In early December of this year, the Brazilian National Development Bank (BNDES) announced that it was granting a new loan of 22.5 billion reais, the largest in its history, to the Belo Monte hydroelectric dam project. When this is combined with the two previous loans already granted to the Norte Energia Consortium which is responsible for the dam’s construction – 1.1 billion reais in mid-2011 and 1.8 million reais in February 2012 – the bank has contributed 25.4 billion reais to a project that violates all of the technical, legal and economic requirements that are mandatorily applied to this type of operation.
With the least power-generating capacity of all of the hydroelectric projects in the country, based on its announced potential of 11,000 MW, Belo Monte will produce on average only 39% of the electricity promised by the government. Due to illegalities in the issuing of licences and permits, the displacement of the population affected, and lack of adequate consultation with indigenous peoples, dozens of legal actions have been filed against Belo Monte since 2001. These include 15 actions undertaken by the Federal Public Prosecutors’ Office (MPF), 21 by the Public Defenders’ Office, and 18 by civil society organizations. An appeal filed by the MPF is currently awaiting judgment of merit proceedings in the Federal Supreme Court. When questioned by the MPF, BNDES did not present any evidence of having assessed the economic viability or risk of the Belo Monte complex, as required under Resolution No. 2.682/99 of the National Monetary Council.
Although BNDES has no specific socio-environmental guidelines to govern financing for the hydroelectric sector, as required by Resolutions 2022/10 and 2025/10 relating to the Social and Environmental Responsibility Policy and the new Socio-Environmental Policy of the BNDES System, the bank claims that it applies certain criteria in its financing operations, including:
1. Beneficiary assessment with regard to its socio-environmental policies, practices and management, including the external environment, considering their articulation with public policies and sustainable local and regional development and taking as a reference the concept of Social and Environmental Responsibility.
2. Beneficiary assessment with regard to its legal compliance with environmental agencies, judicial disputes and effectiveness of environmental actions.
3. Project assessment with regard to aspects related to eco-efficiency, the adoption of socially and environmentally sustainable processes and projects, and greenhouse gas emissions.
4. Assessment of compliance with environmental requirements, particularly in relation to ecological-economic zoning and agro-ecological zoning, and verification of the non-existence of practices that entail crimes against the environment.
5. The potential inclusion of social and/or environmental conditions established on the basis of the analysis undertaken (of the client and the project), as a complement to the requirements stipulated by law.
6. Verification, during the stage of monitoring of operations, of:
-compliance with tax, social security and environmental requirements by the beneficiary and the project;
-fulfilment of eventual mitigation measures, requirements for the adjustment of conduct, and conditions established in the contract and environmental licences;
-monitoring of social and environmental indicators for the monitoring and assessment of the beneficiary and project.
In the case of Belo Monte, however, BNDES did not apply these criteria before granting loans for the project. The hydroelectric dam is currently facing 53 legal actions (since only one has been tried in court so far), which suggests that there has been no assessment of the project’s “legal compliance”.
The social, environmental and indigenous population-related conditions for the Belo Monte dam – which fall under the responsibility of Norte Energia and FUNAI (the Brazilian government agency responsible for indigenous affairs), and were stipulated by the government to minimize the impacts of the project – have not been met, resulting in repeated protests by those affected . BNDES clearly did not verify the “fulfilment of mitigation measures and conditions established in the contract and environmental licences” for the project.
Rates of deforestation in the area around Altamira, where the dam is being constructed, have reached new record highs month after month, according to data from the Real-Time Deforestation Detection System (DETER). The same is true for rates of violence and homicides, as well as the cost of living for the local population, in terms of prices for food, housing, health care and other basic goods and services. BNDES has obviously not been monitoring the “social and environmental indicators” of the project.
Health care and educational facilities, sanitation, security and other basic services in towns in the region, especially in Altamira, have collapsed. BNDES clearly did not assess the project’s “socio-environmental policies, practices and management, including the external environment, considering their articulation with public policies and sustainable local and regional development.”
In early 2012, Norte Energia was fined seven million reais by the Brazilian environmental agency, IBAMA, for non-compliance with various conditions, a fact that was ignored by BNDES. Dozens of riverbank dwellers and farmers lost their houses and lands with no compensation (leading to numerous legal actions against the project), a fact that was ignored by BNDES. The drastic decrease in fish stocks and death of turtles in Volta Grande do Xingu is a documented fact. And yet the bank has not proposed any “social and/or environmental conditions established on the basis of the analysis undertaken (of the client and the project), as a complement to the requirements stipulated by law.”
Year after year workers have staged repeated strikes and revolts due to irregular working conditions, which recently culminated in an action that destroyed the installations and brought work to a standstill.
All of these factors demonstrate planned and conscious violation of national legislation and socio-environmental standards by the Brazilian government, whose pressure on BNDES and regulatory agencies like IBAMA and FUNAI led to the concession of the needed licences, permits and financing for Belo Monte. Authorities who have disagreed with this practice, such as IBAMA presidents Roberto Messias and Abelardo Bayma, have been forced to resign from their posts.
Belo Monte has received a pledge for another 22,5 billion reais in financing from BNDES in order to continue with construction – and with the violation of human rights in Xingu. Much of this money comes from PIS-PASEP and FGTS contributions, which are meant to feed the Workers Assistance Fund (FAT). This money therefore belongs to the Brazilian people, who were never consulted as to whether or not they agree with the construction of the Belo Monte hydroelectric dam.
Dozens of civil society organizations from throughout Brazil and abroad have joined together to call on the Brazilian justice system to deal with the many legal actions pending against Belo Monte. Petitions, letters and requests for hearings have been sent to the Federal Supreme Court, Federal Regional Court and National Council of Justice demanding speedy resolution and sentencing in these legal proceedings, which are all currently languishing at a standstill in various courts. The organizations have also appealed to the MPF and to BNDES, asking that no new financial resources be released for the Belo Monte project until all of the illegalities involved in its execution have been assessed. In the face of a government that violates rights, and an illegal and immoral project, it is now up to the justice system to ensure that justice is served.
Sent by Verena Glass, email: verena@reporterbrasil.org.br For more information on Belo Monte visit www.xinguvivo.org.br and http://www.prpa.mpf.gov.br/news/2010/noticias/belo-monte-os-problemas-do-projeto-e-a-atuacao-do-mpf
