The Amazon: Dirty Dams, Dirty Politics and the Myth of Clean Energy

Brent Millikan
Wednesday, June 6, 2012

A growing trend in Brazil and other countries is to portray large hydroelectric dams as a source of "clean energy" critical to powering a “green economy.” This catchphrase is resounding at a number of international bodies, including Rio+20, which seeks to prioritize market solutions that reflect the interests of powerful economic and political groups. The risk, now being borne out in Brazil’s dam industry, is the undermining of protections for human rights, ecosystem health and democratic decision-making.

Despite calls for “sustainable development” in the preparations for Rio+20, the discussions thus far have ignored the social and environmental footprint of existing dam projects and the implications of an unprecedented wave of dam building worldwide. Similarly neglected are fundamental questions about the unfulfilled promises of mega-dam projects as engines of "sustained growth," the vulnerability of dams in relation to global climate change, and the opportunity costs of the current dam boom on alternative energy strategies.

This look at the inner workings of the contemporary dam industry in Brazil provides an opportunity to analyze the coherence between discourse and reality in debates about “clean energy” and the “green economy.”

Targeting the Amazon

Currently, the rivers of the Amazon basin are being targeted for construction of an unprecedented number of large hydro dams. Up to 40 large dams are planned for construction in the Brazilian Amazon over the next 20 years. Several mega-dams are proceeding rapidly, such as Santo Antônio and Jirau on the Madeira River, and Belo Monte on the Xingu River. In neighboring Peru and Bolivia, new Amazon dam plans are underway, largely as a result of pressure and incentives from the Brazilian government.

Already, the devastating social and environmental consequences of new dam projects in the Amazon are becoming glaringly apparent: uncontrolled migration, land speculation, deforestation, depletion of fish stocks, destruction of traditional communities and livelihoods, child prostitution, overstretched urban services in health, education and sanitation. All these phenomena, caused or intensified by mega-dam projects, are increasingly part of the contemporary Amazonian landscape.

Meanwhile, the Brazilian government and its dam industry partners insist that mega-dams are “clean energy,” ignoring solid critiques of these projects by affected communities, social movements, indigenous peoples, religious leaders, human rights and environmental NGOs, and the scientific community.

The Amazon River basin – from its headwaters in the Andes to its mouth at the Atlantic coast – covers an area nearly the size of the continental United States. The basin is shared by nine countries. With more than 1,000 rivers and smaller tributaries, the Amazon is the world’s largest hydrographic basin and the source of 15% of all fresh water on the planet. In addition to the Amazon’s unique biological and cultural diversity, recent scientific research confirms the critical role of the rivers and forests of Amazônia in regulating the climate system at a much larger scale, from southeastern Brazil to the northern hemisphere.

What explains this growing “dam fever” in the Amazon despite the glaring contradictions between rhetoric and reality?

First, it is useful to note that today’s dam-building industry in Brazil is based on a “triple alliance” between the federal government (especially the Ministry of Mines and Energy and its parastatal energy conglomerate Eletrobras), political patronage groups that control the Ministry of Mines and Energy (led by Senator and ex-President José Sarney and his political party, PMDB), and private multinational construction companies (such as Odebrecht, Camargo Correa, Andrade Gutierrez and GDF Suez).

The glue that keeps this alliance together is money. All members of this alliance stand to benefit from the lucrative potential of mega-dam projects, which involve the effective privatization of rivers; the externalization of the human and environmental costs of dams, and privileged access to public financing through subsidized loans (especially from the Brazilian National Development Bank - BNDES) and generous fiscal incentives. The potential for carbon credits is “the icing on the cake.” The enormous potential for corruption on large infrastructure projects, combined with the fact that dam construction companies are among the main contributors to electoral campaigns, furthers the strength of this “triple alliance.”

The dam frenzy has benefited from the manipulation of public policies at various levels. First, a pronounced bias toward large dams in national energy policy in Brazil is guaranteed by the absence of public debate and lack of transparency on plans drawn up by the Ministry of Mines and Energy. Official neglect of truly renewable sources of generation such as wind and solar are a striking trait of centralized energy planning, often characterized as a “black box” in Brazil.

River basin inventories to select dam sites involve neither public consultations nor input from environmental agencies. These inventories typically clash with (and predominate over) policies regarding river basin management and protected areas. Inventories are approved unilaterally by the National Electrical Energy Agency (ANEEL).

After dam projects have been politically defined, environmental licensing is a mere formality. In Brazil, there is a recurring tendency for environmental impact assessments carried out by dam proponents to underestimate and externalize their true social and environmental costs, especially in terms of greenhouse gas emissions, impacts on biodiversity, and consequences for the livelihoods of indigenous peoples, riverine populations, fishermen, and family farmers. Moreover, national legislation and international agreements regarding free, prior and informed consultations with indigenous and tribal peoples are simply ignored. Public consultations are theatrical exercises, with no impact on the licensing process.

In the interest of fast-tracking dam projects, decision-makers at the highest levels of the Brazilian government have not hesitated to strong-arm federal government agencies responsible for environmental licensing and indigenous peoples, ignoring the opinions of technical staff and occasional protests from dissenting authorities.

Similarly, restraining orders issued by lower-level federal judges in favor of lawsuits regarding gross violations of human rights and environmental legislation on dam projects have been overturned through political intervention by the President’s office in higher-level courts. At present, there are over a dozen lawsuits over Belo Monte awaiting their day in court. Meanwhile, the federal government has engaged in political persecution of public prosecutors critical of mega-dam projects and even confronted the Inter-American Commission over its decision on the need for consultations with indigenous peoples on the Belo Monte project.

Increasingly, the dam-building frontier in the Amazon is expanding into legally protected areas, including environmental conservation units and indigenous territories. As a result, the Dilma government is strong-arming the Brazilian Congress to illegally reduce conservation units and loosen restrictions on exploitation of natural resources on indigenous lands. On May 29, the Brazilian Congress approved the illegal reduction of more than 75,000 hectares in protected areas along the Tapajos River, a major tributary of the Amazon, to open the way for the first two of more than a dozen mega-dams in the sub-basin. In the Tapajos, the dam industry is closely linked to political and economic interests associated with the opening of industrial waterways (hidrovias), energy-intensive mining, logging and export-oriented agribusiness such as soybean production.

Manipulation of public financing for high-risk dam projects, including lack of transparency and accountability, has also characterized the Brazilian dam industry. Financial institutions such as BNDES, the Bank of Brazil, the Bank of Amazônia (BASA) and parastatal pension funds have all been manipulated to fund mega-projects such as Belo Monte and the Madeira dams, with no accountability regarding risk analysis or social and environmental safeguards.

When Luiz Inácio Lula da Silva was elected President of Brazil in 2002, there were great hopes that he would fulfill campaign promises to fight corruption and bring “ethics into politics.” Once in office, Lula and his party, the PT, proceeded to form political alliances with many of Brazil's most backward regional oligarchs. These alliances have reinforced the dam industry in an unprecedented way.

Dam construction consortia led by the Brazilian government are investing heavily in propaganda campaigns to mislead public opinion about the impacts of mega-dam projects in the Amazon. One Orwellian video widely displayed in Brazilian airports cheerfully announces that Belo Monte will have no impacts on indigenous communities living along the 100-km swath of the XIngu River, known as “Big Bend,” despite the diversion of 80% of the river’s flow upstream.

The Brazilian dam industry juggernaut is increasingly extending its scope beyond the country’s borders. Currently, actors such as Eletrobras, Odebrecht and BNDES are deeply involved in the design, finance and construction of large dams in other countries of the Amazon basin and elsewhere in Latin American and in African nations such as Mozambique, Ghana and Angola. Not surprisingly, Brazilian-led dam-building in other countries repeats the same destructive pattern as at home.

In short, the Brazilian dam boom in the Amazon is a startling example of the tremendous gap between discourse and practice that should be informing discussions about “clean energy” and "green economy.”

There can be no "sustainable development" when the development harms human rights and healthy ecosystems or brings political and financial corruption. Clearly, dirty dams founded upon dirty politics are neither “clean energy” nor appropriate for the “green economy” being debated at the Rio+20 conference and beyond.

Slowing the juggernaut of the dam industry in the Amazon and the powerful interests it represents will require a radical democratization of public policy-making (especially with regard to the energy sector); true corporate accountability, and vastly increased mobilization in Brazil and neighboring countries to support the rights and livelihoods of dam-threatened and dam-affected communities.