The Third Chamber of the Supreme Court rejected the cassation appeal on the merits filed by a company holding an aggregate-extraction project (judgment of May 29, 2026), confirming the sanction imposed by the Environment Superintendence for circumvention of the Environmental Impact Assessment System.
The Court was categorical: to exercise its sanctioning power for circumvention, the SMA does not need a prior report from the Environmental Assessment Service.
What happened
The company held an aggregate-extraction project in a river in the central zone of the country, covered by an Environmental Qualification Resolution (RCA) from 2012, which authorized the extraction of up to 300,000 m³ per year in a delimited area within the river bed.
The SMA inspected the project and found that the company had extracted between 1,064,770 and 1,540,017 m³ of aggregates over an area of approximately 41.4 hectares, far above what was authorized. That volume and that area, by their sheer magnitude, would have required an autonomous environmental assessment under article 2(g.1) of the SEIA Regulation. The Superintendence characterized the conduct not as a mere breach of the RCA, but as circumvention of the SEIA, and brought five charges. The most serious charge —the unauthorized extraction, characterized as a very serious infraction— was originally sanctioned with 2,230 UTA, within an initial total fine of 2,379 UTA. That amount, however, was not the final one: upon resolving the reconsideration, the fine for circumvention was reduced to 770 UTA, and the subsequent judicial review required it to be recalculated downward again, based on the economic benefit actually determined.
The company challenged the decision before the Second Environmental Court, which upheld the substantive infraction (the characterization as circumvention and the SMA's sanctioning power), but partially granted the challenge for a defect in the determination of the fine, ordering the SMA to recalculate it downward. The company then filed a cassation appeal on the merits before the Supreme Court, based on three arguments: that the SMA required a prior report from the SEA to impute circumvention; that the environmental court's judgment suffered from defects of reasoning; and that the principle of typicity had been violated.
The Court rejected the appeal in its entirety. Its ratio decidendi was twofold. On the one hand, the legislature expressly and distinctly regulated the cases in which the SEA's report is required —when the SMA requires a project to enter or be modified in the SEIA— and those in which it is not, such as the direct exercise of the sanctioning power. On the other hand, the typicity and infraction chapters of articles 19 to 24 of the Civil Code proved insufficient: the appellant did not explain how the alleged legal infraction influenced the operative part of the judgment. The defect of reasoning, in turn, is proper to cassation on form and cannot be channeled through cassation on the merits.
The rule is clear: operating outside the scope of an RCA in magnitudes that on their own require environmental assessment constitutes circumvention, and the SMA may sanction it without waiting for a pronouncement from the SEA.
What it may mean for your company
The ruling consolidates a distinction with immediate practical consequences for any company that operates projects with a valid RCA.
Until this pronouncement, it was possible to argue that characterizing conduct as SEIA circumvention required a prior pronouncement from the SEA on the need for assessment. The Court rejected that argument. The point is no small matter: it means that the SMA can open a sanctioning proceeding for circumvention, characterize the infraction, and apply the fine, all without a report from the SEA. Subsequent judicial review may question the reasoning, but it cannot invalidate the sanction by alleging the absence of that report.
What this implies in practice: if your company carries out activities that exceed the thresholds or areas authorized by your RCA, the SMA has a clear path to sanction for circumvention without first conducting a procedure before the SEA.
There is another angle. The ruling is not only relevant to extractive projects. It applies to any RCA holder that executes works, stages, or activities not contemplated in the original assessment and whose magnitudes are sufficient to have required independent entry into the SEIA. Plant expansions, intervention of new areas, increases in production volumes, or process modifications may fall into this zone.
Gray area: the standard does require that the unauthorized works on their own reach the SEIA thresholds (under article 2(g.1) of the SEIA Regulation or the relevant typology). A minor deviation from the RCA does not automatically constitute circumvention; magnitude is the determining factor. But in the case of infrastructure, energy, mining, or natural-resource extraction projects, those thresholds are reached more easily than the usual reading of RCAs suggests.
The fines are in annual tax units (UTA), not fixed pesos. At current values, a sanction that in its original resolution reached 2,379 UTA is equivalent to a figure that no compliance budget absorbs without impact —and although that amount can be reduced in the review stages, as happened in this case, the starting point marks the magnitude of the risk. Added to this is the possibility of provisional measures, such as the suspension of operations ordered during the procedure.
Could any expansion or production increase under way reach the SEIA thresholds on its own? Schedule a review of your RCA compliance before the next inspection.
What you can do
If your company operates one or more projects with a valid RCA, the immediate risk is discovering during an inspection that activities that seemed like simple operational deviations are being characterized as circumvention. Three concrete actions:
- Audit the actual compliance of each valid RCA: contrast what is authorized (area, volumes, stages, activities) with what is actually being executed. The difference between breach of the RCA and circumvention of the SEIA turns on the magnitude of the deviation, and that analysis must be done before the SMA does it.
- Review whether any modification or expansion under way requires entry into or voluntary modification of the SEIA, under article 2(g.1) of the SEIA Regulation. Entering preventively can transform a future imputation of circumvention into a regulated assessment procedure, with radically different consequences.
- Design an early-warning protocol for operating projects: internal milestones that trigger legal review when production or intervention indicators approach the RCA thresholds. SMA inspections give no notice; early detection is the only way to manage the risk before a charge is formalized.
If any of these points raises questions —the magnitude of your deviations or the advisability of a preventive entry into the SEIA— a 30-minute diagnostic session is enough to size up your gaps. Schedule here.
If you need to review the compliance status of your RCA projects in light of this ruling, or assess whether any activity under way could be characterized as circumvention of the SEIA, schedule a diagnostic meeting with our team.
This content is informational and does not constitute legal advice.