May 26 2023 | Nº. 68

Editorial

The administration of Luiz Inácio Lula da Silva found itself this week in the midst of a governing crisis that could well escalate in the weeks ahead. It began over a dispute regarding whether or not to allow new oil drilling at the mouth of the Amazon River. The Brazilian Institute for the Environment and Renewable Natural Resources (IBAMA), the government entity responsible for upholding both federal environmental laws and international agreements that Brazil has joined, denied a request from the country’s national oil company Petrobras to drill at the mouth of the Amazon River. Minister of the Environment Marina Silva said on Tuesday, Mat 23 that IBAMA’s decision would be “obeyed and respected” even in the face of opposition from members of the administration and their allies who see new oil finds as key to economic growth. Perhaps most dramatically, Marina’s position led Senator Randolfe Rodrigues, a leader of the Lula government in Brazil’s senate, who hails from the state where Petrobras hopes to drill, to end his affiliation with Rede Sustentabilidade (Sustainability Network), the party Marina founded in 2013.

What followed was a broader assault on the government’s environmental agenda. A series of measures approved by Congress on Wednesday, May 24 transferred several key attributions of Marina’s ministry of the environment and the newly created ministry of Indigenous peoples to other agencies less likely to hold the line against the rapacious interests that drive so much environmental degradation, much to the alarm of several NGOs. Congress this week also advanced a rule that would limit the demarcation of Indigenous lands to those already occupied by native peoples on October 5, 1988, the date the post-dictatorial Constitution was ratified. In practice, this would hinder the creation of new protected areas in the most environmentally vulnerable areas. “They want to change [the cabinet makeup] to implement the [policies of the] Bolsonaro government in the Lula government,” Marina told Folha de São Paulo. As the well-sourced journalist Mônica Bergamo put it, “an important part of the inner circle of the Lula government has already thrown in the towel and understands that the president needs to hand over several rings to keep his fingers. That is, giving up concrete and also symbolic public policies, such as in the area of the environment, to achieve progress in at least one central theme: economic development, without which the government could fail resoundingly.”

It is not clear if Lula will challenge the sway of major agricultural producers in congress. Economic measures like the new fiscal framework approved this Thursday (see Highlights), derided by some on the left as a means of imposing austerity, and an ambitious tax overhaul are clearly priorities for the administration. There is no progressive majority in Congress, which forces the government to pick and choose its battles. But how much is Lula willing to concede and on what issues? Lula’s commitment to conservation and the rights of Indigenous peoples has been his trump card in moments of tension with the United States and the European Union so far. If he gives in now, he might well appease congressional powerbrokers intent on constraining Lula’s most ambitious progressive inclinations, but he runs the risk of losing international goodwill once and for all, to say nothing of the costs of further environmental degradation. How Lula decides to proceed will reveal much about how he understands the country’s current political landscape. 

Highlights

• CONGRESSIONAL INVESTIGATION ON THE COUP. On May 25, the Brazilian congress installed the Mixed Parliamentary Commission of Inquiry composed of members of the Chamber of Deputies and the Senate, which will investigate the failed coup d'état attempt, which took place on January 8. The president will be Arthur Maia, from the political party União Brasil, who is linked to the centrist forces, nicknamed Centrão, or Big Center. The rapporteur will be Eliziane Gama (Social Democratic Party, PSD), which is closer to the Lula government. Bolsonarist Magno Malta (Liberal Party, PL) will be second vice-president and Cid Gomes (Democratic Labor Party, PDT), brother of defeated presidential candidate Ciro Gomes, will be vice-president of the Commission.

• LULA WINS. On May 23, the Chamber of Deputies approved an important text that establishes new bases for government spending. In Brazil this text is known as the “new fiscal framework.”  It increases the federal government's spending and increases flexibility on which expenditures the government can make. The previous rule was more restrictive. It was called a “public spending ceiling” and had been approved during the Michel Temer government (2016-18). The approval of the new text shows that the Lula government will have more budgetary slack to deliver its campaign promises to voters and that his government has the strength to approve measures in Congress. At least 257 votes were needed to pass the measure. The government got 372.

• NOT SO MUCH. The president of the Chamber of Deputies, Arthur Lira, hastened to say that the government's significant victory in the vote on the new fiscal framework should not be confused with broad, stable, and permanent support from the majority of Congress for President Lula's agenda. Lira belongs to the Popular Party, a right-wing party that was part of Bolsonaro's support base but is now loosely associated with the Lula government. According to him, the new budget rule was approved by such a wide margin because it was in the country's interest. Lira's speech shows that Lula still needs to invest in building good relations with a Congress dominated by political parties, which have little ideological coherency.

• OPERATION CAR WASH. Judge Eduardo Appio, responsible for judging the remaining cases of Lava Jato (Car Wash) Operation in Curitiba, was removed from his duties on May 22. The decision was taken by an internal body of the judiciary. Appio had replaced former judge and now senator Sergio Moro at the head of the investigation. He was critical of Moro's methods. In office, he even reversed decisions made by his predecessor, in addition to questioning agreements made between Lava Jato and investigated companies, such as Odebrecht, now called Novonor. Appio was replaced by Judge Gabriela Hardt, who is more aligned with Moro.

• STRANGE CASE. Appio was removed because he is suspected of having made a threatening phone call to a lawyer named João Eduardo Barreto Malucelli. In the call, he allegedly pretended to be an IRS inspector. João Eduardo recorded the conversation and handed it over to the court. The lawyer who received the call is the son of Marcelo Malucelli, a judge who had been responsible for reviewing the decisions taken by Appio. In addition, João Eduardo is a partner of Moro and his wife, federal deputy Rosângela Moro, in a law firm. Appio is on vacation and has not made any public statements about the case.

• LULA AND ZELENSKY. The president of Ukraine, Volodimir Zelenski, did not personally meet with Lula during the G7 summit in Hiroshima, Japan on May 21st. Brazilian diplomacy said it had made several meeting times available to Zelenski's advisers, who, after scheduling and rescheduling the meeting, stopped responding. The disagreement negatively affects Lula's plans to broker a peace agreement between Russia and Ukraine.

• COUP D'ETAT. On May 22, the Brazilian Supreme Court, equivalent to the Supreme Court in the United States, convicted 250 people involved in the failed coup d'état attempt on January 8. With that, the total number of people who will be judged for their involvement in these events is 1,045 at the moment. Most of the accused were in the camp set up in front of the army headquarters in Brasília, asking the armed forces to carry out a coup d'état to reverse the results of the October 2022 election results.

• RASKIN AND BRAZIL. On May 23, Democrat Congressman Jamie Raskin participated in a meeting with parliamentary, state and social movement leaders involved in the defense of democracy in Brazil. The meeting was organized by the WBO and five partner organizations in Brazil. Raskin was a member of the commission that investigated the invasion of the U.S. Capitol building on January 6, 2021. Brazil has set up a Parliamentary Commission of Inquiry with members of the Chamber of Deputies and the Senate to investigate the failed coup attempt of January 8, 2023.

• NEW PODCAST EPISODE. The newest episode of the Brazil Unfiltered podcast, produced by the WBO, is out. In it, James N. Green interviews political scientist Maria Hermínia Tavares de Almeida. She talks about the paths of Brazilian foreign policy in President Lula’s third term in office.

Feature Article

by Silvio Eduardo Alvares Candido

The Unequal Division of Labor in the Deforestation of the Brazilian Amazon Rainforest

The illegal deforestation of the Brazilian Amazon today is enabled by interconnected economic sectors. These tend to be addressed by scholars and authorities separately. I would like to draw attention to the larger picture and to how the dynamic of deforestation entails a division of labor among several fields cross-cut by unequal relations. The “dirty work” of clearing the forest is undertaken in regions with the most precarious presence of the State and in relatively powerless sectors of society. These are connected to more powerful Brazilian agribusiness interest, which benefit from deforestation without risking exposure.  

Driving off onto secondary roads, loggers usually penetrate the areas to be “opened”, building unauthorized roads usually on public lands. Researchers from the Brazilian NGO Imazon estimate the existence of a network of 3.46 million kilometers of such roads throughout the Brazilian Amazon. These commonly invade indigenous peoples’, quilombolas’ and riverside communities’ lands. Loggers intimidate communities using violent means and economically co-opt inhabitants. Precarious labor is used for selective logging, and high valued species extracted are sold predominantly in domestic markets.

The role of illegal land markets is key in the dynamic of deforestation and tend to be neglected. The rule in this business is: “Whoever deforests, owns it.” Commonly using pathways opened by loggers, perpetrators burn tons of highly biodiverse biomass, adding its carbon to the atmosphere and reducing to ashes resources from which the livelihoods of traditional communities depend. This also involves precarious, slavery-like, working conditions. The clearing enables a sharp increase in the price of land, compensating risks undertaken by perpetrators. The illegal commercialization of lots is enabled by fragile institutions regulating property in the Amazon. Federal land regularization programs, such as Terra Legal and Titula Brasil, may allow the early legalization of grabbed lands.

But the “purification” of deforested areas tends to start when they are purchased for cattle ranching. Actors involved in it come from consolidated parts of the Amazon frontier or work for investors from wealthy parts of the country. Owners getting their livelihoods from ranching buy larger areas with the resources from the sale of their lands further south, expanding their patrimony and business into the frontier. For speculators, cattle is a way to assure possession and to enable its regularization. Fattening cattle is a flexible and low-risk activity, entailing minimal labor and relatively small investment, and is used to occupy large and remote areas. Ranches owned by both small producers and speculators are extensive and inefficient. Amazon cattle is still mainly commercialized in domestic markets (circa 75 percent of the volume), but exports are rising due to increasing control over foot-and-mouth disease, the growth and internationalization of the three major Brazilian beef-processing companies (JBS, Marfrig and Minerva), and the rising demand from China. Despite being considered as the main vector of deforestation, ranching in the Amazon is deemed as a legitimate activity, made up of powerful and politically organized Brazilian agribusiness. 

The intercropped production of soy and corn is the most capitalized activity of the dynamic that moves deforestation forward. While farmers are directly involved in many crimes in the Amazon, they increasingly participate only when the “dirty work” is done. They reward the pioneering activities and the risks taken by ranchers and land grabbers by purchasing their prized lands. Farming deploys sophisticated production technology, entails better and increasingly formalized working conditions, and is strongly integrated into global finance. Properties are predominantly legalized and are the locations for the production of grains for major traders such as Cargill, ADM, Bunge, LDC, Ammagi and the Chinese entrant COFCO. Part of the soy is exported in natura, especially to China (circa 49 percent). Another part (49 percent) is domestically processed into soy meal, which is exported (52 percent) and used domestically for animal feed (48 percent), and soy oil, predominantly consumed in the country for food and biodiesel production (77 percent).

The effectiveness of public and private attempts to control deforestation depend on the intervention in the dynamic interconnection of these economic sectors. Brazil made important progress in combating deforestation with the implementation, in the first mandate of Lula, of the most comprehensive and structured policy ever created for that end: the Plan for the Prevention and Control of Deforestation in the Amazon (PPCDAm). In the 2010s, opposition to the plan gradually increased due to new investments in infrastructure in the Amazon and to the political strengthening of agribusiness. In Bolsonaro’s government, agribusiness and the military took over the Ministry of the Environment, and the work of legitimizing sectors taking care of the dirty part of the deforestation process was continuous. Now, the backlashes generated have to be fixed. Those interested in this process should read and contribute to the ongoing public consultation about the resumption of PPCDAm. 

Silvio Eduardo Alvares Candido is a Professor of Organization Studies and the coordinator of the Network for Socioeconomic and Organizational Studies in the Amazon Rainforest (www.resoa.ufscar.br) at the Federal University of Sao Carlos (UFSCar). His current research addresses the dynamic of markets associated with the illegal deforestation of the Amazon Rainforest in Brazil, especially finance and the production and processing of soybeans and cattle beef. This text was originally written for issue 68 of the WBO Newsletter, published on May 26, 2023. Fill in the form at the bottom of the text to access and subscribe to the WBO weekly newsletter in English.

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