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Promised US$1 billion in Belo Monte dam compensation largely unpaid?

  • In a 2011 binding agreement with Brazil’s federal government, the Norte Energia Consortium agreed to pay US$1 billion to Altamira residents, including 9 indigenous groups, in compensation for the Belo Monte dam. Little has been paid to date, says the Instituto Socioambiental (ISA), an NGO watchdog group, while the consortium responds that it is meeting its obligations.
  • Belo Monte significantly impacted Altamira’s environment and people, requiring the diversion of 20 kilometers of the Xingu River, reducing the stream’s flow by 80 percent over a 100 kilometer stretch, and dislocating indigenous people and other area residents; 8,000 families were displaced by the dam.
  • According to critics, only 15 percent of required compensation to protect indigenous lands has been spent, while Norte Energia has failed to sufficiently secure entry points to indigenous lands, per their agreement, a failure that facilitated the entrance of illegal loggers who cut significant amounts of timber on Indian lands.
  • Promised Altamira garbage collection infrastructure has yet to be put in place. While an underground sewage system and water distribution system have both been completed by the consortium, no houses have been connected to the system. Norte Energia argues that it is the city’s responsibility to make the connections.
The Arara Indians were among the groups who were supposed to receive compensation for the building of the Belo Monte dam. Photo courtesy of CIMI

Earlier this year, the Norte Energia Consortium completed building the gigantic Belo Monte hydroelectric project — the third biggest in the world — located within the municipality of Altimara in the state of Pará, in the heart of the Amazon.

But even though that hugely controversial dam is now operational, critics say that Norte Energia has yet to meet the mandatory US$1 billion compensation commitments it made to Altamira’s residents — including nine indigenous groups — as a condition for being granted the project contract by Brazil’s federal government in 2011.

The project has hugely impacted the area’s environment and its people. It required the diversion of the main stream of the Xingu River, reducing its flow by 80 percent along a 100 kilometer (62 mile) stretch of its original channel. The project also required the relocation of part of Altamira’s population, including indigenous groups.

According to the Instituto Socioambiental (ISA), an NGO, only 15 percent of the compensation required to protect the land of the indigenous tribes has been spent so far.

ISA has been monitoring environmental degradation at the Belo Monte site since 2011, utilizing satellite imagery analysis, surveillance over flights, and fieldwork. Those observations show that Norte Energia has failed to adequately secure indigenous lands at 21 entry points, as originally promised. Only seven security points have been set up to date, but their effectiveness is questionable. According to ISA, illegal loggers have been invading the demarcated indigenous areas and deforestation has increased in the area surrounding the Xingu River — activities that continued even after completion of the Belo Monte dam.

In 2014 alone, over US$100 million in timber was stolen from the Cachoeira Seca indigenous lands of the Arara people, according to ISA, with the logs exported to markets in South and Southeast Brazil. The NGO believes that the saw logs were also sold to meet booming construction industry demands in Altamira, a city whose population jumped 50 percent after Belo Monte’s construction began. Today it is a city of 150,000 people.

The Belo Monte dam under construction. In a 2011 binding agreement with Brazil, the Norte Energia Consortium agreed to pay US$1 billion to Altamira residents, including 9 indigenous groups, in compensation for one of the world’s largest hydroelectric projects. Photo courtesy of Agencia Brasil

“Those Indigenous Lands and Conservation Units [include] large pockets of forest, rich in biodiversity, [and are] suffering immense pressure [from] Belo Monte. The security measures [for] these territories should [have been] preventative [and implemented] before the start of the projected impacts,” said ISA lawyer Bivany Rojas. Waiting until the dam was finished to put protective measures and territorial supervision and enforcement in place as an afterthought is irresponsible and ineffective, she added.

Important promises made to other Altamira citizens have not been met by Norte Energia, according to ISA, which reports that 8,000 families — around 40.000 people — were removed from their homes to build the dam.

Promised garbage collection and disposal infrastructure has yet to be put in place. And while an underground sewage system and water distribution system have been built by Norte Energia, no houses have yet been connected to the system. Critics say that this lack of water and sanitation infrastructure could represent a serious looming public health crisis.

“Basic sanitation, distribution of piped water, sewage… All this should have been done before the dam [was filled and went into operation]. These were the pre-conditions determined by the government”, said Luiz Claudio Pereira, secretary of Altamira Planning in an interview for the website Colabora.

Norte Energia has responded by saying that the connection of residences to the sewage system is the city’s responsibility. The company adds that all infrastructure is working in the five RUC (Urban Collectives Resettlement) neighborhoods created by Norte Energia where the displaced families were relocated. The company also asserts that all the displaced families “either got compensation, social rent or new houses”.

Norte Energia is known to have fulfilled an obligation to build 378 classrooms in local schools. But many of those schools remain closed and without teachers in rural parts of Altamira, while the demand for schools has steadily risen largely due to the population influx to build the dam. In 2012, the city counted 24,791 children and adolescents enrolled in classes. By 2015, that number had risen to 27,486 in overcrowded schools. The company says it met its obligation by building the needed facilities, and that it is now government’s job to assign children to the schools and maintain classrooms and teachers. The company notes that it has no special program or policy to encourage children to attend classes.

Overcrowding, underbuilt infrastructure, inadequate public services and not enough paid public servants have resulted in a marked decline in quality of life in Altamira, say critics. The completion of the dam earlier this year, has also meant a steep rise in unemployment.

One measure of the decline in living standards during the Belo Monte construction years can be found in crime statistics. The number of adolescents detained by Altamira police rose dramatically: there were just 27 arrests in 2010, the year before construction started. That rose to 66 arrests in 2011; 175 in 2012; 189 in 2013; and 182 in 2014, the most recent accounting. That’s a nearly sevenfold increase in adolescent arrests in just four years, with all other forms of crime also on the upswing during that period.

Now, with the dam complete, some people have moved on from Altamira in search of other jobs. But the controversy and debate in Altamira over whether or not the Norte Energia Consortium has fulfilled its many promised Belo Monte compensation commitments is likely to continue into the foreseeable future.