The problems with licensing projects in Brazil's Amazon region

Licensing for infrastructure, mining and oil and gas projects in Brazil’s Amazon region has always sparked controversy, and current plans for road paving, exploration and a new rail line are no exception.

Beto Veríssimo, co-founder of environmental NGO Imazon, talks with BNamericas about the chances of different projects advancing in the region and the potential impacts.

BNamericas: What are the main difficulties when it comes to licensing for projects in the Amazon?

Veríssimo: Some initiatives and projects planned in the region have a series of impacts, from environmental impacts to impacts on native peoples who live in those regions.

The state institutions that deal with some of the environmental processes have very small staff that cannot assess everything. This applies to activities associated with wood extraction, licensing for livestock activities, infrastructure projects, energy and mining.

I would say that the lack of personnel at state agencies is a critical issue.

BNamericas: Given the staff shortages, how challenging is it to obtain licenses?

Veríssimo: The Amazon is a highly sensitive region, due to issues of biodiversity, deforestation, impacts on indigenous peoples, among other aspects.

Large projects in this region involve all these impacts, which is why licensing is very complex.

As I said, the state institutions in the region responsible for licensing have small staff to evaluate large projects and many activities. Federal bodies have bigger staff, but it is still a challenging scenario.

However, I would say that a complex and time-consuming licensing process is necessary given the sensitivity of the region.

For example, the Belo Monte [hydroelectric] project took a long time and even so, there were many environmental problems associated with it. If this hadn't been discussed as much as it was, this project would have faced even bigger problems.

BNamericas: Is it possible to use a single evaluation model for all projects in the region?

Veríssimo: We could be faster in licensing areas that have already suffered under deforestation, but we have to consider that we have different Amazons.

We have at least five Amazons: the Amazon of the savannah, the Amazon already deforested, the Amazon under pressure from deforestation, the Amazon of dense and unexploited forests and the Amazon of cities. Each of these different Amazons has a different reality.

The Amazon region has 772 municipalities, an area larger than Europe, and each location has its own particularity. Investors, companies and authorities must have a qualitative view of the region. It is not possible to have a single view of the place.

BNamericas: How does mining affect this area?

Veríssimo: The big problem is illegal mining, more specifically garimpo.

Garimpo is spreading throughout the region in search of gold, and this causes a series of problems.

If we look at deforestation, this is relatively simple for the authorities to combat because the authorities know more or less where the areas most prone to deforestation are.

Now with illegal mining, there is no way to know where it will happen and it occurs in a more spread out way.

Garimpo causes pollution of Amazonian rivers, due to the use of mercury and there is a social and economic impact.

Today, garimpo is controlled by organized crime and these criminals do not allow areas dominated by them to have other business activities, impacting nearby communities.

A company planning to set up shop in an area close to mining sites needs to have its own security arrangement, a private army, and this makes formal business unfeasible.

Where there is garimpo, legal private investment is unfeasible and, in the long term, it generates ghost towns.

BNamericas: Is there room for the development of legal mining on an industrial scale in the region?

Veríssimo: Industrial mining projects have a small environmental impact, but we also have to consider that mining does not make as much of a contribution to the local economy as some people imagine.

This activity does not generate as much tax collection from exports for the regions where it is concentrated.

Furthermore, industrial mining generates quality jobs, but not that many jobs in a given region, so the discussion to be had about industrial mining involves more the socio-economic return that activity can generate for society, rather than the actual environmental impacts.

But we have seen progress.

Vale has mineral reserves in Carajás, in Pará state, for the production of iron ore for the next 500 years, and the company has increasingly understood that it needs to bring prosperity to that region.

Previously, it was common to see sabotage of logistics operations in the region, on mining pipelines and rail lines, due to social conflicts. But today there are fewer such problems because mining companies are understanding how to manage this type of situation, even under pressure from their shareholders.

BNamericas: What are the impacts of infrastructure projects, such as paving the BR-319 highway or building the Ferrogrão rail, and what are the chances of licensing?

Veríssimo: If the BR-319 moves forward, it is a project that could be devastating for Amazonia and take the forest to a point of no return in terms of deforestation.

History shows that the existence of highways leads to uncontrolled occupation of nearby areas and the government has no way to monitor this.

If we move forward with BR-319, we will be contracting uncontrolled deforestation.

BNamericas: Considering the difficulties associated with BR-319 and Ferrogrão, what are the chances to obtain licenses for oil exploration in the Equatorial Margin?

Veríssimo: Let's look at the different parts.

BR-319 is a project with major environmental impact and could take the Amazon rainforest to the level of no return, to complete lack of control of deforestation and we don't have any vaccine to mitigate this.

Ferrogrão doesn’t seem to make much economic sense. It generates carbon dioxide emissions, which is expensive, there are doubts about the financial return.

Now oil exploration is controversial from an environmental point of view, but different from these two other projects.

BNamericas: Why?

Veríssimo: When we talk about the Equatorial Margin, we talk about oil production that generates royalties for local governments.

Political agents in the region are very interested in advancing this activity, so from the political side there is pressure to move ahead.

However, oil exploration is a sensitive topic from an environmental point of view and even more so in that area because we are talking about oil exploration at the mouth of the largest river in the world, the Amazon river.

We are at a time when the world is discussing whether oil is a thing of the past and by the time we know all the environmental impacts of exploration in the Equatorial Margin, maybe we won't even have oil as the main source of energy anymore because we are talking about a horizon of at least 10 years for any activity to start there.

This is also an issue that can greatly affect Brazil's international reputation in terms of sustainability and the environment.