The City of Buenos Aires ruled on the Environmental Compensation Fund

Law No 3,341, published in the Official Gazette on January 27, 2010, created the “Environmental Compensation Fund” (“ECF”) of the City of Buenos Aires, within the provisions of Section 34 of the General Environmental Act (Law No 25,675).

By means of this new regulation, the City of Buenos Aires complies with the obligation to constitute the ECF as set forth in the General Environmental Act, in order to guarantee the quality of the environment, the prevention and mitigation of harmful or hazardous effects upon the environment, the remediation of environmental emergencies, and the protection, preservation, conservation or compensation of ecological systems as well as the environment.

As provided by this regulation, the priorities of the ECF are to:

a.          Bear the capital expenses of restoration or mitigation actions and works regarding calamities caused by collective environmental damage, in cases in which those initially responsible are insolvent or unidentifiable;

b.          Compensate environmental damage through actions or works ensuring the improvement of the environment and to represent social values for the population of the affected area.

In this regard, the new regulation provides that the Enforcement Authority shall administrate the ECF, whose funds must be deposited into a special account in the Banco de la Ciudad de Buenos Aires.

As for the ECF’s integration, the Law provides that it shall be constituted by the amounts collected as:

a.          fines, duties and other taxes and allowances set forth through special laws;

b.          fines, duties and other taxes and allowances arising from the enforcement of national environmental regulations within the City of Buenos Aires, pursuant to the agreements entered into by and between the City of Buenos Aires and the Federal Government to such end;

c.          amounts set forth in concept of environmental damages, accessory to fines provided in the sub-sections above, as set forth by special regulations;

d.          compensations imposed by court order due to collective environmental damage;

e.          resources arising from the execution of agreements;

f.          proceeds of the sale of publications; and

g.          subsidies, donations or legacies.

Lastly, the Law introduces a section which provides that the Enforcement Authority will draft an annual report on the administration of the Fund, which shall be remitted to the Ecological Commission of the House of Representatives for its consideration.

This Law is still pending regulation by the Executive Branch.

Nevertheless, it is worth mentioning that through this Law, the City of Buenos Aires has filled a legal vacuum which, to date, had been frequently held as an argument to justify the lack of payment to the ECF of the amounts imposed in court, on the grounds of the lack of regulation of Section 34 of the General Environmental Act, both by the Federal Government and by every jurisdiction through their specific laws.