Brazil's biggest dam project under fire

Brazil's biggest dam project under fire

25th February 2008

The biggest dam complex in Brazil's history is being planned along the Madeira river in the state of Rondonia. Among those lining up to bid for the prospective hydro power are Vale (the world's biggest iron ore producer), Alcoa Aluminum, and BHP Billiton.

Now, Friends of the Earth Brazil is calling on two Brazilian pension funds, to re-examine its plan to invest in the massive project. The NGO claims that such investment would violate the UN Principles for Responsible Investment (UNPRI) to which both are signatories, and their own codes of social responsibility.

Amigos da Terra questions the participation of pension funds in Rio Madeira

São Paulo - SP

25th February 2008

Link: http://www.amazonia.org.br

The NGO Amigos da Terra - Amazônia Brasileira (Friends of the Earth - Brazilian Amazon) has sent a letter to the pension funds Petros and Funcef, questioning their intent for an equity participation at Madeira Energia consortium, winner of the auction of Santo Antônio Hydroelectric Dam in the Madeira river, state of Rondônia. There was an interest shown by these funds since last year. According to the report published today by the newspaper O Globo, the president of Petros, Wagner Pinheiro, stated that each fund could inject up to R$150 million (US$ 85 million) in the capital of the Specific Purpose Vehicle formed by the consortium led by Odebrecht. This value could mean a stake of up to 12%.

According to the letter from Amigos da Terra, the participation of the funds in the venture would signify a violation of the United Nations Principles for Responsible Investment (UNPRI), in which both funds are signatories in order to consider social and environmental implications during their investment process. In addition, the funds come into conflict with their own policies for investment and social responsibility. This is because the projects are being taken forward with an environmental license that does not comply with the law, and is already the cause of serious environmental impacts in Rondônia, which has experienced an increase of more than 600% in deforestation rates and land speculation in the Rio Madeira, argued the NGO.

"The image damage to the funds is not just due to one policy misalignment. Investing in Rio Madeira is a significant risk to the pension funds assets. Social, environmental, technical and legal problems represent a serious financial risk to investors and financiers", said Gustavo Pimentel, Eco-Finance Program Manager at the NGO. According to the expert, participants and retirees of Petros and Funcef should be concerned about the misapplication of their pension assets.

The letter also suggests that the episode is evidence of political interference within funds by the federal government, great advocate of the dams and controller of the companies sponsoring the funds. "That would be a big step backward, because for years the industry of private pensions has been improving its governance," argues Pimentel.

Petros, sponsored by Petrobras, is the second largest pension fund in the country, while Funcef by Caixa Economica Federal is the third.

10 mil familias del Estado de Rondonia temen por la construcción de las represas en el río Madera

31 Ene 2008

(Radioagencia NP).- La población que vive en el litoral del río Madeira, en el estado de Rondonia, al norte de Brasil, está preocupada. Dentro de poco tiempo, los habitantes de la región serán afectados por la construcción de las usinas de Santo Antônio y Jirau por las empresas Furnas y Odebrecht. Las empresas afirman que serán afectadas 2.500 familias. El Movimiento de los Afectados por Represas (Movimento dos Atingidos por Barragens –MAB) denuncia que el número de familias perjudicadas asciende a alrededor de 10 mil.

El comienzo de las obras depende de que el Instituto Brasileño del Medio Ambiente y de los Recursos Naturales Renovables (Ibama) conceda una licencia ambiental. De acuerdo con el Instituto, la autorización para iniciar la construcción deberá emitirse hasta comienzos de 2009.

Antes de empezar las obras, la población ribereña tendrá que ser reasentada en otras áreas. Las familias temen que se repita el caso de la usina hidroeléctrica de Samuel, también en el río Madeira. La obra fue realizada durante la década de 1980 y afectó a 650 familias que hasta hoy no fueron totalmente indemnizadas.

El complejo hidroeléctrico del Madeira deberá satisfacer 8% de la demanda energética del país. El Movimiento de los Afectados por Represas, sin embargo, cuestiona la viabilidad de este tipo de obra. La usina de Ilha Solteira, situada en la frontera entre los estados de San Pablo y de Mato Grosso do Sul, fue construida en la década de 1970 para atender a 45% de la demanda energética del país. La usina produjo gran impacto ambiental en la región. Hoy, con 30 años de funcionamiento, sólo responde por 1% de la energía consumida en Brasil.