Environmental licensing in the State of Minas Gerais is governed mainly by State Law No. 21,972/2016, which established the State Environmental and Water Resources System (Sisema), and by State Decree No. 44,844/2008, which establishes general environmental licensing standards and the procedure to be followed in administrative processes for supervision and application of penalties.

According to state legislation, it is the responsibility of the State Council for Environmental Policy (Copam), among other duties, to approve regulations regarding licensing and permits for environmental intervention, including the categorization of activities and undertakings, taking into account the criteria of location, site, potential for pollution, and the nature of the activity or enterprise. Usually, Copam exercises its regulatory duties through normative and regulatory resolutions, which set forth the criteria and specificities applicable to environmental licensing in the State of Minas Gerais.

Considering the general provisions set forth in state legislation, Normative Resolution No. 74/2004 emphasized the "criteria for classification, according to size and pollution potential, of enterprises and environment-modifying activities that may be authorized or receive environmental licensing at the state level." Through the combination of specific information, the norm used to be for a long time the main regulation governing the activities and undertakings subject to environmental licensing at the state level.

However, Normative Resolution No. 217/2017, published in the Official Gazette of Minas Gerais on December 8, 2017, in addition to bringing in innovations to the environmental licensing process, by establishing criteria for definition of the licensing modalities applicable and reviewing the classification of projects and activities that use environmental resources in the State of Minas Gerais, revokes the entire Normative Resolution No. 74/2004 and 50 more resolutions of Copam.

The new normative resolution will come into force only 60 days after its publication in the Official Gazette, not only with norms applicable to new licenses, but also with rules of transition and propositions for existing cases.

Among the innovations brought in by the normative resolution, three possible environmental licensing modalities must be highlighted: (i) Three-phase Environmental Licensing (LAT), in which the Preliminary License (LP), the Installation License (LI), and the Operating License (LO) are granted in successive stages; (ii) Concomitant Environmental Licensing (LAC), in which the same steps for the LAT are considered, but with the possibility of concomitant issuance of a license comprising two or more stages, as provided for in State Law No. 21,972/2016; and (iii) Simplified Environmental Licensing (LAS), similar to the formerly existing Environmental Authorization for Operation (AAF),carried out in a single step by means of electronic registration of information related to the activity or the enterprise with the competent body, or by the submission of a Simplified Environmental Report (RAS).

With the creation of the LAS, the AAF ceases to exist. The difference between the two procedures relates primarily to the information and documents to be submitted by the developer to formalize its licensing process. While for the AAF the developer needed to proceed with a registration accompanied by a Statement of Responsibility and the respective Technical Responsibility Note (ART), the LAS requires the completion of an electronic registration of information or the submission of a RAS.

In addition, the new Normative Resolution regulates corrective licensing procedures, applicable to cases in which the installation and/or operation of undertakings and activities, even in the event of expansion, were initiated without prior licensing.

Pursuant to Normative Resolution No. 217/2017, the assessment on the type of licensing procedure to be followed will take into account the specific characteristics of the activity or undertaking, in light of the list attached to the norm, in addition to locational criteria for classification and other restriction/prohibition factors. Issues such as location in certain categories of conservation units, areas with high incidence of caves, or areas in formally established ecological corridors are considered.

Restriction or prohibitions factors, in turn, may rise due to situations already prescribed in current legislation. Indeed, due to the need for greater control and/or possible occurrence of environmental damages, the occurrence of certain situations may entail restrictions/prohibitions and will be analyzed more carefully in the course of the licensing process. Among them, restrictions/prohibitions applicable to intervention in permanent preservation areas, airport security areas, in the Atlantic Forest biome, areas containing rivers of permanent preservation, indigenous and quilombola lands, stand out.

Normative Resolution No. 217/2017 also innovates by expressly prohibiting the fragmentation of the environmental licensing, which might entail the application of sanctions (Article 11). Even though the public authorities and agencies already used to question such practice - since it jeopardizes the proper analysis of the environmental impacts of an enterprise - until then such questioning was based on an interpretative construction of the environmental legislation and not on express and specific norms on the subject. In practice, the express prohibition may prevent the spin-off of ventures in several phases or stages, used as a strategy for avoiding an Environmental Impact Study and Environmental Impact Report (EIA/RIMA), and even in an attempt to accelerate the issuance of licenses.

Finally, in accordance with the rules of transition set forth in Normative Resolution No. 217/2017: (i) the processes for licensing activities that are now exempted will be declared extinct and shelved; (ii) licenses and AAFs issued for activities that are now exempted from environmental licensing will be revoked; and (iii) the issued AAFs will be converted into Simplified Environmental Licenses, provided that all the documentation required by the licensing body is submitted. It should be noted, however, that the new normative resolution authorizes the issuance of AAFs until the LAS procedure is duly implemented.

The new characterization of size and polluting potential, as well as the criteria of location and the factors of restriction or prohibition will be considered for licensing processes in which the license (whether or not corrective) and AAF have not yet been issued by the competent body. For activities licensed before the new normative resolution comes into force, the new classifications will only take effect upon renewal of the licenses, and the licensing body will be charged with carrying out the appropriate adjustments.

It is worth mentioning that, despite bringing in more specifications, Normative Resolution No. 217/2017 sets forth certain provisions that aim to maintain or even extend the discretion of the environmental body within the scope of the licensing process, in line with what is proposed in Draft Law (PL) No. 3,729/2004, debated at the federal level and commonly known as the draft of the General Law of Environmental Licensing. For example, the Normative Resolution No. 217/2017 contains provisions that enable the environmental body to (as long a proper justification is made): (i) determine the licensing modality that should be carried out, regardless of the preliminary classification of the activity (Article 8, paragraph 5); and (ii) request other studies deemed necessary, in addition to those provided for in the norm, for correct identification of environmental impacts (article 17, paragraph 6).

On the other hand, the resolution innovates by bringing in a fairly important and beneficial provision for developers. Article 29 reinforces the constitutional right to an adversarial proceeding and enables the licensing party to question and request the exclusion or modification of a certain condition established in the environmental licensing process, based on supervening facts or on technical justifications that demonstrate why the total or partial compliance with such condition would be impossible.

In view of such innovations, the Normative Resolution No. 217/2017 not only gains a prominent role in the environmental legal framework of the State of Minas Gerais, but also reflects a new trend at the national level. The institutionalization of concurrent and simplified licensing by electronic registration, the express mention of the possibility of adversarial proceedings in relation to constraints and the increased scrutiny in relation to fragmentation of environmental licensing can be pointed out as relevant changes. They reveal the consolidation of some practices that were already being adopted without a legal framework that would give them legal certainty, as well as the desire of entrepreneurs and the government for a faster and fairer environmental licensing process.