By means of Law 41 of July 1, 1998 (the Environmental Law) the framework legislation whereby the standards of protection, conservation and recovering of the environment was enacted. It immediately created the Environmental National Authority ("ANAM", for the Spanish acronym) as an autonomous entity of the Panamanian government in charge of natural resources and environmental issues. ANAM is authorized, among other functions, to issue environmental regulations concerning environmental emissions, products, procedures and impose fines.
Law 41, among other issues indicates that all activities and projects, public or private, that in any way may generate environmental risk require the elaboration of an Environmental Impact Study ("EIS") prior to their execution. The EIS must be in accordance with the Environmental Management Adequation Program that will be established by ANAM. EIS will be subject to approval or rejection by ANAM. All EIS must indicate the cost-benefit value of the activities to be developed in relation to the environment in such cases were such activities imply the use of natural resources.
ANAM will establish environmental quality control regulations, prevention and decontamination plans for sensitive zones and areas that exceed emission limits.
The Ministry of Health and ANAM will establish technical and administrative measures to restrain environmental alteration, which could be hazardous to human health.
ANAM will support the Ministry of Health in the enforcement of any other international agreements adopted by the Republic of Panama in connection with the control of dangerous waste. ANAM and the Ministry of Health will establish a joint program to eliminate and prohibit the importation and distribution of the above mentioned substances. All potentially dangerous substances must be registered with ANAM prior their use or commercialization.
Law 41 indicates that natural resources are of public domain and of social interest without affecting acquired rights of individuals. ANAM must incorporate the concept of rationality and maintenance of natural resources to assure environmental protection in the administration of such resources. ANAM will establish tariffs for the use of natural resources.
Law 41 also established the National System of Protected Areas. ANAM will regulate such areas an will encourage the development of protected areas in private properties through fiscal incentives and market mechanisms. ANAM will control and regulate access to protected areas indicated in the National Protected Area System.
ANAM also will regulate the use and exploitation of forests and soils.
Water or hydro resources are of public domain and therefore all users are obliged to develop programs for their conservation in accordance to the Environmental Management Plan and the respective Concession Agreement. ANAM will create special programs for the management of river basins due to the level of deterioration or due to strategic conservation measures.
Law 41 also provides that the development of activities concerning the generation, transmission and distribution of electricity will be regulated by the Energy Policy Commission and ANAM in relation to environmental impact and natural resources. The Panamanian government will promote and give priority to noncontaminating energetic projects that use clean and efficient technologies.
ANAM and the Hydrocarbons Department of the Ministry of Commerce and Industries will regulate and control contamination in accordance with the corresponding EIS. Contamination above permissible limits or against regulations, procedures and mechanism established for the prevention and control of contamination will result in civil, administrative and criminal liability.
Any person involved in the development of an activity that produces damages to the environment or human health must repair the damages, must undertake prevention and mitigation measures and pay for all the costs of such repair of damages and measures. Any person that emits substances or waste may affect human health, the ecosystem or the environment has an objective liability for the produced damages. Persons involved in dangerous waste generation, including radioactive substances, are responsible for the transportation and management of such substances and are liable for the damages resulting from the manipulation of such substances before, during and after their final disposition.
Non compliance with Law 41 and its regulations, Environmental Impact Studies and Adequation and Management Programs will be penalized through written admonition, temporal or permanent suspension of activities and the imposition of fines that will not exceed US$ 10,000,000.00.
Environmental civil action has as an objective the restoration of the affected area or the indemnization of the damages caused. Environmental civil actions prescribe in ten years after the date of damages or from the date the damages were known. The office of the Superior Environmental Prosecutor is created within the Public Ministry to practice all measures to investigate and prosecute environmental misdemeanors and felonies.