Nov 8 2024 | Nº. 142

Editorial

The election of Donald Trump carries considerable implications for Brazil. For one thing, it signals that the rise of Trump, whose victory exceeded most expectations, was not a mere historical mistake. He is, in fact, leading a significant reshaping of the US electorate, broadening its appeal across all racial minorities, especially among the growing Hispanic population. The notion that the Republican Party was going through a populist and turbulent phase but would soon return to its traditional moderate roots has been completely dispelled. This marks a profound shift in the US political landscape with implications for Brazilian politics. President Luiz Inácio Lula da Silva repeatedly made clear his preference for Vice President Kamala Harris, calling Trump a “radical lunatic” in the lead-up to election day. While Lula now says he intends to pursue a “correct” policy toward the US under Trump, the Republican’s resurgence is expected to provide an enormous boost to Lula’s far-right opponents, who venerate Trump. Former President Jair Bolsonaro, whose passport has been seized by authorities as he remains under investigation for an assault on Brazil’s democratic institutions, says he’ll seek formal permission to attend Trump’s inauguration.

In economic terms, Trump’s election is equally weighty. The new protectionist policies he has proposed could prove especially damaging to Brazilian steel, textiles, and other key exports. It also led to a new increase in the value of the dollar, which could fuel further inflation and interest rate increases in Brazil. This new context is likely to empower Finance Minister Fernando Haddad in his ongoing push for structural reforms to the country's budget. Haddad has long advocated for necessary fiscal adjustments to address Brazil's growing debt and chronic budget deficits, and the shifting dynamics of global economic power could provide him with new leverage. Indeed, Trump’s election underscores the high-stakes argument playing out right now within Lula’s Workers’ Party (PT) and left-wing governing partners.

Haddad, the once and possibly future PT standard-bearer, has this week pressed the Lula administration to embrace structural changes to federal spending to signal the kind of fiscal responsibility ultimately needed to bring down interest rates and grow the economy, which everyone in the administration agrees is imperative in the face of the political resilience of an opposition fortified by Trump’s return. Against this notion are left-wing social movements, parties, and some cabinet ministers who argue that cutting spending and potentially trimming certain labor rights will lead to popular disillusionment with Lula government at a moment of far-right ascendancy. The Lula government will have to adjust to the transition to Trump from the outgoing Joe Biden, who spoke with his Brazilian counterpart this week to confirm his presence at the G20 summit in Rio de Janeiro later this month.

Highlights

• Decrease in deforestation. The deforested area in the Brazilian Amazon was 30.6% smaller between August 2023 and July 2024, compared to the same period in the previous year. In absolute terms, deforestation in the region was 6,288 km2. This is the smallest area destroyed in the Amazon in this period since 2015. However, this measurement does not yet include data from August and September 2024, when the region faced major fires. In another important biome, the Cerrado, the loss of native vegetation was 8,174 km2 in the same period, which represents a 25.7% decrease in relation to the same period in the previous year.

• COP29. COP29 begins this Monday, November 11, in the city of Baku, Azerbaijan. The Brazilian government hoped to arrive at the meeting with a brand-new law on the country's carbon market, but its intention was frustrated by Congress, which delayed the vote and is still trying to exclude the agribusiness sector, responsible for 27% of Brazil's greenhouse gas emissions, from the text. Even under an urgent procedure, the vote is only expected to take place in the Senate on November 12, one day after the start of the summit, with content that is inferior to what was intended. The bill still needs to pass through the Chamber of Deputies before being sent for presidential approval.

• High interest rates. The Brazilian Central Bank raised the interest rate by 0.5 percentage points, from 10.75% to 11.25% per year. The reason was the external environment, classified as “challenging” after Donald Trump's victory in the U.S. presidential elections was announced. The fear in Brazil is that inflation will rise in the United States, leading to an increase in the American interest rate. This movement could be caused by restrictions on immigration and the imposition of tariffs on imports – two of Trump's campaign promises – which could trigger an inflationary dynamic, with consequences for the international economy.

   

• Lava Jato. This week, the Attorney General's Office appealed a decision made by the Supreme Court Justice that overturned the sentences of José Dirceu, a leader of the Brazilian Left, a former minister in the Lula administration, and an influential figure in the PT. Dirceu had been convicted in the Car Wash (Lava Jato) Operation investigations. Mendes understood that the judge in the case, Sergio Moro, acted biasedly, in collusion with the prosecution, to convict Dirceu. The Attorney General's Office argues that the irregularities detected in the trial only concern the cases involving Lula, and cannot be extended to the convictions of his former minister. The appeal will be judged by Mendes himself. If denied, it will be analyzed by the Second Panel of the Supreme Court, formed by 5 of the Court's 11 justices.

• Judicial scandal. Judges of the Superior Courts of Justice of two states in the Brazilian central west – Mato Grosso and Mato Grosso do Sul – are being investigated by the Brazilian Supreme Court for selling court rulings. The first case uncovered was in Mato Grosso do Sul, where the chief justice of the court allegedly received cash as a bribe for decisions, and bought cars and more than 80 head of cattle without any record of bank withdrawals of those amounts. The case also involves forgery of land ownership documents in a region where agribusiness is illegally expanding its presence, usurping state lands and protected and preserved areas.

News from the WBO, Organizations and Social Movements

Brazil Unfiltered. The WBO podcast Brazil Unfiltered aired on Wednesday, November 6, with a special edition, live and in Portuguese, about the result of Donald Trump's election and its consequences for Brazil. The host, James N. Green, had André Pagliarini, Vânia Penha-Lopes and Thaís Reis de Oliveira as guests. The program lasted an hour and a half and had more than 2,600 views on the WBO channel as well as that of the magazine Carta Capital, which joined the initiative. If you missed the live broadcast, you can still access the recorded content through this link.

Associate researchers. André Pagliarini and Vânia Penha-Lopes, who participated live on Brazil Unfiltered, are associate researchers at the WBO. In addition to them, other fellows also gave interviews and offered their analyses about the impact of the U.S. elections on Brazil. Guilherme Casarões spoke with Globo News, Fábio Sá e Silva with EBC; and Rafael R. Ioris with the Mundioka podcast; among other researchers who accepted invitations from other media outlets. Iman Musa, a Public Relations specialist at WBO, spoke to Revista Trip.

G20 Social. On November 11 and 13, the Brazil Office will hold a series of virtual meetings with Brazilian civil society organizations to exchange information and start conversations on gender and climate issues within the scope of the G20 Social Summit. These meetings are part of the Feminist Dialogues in Collaboration, a broader umbrella of initiatives that includes the preparatory dialogues for the G20 and at least two more future events: the United Nations Commission on the Status of Women in March 2025; and Conference of the States Parties to the Climate Convention (COP 30) in November 2025. More information and registration at this link.

Urban 20. Urban 20, the G20 mayors' forum, will host discussions on urban solutions and the future of cities amid climate challenges during the meeting of the world's 20 largest economies in Rio de Janeiro, with programming open to the general public, from November 14 to 16. The U20 will feature panels, debates and conferences, in addition to the presentation of initiatives in urban solutions. The meetings will address the G20's priority themes, highlighting the perspective of local governments. Registration is now open at the link.

Feature Article

Takeaways from COP16 on Efforts to Combat Environmental Crimes

By Julia Yansura

Last week, representatives from countries around the world gathered at the COP16 Biodiversity Conference in Cali, Colombia to discuss national commitments to protect biodiversity at a time when up to 1 million species are at risk of extinction. 

Of course, environmental crime falls squarely within the agenda of COP16. We know that illegal logging, mining, and trafficking of wild flora and fauna constitute major threats to biodiversity. This occurs through direct threats, such as trafficking of endangered species that removes them from their habitats and puts their immediate survival at risk. It also occurs through indirect threats, such as mercury use in illegal mining, which poisons living organisms downstream, including dolphins and jaguars. 

The FACT Coalition arrived at COP16 having just published new research on environmental crimes and the dirty money that fuels them. FACT analyzed 230 environmental crimes over the past ten years and found that the United States is the single most common foreign jurisdiction in environmental crimes committed in countries in the Amazon region, serving as a destination for illegally-sourced natural resources as well as the proceeds from their sale. In these cases, illicit proceeds are often laundered through anonymous shell companies. Moreover, FACT found that environmental crimes frequently overlap with other crimes like corruption and terrorism financing, a phenomenon known as "crime convergence."

Like FACT, many organizations arrived at COP16 with new research, cases, and resources to share. Following two weeks of intense discussion, debate and exchange of ideas, these are some of the key takeaways pertaining to environmental crime:  

1. There is widespread agreement that we need to “follow the money,” but also concerns about how to effectively put this into practice. “Efforts to combat illicit finance related to other illegal economies, such as drug trafficking, yielded underwhelming results”, María Victoria Llorente, the director of one of Colombia's leading think tanks, told me at COP16. “How can we ensure that we do better with environmental crime?” It's a challenging question, but certainly, part of the answer lies in raising awareness among the financial sector. For example, the World Wildlife Federation launched a new toolkit at COP16 that helps financial institutions to understand and mitigate risks associated with environmental crimes. Another part of the solution lies in strengthening government responses. At a COP16 event, a government official with Colombia’s Financial Intelligence Unit explained that Colombia has recently implemented administrative changes to the way financial intelligence is sent to the Attorney General’s Office. Now, cases are referred not only to the Environmental Prosecutor’s Office, but also to the Anti-Money Laundering Prosecutor’s Office in an effort to ensure parallel financial investigations.

2. 
   If recovered, the proceeds of environmental crime could help finance efforts to protect biodiversity going forward. The proceeds of environmental crimes are estimated to total as much as US$281 billion a year. According to Gastón Schulmeister from the Organization of American States, given the scale of these illicit economies, “countries should consider how recovering assets from environmental crime could help meet funding needs associated with COP16 and efforts to protect biodiversity.”

3. Stronger collaboration is needed among countries to bring environmental criminals to justice. Research by FACT has found that many of these crimes are transnational in nature. However, countries are often fighting back alone. As Hanny Cueva Beteta, head of the Global Programme on Crimes that Affect the Environment at the UN Office on Drugs and Crime, commented at one COP16 event, “connecting law enforcement internationally is key.”

4. There is growing recognition that the term "deforestation" is inadequate to describe the full range of harms caused by environmental crime. Illegal gold mining, arguably the most serious environmental crime in Latin America, causes devastating environmental damage but does not always result in deforestation, especially when mining occurs along rivers. Meanwhile, experts are pointing to the need to protect other ecosystems beyond tropical forests, such as wetlands, grasslands, and special alpine tundra known as páramos. 

5. Illegal gold remains a top concern. The Government of Colombia made traceability a high level priority for COP16 with the launch of the Global Commitment to an International Agreement on Mineral Supply Chain Traceability on October 29. At the local level, Cali has led in creating a regional coalition of cities committed to addressing environmental crimes such as illegal gold mining. Meanwhile, civil society also expressed concern about illegal gold at dozens of COP16 events. FACT participated in an event with experts from Colombia, Peru and Brazil on illegal gold mining in the Amazon region, launching a new policy brief with seven policy recommendations to address the issue.

*Julia Yansura is director of the Environmental Crimes and Illicit Financial Program at the FACT Coalition (Financial Accountabilty and Corporate Transparency)

Feature articles express the opinions of the author and do not necessarily reflect the opinions of the editors or WBO.