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27 Feb 2023

Nadia Saracini, Christian Aid

Government action needed to tackle mining-related deforestation in the Brazilian Amazon

Carlos Penteado, Christian Aid

Quilombola communities, Brazilian Amazon

Despite its importance for the global climate and biodiversity, the Amazon rainforest and Indigenous and other traditional communities who have been its custodians for centuries are under threat from extensive deforestation caused by industrial mining. In Brazil’s Amazon, mining contributed to 11,670 km2 of deforestation between 2005 and 2015, which represents approx. 9% of total Amazon forest loss during that period. In addition to the deforestation within mining lease boundaries, industrial mining induces deforestation due to its supporting infrastructure and supply chains. In the Brazilian Amazon, industrial mining has also had widespread human rights impacts for marginalised communities. For Indigenous, Quilombola and riverine communities, deforestation is a direct threat to access to food and other resources which support their livelihoods. Industrial mining operations have also restricted community access to watercourses and polluted sources of drinking water.

Christian Aid recently published two reports which demonstrate how public policies and corporate profiteering in industrial mining are driving unsustainable exploitation of the Brazilian Amazon’s forests, contributing to climate change and undermining rights of traditional communities. Our report Undermining Resilience documents the human rights and environmental impacts of deregulation under the Bolsonaro administration, which facilitated the expansion of industrial mining into pristine forests and encouraged illegal miners and loggers.

Our research into how economic policies and corporate practices perpetuate this unsustainable exploitation of the Brazilian Amazon, Profit before People and Planet, found Brazil grants large tax exemptions to mining companies operating in the region. These tax exemptions cut directly into the budgets of states and municipalities tasked with providing public services and investing in sustainable development, while increasing company profits and thus incentivising industrial mining in the region.

International aluminium and mining companies like Norsk Hydro, Alcoa, Rio Tinto and South32 have significantly benefited from tax exemptions for bauxite mining companies operating in the region - such as Mineração Rio do Norte (MRN) – facilitated by their significant shareholding in one or more of the mining companies. These companies source large amounts of bauxite, which is produced at a lower cost than other minerals for which tax exemptions do not apply, from MRN - structuring their operations so as to maximise their benefits. This boosts profits at the expense of public coffers. Despite their significant influence on MRN, our research finds these international companies have largely failed to take appropriate actions to prevent and mitigate the adverse human rights and environmental impacts of MRN’s operations.

The governments of headquarter countries of international aluminium producers and industrial mining companies, namely the United Kingdom, Norway, the United States and Australia, must take urgent action to address these issues, including:

  • Adopt mandatory regulations on corporate human rights and environmental due diligence, and ensure effective implementation. This should also include supporting a binding treaty on business and human rights that reaffirms wider obligations, including access to effective remedy;
  • Regulate for mandatory public country-by-country reporting in terms of the profits and other key financial data in all jurisdictions where the company operates. Regulating also for mandatory public beneficial ownership;
  • Demand aluminium producers and industrial mining companies with significant business operations in relevant jurisdictions prioritise sourcing bauxite mined in regions other than tropical forests; and
  • Require companies in these sectors to plan a responsible exit from tropical forests.

Brazil’s Federal government and local government in relevant Brazilian states such as Pará and Maranhão should:

  • Publicly evaluate the costs and benefits of mining operations in the Brazilian Amazon to the human rights of local communities, the environment and the ecosystem services these depend on an ongoing basis;
  • Prioritise the rights and voice of local communities and the preservation of Amazon ecosystems;
  • Ban new mining exploration in the Brazilian Amazon and take effective measures to ensure industrial mining companies prevent and mitigate the harmful social and environmental impacts of their operations and provide effective remedy for harms already caused. In the mid- to long-term, design a plan to phase out existing mining operations, in consultation with local communities; and
  • Ensure mining and related sectors involved in the aluminium value chain are adequately taxed, and take decisive action to eliminate tax exemptions in relation to these sectors, particularly in the Amazon.

The report Profit before People and Planet was prepared as part of a collaborative initiative between Christian Aid, the Financial Transparency Coalition and Latindadd. Both reports were implemented as a component of ‘the Forest Custodians’ project.

By Nadia Saracini, Policy Analyst at Christian Aid. Nadia works on sustainable development and recently supported Christian Aid’s Economic Justice team in producing the two reports mentioned in this blog.