Do increasing natural disasters mean more regulations?

As global warming persists across the world, we’re seeing the myriad ways that climate change is impacting the planet much more clearly. One of the most hard-hitting of those ways is in the form of more frequent and severe natural disasters — and not only in the locations that have been historically prone to such phenomena.

Regardless of the season, different parts of the world are struck by different types of natural disasters at an increased pace: floodings, droughts, wildfires, hurricanes, and tornados. Much talk surrounds the collective measures that governments and society must implement toward nature preservation and resources sustainable use, but there are also measures that companies can implement both to help prepare for those situations, as well as to handle their subsequent impacts.

In this article, Senior EHS Regulatory Consultant Natércia Escorel Cordeiro de Castro examines two major examples of natural disasters that occurred in the first semester of 2024, including an analysis of the governmental responses within those jurisdictions and what implications this may have for the future of legislation around natural disasters and the effect they have on businesses.

Flooding in Rio Grande do Sul, Brazil, April 2024

At the end of April 2024, heavy rain impacted the south of Brazil — more specifically, the State of Rio Grande do Sul. This rain caused floods that impacted 478 of the 497 cities of the state, including the state’s capital, Porto Alegre. This meant an impact on more than 2.3 million people. Needless to say, this also had enormous ramifications for the operation of businesses, with industrial plants, office buildings, and agricultural properties’ activities abruptly halted.

Considering the devastating impact of the flooding, the federal and local governments of Brazil and Rio Grande do Sul were fast in implementing a “state of public calamity” (“estado de calamidade pública”) until 1 November 2024, which allows for temporary exemptions from multiple obligations, ranging from environmental to health and safety-related requirements.

Use of fuels

For example, FEPAM Ordinance 431 of 29 May 2024 allows companies to temporarily use wood waste mixed with regular fuels as biomass in boilers and ovens (where before only wood was allowed), while FEPAM Ordinance 410 of 7 May 2024 exempts companies from renewing their environmental licenses expiring during the state of public calamity, as they’re now granted extensions of validity.

Waste disposal

Furthermore, SEMA/FEPAM Joint Normative Instruction 3 of 14 May 2024 imposes specific requirements on companies regarding the disposal of waste generated by natural disasters. This includes disposing of disaster waste in sites licensed to receive construction waste, in cases of debris waste controlling industrial solid waste output. It also details requirements regarding the submission of monthly reports with the information gathered to the State Environmental Protection Foundation “Henrique Luis Roessler” (FEPAM) — the state environmental authority.

Risk assessment exemptions

On the impacts related to occupational health and safety requirements, MTE Ordinance 838 of 27 May 2024, which is edited at the federal level, exempts companies resuming operations in the State of Rio Grande do Sul from reviewing their risk assessments, as included in their Risk Management Program (Programa de Gerenciamento de Riscos – PGR), if they expire during the state of public calamity. These companies are also exempt from carrying out the otherwise mandatory periodic, clinical, and complementary medical examinations for 90 days, unless the physician coordinating the company’s program for medical control and occupational health (Programa de Controle Médico de Saúde Ocupacional – PCMSO) considers that this represents a risk to the employee’s health.

This exemption also pardons companies from conducting mandatory periodic training of current employees, foreseen in regulatory norms (NRs) for occupational health and safety.

The situation in Rio Grande do Sul is a salient demonstration that natural disasters go beyond environmental impacts, such as disturbances in a company’s operation flow. They escalate to halt operations to a level that impacts workers and requires a shift in operations going forward, potentially suspending safety requirements or adapting environmental-related activities, such as those relating to waste management.

The measures implemented by Brazilian authorities aimed to help companies reorganize their operations and cope with the massive costs of damages suffered. However, we can identify another angle on governmental action with the German case below.

Flooding in Bayern, Germany, June 2024

The State of Bayern, in the south of Germany, was also impacted by heavy rains and severe floods, causing thousands of people to evacuate from their homes and cities. Both local and federal governments recognized that this event was more severe than any other experience in the region to date.

Analyzing the German response to the floods in Bayern, it’s possible to assess future possible impacts on the prevention front.

Mandatory hazard insurance against natural disasters

Shortly after the floods, Germany’s Chancellor Olaf Scholz emphasized the importance of “mandatory natural hazard insurance” across the country. If implemented, this mandatory insurance would represent an additional mandatory insurance imposed on companies placed in risk areas.

Extreme weather forecasting

Furthermore, the Federal Ministry for Education and Research (Bundesministerium für Bildung und Forschum – BMBF) is currently investing in and supporting several projects on the development of better prediction and resilience mechanisms for flooding situations. For example, the ClimXtreme platform invests in more accurate forecasting of heavy rain and extreme weather events, while the framework program Research for Civil Security, partly funded by the BMBF, developed a test facility for the optimization of mobile protective walls for flood and disaster protection.

This trend shows that companies placed in risk areas have more options than waiting for the next extreme event to happen. They can invest in preventive measures — be it potential mandatory insurance or investment in their own structures — for a more resilient operation, privately or in partnership with governmental agencies.

Preparing for a future with more risks

On reflection, it’s evident that the governmental response was different in each of these situations. In Brazil the focus is on remediating and dealing with the consequences of flooding, while in Germany there’s a clear recognition of its relationship with climate change, and the government’s focus is more towards studying further prevention measures.

These different angles and all the measures implemented by authorities evidence how multifaceted the impacts of natural disasters are — and how long-lasting their effects can be. The occurrence of a natural disaster can be momentary, but companies must deal with its repercussions for a long time.

We saw examples of how companies can be required to modify their operations regarding environmental requirements, such as waste disposal operations and energy generation sources. Likewise, mandatory insurance requirements and the reassessment of risks can impact companies and their supply chain, as it may signify increased costs and additional requirements to ensure a safe and sustainable operation that resists foreseeable setbacks.

Companies can no longer look at these events as punctual occurrences, as unpredictable and independent events, but they must prepare to stay ahead of them and resume activities in the most efficient timeline.

The best way to do so is with knowledge. Awareness of what kind of natural events can happen where you operate and how your local authorities will support you in the worst-case scenario helps you prepare to support your operations, from workers to suppliers and customers. As governments continue to adjust or introduce regulations for preventive and protective measures against natural disasters, it’s all the more important for organizations to be fully aware of the requirements in all jurisdictions in which they operate.

It’s an undeniable fact that these events are becoming more extreme and there’s little to do to avoid them — all companies can really do is prepare to go through them in the best possible manner. Preventive measures are as important as knowing what to expect in the aftermath of an extreme natural disaster, and these recent events showcase what can be expected.

Learn more about mitigating climate-related risks

Natural disasters and other climate-related concerns are having a significant impact on how businesses function around the world. Whether it’s direct, causing closures and delays, or indirect through preventive or safeguarding regulations, it’s vital for companies to be aware of what impact these phenomena have on operations.

Take a look at these related resources to find out more about the ways that climate-related risks are influencing regulations and best practices for businesses…