The new environmental impact assessment in the LGEEPA proposal

Executive Summary:

The LGEEPA proposal will require companies' studies to evaluate entire ecological regions (not just the project site) and will increase investment costs by requiring financial compensation for unavoidable damage and raising the maximum fine to nearly 880 million pesos for illegal construction.

Introduction

As has already been discussed in previous legal updates, the head of the Federal Executive has presented an initiative to issue a new General Law of Ecological Balance and Environmental Protection (the "Marriage Proposal

The proposed legislation would bring significant changes to the environmental impact assessment process, incorporating new obligations, criteria, and guidelines. This note compares the environmental impact provisions of the General Law of Ecological Balance and Environmental Protection (“LGEEPA”) and the proposed legislation.

1. More robust environmental diagnosis.

The proposal would change the focus of the Environmental Impact Assessment (EIA). Currently, the EIA primarily focuses on describing the environment where a project is planned, the ecosystems that could be affected, and the measures to prevent or reduce its impacts. In contrast, the proposal seeks to make the EIA a more comprehensive environmental assessment, one that also considers the social and economic factors of the area.

To this end, the Proposal requires that the Environmental Impact Assessment (EIA) delimit, describe, characterize, and diagnose the ecological region where the project is intended to be located. This means that the assessment should not be limited to the property or the exact point where the construction will take place, but should analyze a broader environment.

Furthermore, the Proposal adopts a broader vision of the project's ecosystem. The Environmental Impact Assessment (EIA) would no longer be limited to identifying flora, fauna, soil, water, or nearby communities, but would also need to explain how these elements interact and how they might be affected by the construction or activity. In practical terms, this would raise the technical level of environmental studies, as the assessment would shift from a general description of the site to a more comprehensive analysis of the environment in which the project is situated.

Another significant change is that the Environmental Impact Assessment (EIA) would have to identify existing environmental problems in the area, in addition to the project's impacts. This means that the authority would not evaluate the project as if it were being developed in an isolated space, but rather considering the region's pre-existing environmental conditions, such as environmental degradation, pressure on water resources, pollution, loss of vegetation, habitat fragmentation, or other existing problems.

In that sense, the Proposal could make the environmental impact assessment stricter, because it would require companies or developers to justify their projects not only in relation to their direct impacts, but also in relation to the actual environmental state of the area where they intend to develop them.

Finally, the new Environmental Impact Assessment (EIA) would emphasize the cumulative impacts of the project. This means that the assessment would not be limited to the direct effects of the construction or activity, but would also have to consider the impacts associated with the inputs, services, raw materials, suppliers, emissions, discharges, and waste that are part of its operation. In practical terms, the project would have to be analyzed within a broader context, considering how its impacts add to the existing environmental conditions in the area.

2. New prevention, mitigation, compensation and restoration measures.

The proposal would also change the types of measures that can be required within an Environmental Impact Assessment (EIA). Currently, the EIA focuses primarily on explaining what the project will do to avoid or reduce its negative environmental impacts. In contrast, the proposal more clearly incorporates the concept of offsetting environmental impacts that cannot be completely avoided or reduced.

In other words, the authority could require the project not only to reduce its environmental damage, but also to contribute to repairing, restoring, or compensating for the impacts it generates. Environmental compensation could include various actions, such as restoring ecosystems, remediating affected sites, rehabilitating degraded areas, or implementing measures related to climate change adaptation or mitigation.

In practical terms, this could make the Environmental Impact Assessment (EIA) more demanding and costly. Companies or developers would have to plan more comprehensive and justifiable environmental measures from the outset, including potential restoration, rehabilitation, or compensation costs.

3. Regularization of projects already started.

In cases where a project has illegally commenced without prior environmental impact authorization, the requirements of the Environmental Impact Assessment (EIA) must be submitted, along with an environmental damage study identifying the damage caused and the corresponding compensatory measures. In other words, the authority will not only evaluate whether the project can proceed, but also what environmental impacts have already occurred and how they should be addressed.

This change could make the regularization of projects more complex and costly. Companies or developers would have to demonstrate the environmental viability of the project, but also propose measures to compensate for or restore the damage already caused. This could include, for example, vegetation restoration, rehabilitation of affected areas, remediation of impacted sites, etc.

Furthermore, the Proposal clarifies that requesting regularization would not prevent inspection visits by the Environmental Prosecutor's Office; however, it is noted that the Prosecutor's Office has a period of 6 months to carry out this visit, but it is not clear whether after this period the authority could no longer sanction for the irregular works.

In practical terms, this means that starting construction without environmental impact authorization could become more expensive and risky. Although regularization would still be possible, the developer or company would be subject to greater technical burdens, compensatory measures, and inspection procedures. This last point goes hand in hand with an increase in the amount of fines, since under the Proposal the maximum environmental fine reaches $879,825,000.00.

Recommendations.

The proposal represents a significant change to the environmental impact assessment model in Mexico. If approved, projects requiring authorization in this area would have to comply with more complex and rigorous requirements. Therefore, if you are currently considering initiating an environmental impact assessment, it is advisable to begin the process as soon as possible so that the project can be evaluated in accordance with the current regulatory framework.

Furthermore, in the case of projects requiring environmental regularization, it would also be advisable to initiate the corresponding actions as soon as possible, with the aim of processing the procedure under a less strict legal framework than that provided for in the Proposal.

Finally, the fact that the Environmental Impact Assessment (EIA) may become a more technical, complex, and rigorous study should not be interpreted as an impediment to project development. Rather, it implies the need for a specialized technical and legal team capable of adequately addressing these new requirements, whose ultimate purpose is to strengthen environmental protection.