The EIA is an integral (high-profile) component of regulatory process that has evolved over the last couple of decades to extend ‘upstream’ into the planning process and ‘downstream’ into the licensing procedure, so that the state (and civil society) can intervene, either to modify the original proposal or to correct deficiencies that are manifest as the facility or asset is under construction.

Feasibility studies focusing on the technical and financial viability of capital-intensive investments have always preceded most projects, but now these evaluations are carried out in the context of the potential tradeoffs caused by environmental and social impacts. In Brazil, feasibility studies include a public consultation that allows civil society to question the need for the investment and propose alternative approaches to resolve the perceived need for the proposed investment, as witnessed by the recent debate about exploring for oil off the coast of Amapá. In Colombia, the regulations require a formal study (Diagnóstico Ambiental de Alternativas) that evaluates specific alternatives. 

If the project passes that stage, and after completion of the EIA, project proponents must request an environmental licence. Most countries have embraced a process, which in Brazil is referred to as Licenciamento Ambiental Trifásico, which stratifies the licensing process into stages with clearly defined benchmarks.  For less-complex projects (B/EIA or C/EIA), regulators can compress the licensing procedure into a single step (Licenciamento Ambiental Simplificado), which requires a simplified environmental report that identifies potential impacts and proposes appropriate mitigation measures, or select an intermediate option (Licenciamento Ambiental Simultâneo), with two licenses to be issued at the same time.

Procedures vary across the region, but all systems share a common attribute: the power to terminate a project with an unacceptable level of negative impacts. The rejection of an application for an environmental licence is not uncommon, but rejections are seldom permanent.  In the Peruvian Amazon, between 1995 and 2023, a total of 603 EIAs were conducted; all but six were eventually approved, although 115 were sufficiently deficient that developers had to file formal modifications. The five projects that were rejected included the Mazán hydropower plant near Iquitos, the controversial electrical transmission line between Moyobamba and Iquitos, two hydropower plants near Machu Picchu and the extension of a natural gas pipeline into Indigenous territory near Camisea.

Hydropower: EIAs in the Public Eye

Several high-profile hydropower facilities have been constructed in the Brazilian Amazon. Three were approved with a list of conditions outlined in the EIA: Belo Monte, Jirau and San Antônio. One project, São Luiz do Tapajós, was terminated because the EIA highlighted its deleterious impact on an Indigenous community, which made it constitutionally illegal.

The Belo Monte project on the Rio Xingu was the most controversial and was subject to an evaluation process that spanned forty years. Opposition to the project caused it to be downsized from multiple dams and reservoirs to an idiosyncratic configuration at a single locality.

The compromise design purported to maintain the connectivity of the natural riverbed, while diverting most of the water flow through a parallel power facility. The quality of the EIA and the licensing process was questioned repeatedly, and the public prosecutor (MPF) filed 22 injunctions questioning the validity of the project, the quality of the EIAs and compliance with mandated mitigation measures.

Nonetheless, support from Presidents Lula da Silva and Rousseff ensured that the environmental agency (IBAMA) approved the construction and operation licences, and eventually the Tribunal Federal Suprema rejected legal attempts to halt the project. The facility is now viewed as an technical and financial failure, because water flows are not sufficient to operate it at full capacity, while the reduction of water in the Volta Grande have devastated fish populations above and below the dam.

The permitting process for the two facilities on the Rio Madeira was considerably less conflictive, partly because they were conceived as run-of-river projects from the outset, with impoundments kept to a minimum. Perhaps more importantly, the stretch of the river impacted by the San Antônio and Jirau water impoundments was occupied by traditional communities descended from rubber tappers, rather than Indigenous villages that enjoy special protection under the 1988 constitution. Predictions by ichthyologists that the dams would impede the migration of commercially important species, particularly goliath catfish, were validated in 2019, after their completion, when studies showed the species did not use the so-called fish ladders built as mitigation measures.

The hydropower facility at São Luis do Tapajós is one of the few examples of a dam that has been terminated because of information contained in its EIA .

This run-of-river facility would have flooded about seven per cent of a proposed Sawré Muybu Indigenous Territory and forced the relocation of a village populated by the Munduruku ethnic group. The federal agency that manages Indigenous affairs (FUNAI) opposed construction of the dam, which caused IBAMA to declare the project ‘constitutionally unviable’ because of its impact on an Indigenous community .

The three approved projects preceded the rejected one by approximately five years, during which time the political landscape had been roiled by the Lava Jato corruption scandal and the impeachment of President Rousseff. The charged political environment presumably made it more difficult for political operators and lobbyists to overturn the recommendations of IBAMA’s and FUNAI’s technical and legal staff. Unsurprisingly, the administration of Jair Bolsonaro tried to revive the project, but was unsuccessful, partly because IBAMA’s decision rejecting the EIA had been upheld by a federal court.

Industrial Mines: Conflict with Communities

Brazil’s largest mining company mining, Vale SA, operates ten industrial mines in the Carajás mining province and is slated to open another in the near future.

IBAMA has supervised the environmental review of seven of these mines, because they are located within a national forest (FLONA Carajás and FLONA Tapirapé-Aquiri), while the state agency (SEMA) has supervised development at the other three mine sites, located on so-called consolidated landscapes that were settled and deforested between 1970 and 2010.

The mines supervised by IBAMA and located within a FLONA have largely avoided interactions with landholders and communities, except for smallholders who had occupied public lands in the migratory boom in the 1970s. Vale needed to relocate these communities to develop the S11D iron ore complex, but the company encountered resistance when most of the residents rejected its offers as insufficient. The company allegedly resorted to a series of coercive techniques with the support of local authorities and individuals within IBAMA, while the peasants enlisted legal support from the Catholic Church’s Comissão Pastoral da Terra.

Eventually, the company prevailed in court because, under Brazilian law, subsurface mineral concessions supersede surface property rights. Nonetheless, the judicial proceedings were complicated by Vale’s strategy of purchasing landholdings with uncertified title documents, which mine opponents characterise as the illegal acquisition of public lands.

Land-tenure conflicts are even more acute on the landscapes where the company is developing a copper mine (Cristalino) that will be regulated by the state authority (SEMAS). The state authority is generally considered amenable to mining companies, but SEMAS has shut down mines when confronted with obvious environmental violations. For example, Vale’s Once Puma nickel mine, which began operation in 2011, was sued by Indigenous communities seeking redress for water pollution. SEMAS instructed the company to halt operations after a court ordered the company to pay the Xikrin do Cateté tribe of the Kayapó nation $R 26.8 million in compensation. The company chose to appeal the verdict, however, arguing that the pollution was caused by garimpeiros who exploited gold deposits prior to development of the industrial mine. The dispute has led to injunctions and counter-injunctions, causing the mine to intermittently cease operations since 2017; as of April 2024, litigation was ongoing.

Perhaps the most conflictive mining-related EIA in Pará is for the Belo Sun gold mine project, located across the river from the Belo Monte hydropower facility. Opponents contend that mining could pollute the Rio Xingu, a vital waterway essential for the Indigenous livelihoods. Moreover, the proposed mine would impact the PA Ressaca, the borders of which were recently modified to facilitate land acquisition by the company. Belo Sun, which is a Canadian company, claims to be committed to ‘responsible mining’, and an EIA for the mine was approved by SEMAS in 2017, when it issued a Licença Previa. The license was suspended in 2018, however, when a federal court found that the consultation process did not comply with Brazilian law, because the project would impact a fully legalised Indigenous territory (TI Arara da Volta Grande do Xingu). The judge instructed the company to resubmit its EIA to IBAMA.

The company appealed that verdict and filed a criminal complaint against anti-mine activists who had occupied landholdings the company had acquired from the agency responsible for certifying land tiles (Instituto Nacional de Colonização e Reforma Agraria – INCRA). Prospects for the mine were undermined in 2022, when the managers of the Belo Monte hydropower complex publicly stated that the combined risks of the two projects merited IBAMA’s intervention. In 2023, an appellate court upheld the decision to refer the licence application to IBAMA.

Bias and Oversight

The litigation surrounding all these projects highlights the limitations of the EIA process for adjudicating complex and conflictive development projects, particularly when vested interests permeate the system. The most obvious conflict of interest occurs when the construction contract gives the company the responsibility to conduct both the feasibility study and the environmental evaluation. Using in-house subsidiaries is prohibited in Latin America, but project developers turn to a limited number of contractors specialising in the preparation of EIAs. Not surprisingly, all these companies market their services by citing their ability to guide the EIA process to a successful conclusion, with delivery of the environmental licence.

Western multinationals may be more open to the value of an objective EIA than a domestic or a Chinese company. Many are publicly listed corporations whose executives are sensitive to bad press linked to environmental negligence; nonetheless, they are obligated to maximise profits and reward subordinates that finish on time and under budget. Multilateral financial agencies uniformly insist on the preparation of a high-quality EIA, but their loan officers are evaluated based on the number projects they move through the project pipeline, not on their ability to reject risky projects. The most objective EIAs are probably those that involve NGOs and academics as subcontractors or consultants, but these institutions also can be subject to bias, especially if they are suffering from financial stress or under political pressure to approve the project.

The EIA process has been designed to overcome this systemic bias via the public consultation process, or by separating EIA preparation from the approval process. Nonetheless, environmental authorities often side with the vested interest and powerful stakeholders, for political reasons or because of a philosophical orientation enhanced by similar educational and career paths. Economists call this “regulatory capture,” and it occurs when an agency or process advances the interests of the parties impacted by the regulations, rather than promoting the interests of the general public, for which the regulations were created.

In the Amazon, where a significant proportion of the residents are of Indigenous heritage, the potential impact on cultural heritage sites, traditional practices and cultural values of local communities is considerable. The EIA should explore the potential for social conflicts that could arise because of the project. Key to the social component is the need for a broad and effective public consultation process, which should begin early and continue throughout the EIA process. This involves informing communities about the project, conducting consultations and incorporating their concerns into the assessment.

Key to effective oversight is providing civil society access to all EIA documents; this allows their analysts to review the data and the logic behind their decisions, a requirement that has been vastly improved by the ongoing informatics revolution, which continues to transform Amazonian society.

Banner image: A sample of the more than 55 types of fish in the Rio de la Plata on the Brazilian side. Credit: Rhett Butler.

“A Perfect Storm in the Amazon” is a book by Timothy Killeen and contains the author’s viewpoints and analysis. The second edition was published by The White Horse in 2021, under the terms of a Creative Commons license (CC BY 4.0).

To read earlier chapters of the book, find Chapter One here, Chapter Two here, Chapter Three here, Chapter Four here, Chapter Five here and Chapter Six here.