Belo Monte dam installation license suspended, housing inadequacy cited

Photograph: Zoe Sullivan

A federal court in Brasilia has found fault with Norte Energia´s resettlement of people displaced by the Belo Monte dam in the Amazonian state of Pará. The court ruled in favor of the Federal Public Ministry (MPF), a body of independent prosecutors, which argued that the urban resettlement plans for the thousands displaced by the dam were inadequate.

The new ruling suspends Norte Energia´s installation license, blocking the consortium from proceeding with further construction on the dam, slated for completion in 2019. The Belo Monte hydroelectric facility has been operational since early 2015.

According to the suit, Norte Energia promised in 2011 to build three-different sized houses for displaced families (60, 69 and 78 square meters), allocating them according to the size of resettled families. But in 2013, the firm reneged, saying it would only build one size house of 63 square meters. This decision, according to the ruling, was made without consulting the people affected, many of them indigenous and traditional people who had lived along the Xingu River.

Another change involved opting to build the houses from cement blocks instead of brick as originally promised. While this may seem a minor alteration, it meant that sleeping hammocks, traditional in the Amazon, could not be supported by the block walls.

An additional problem cited is that the resettlement communities were located more than 2 kilometers away from the residents´ original homes, a serious problem since there is little public transit available in the city of Altamira. During this journalist´s visit to Altamira resettlement communities in 2016, motorcycle taxis were the only reliable method of transportation to work, school and shopping. However, these taxis charge higher rates than most city buses in Brazil, causing a financial hardship for the many displaced people without jobs. The taxis also restrict who can travel — since there are no allowances for the differently abled — as well as the items a passenger can carry.

Additionally, the MPF found that the houses proposed by Norte Energia violated the Altamira municipality Construction Code. Instead of demanding the consortium meet the existing code, however, the city council approved a code amendment in order to adapt it to the Norte Energia projects. The MPF contended that the sudden change by the city council was unconstitutional.

The Belo Monte dam was built to have the third-largest hydroelectric generating capacity in the world. It is located on Brazil´s Xingu River near the city of Altamira. The Norte Energia consortium that built the dam signed an agreement with the Brazilian government in 2011 promising to pay US$ 1 billion in compensation to those affected by its construction, including displaced indigenous and traditional people. An NGO, the Movement of Those Affected by Dams (MAB) estimates that some 40,000 people were displaced by the dam. However, Norte Energia´s Environmental Impact Study estimated that only about half that number would be affected.

The dam’s construction resulted in a rush from across Brazil to the city by job seekers and those with businesses supporting them. As dam construction work continues to wind down, unemployment has rapidly escalated. Altamira today ranks as the most violent city in Brazil according to the 2017 Atlas of Violence.

Over the past year, Norte Energia´s license has been suspended because of its failure to fulfill the terms of its operating agreement, especially the building of an adequate sewer and water system for the city of Altamira where most of the displaced have been relocated.

The reduction in river flow resulting from the dam´s installation has also negatively affected indigenous people and traditional fishing communities, which depended on the abundance of the Xingu’s fish for sustenance and cash income. Major fish killshave occurred since the dam’s construction, for which Norte Energia was fined US $10.8 million. In 2015, the MPF charged the consortium and federal government with ethnocide, the destruction of indigenous culture, due to its failure to meet its commitments to indigenous people displaced by the project.

While the new ruling impedes Norte Energia from continuing work to expand the hydroelectric project, the dam has been operational since early 2015. In a press statement, Norte Energia said it had not yet been notified of the decision. O Globo´s national television news noted on September 15th that the dam continues to operate. Norte Energia’s statement maintains that it has an operating license that supersedes the installation license that the court suspended, and so there are no practical impacts for the firm resulting from the suspension. The release noted that Norte Energia will appeal.

Attorney Biviany Rojas Garzon was indignant that the company would brush off the ruling in this way. Rojas Garzon works with the Socio-Environmental Institute’s Xingu River program. “The idea that this decision is innocuous is false,” she told Mongabay. “The rights of the people who have been affected by this dam are still valid, and they don’t expire. The [consortium’s] obligation to the people who were expelled from their homes remains.”

Rojas Garzon also expressed concern that the dam may be purchased by Chinese investors, given the lackluster reputation China has on human rights issues. Reuters reported in April that the Belo Monte dam ownership was in talks with the Zhejiang Electric Power Construction company (ZEPC). News of a potential sale emerged after Brazilian President Michel Temer travelled to China. By July, however, Reuters reported that talks around a potential sale had cooled in part because of the dam’s legal issues.

Belo Monte’s current owners include Eletrobras, Brazil’s state-owned power company; Vale, the Brazilian mining giant; Neoenergia SA, Cemig and Light SA; and pension funds Petros and Funcef. The operation is valued at 35 billion Reals, but a source told Reuters that the risks and uncertainties involved in the project could be a “deal-breaker.” The hydropower dam is also involved with an administrative case brought by ANEEL, Brazil’s electrical agency, because it began producing power behind schedule.

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