Brazil’s Vale on the Offensive As Legislators Consider Amending Forest Code
Mining company earns dubious distinction as critical vote approaches

In an award show planned to coincide with this week’s World Economic Forum, the world’s second largest mining company, Brazil’s Vale, was honored as it made the jump to number one, though likely not in the category of its choice. Last week, Vale took home the 2012 Public Eye Award, presented yearly by Greenpeace and the Swiss NGO Berne Declaration to honor the world’s worst corporation.

Vale's Belo Monte project has sparked massive protests in Brazil. Photo published under a Creative Commons license from Pedro_dm_Ribeiro

The Companhia Vale do Rio Doce (or more innocuously, in English, the Sweet River Valley Company), which operates in 38 countries, managed to edge out Tepco, the Japanese company responsible for this year’s Fukushima reactor meltdown, to win top honors.

But Vale’s record is itself impressive. It is responsible for nearly 4% of Brazil’s carbon emissions, operates within several protected forest reserves, and has been cited for illegal dumping in several of the countries in which it operates. Vale is the major private operator in the consortium responsible for the construction of the controversial Belo Monte dam, and the company is likely responsible for its fair share of the many death threats delivered to environmentalists and union leaders in Brazil’s northern interior.

Yesterday, workers at a Vale nickel mine in Canada reached a contract agreement with the company after a 17-month strike, the longest in the corporation’s history. But Canadian miners are likely better off than Vale workers in Brazil, where judges in Parauapebas have watched the number worker complaints soar in recent years after Vale opened its massive Carajás project.

On the heels of Vale’s sweep at Davos came news of the first oil spill related to the exploration of Brazil’s vast new pre-sál oil reserves (officially called the Tupi oil fields, in a somewhat ironic nod to Brazil’s indigenous peoples). Though the spill was small by post-Deepwater Horizon standards, covering only about 70 km², it comes only a few months after a more serious spill led Brazil to suspend Chevron’s right to drill in Brazilian waters. Oil revenues have and will continue to play a major role in Brazil’s economy, but such recent events call into question the safety of drilling operations.

Environmental concerns will be at the forefront of the discussion when Brazil’s legislature reconvenes on Feb. 2, with lots of buzz surrounding a March vote on controversial reforms to Brazil’s Forest Code. The reforms, among other things, aim to reduce the amount of native vegetation that property owners must leave intact and reduce the size of protected areas near rivers. According to the WWF and other groups that oppose the reform, the proposed code also grants a measure of amnesty for illegal deforestation in areas that have already been mostly commercialized. The bill is currently waiting on approval from Brazil’s lower house. It has already passed both chambers but was modified by the Senate and thus must pass once more through the lower chamber before heading to President Dilma Rousseff’s desk.

The Brazilian government has traditionally given rather deferential treatment to agro-export interests and the important discovery of the oil reserves prompted Lula, the former president, to declare a “second independence” for the country. But recent events show that tougher decisions must be taken. Dilma should veto any bill that reforms the Forest Code and take a tough stance toward companies like Vale in spite of their big-name status. It seems obvious to say, but the country should look to sustainable resources for its future security. Oil revenues should be invested in green industries and resources should be dedicated to protecting natural reserves, particularly the Amazon rainforest. In Brazil, growth does not have to be a dirty process.