There is one environmental liability that never appears on a balance sheet, triggers no notification and halts no operation: the set of licence conditions whose compliance was never fully documented. It stays invisible while the licence is valid — and becomes the main obstacle precisely at the two moments when the company has least time: renewal and due diligence.
Why this is a management problem, not a question of intent
In most cases we examine, the obligation was met. What does not exist is organised evidence that it was. Monitoring programmes run by successive consultancies, reports filed electronically but never archived internally, offset measures implemented by a department other than the one responsible for the licence: the result is a scattered record that nobody can reconstruct in thirty days.
Renewal of an operating licence must be requested at least 120 days in advance under CONAMA Resolution 237/1997. Companies that begin surveying what has been done only at that point reach the filing with gaps that can be explained — but not evidenced.
A condition met without archived evidence is, in an administrative process, a condition not met.
The effect on a transaction
In mergers and acquisitions, the buyer does not assess the seller’s intent: it assesses documented risk. Conditions without systematic evidence become findings in the due diligence report, and findings become price retention, additional guarantees or a specific indemnity clause. The discount is calculated on the worst-case scenario, because that is the only one that can be demonstrated.
A control that fits in a spreadsheet
The solution is not sophisticated. It is a single conditions matrix, continuously updated, under named responsibility — rather than the periodic reconstruction of a history that has already been lost.
Companies that keep this control arrive at renewal with a file. The rest arrive with an explanation. The difference between the two is usually measured in months of process and in percentage points of a transaction value.
Zilto Bernardi Freitas
Nearly three decades in Environmental Law from both sides of the table: Superintendent of IBAMA in Rio de Janeiro, municipal Secretary of Environment and senior permitting adviser to Petrobras, Transpetro and Shell.
Full profile→Informative content, produced for institutional communication purposes under CFOAB Rule 205/2021. It does not constitute legal advice and does not replace analysis of the specific case.
