Belo Monte Dam: The Costs of Development in Brazil

Jul 1, 2010

By: Jennifer Lerner

Americas Program

On April 19, 2010, after much battle and debate, a regional appellate court decided to allow development of the Belo Monte dam. With this legal victory, the Brazilian government will allow the Norte Energia consortium – the company with the highest bid – to commence construction of the dam. It will be the third largest dam project in the world.

The Belo Monte dam is located near the city of Altamira, in northern Brazil. The Belo Monte dam, when constructed, will divert the flow of water in the Xingu River - located alongside Altamira – to provide more water and electricity to the nation.  The development of the dam has been in flux for about twenty years, as domestic and international pressure caused the government to abandon the project in the 1990s. The controversy recently surfaced once again, as current President Luiz Inácio da Silva pushed for the completion of the dam. Although three court injunctions were issued to stop the bidding of construction rights, all were eventually struck down by a regional appellate judge, ruling in da Silva’s favor to continue with development of the Belo Monte. At least 70 dam projects are currently in the planning stages in the Amazon region.

President Lula strongly supports the Belo Monte dam, as electricity blackouts have plagued the country in recent years. Furthermore, Lula views the dam as a step forward in the country’s path to development. The projected benefits of the dam will include creating new jobs and bringing electricity to 23 million homes. Brazil’s Environment Minister José Machado also claims that no indigenous people will be displaced by the project. Furthermore, the Norte Energia consortium will have to pay $800 million to protect the environment, as well as meet 40 other conditions to develop the dam. Critics of the project – which includes indigenous, human rights, and environmental groups – allege that the dam will flood about 500 square kilometers of the Amazon, displacing a projected 12,000 indigenous people. Indigenous groups have also stated that they were not consulted by the government to discuss the dam’s construction.

The debate around the Belo Monte dam is reminiscent of the controversy that surrounded the Sardar Sarovar dam in India in the late 1990s. The Sardar Sarovar dam was constructed in the Narmada River, close to which thousands of indigenous people live. The government promoted the development of the dam, believing that the benefits would outweigh the social and environmental costs. The government acknowledged that although 20 villages would be submerged, and about 20,000 indigenous people displaced, the project remained viable since it would bring electricity to millions of its citizens, as well as safe drinking water to an estimated 30 million people. However, since the dam was partially completed in 2008, the majority of that water has been channeled to places already rich in water, instead of regions lacking water resources. Furthermore, critics allege the dam is inefficient, estimated to produce only 3% of its projected 1450 megawatts of power. While there is no current government statistic, some estimates have put the number of displaced people at over over 320,000. Resettlement has also proven to be an issue, as critics charge the government has not allocated sufficient land for the displaced communities. Those that have been resettled have found their land of poorer quality and less suitable for agricultural purposes. Unfortunately, the Sardar Sarovar dam is but one example of a development project that has not provided the promised benefits. Globally, millions of people, often indigenous, have been displaced in the name of development, often with little support from the state.

In Brazil, criticisms of the Belo Monte dam may foreshadow parallel consequences as in India. As the project moves forward, critics continue to argue that the Brazilian government is underestimating the social and environmental costs of the project. Furthermore, two employees of IBAMA – the Brazilian government’s environmental agency responsible for giving approval of the project – resigned because of the rushed timeline to approve the dam, which they claim was aided by political pressure. Opponents also claim that the government is overestimating the benefits of the dam, as they charge that the dam will be highly inefficient, producing a paltry 10% of its installed capacity during the three to five month-long dry season, a significant drop-off in energy production.

With the Belo Monte dam set to be completed in 2015, indigenous groups and their allies have vowed to continue to fight the dam’s construction. Although it is doubtful that their efforts will ultimately be successful, one can hope that their efforts will lead to a development plan that acknowledges the full social and environmental costs of Belo Monte.

 

Photo courtesy of International Rivers