University of Miami International and Comparative Law Review


Bianca Zambão


Due to an emerging Brazilian doctrine of environmental liability, lenders now face the prospect of lawsuits that seek remediation of, or compensation for, environmental damages resulting from their borrowers' activities. Unprecedented judicial decisions (based on a strict, joint and several environmental liability for lenders) broad standing, and ongoing initiatives of the government portray financial institutions as the best target to pursue environmental protection in the country. That scenario, however, may represent a detour from the imperative improving the functionality of the public administration. This article examines how legal actors are shaping Brazil's environmental law enforcement and the extent to which it affects financial institutions, and also the grounds where the lender environmental liability scheme applied in the United States was tailored to sound banking practices. This article concludes that placing lenders as substitutes for the public administration should not be misunderstood as consistent with a modern business model based on accountability, and will impose political and economic costs on the sustainable development of the country. This article also suggests practices that might be employed to enhance deals in Brazil, but in a safer manner for lenders.