Production contracts and environmental liability of processors due to dangerous activities carried by farmers

Abstract

Production Contracts have become a widely used tool to coordinate the production of commodities for industrial purposes in Argentina. As a remarkable feature, these contracts allow industrial firms (“processors”) to manage and supervise the commodities production process, turning farmers and small agricultural enterprises into mere providers of services. Under this relationship, when farmers perform dangerous activities guided and monitored by processors and those activities cause certain type of environmental damages, the former can be held liable and required to com-pensate the victims. This liability rule is built upon the provisions of the new Argentine Civil and Commercial Code, the General Law for the Environment and the National Constitution.