Over the last few years, the state of São Paulo has adopted several measures to restrain the practice of field burning – traditional agropastoral techniques in which a vegetation is set on fire to clean off the site – in areas of sugarcane cultivation. In 2017, for example, the Greener Ethanol Protocol (Protocolo Etanol Mais Verde) was executed between the Environmental Agency of the State of São Paulo (Cetesb) and the sugar-energy sector. One of its technical directives is the elimination of the use of fire as a pre-harvest agricultural method for the processing of sugarcane in certified areas. The aim is to reduce greenhouse gas emissions, protect riparian vegetation and headwaters, and stimulate the adoption of good practices for soil conservation.

Recently, on February 11, 2021, the 2^nd Chamber Reserved for the Environment of the Court of Justice of the State of São Paulo (TJSP) approved the extrajudicial agreement executed between Cetesb and the sugar-alcohol sector, represented by the Sugarcane Agroindustry Union of the State of São Paulo (Unica) and the Organization of Associations of Sugarcane Producers of Brazil (Orplana).

The agreement, which represents a pioneering initiative of Cetesb, aims to address the environmental debts arising from the issuance of Infraction Notices with the imposition of fine (INs), related to infractions arising from fires in sugarcane cultivation areas of the state of São Paulo: "The object of this Extrajudicial Agreement is to formally continue the settlement of pending debts that have not been registered in Active Debt arising from Infraction Notice with the Imposition of Fine Penalty issued due to fires in areas of sugarcane cultivation which have been issued until 31.12.2019." According to environmental legislation, forest fire is considered as every fire that uncontrollably advances on vegetation.

The settlement negotiations were carried out due to the various ongoing lawsuits questioning the validity of INs related to fires in the cultivation areas. The most recent rulings from TJSP indicate a trend of alteration in the understanding relating to the INs issued by Cetesb, and the Court has repeatedly passed decisions stressing the absence of a chain of causation between the conduct of the defendants (owners and possessors of the areas and even sugarcane mills) and the occurrence of fires in cultivation areas.

Therefore, in order to solve the assorted ongoing judicial demands and the controversy over the INs related to fires in the sugarcane cultivation areas, Cetesb proposed the execution of the agreement, aiming to give the opportunity to those who had been fined to settle the debts arising from the INs issued until December 31, 2019, provided that they are not yet enrolled in active debt.

Amongst the most relevant obligations of the agreement there are:

• the obligation to pay the amount of the fine in a single quota or in up to 18 monthly installments;

• the waiver of filing any appeals in the administrative proceedings before Cetesb; and

• the discontinuance of the lawsuit in which the validity of the INs issued by Cetesb is discussed.

At the same time, Cetesb is committed to express its agreement with the withdrawal of lawsuits filed by the entrepreneurs.

If the interested party decides to pay the debt in a single quota, the discount applied on the corrected amount of the debt is 75%. If the party decides to pay the amount in installments, a 50% discount is applied on the corrected amount of the debit.

In a video presentation of the context and provisions of the agreement made available by Cetesb on March 17, 2021, additional details were disclosed on the developments of the agreement, amongst them, we highlight that the execution of the agreement: (i) will not be considered for the purpose of ascertaining recurrence in an administrative infraction, since new parameters have been adopted for the year of 2020; and (ii) does not constitute a confession to committing the alleged offence.

The agreement and the discount granted by the environmental agency do not imply the waiver of any obligation to recover environmentally degraded areas. Cetesb also reported that, as of 2020, the applicable procedure for identifying the chain of causation related to fires will be based on different parameters, based on Cetesb's Board Decision No. 29/20, in consonance with the modification of the understanding expressed by the TJSP in recent trials.

Cetesb's change of stance ensures greater legal certainty and demonstrates a commitment to the sugar-alcohol sector, which plays an important role in the climate change agenda. In the future, the agreement could even be used as a case of success to guide and support the drafting of new agreements between environmental agencies and other economic sectors that also present a significant number of ongoing legal disputes to discuss penalties applied in the administrative sphere.