Buying land or assessing a project’s feasibility in Costa Rica requires understanding the environmental and technical conditions that can affect its development before you invest. Restrictions tied to water resources, protected areas, aquifers, forest cover, natural hazards, or a history of contamination can limit how a property may be used, and can bring unexpected costs or permitting delays.
In this context, an Environmental Due Diligence makes it possible to identify these conditions in advance and assess how they could affect an acquisition, a project, or an investment.
What is an environmental due diligence?
It is a research and technical assessment process carried out prior to a transaction or to developing a project, with the goal of identifying possible risks, restrictions, and environmental liabilities associated with a property or activity.
Its purpose is to provide the information needed to make better-informed decisions before purchasing real estate, investing in a project, or committing resources to its development.
In short, it seeks to answer questions such as:
- Is there evidence of soil or surface/groundwater contamination?
- Are there environmental liabilities linked to previous activities, such as workshops, gas stations, agricultural operations, or the handling of chemical substances?
- Does the property have use restrictions tied to rivers, streams, springs, wells, wetlands, protected areas, or other environmentally regulated zones?
- Are there geological or hydrogeological conditions that could limit or condition development?
- Are there natural hazards such as landslides, flooding, or conditions associated with geological faults?
- Is the proposed project technically feasible given the property’s current conditions?
- What studies, permits, mitigation measures, or additional investments might be needed to develop the project?
Why does it matter in Costa Rica?
In Costa Rica, a property’s environmental, geological, and hydrogeological conditions can limit its use and affect a project’s feasibility, costs, and timeline. That is why it is important to evaluate protection zones, water resources, springs, forest cover, wetlands, aquifers, natural hazards, and other restrictions, as well as the requirements and procedures before institutions such as SETENA, SINAC, SENARA, and the Dirección de Aguas (Water Directorate).
Carrying out an Environmental Due Diligence before acquiring a property or making an investment allows these conditions to be identified early, reducing risks, costs, and delays during a project’s development.
The phases of an environmental due diligence
The scope of an Environmental Due Diligence depends on the property’s characteristics, its current and prior use, and the type of project to be developed. For that reason, the process can move from an initial assessment to more specific studies when conditions requiring further analysis are identified.
Phase I – Initial assessment (qualitative)
This is the foundation of the analysis and, in many cases, may be the only phase required. It includes a documentary and cartographic review, an analysis of environmental, geological, and hydrogeological conditions, a review of restrictions and protected areas, identification of natural hazards, a field inspection, and a review of the applicable regulatory framework.
The goal is to determine whether conditions exist that could limit the property’s use, affect the project’s feasibility, or represent a potential environmental liability.
Phase II – Specific studies and analyses (quantitative)
When the initial assessment identifies indications that call for more detailed investigation, specific studies are carried out to confirm and characterize the conditions found. Depending on the case, these may include soil and water sampling and analysis, hydrogeological studies, geophysical surveys, or other technical evaluations.
Phase III – Characterization and management measures
When an environmental impact requiring intervention is confirmed, its characterization is deepened and the management, control, mitigation, or remediation measures are determined, in line with the site’s characteristics and applicable regulations.
Want to learn more about geotechnical studies in Costa Rica? Read our article on the topic! https://www.ambitumcr.com/geotechnical-investigation-what-why-when/
A negotiation tool
An Environmental Due Diligence does more than identify risks: it also provides information useful for investment and negotiation decisions.
The results can help determine whether a property is suitable for the intended project, estimate additional costs, adjust a development proposal, or set conditions before closing a purchase. When an environmental liability is identified, this information can also serve as a basis for negotiating price, assigning responsibilities, or establishing contractual conditions.
Due diligence and SETENA procedures
An Environmental Due Diligence and the environmental viability review before SETENA are different processes, although they can complement each other.
The Due Diligence is carried out beforehand and voluntarily, as a preventive step to understand a property’s or project’s conditions and possible limitations before committing an investment. The SETENA review, in turn, is the established procedure to determine the environmental viability of projects subject to that requirement.
Carrying out this kind of assessment in advance makes it possible to anticipate conditions that could affect a project’s environmental viability, as well as the studies, permits, or measures that may eventually need to be managed.
Why does an integrated approach make a difference?
An effective Environmental Due Diligence goes beyond a document review. It requires integrating a property’s environmental, geological, hydrogeological, and regulatory conditions to understand how they may influence the project to be developed.
At Ambitum, we combine our experience in geology, hydrogeology, and environmental management to evaluate site conditions, identify possible restrictions, and provide the technical information needed to make sound decisions — from a property’s initial assessment through to support with the corresponding environmental procedures.
Before you invest, know the conditions of the site.
Contact us and request a quote for an Environmental Due Diligence tailored to the characteristics of your property and project.