• Brazil

Legal framework for forest management and timber trade of Brazil

Forest governance

The forest law, the Brazilian Forest Code (Law No. 4.771) has a national scope and was in force from 1965 up to 2012, when it was replaced by the Brazilian Forest Law (Law No. 12.651). The management of Brazil's forests involves different institutions at three levels of government (federal, state, and municipality). In the federal government, the forest management is under the direct responsibility of four institutions:

  • The Ministry of the Environment (MMA) is responsible for formulating forestry policies. It operates by granting power for sustainable forest production and is responsible for signing forest concession contracts.
  • The Brazilian Forestry Service (SFB) is the administrative institution of the federal public forests for the sustainable production of goods and services. It is also responsible for the generation of information, qualifications, and fostering the forest area. It was part of the Ministry of the Environment until 2019, when it was transferred to the Agriculture Ministry.
  • The Brazilian Institute of the Environment and of Renewable Natural Resources (IBAMA) is the institution responsible for environmental control and inspection, and is also responsible for licensing and environmental control of the Brazilian forests in its area of competence.
  • The Institute Chico Mendes of Conservation and Biodiversity (ICMBio) is responsible for proposing, implementing, managing, protecting, inspecting, and monitoring the Conservation Units instituted by the Federal Government.

At the state level, generally, the state departments of the environment are responsible for formulating policies and forest standards, and the state environmental institutions are responsible for licensing, controlling, and inspecting forest activities and conservation. In the municipalities that have a forest management structure, the arrangement is similar.

As the management of Brazil’s forests involves different institutions at three levels of government (federal, state, and municipality), timber importing operators should also comply with relevant and applicable legislation at federal, state and municipal level. The rules for the management of native forests are much more stringent than those for plantations. The need for an environmental license for plantation management varies from state to state.

Legal rights to harvest

Only Brazilian-based community associations, cooperatives and companies can participate in forest concessions. Timber extraction in Brazil occurs in public (forest concessions within National Forest) or private land. The licensing process for the extraction varies depending on if the forest is public or private. But, in all cases, the annual operation plan must be approved by means of a logging permit issued by the relevant state environmental agency (except for federal forests, where the permit is issued by the federal environmental agency - IBAMA).

All concessionaires must be on IBAMA’s technical register (Cadastro Técnico Federal). IBAMA also has an active database that can be consulted to find out about ‘blacklisted’ forests and companies (‘areas embargadas’). The output is a list of areas (and the managing company) where harvesting is prohibited. Maps are also available per search result.

In order to harvest from concessions in native forests, concessionaires must hold a concession contract. In order to harvest from private lands in native forests, timber companies must hold land title documents (or leasehold).

Forest managers and harvesting companies harvesting native species from planted forests must inform IBAMA or the state environment body in question about their commercial activities.

In most cases, companies harvesting from planted forests which are not considered an area of permanent conservation (PFE), do not need to have a harvesting permit, but need to declare to the authorities the purpose of exploitation when establishing the plantation (Law No. 12.651).

Taxes and fees

In Brazil, the responsible body for the collection and inspection of income tax is the Secretaria da Receita Federal do Brasil (Secretariat of the Federal Revenue of Brazil), commonly referred to as Receita Federal (RFB). The RFB has a computerized system to collect the income taxes of all statutory individuals and entities, cross-checking data between different payers and income recipients. Anyone can check if a company has any disputes with the Secretariat of the Federal Revenue of Brazil through the RFB website.

Timber harvesting activities

When harvesting in native forests, timber companies must hold an approved Sustainable Forest Management Plan (Plano de Manejo Florestal Sustentável - PMFS), an approved Annual Operational Plan (Plano Operacional Anual - POA) and an Operating Authorization (generally called Autorização de Exploração – AUTEX, except in the State of Pará, where it is called AUTEF, and in the State of Amazonas, where an Operating License – LO is required). In addition, when harvesting from concessions in native forests, concessionaires must hold a concession contract.

In terms of workers’ rights, Brazil has a broad legal framework relating to the legality of employment. The Decree Law 5452/1943 (Consolidation of the Labor Laws CLT) is the main guideline on this matter. Its Clause 41 stipulates that all workers should be registered by the company employer. Other points present workday rules, paid rest, child and woman labor, compensation, unionization, and other matters. In addition, the Ministry of Labor and Employment (MTE) have created and regularly updates a register of employers who have submitted workers to conditions analogous to that of a slave, which is then disseminated by the NGO Reporter Brazil.

For Health and Safety requirements, the authority responsible for inspections and regulations is the MTE. There is a large range of Regulating Norms (NR) that deal with the matter, with the most applicable to the forestry sector being the NR 31 (Security and Health in the Work in Agriculture, Livestock Farming, Forestry, Forest Exploitation and Aquaculture), which has the objective of aligning the planning and development of rural activities with the health and security of the workers.

Third parties’ rights

IBAMA must be informed of any applications for an environmental license for activities in the vicinity of Indigenous or Quilombola (descendants of rebelled slave communities) (Inter-ministerial administrative decree issued by the Environment Ministry under No. 419/11).  IBAMA will then consult with the entities involved. It might be necessary to prepare an EIA/RIMA (Environmental Impact Study and Report) following public consultation.

Trade and transport

The transportation of timber within Brazil requires a timber transport authorization, called Guia Florestal (“GF”, in the states of Pará and Mato Grosso) or Documento de Origem Florestal (“DOF”, in all other states). Timber should also be accompanied by a Nota Fiscal Eletrônica - a Federal digital invoice/receipt of the Brazilian revenue department, to record all sales in the country and the amount of taxes due.

DOFs are issued by IBAMA and can be used for any type of native timber product. The DOF is a computerized timber control system. It contains information about the timber’s origin, species, type of product, quantity and value of the cargo, as well as detailed transportation route. Products and sub-products are to be accompanied by the relevant DOF from the originating timber yard up to customs terminal. Sub-products such as windows, doors and furniture, and cellulose and wood paste are exempt and so do not require a DOF. The DOF is issued with an expiration date: 5 days for state road transportation, 10 days for interstate road transportation and 30 days for logs being transported by rafts. Some states have their own transportation licenses, which are integrated with the DOF system. These states are Mato Grosso, Pará and Rondônia (Guia Florestal - GF) and Minas Gerais (Guia de Controle Ambiental - GCA). Companies transporting exotic species from planted forests are not required to carry a DOF but must carry a ‘nota fiscal’ (invoice).

Guia Florestal (GFs), used in the states of Pará and Mato Grosso, are issued by SEMA (Secretaria do Ambiente e Desenvolvimento Sustentável, or State Secretariat for the Environment). They are divided into two types:

  • GF1 – authorization to transport logs, from the forest of origin to a sawmill;
  • GF3 – authorization to transport sawn or processed timber products.

GF3s are also issued when timber is exported, and in this case, must contain the name of the importer and the destination country.

All GFs have a barcode which can be used to retrieve an electronic version of the document. On the electronic version, the documents of a concession or sawmill (e.g. licenses and AUTEF/AUTEX) and sanctions against the operator can be searched on IBAMA’s services website.

All processing companies must be on IBAMA’s technical register (Cadastro Técnico Federal). IBAMA or a state environmental agency must issue a license before timber processing activities are carried out. In addition, all sawmills must be enrolled in the DOF system (or the Sisflora system, if in the states of Para and Mato Grosso). The timber processing company must complete relevant sections of the DOF (Documento de Origem Florestal).

Exportation in Brazil is also regulated by the Brazilian Federal Revenue (RFB) through the online system called SISCOMEX (Integrated Foreign Trade System). Private individuals and companies must be registered with SISCOMEX in order to perform imports or exports when the operation requires a license from SISCOMEX. This registration with SISCOMEX, is also known as RADAR (Ambiente de Registro e Rastreamento de Atuação do Intervenientes Aduaneiros).

Timber companies seeking to export timber from Brazil must provide the following:

  • Importer registration (SISCOMEX code)
  • Import claim
  • Customs declaration
  • Purchasing contract
  • Purchasing order
  • Legal transportation permits
  • Packing list
  • Invoice

Products must go through one of the two customs declaration procedures available. A simplified declaration can be used when goods do not exceed $50,000 and a full customs declaration is used when exported goods exceed this value. The simplified declaration can be done online via SISCOMEX or through paper forms. The full customs declaration must be processed online via SISCOMEX.

Customs clearance is done by means of a Declaração de Exportação - DE (export declaration), which must be formalized with up to 48 hours prior to shipment by the local IBAMA unit. The following documents are needed for a DE to be issued:

  1. Copy of the Registro de Exportação - RE (Export Registration) from SISCOMEX;
  2. Copy of the nota fiscal (Invoice);
  3. Packing list;
  4. Transportation Authorization;

Export authorization for wood products and sub-products (e.g. CITES), as appropriate.