Environmental compliance in Latin America: a bridge to Sustainability based on Legality and Business Ethics  

In a context of climate crisis, loss of biodiversity and growing social pressure for responsible development, public institutions and companies in Latin America must assume a more proactive role. Environmental compliance is emerging as a key tool not only for complying with current regulations, but also for building trust, preventing risks and promoting ethical and sustainable development in nations.

For some months now we have been implementing the ISO standard for Anti-Bribery Management in the Ministry of Environment and Natural Resources of the Dominican Republic, where we have been able to gauge the importance of internal compliance to legitimize its regulatory, supervisory and sanctioning role in an environment of external control. The promotion of environmental compliance must start from the heart of the State: regulatory institutions. A high standard of compliance cannot be demanded of the private sector if the supervisory body itself lacks effective systems to prevent corruption, guarantee transparency or act on a technical basis. A regulator that integrates compliance principles, good governance practices and tools such as ISO 37301 (compliance management) or ISO 37001 (anti-bribery) not only improves its functioning, but also legitimizes its authority in the eyes of companies, communities and society in general.

This is the main objective of these initiatives in organizations such as the Superintendency of Electricity where we are also implementing compliance and anti-bribery, as an active part of the transition process towards a cleaner and more sustainable energy matrix, in line with the Sustainable Development Goals (SDGs) and the country’s climate commitments, and whose regulation has a direct impact on the financial and operational viability of renewable and sustainable energy projects, influencing private sector investment decisions.

In the same vein, a clear example of the importance of institutional compliance is offered by the Dominican Republic in the Pueblo Viejo mining project, managed by the company Barrick Gold, where controversies arose related to environmental, social and contractual issues. The lack of rigorous controls, transparency in the concession and solid environmental oversight by the State generated social tensions, mistrust and a national debate on the role of the regulator. This case subsequently led to institutional improvements in the Ministry of the Environment, such as the digitization of procedures such as environmental authorizations. However, there is still a need to implement a systemic approach to compliance within the public bodies that manage the environment.
Latin America has strengthened its environmental legal framework over the last decade. Countries such as Brazil, Mexico, Chile, Peru and Colombia have passed stricter laws on issues such as environmental impact assessment, waste management, protection of natural areas and emissions control. At the same time, anti-corruption policies have begun to explicitly cover environmental crimes, sanctioning illegal practices that directly affect ecosystems.

The result is an increasingly complex and demanding regulatory environment, where companies that do not adapt run the risk of facing sanctions, losing licenses or seeing their reputation affected, and whose exposure is evident, given that the most serious environmental damage in the region is linked to non-compliance that leaves room for corruption. From irregularly granted licenses to the deliberate omission of controls in sectors such as mining, energy or infrastructure, environmental crimes are often accompanied by bribery, influence peddling or networks of impunity, where the ethical tone of the private sector plays a key role.

This reality makes environmental compliance a field that requires not only technical knowledge, but also a firm ethical and legal stance. The focus should be on prevention, integrated risk management and the strengthening of internal controls. To meet these challenges, companies must rely on international standards and frameworks that provide structure, credibility and guidance, such as:

• ISO 14001 Environmental Management Standard;
• ISO 37301 Standard for Compliance Management Systems;
• ISO 37001 Standard for Anti-Bribery;
• ISO 26000 Standard for Social Responsibility;
• ISO 37000 Standard for Institutional Governance;
• Amendment on climate change applied to ISO standards.

These standards offer a guide to good practice which, when implemented in a coordinated manner, enable the coherent and efficient management of environmental, legal and reputational risks. Adapting to environmental compliance requires a comprehensive and proactive approach. Some key actions are:

• Mapping environmental obligations
• Assessing environmental and integrity risks.
• Designing effective policies and controls.
• Fostering an organisational culture of sustainability.
• Monitor and continuously improve.

Throughout the region there are examples of companies that have adopted robust environmental compliance models, even in high-impact sectors. Some have achieved ISO 14001 certification, others have integrated binding ESG commitments into their contracts, and several are actively involved in initiatives such as the UN Global Compact.

And where is environmental compliance leading us? Are environmental compliance and sustainability the same thing? While environmental compliance focuses on compliance with legal obligations, regulations and technical standards related to the environment, sustainability implies a broader and more strategic vision that integrates the environmental, the social and the economic.

Both approaches must coexist: compliance ensures the legal and ethical basis; sustainability projects the company towards the future. Today more than ever, this articulation becomes critical, especially due to new global demands, such as the European Union, which has advanced regulations such as the Corporate Sustainability Due Diligence Directive (CSDDD) and ESG criteria for investments.

In this context, the recently published IWA 48:2024 standard is presented as a key frame of reference for implementing ESG strategies, as it allows for the alignment of business decision-making with sustainability principles, the integration of environmental factors such as water footprint, biodiversity or circular economy, and facilitates the presentation of reliable and verifiable reports. This type of approach not only strengthens environmental compliance, but also responds to growing international requirements that directly impact the ability of Latin American countries to attract financing, export to regulated markets and position themselves in value chains.

Although sustainability should be a strategic goal for companies, it is also true that many of them face real barriers to embracing it, especially in contexts of high economic uncertainty, competitive pressure or limited financial capacity. Adopting sustainable practices, such as clean technologies, circular processes, environmental traceability or measuring carbon footprints, has initial costs, and this can mean that even organizations with good intentions prioritize short-term "cost-effectiveness" over what is environmentally correct.

For this reason, governments have a crucial role in creating the conditions that will enable sustainability to become not just an aspiration, but a viable reality. This means developing public policies that provide tax incentives for green investments, facilitate access to sustainable financing, and promote public procurement, as is the case in the Dominican Republic.

In any case, sustainability today offers an opportunity, the opportunity for differentiation, the opportunity for novelty and trust. Companies must take care to create a sustainability plan that gradually incorporates the good practices mentioned, since today it is an opportunity but tomorrow it will be an indispensable requirement in business and the sooner we commit to it, the sweeter the transition will be. Sustainability does not wait: it is the present that defines the future.

Tania De León
Compliance Partner-Director, Lexi-Legal, Risk & Management Solutions
Inlaw Alliance | Dominican Republic

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