The Barra Grande Hydroelectric Plant is currently running up on the border between the states of Rio Grande do Sul and Santa Catarina. It was built and is operating by the Brazilian business consortium called Barra Grande Energetica S/A (BAESA Inc), which includes the US aluminum giant ALCOA. The participation of ALCOA in this project is not surprising given that the aluminum industry is the world’s largest industrial consumer of electrical energy, using about 1% of all the electrical energy generated globally, and about 7% of world industrial consumption. In the case of Brazil, the aluminum industry accounts for roughly 8% of the country’s total electricity use.
For the formation of the reservoir, an area of approximately 8,140 hectares was flooded, 90% of which is covered by primary forest.
The Environmental Impact Assessment and a related Environmental Impact Report (EIA/Rima) is the document required by Brazilian law for the concession of environmental licenses for this type of activity. In this case, the EIA/Rima didn´t inform that more than half of the flooded area consisted of remnants of the Mata Atlântica Forest.
Moreover, The corporations violated the OECD Guidelines for Multinational Enterprises by utilizing an environmental impact assessment conducted by the company Engevix Engenharia S.A. in 1999.
As a signatory to the OECD Guidelines, Brazil must prevent its environmental laws from being indiscriminately violated. Despite being aware of the fraudulent nature of the assessment, the Baesa Consortium went ahead with the exploration and used the flawed assessment to justify its disregard for its commitments to sustainable development.
The Brazilian Federal Constitution, in Article 225, § 4, declared that the Mata Atlântica ecosystem is a National Heritage, a status which brings it under special protection by the law. According to Federal Decree No 750/1993, cutting, exploitation and removal vegetation in primary and advanced secondary regeneration stages in the Mata Atlântica ecosystem are expressly forbidden. Therefore, under Brazilian law it would not be possible to grant the environmental licenses for the construction of the Barra Grande Dam.
Given the illegality of the granting of environmental licenses, a number of NGO have joined for public civil action lawsuit, aiming to stop the work and discuss the real impacts of that project.
BAESA never denied the irregularities and established an extrajudicial agreement with IBAMA (Brazilian Institute of Environment and Renewable Natural Resources- the government department responsible for monitoring and granting the environmental license), whereby committed as compensatory measures and mitigation of environmental damage. This agreement had the approval of the Ministry of Mines and Energy, of the Environment Ministry, of the Attorney General of Nation and of the Federal Public Ministry.
The court ignored the statutory forbiddance of deforestation on the grounds that the work of the dam was almost completed, and that too much money has already been invested; moreover, they argued that the agreement made between the entrepreneur and the consortium of environmental enforcement department was enough robust, thus allowing the cutting of the forest and flood of that area.
Finally, we can still highlight the popular mobilizations against the dam during this conflict. The SOS Rio Uruguay Movement opposed the implementation of the dam; it held a protest in Porto Alegre against the decision authorizing the operation of Barra Grande Hydroelectric Plant.
The Movement of People Affected by Dams (MAB) also organized protest actions, especially in a claim that the wood removed from the forest was not used for the construction of houses for the affected population, as BAESA promised.
However, the most hard-hitting action was the lawsuit promoted by NGOs, as they had sufficient legal arguments for the work interruption and cancellation of environmental licenses granted based on fraudulent EIA. However, such arguments were not found robust enough by the court.