Integration and the Environment on the Rio Madeira

A huge dam complex on the Amazon's Madeira River pits the imperatives of economic growth and integration in South America against the conservation of an environmentally sensitive area. Environmental conflicts such as the one underway on the Madeira will become increasingly common in South America as the initiative for the Integration of South American Regional Infrastructure (IIRSA) – of which the Madeira Complex is a part – reaches ever-widening implementation.

March 9, 2009

At the recent World Social Forum held in Brazil, a group of 27 organizations issued a manifesto opposing the local government's construction of the Madeira Dam Complex in the Amazon. Among a long list of complaints, the groups accused the Brazilian government of disregarding "the protests of social movements and other civil society organizations of Brazil, Bolivia and Peru."

Aerial view of the Madeira, the largest tributary of the Amazon River. (By Wilson Dias/ABr)

For the Amazon, and other environmentally sensitive areas, it is a familiar story: The Madeira Complex pits the increasing demands of economic "progress" and growth against the subsistence of local communities and the protection of the fragile ecosystems in which they dwell. Such dilemmas are coming to a head as the continent-wide initiative for the Integration of South American Regional Infrastructure (IIRSA) – a sort of mega-project of mega-projects of which the Madeira Complex is a part – reaches ever-widening implementation.

The proposed project in western Brazil near the Peruvian and Bolivian borders would include two massive dams on the Madeira River and two additional dams upstream. The government says the dams will help solve Brazil's chronic electricity shortages. The complex will also include a series of locks for a 2,600-mile waterway capable of handling industrial barges. The waterway would serve as a busy corridor for the transport of minerals, grains, timber, and other products. These resources could flow east toward Brazil's Atlantic port of Belém, and eventually on to Europe; or they could flow west toward Bolivia and Peru, and eventually on to China. Estimates on the price of the project – the largest ever attempted in the Amazon – range from the $13 billion cited by official sources, to as much as the $22 billion calculated by watchdog groups.

The Madeira River Basin covers roughly a quarter of the Brazilian Amazon and is the Amazon River's largest tributary. The environmental impact of the project would extend over nearly a million square kilometers of rainforest in Brazil, Bolivia, and Peru, flooding areas, deforesting others, reducing fish stocks, upsetting water flows and silt deposits, and threatening endangered species in this region of unique and immense biodiversity.

Proponents claim the Madeira Complex will bring sorely needed economic opportunities to impoverished and isolated local communities by creating jobs and by connecting them to more developed regions. But activists counter that the lion’s share of the mega-project’s benefits will go to big companies – particularly those in agribusiness.

Agribusiness at the Helm

One of the people with the most to gain from the Madeira Complex is Blairo Maggi, a recipient of Greenpeace's Golden Chainsaw Award for being the "Brazilian most responsible for Amazon destruction." Maggi is the head of the world's largest soybean production firm, Grupo Maggi, and is the current governor of Mato Grosso, one of the three Brazilian states to be affected by the project. During his first year as governor in 2003, deforestation rates in the state more than doubled.

Click for larger image. (Courtesy

According to Zachary Hurwitz of the Americas Program at the Center for International Policy, the dam project's network of industrial canals would “enable the Madeira River system to transport an estimated 35 million tons of soybeans a year—a 500% increase from the seven million tons currently carried out by river. Critics claim cheaper transport costs on the river would provide an incentive for the expansion of soybean production in neighboring Rondônia and Amazonas states, increasing deforestation and land invasions.”

Glenn Switkes of the river-defense network International Rivers, points out that “a preponderance of independent expert opinions identified flaws in the environmental (impact) studies" of the project. Switkes says these same concerns were shared by the technical staff at the Brazilian environmental protection agency (IBAMA). "There is growing recognition that the projects were approved despite overwhelming evidence of the enormous degree of their impacts," he concludes.

Nonetheless, the government and private investors moved ahead with the project after the administration of President Luiz Inácio Lula da Silva granted an environmental license to the state-run Furnas electrical company and the private conglomerate Odebrecht for Santo Antônio and Jirau – the Madeira Complex's two biggest dams. The construction of the dams is already underway, despite legal challenges and mounting pressure by activists on private banks to deny funding to construction effort. In May 2008, the Franco-Belgian Suez consortium – along with a handful of smaller corporations – was awarded the contract for Jirau. And this February, the Brazilian state development bank (BNDES) approved $3.1 billion to finance the project.

An Opening of the 'Veins'?

The Madeira Complex is but one of more than 550 mega-projects being advanced under the auspices of the Integration of South American Regional Infrastructure (IIRSA). Countries have invested $80 billion into the integration project thus far. The Madeira Complex falls within the Brazil-Bolivia-Peru hub, one of 12 “multinational strips” in South America designated for the integration and development of energy, communications, and transportation infrastructures. Each of the hubs consists of several, interlaced projects; the Madeira Complex is the largest. Its expected multi-billion dollar price tag is to be financed by the Inter-American Development Bank (IDB) in addition to loans from other regional funds and national banks – particularly, Brazil's state development bank (BNDES).

IIRSA is an interlocking set of regional infrastructure development hubs or "axes."

IIRSA's harshest critics say it is a plan solely focused on the full-spectrum exploitation of the continent’s prodigious natural resources. Indeed, IIRSA maps show South America's rivers, mountains, and forests crisscrossed with color-coded lines and areas for planned development "axes" and "corridors." A more refined ideal of Eduardo Galeano’s Open Veins of Latin America there’s never been.

Announced in 2000 and backed by South America's 12 republics, IIRSA aims to connect resources in isolated areas to major export hubs. IIRSA could be said to be the infrastructural counterpart to the ill-fated Free Trade Area of the Americas (FTAA). Its proponents stress the need to overcome the continent’s great geographic barriers – the Andes, the Amazon, and the Orinoco Basin – with integrated infrastructure that will help spur growth in poor areas through sustainable development.

But detractors contest IIRSA technocrats' claims of promoting a "people-centered" integration framework. Instead, these critics describe the plan as a syringe for siphoning resources out of the region and injecting them into the global market.

Uruguayan professor and journalist Raúl Zibechi adds that IIRSA would also deepen the gap between more and less developed countries, such as Brazil and Bolivia. Brazil has become one of the largest regional investors in South America, and it has started flexing its financial muscle through the BNDES, which is one of IIRSA's biggest boosters. Since Brazil is the largest economy in the continent, it also has the most to gain.

Integration vs. Environment?

In a 100-page environmental assessment of IIRSA, conservation biologist, Timothy Killeen, writes: "Failure to foresee the full impact of IIRSA investments, particularly in the context of climate change and global markets, will bring about a combination of forces that could lead to a perfect storm of environmental destruction [in the Amazon]."

Although Killeen notes environmental awareness in the IIRSA is relatively high (on paper), he faults the initiative's promoters for assessing environmental impacts only insofar as they concern immediate local effects of certain projects. A broader analysis, he says, one concerning the interconnectivity of the IIRSA’s myriad projects, is fundamental for identifying the long-term impacts of any given project.

Although a major paradigm shift is needed, Killeen believes IIRSA has the potential to help South America: "But there needs to be greater emphasis on environmental safeguards, so that investments from IIRSA actually work to conserve the Amazon as well as to integrate the economies.”

Killen adds that the primary concern must be the conservation of the Amazon. One of his alternative suggestions is the provision of “subsidies to promote economic growth that simultaneously conserves crucial natural ecosystems." He also cites sustainable development alternatives such as aquaculture, ecotourism, and the monetization of the tremendous stores of carbon in the rainforest – if it's left intact – valued at a theoretical $1.5 to $3 trillion in carbon credits.

But IIRSA's prevailing mindset jettisons the intrinsic value of biodiversity for the sake of turning a quick buck through infrastructure that enables the exploitation of industrial agriculture and hydrocarbons. Killeen suggests this mentality, which views geography as an obstacle and nature as a mere "resource," must be replaced with something both sensible and visionary.

Simón Farabundo Ríos, a NACLA Research Associate, is currently writing a novel about his travels through Latin America.

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