, upon each request for further information, may effectively ‘reset’ the time frame for determining the matter. Accordingly, it is best to be mindful that the time frames outlined below are not always helpful in project managing the process, particularly where other business decisions may hinge upon a determination from the EMA, even on preliminary matters such as whether or not an EIA is required. Subject to Rule 6 (1) of the CEC Rules, a determination with respect to a CEC Application will be made:
Where the Authority considers that it is unable to make a determination within the period specified above, it shall notify the applicant in writing of an extended date by which the determination would be made and the reasons for the delay.
The CEC is granted for a particular activity and so where the activity has changed a new CEC application will have to be made. It is imperative that the applicant complies with the terms and conditions of the CEC as well as any prescribed mitigation measures. The activity must begin within three years of the date of the CEC as upon expiry of this period a new application will have to be made. The CEC must also be placed in public view at the site of the activity for which it was issued.
An applicant has a right of appeal to the Environmental Commission to determinations of the EMA.
For persons other than an individual, damages for failure to comply with applicable environmental standards are capped at ten thousand dollars ($10,000.00) for each violation, and in the case of a continuing violation five thousand dollars ($5,000.00) for each day that the violation is not remedied. The intentional or reckless release of any pollutant or hazardous substance by any person is a criminal offence which carries a penalty of one hundred thousand dollars ($100,000) and imprisonment for two (2) years.
In addition to the above power of imposing sanctions, the EMA has significant powers to halt activities and projects or prevent potential violations, which may result in a violation of any environmental requirement and may even result in assessments for compensation by the Environmental Commission.
Procuring a CEC can become a protracted process whether or not the EMA requests an EIA. If no EIA is required, inadequately presented applications may result in repeated requests for further information which will extend the time frame for a determination since the 30 working day time frame for a response is counted from the date of submission of a duly completed application.
Depending on the requirements of the TOR, the applicant will need to hire one or several environmental consultants. The ability of the consultants to deliver an EIA within set timeframes and up to the EMA’s standards should be carefully considered in selecting an appropriate environmental consultant/firm. Failure by these environmental consultants to deliver the required information to the EMA can result in delays in acquiring approval since the EMA has 80 days from receipt of the complete EIA Report within which to respond.
Maximising one’s ability to achieve a determination on a CEC application requires significant preparation and collaboration on the part of the applicant with the EMA. As far as possible, an application that is prepared in a problem-solving manner and with co-operation with the EMA, may avoid an extended time loop of requests for information.
Obtaining a CEC does not mean that approval from other statutory authorities will automatically follow. The EMA Act provides that no authority can issue a permit or approval for an activity for which a CEC is required prior to the grant of such CEC. However, this does not obviate the need for approval from other regulatory authorities for any given undertaking, as approval from the relevant agencies remains a necessary pre-requisite to start up of operations.
Obtaining a CEC does not mean that approval from other statutory authorities will automatically follow. The EMA Act provides that no authority can issue a permit or approval for an activity for which a CEC is required prior to the grant of such CEC. However, this does not obviate the need for approval from other regulatory authorities for any given undertaking, as approval from the relevant agencies remains a necessary pre-requisite to start up of operations.
A lender, a bank or a financial institution that either directly provides financing to a borrower company in Trinidad and Tobago or invests in the commercial paper (bonds, notes and the like) that a Trinidad and Tobago company may issue, may wish to know whether the environmental infrastructure and standard in Trinidad and Tobago is comparable to international standards.
Generally, in addition to obtaining a CEC (as described above), there are provisions which require the issuing of permits with respect to water, air and noise pollution, the release and handling of hazardous substances and the release and treatment of waste disposal. The first point of concern for a foreign lender is that the local laws may not reflect the general international environmental standards, although there are standards such as contained in the Noise Pollutions Control Rules, Water Pollution Rules, Air Pollution rules (not yet in force), Waste Management Rules (not yet in force).
To the extent that a foreign lender’s internal policy may be to provide financing upon conditions which may include a borrower’s agreement to adhere to international environmental standards, this may be resisted since it may be a higher standard than what may strictly apply in Trinidad & Tobago. Bearing this in mind, to balance potentially two differing points of view, one may consider the hybrid of requiring the adherence to local standards and, if it is a new development, compliance with the terms of any CEC that may be granted. This may or may not be a deal breaker.
As noted above, failure to adhere to an environmental requirement, which includes applying for the various permits and certificates and adhering to the conditions upon which such permits/ certificates are granted, carries substantial fines.
A lender may need to be aware that the doctrine of lender liability does not exist as a specifically identifiable legal doctrine in Trinidad and Tobago, and as such no legislation or local case law to date specifically, treats with lender liability. It is important to note in this regard, that our legal system is based on an adoption of the English legal system and thus the common law in Trinidad and Tobago is influenced by the English common law where the doctrine of lender liability does in fact exist.
To that extent, it is possible that a foreign lender may find itself liable for a local borrowing company’s environmental liability where the lender acts as:
(i) a lead bank in a syndicated loan facility;
(ii) a shadow director of the borrower; or
(iii) a financier of the polluter or the company in breach of the applicable environmental standards.
Environmental liability can be attached to the lender under the doctrine of “direct lender liability” where a lender becomes responsible for the environmental liabilities of its client.
The issue of “direct lender liability” may arise where a lender becomes an occupier of contaminated land through the exercise of its remedies against the borrower, for example, by becoming a mortgagee in possession or foreclosing its mortgage over the land. It may also arise where the lender can be considered to be in a position where it exerts control over a borrower, for example, where it can be said that the lender has some control over the policy making (or finds himself in a position with powers akin to that of a director) or if the lender acts in a fiduciary capacity, including management involvement in the day-to-day operations of industrial or commercial facilities, which causes environmental harm, the lender may incur liability to clean up the contaminated land and to compensate 3rd parties for any loss suffered as result of the environmental harm.
The limits and standard of such liability can be gleaned from the House of Lords decision in the Cambridge Water Company Ltd v Eastern Counties Leather Plc [1994] 1 All ER 53 which stated that liability in relation to historical activities is now less likely under common law principles. The House of Lords acknowledged that it would be unjust to impose retrospective liability for historical contamination at common law. However, where the damage is not historical and liability would not be retrospective, the ruling of the case affirmed that the courts will impose strict liability where reasonably foreseeable damage is caused.
Locally the EMA Act, provides at section 71:
Where a violation of any environmental requirement has been committed by a person (other than an individual), any individual who at the time of the violation was a director, manager, supervisor, partner or other similar officer or responsible individual, or who was purporting to act in such capacity, may be found individually liable for that violation if, having regard to the nature of his functions in that capacity, the resources within his control or discretion, and his reasonable ability to prevent the violation:
(a) the violation was committed with his direct consent or connivance; or
(b) he, with knowledge, did not exercise reasonable diligence to prevent the commission of the violation.
Section 70(2) of EMA Act further provides that it is an offence for any person who knowingly or recklessly allows or undertakes any activity in designated sensitive areas, or with respect to designated sensitive species, which may have an adverse effect on the area or species so designated, which carries the fine of $100,000.00 and imprisonment for two years.
Therefore, assuming that a lender exercises some degree of control over the borrower and its decisions and policy making, for example by appointing a director on the borrower’s board, the lender may be found to be liable for the violation that was committed.
Any investor who contemplates doing business in Trinidad and Tobago should become aware of the local environmental infrastructure. An investor does not wish to find himself without the requisite consent or licence, nor does he wish to invest in a company that is not in compliance with the the country’s environmental laws.
Things To Know
Global & International
