CHANGES IN NATIONAL DAM SAFETY POLICY

On October 1st, 2020, Federal Law No. 14,066 was published, which substantially altered the National Dam Safety Policy (Federal Law No. 12,334/2010), especially regarding  (i) the classification of risk and potential damage associated with dams, (ii) the preparation of the Dam Safety Plan, (iii) preparation of the Action and Emergency Plan, (iv) new administrative infractions and penalties related to non-compliance with the provisions of the PNSB (Política Nacional de Segurança de Barragens, in Portuguese) and (v) the requirement of non-cumulative presentation of bail, insurance, warranty, or other real or financial guarantee to repair damage to human lives, environment and public property. Find below a summary of the main changes.

I. Classification of the dams
National Dam Safety Policy (PNSB, in Portuguese) establishes, in its article 7, criteria for the classification of risks and potential damage associated with dams. This classification is important in order to support the Dam Safety Plan and determine the need for the submission of an Action and Emergency Plan (Plano de Ação e Emergência – PAE, in Portuguese).

Law No. 14.066/2020 includes, on item I of article 7, the criteria “construction method” and “enterprise’s age” as determinants for the assessment of a dam’s risk classification, in addition to the criteria that were already previously required by legislation, in special: technical characteristics, state of conservation and compliance with the Safety Plan.

II. Dam Safety Plan
The minimum content of the Dam Safety Plan (Plano de Segurança de Barragens, in Portuguese) is established by Article 8 of the PNSB. Even more detailed regulation is Ordinance DNPM No. 70.389/2017, which, in its Annex II, details of the necessary content in each of the annexes of the PSB.

Recently edited Law No. 14.066/2020 added some clauses to Article 8, providing a minimum content to all Security Plans, as follows:
“X – identification and evaluation of risks, with the definition of the hypotheses and possible scenarios of accidents or disasters;
XI – flood map, considered the worst case scenario identified;
XII – identification and technical data of the structures, facilities and monitoring equipment of the dam”.

The conduction of these studies was not mandatory out of the scope of the Action and Emergency Plan. However, with the publication of the amendments to the PNSB, they will become mandatory even for dams whose PAEs were not required by previous legislation.

Another important aspect is that the legislative changes expressly determine that the inspection agencies must establish deadlines for the implementation of changes resulting from the Periodic Dam Safety Review and the Regular and Special Inspection Reports, according to paragraphs 4 and 3, added to articles 9 and 10, respectively.

III. Action and Emergency Plan

The Action and Emergency Plan is the document provided for in articles 8, II and 11 of the PNSB. Previously, the PAE was required for dams classified with a high Associated Potential Damage – DPA (Dano Potencial Associado, in Portuguese) or those with medium DPA, only when the item “existence of population downstream” or “environmental impact” reached 10 points in the matrix presented by Annex V of Ordinance DNPM 70389/2017.

However, due to the changes introduced by Law 14.066/2020, the PAE becomes mandatory (i) to all dams with medium and high DPA (item I, Article 11), (ii) all dams classified as of high risk ones, according to the criteria of the supervisory agency (item II, Article 11) and (iii) all mining tailings dams, regardless of their risk  classification or potential damage associated (sole paragraph, Article 11).

In addition to expanding the requirement of the Action and Emergency Plan, the Law also determines new responsibilities for the entrepreneur under the PAE:

(i) to provide training and disclosure programs for all those involved and the
communities potentially affected, with periodic simulated exercises;
(ii) to determine the attributions and responsibilities of those involved and the drive
flowchart;
(iii) to define specific measures, in articulation with public authorities, to rescue affected people and animals, to mitigate environmental impacts, to ensure the supply of drinking water and to rescue and safeguard  the cultural heritage;
(iv) to delimitate the Self-rescue Zone (ZAS) and the Secondary Security Zone (ZSS),
from the flood map referred to in subsection XI, caput, art. 8 of this Law;
(v)  to register and update the mapping of the existing population in ZAS, including identification of social vulnerabilities;
(vi) to plan the setup of a sound system or other technological solution of greater
effectiveness in  case of an alert or emergency, with a range defined by the inspection
agency;
(vii) to plan the establishment of escape routes and meeting points, with the respective signs, among others.

Among the changes brought by Law No. 14.066/2020, the PAE must also be made available at the entrepreneur’s website, in digital media, and, in paper, at the enterprise, protection and civil defence agencies of the municipalities inserted in the flood map. It should also be uploaded to the National Information System on Dam Safety.

IV. Administrative infractions and penalties
Law No. 14.066/2020 added to the National Dam Safety Policy Chapter V-A – Infringements and Sanctions, through which the entrepreneur is held administratively liable if fail to comply with any of the obligations established by the legislation, subject to penalties such as a warning, activity/construction embargo, demolition, partial or total suspension of activities, seizure of ores, goods and equipment, forfeiture of titles, rights restrictive sanctions and simple or daily fines.

The fine may vary from R$ 2,000.00 (two thousand reais) to R$ 1,000,000,000.00 (one billion reais), according to the severity of the infraction.
Another important point provided by the new law is that the infractions arising from the PNSB and its regulations will be investigated in autonomous administrative processes, with their own deadlines.

V. Requirement for financial or real guarantees.

Finally, among the changes to the PNSB, we highlight the inclusion of paragraph 2 in Article 17, which establishes the obligations of the entrepreneur to be required by the inspection agency to provide financial or real guarantees.

As of October 1st, 2020, the supervisory agency may require entrepreneurs who operate (i) dams for mining or industrial or nuclear waste classified as medium and high risk or with medium and high DPA and (ii) dams for the accumulation of water for hydroelectric exploitation purposes classified as high risk ones, to present a bond, insurance, warranty or other real or financial guarantee that may cover the eventual need to repair any damage to human life, environment and public property.

Our environmental and sustainability team is available for further clarification.