Volvo believes Brazilians will plug in their cars

CEO says current hybrid is ticket to full electrification

06/28/2022

Anders Gustafsson — Foto: Silvia Zamboni/Valor

Anders Gustafsson — Foto: Silvia Zamboni/Valor

Volvo is the leader in the fully electric car segment in Brazil, with 39% of this market from January to May. About a year ago, the company decided to abandon the sale of combustion-powered cars in Brazil and to offer only hybrid and fully electric cars. And at the end of 2021, it announced an investment of R$10 million to expand the installation of public battery charging points, mainly on highways.

A few days ago, the CEO of Volvo Cars Americas, Anders Gustafsson, visited Brazil. Among the work commitments, in a meeting with dealers, the also executive in charge of the Americas operations since 2017 and still the CEO of Volvo Cars in the United States heard what he hears in every country he visits: there is a shortage of cars. It is a problem that frustrates him. But there is nothing to be done while the shortage of semiconductors persists. In his conversation with Valor, he takes the cap of a water bottle and compares: “Without this little piece, this bottle of water is useless.”

Read below the main excerpts of the interview:

Valor: Volvo decided to sell only electrified vehicles in Brazil. What has been the consumer’s reaction?

Anders Gustafsson: Many people told us that it would be too early to make this decision. There was a fear of lack of infrastructure. But we are seeing that consumers are adapting much faster than we could have imagined. Our customers are affluent and like what gets them into technology. Getting out ahead of the rest was a risk. But it is easier to win if you are the first.

Valor: In Brazil, there is a lot of talk about starting the electrification process with hybrids. What is your opinion?

Mr. Gustafsson: We see our hybrids as the ticket to the world of electrification, which gets you addicted. I remember how pleased my wife was when she started charging the car and later saw that she could monitor the charge level on her cell phone. I have three children. The youngest is extremely annoyed when she hears the noise of a combustion engine.

Valor: So, sustainability is already a sales appeal for electric cars?

Mr. Gustafsson: It is growing. And it happens the same way for all of us. We are all talking about it. I often say that when you get sick, nothing is more important than getting healthy. And I think the same is true for sustainability. We see what is happening in the world. We see diseases that we have never experienced before, and the power of nature is quite unique.

Valor: You are the CEO of Volvo in the USA, where the government has bold plans for electrification. How has this process been?

Mr. Gustafsson: In the end, it is always the consumer who decides. But incentives can lead customers to a faster transformation. Today we have electrification with financial support for the consumer in the U.S., and the government will provide additional financial stimulus to accelerate the process. There will also be lots and lots of money for infrastructure; and not just in California. The combination of the financial support and the existence of infrastructure will certainly increase interest in electrification in the United States.

Valor: And how are the tests with autonomous cars going over there?

Mr. Gustafsson: All brands are testing autonomous cars and we have advanced in the development with our partners. Probably in two months we will talk more about it.

Valor: Brazil is a country with an unstable economy. Do factors such as inflation and high interest rates worry a luxury brand like Volvo?

Mr. Gustafsson: I am not happy about it. But we are a strong brand, with a strong product portfolio. We only absorb one part of the industry, which is the premium segment. We don’t compete with conventional brands. We run a business that is healthy. When the market falls, we normally gain market share. And if the market grows, we have our cycle of new products.

Valor: Do you plan to increase the offer of products in Brazil?

Mr. Gustafsson: In the next two years, we will launch two new models in segments where we are not today. We will have a new fully electric SUV. We are moving forward with cars in new segments. This is how we grow profitably.

Valor: Volvo chose not to have a plant in Brazil. Could this change someday?

Mr. Gustafsson: We are a listed company and, therefore, we need to ensure return to shareholders. We make decisions based on what we need. We are growing and the structure will change if necessary. But first of all, we need to achieve volumes.

Valor: And how does Volvo face the shortage of semiconductors?

Mr. Gustafsson: It is frustrating because we could sell 100% more. But we don’t have cars. Our suppliers are trying to do their best. A lot of them happen to be in Asia. And they were under tremendous pressure last month. But now the factories are opening again and production is back to levels to meet our expectations.

Valor: Has the issue of chip shortage taught any lessons?

Mr. Gustafsson: We have the metal, we have the batteries, we have the technology, but without this little piece we cannot make the cars. It is amazing. My wife and I often buy things at IKEA [Swedish brand that designs and sells ready-to-assemble home accessories]. She always asks me to assemble them, but I end up asking her for help because, based on my gender, I never read the instructions. I always try without reading instructions. Then I end up leaving some piece out. This ruins my day. That is how I feel now at work about the lack of semiconductors.

Valor: There has always been an over-dependence on supply from Asia…

Mr. Gustafsson: Yes, and it was painful. But now the US government and several other countries are working with incentives to attract the semiconductor industry so that this does not happen anymore. The semiconductor needs to be made in a very strict environment, with a lot of investment.

Valor: Going back to electrification, although brands like Volvo are investing in public charging points, Brazil still lacks infrastructure. Doesn’t that affect your plans?

Mr. Gustafsson: I am happy when I see our charging stations and when I see that our competitors use them. Why do we have to wait for the government to fix everything? If we all invest in infrastructure it will be much easier to sell more electric vehicles.

Valor: But the lack of infrastructure still makes the consumer afraid of buying a 100% electric car…

Mr. Gustafsson: It is all a matter of changing habits. When I had to go on a strict diet, the first month was difficult, the second month was too. Today, it’s not anymore. I hate going to the gym. But I started going 30 minutes a day. And now I feel bad when I don’t go. With electrification, it is the same thing. The consumer will learn to change habits. Let’s be honest: how often do we drive the car until we get the full range of the fuel we have? Or: how much percent of the cell phone memory do we use? I really hope that the consumer will start to think differently about electric cars.

*By Marli Olmos — São Paulo

Source: Valor International

https://valorinternational.globo.com/
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Vivix to invest R$1.3bn in new plant

Company projects to increase its market share to 30% from current 13%

06/28/2022

The new furnace will have the capacity to produce 1,000 tonnes a day — Foto: Reprodução/Vivix

The new furnace will have the capacity to produce 1,000 tonnes a day — Foto: Reprodução/Vivix

Flat glass manufacturer Vivix, owned by the Cornélio Brennand group, will invest R$1.3 billion in a new plant in the municipality of Goiana (Pernambuco), where it has been installed since 2014. With the investment, the company projects to increase its market share to 30% from the current 13%, expanding distribution outside the Northeast region.

The construction of the unit will begin in December and the start-up is scheduled for mid-2025. The new furnace will have a production capacity of 1,000 tonnes per day. Currently, the capacity of the company, which grossed R$900 million last year, is 900 tonnes/day.

The company signed on Monday a memorandum of understanding with the state government of Pernambuco to implement the venture. According to Henrique Lisboa, Vivix’s CEO, the project’s financial equation is still being closed. He says that the plant will have the contribution of shareholders’ own capital, resources from the company’s cash flow and a funding capture in the market.

The flat glass market is currently dominated by three multinationals (Cebrace, Agc, and Guardian). With the new plant, Vivix, the only 100% Brazilian, expects to become the second ranked company in the country.

Vivix’s expansion was planned since its implementation eight years ago, with investments of about R$1 billion. Mr. Lisboa says that the glass consumption per capita in Brazil is still low if compared to the United States and Europe, which indicates a great potential to expand the demand for the product, used mainly in construction, furniture, and decoration.

At the moment, the sector is going through a slowdown phase after the peak of the pandemic, following the oscillation the real estate market suffers directly the effects of high interest rates. “When we talk about high interest rates, we are talking about short term. The plant takes about 30 months to be ready and the furnace operates for 18 years,” says Mr. Lisboa.

According to the executive, the flat glass market may experience a slight contraction in volume this year, around 5%. The years 2020 and 2021 together add up to an increment of 14%.

Currently, Vivix commercializes half of its production outside the Northeast region, with road and sea distribution. With the new factory, the company wants to expand this share to up to 70% by road and sea.

The furnace will be practically all imported. It will be fueled mostly with natural gas. A residual portion will use electricity. The group has ore mines to supply the plant in a nearby region.

The unit currently employs 360 people. When it is fully operational, the workforce is expected to exceed 600 people.

*By Marina Falcão — Recife

Source: Valor International

https://valorinternational.globo.com/
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Scenario for agriculture until 2031/32 is promising

This is what new projections from federal government indicate, despite global prospects

06/27/2022

Although the long-term prospects for the Brazilian agribusiness continue to be the most promising, the current global economic situation, marked by interest rate increases and inflationary escalation in several countries — and amid the Russian invasion of Ukraine — tends to make the path for the growth of production and exports of agricultural products and animal proteins in the country a little more turbulent, at least for the next few years.

“In the second half of this year, we will still see commodity prices rise amid high costs. But we are slipping into an economic slowdown that could lead to a recession in the United States, Europe, and other countries. By 2023, I see destruction of demand and falling prices”, said economist José Roberto Mendonça de Barros, partner at MB Associados, in an event promoted by the Brazilian Center for International Relations (CEBRI) and by Insper Agro Global.

Once this difficult period is over, the tendency for the Brazilian agribusiness is to resume a stronger and more stable pace of expansion, because many specialists, including foreigners, believe the country is the one that is most capable of expanding the offer of food in a scenario of global population growth and of the evolution of part of this population to a menu with products of higher added value.

The Ministry of Agriculture has reviewed its projections for the sector over the next decade, as it regularly does, and projected that Brazil’s grain harvest, for example, will increase 25.4% by the 2031/32 harvest, to 338.9 million tonnes — for this 2021/22 cycle, the figures indicate 270.2 million tonnes.

Obviously, forecasts of this type do not consider possible shortfalls caused by climatic problems, but contemplate prospects for planted area and productivity, calculated on the basis of recent history and ongoing investments and technological transformations. For the area planted with grains, the ministry projects an increase of 19.5% until 2031/32, to 87.7 million tonnes — thanks mainly to the conversion of degraded pastures into crops. The difference between the percentages of increase in volume and area is explained by productivity.

A growth of almost 70 million tonnes is expected in the country’s annual grain harvest in the next decade for meat production in general, and the ministry estimates an increase of 6.8 million tonnes. In the 2031/32 season, there will be 35.4 million tonnes, compared to the 28.6 million tonnes estimated for 2021/22. And if in grains the advance will be driven by cotton lint (36%) and soy (32.3%), in meat, the highlights may be chicken (27.8%) and pork (24.2%).

The scenario outlined also highlights that Brazil will maintain its domain in the production and export of products such as coffee, sugar and orange juice, and foresees a new production level for some of the fresh fruits it most exports. In the case of melons, for example, the expectation is for a 29.8% growth in production until 2031/32; in the case of grapes, 27.6%.

*By Fernando Lopes — São Paulo

Source: Valor International

https://valorinternational.globo.com/
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Fiscal, political risks cloud horizon for Brazilian assets

Investors are wary after federal government’s recent measures to contain fuel prices

06/27/2022

Mariana Dreux — Foto: Ana Paula Paiva/Valor

Mariana Dreux — Foto: Ana Paula Paiva/Valor

The resurgence of fiscal and political risks in recent weeks has further clouded the horizon for Brazilian assets. Market mistrust has increased with the federal government’s recent measures to contain fuel prices, so that uncertainty about the public accounts has once again penalized domestic markets, in an environment aggravated by the tightening of financial and monetary conditions that has been generated, in a synchronized manner, by central banks.

Among the main risk metrics, the long-term real interest rate stands out for remaining close to 6%, while the Brazil risk measured by the five-year CDS returned to levels not seen since 2020 and is worse, in absolute terms, than in emergent peers like Mexico, Colombia and South Africa in 2022. Long-term nominal interest rates have also risen consistently; Brazil’s benchmark stock index Ibovespa has fallen below 100,000 points; and the foreign exchange rate is again above R$5.2 to the dollar.

“No doubt the fiscal risks have increased. Most of the current deterioration in the public accounts leaves scars, and that will make the work of the next administration difficult, especially on the tax front. The domestic economy has been very robust, but all the drivers indicate a much more pronounced deceleration ahead, with a contractionary level of interest rates and downward revisions in world growth. We are going to navigate through more turbulent seas,” said Mariana Dreux, a partner and macro funds manager at Truxt Investimentos.

She said the country collecting extraordinary revenues due to the cycle of high commodity prices, but when demand cools down, the economy will be exposed. She sees a much more complicated debt trajectory ahead. Despite recent gains, a reversion towards 100% debt-to-GDP ratio could be very fast, she says. She notes that Brazil’s potential growth has proven low and that the natural interest rate is no longer as low as imagined and may have risen.

Julio Fernandes, a partner and manager of multimarket fund strategy at XP Asset Management, shows similar concern. He points out that Brazil has a high debt problem and continues to discuss how to ease the spending cap rule, which limits public spending to the previous year’s inflation. And, since the fiscal situation is complicated, the government must be careful not to give up revenue permanently.

He wonders if the next federal administration will automatically resume taxes at the beginning of next year in case there is some kind of exemption, which would mean a gasoline and diesel price shock on the first day in office. Lowering taxes is easy, he says, but the problem is that if taxes are not resumed, the incoming government will see revenues plummet.

“If the hole becomes permanent, it tends to make the long end of the yield curve rise even more and cause the real to depreciate more than its peers. The uncertainty about the size of the fiscal hole is what leaves doubts in the market and increases the risk premium on assets. Part of the fall in the stock market is also due to the rise in interest rates, which affects stocks in the domestic sector.”

Drausio Giacomelli, the chief strategist for emerging markets at Deutsche Bank, said that at a time when several countries are experiencing the same problem of rising fuel prices, global agents are looking at the quality and magnitude of measures taken by each government to ease prices without deteriorating public accounts.

“We have a global risk reduction movement, and emerging markets are risk markets, which is part of the problem. In addition, when looking at how each country deals with fuel hikes, investors understand that focused and temporary spending is more desirable than dispersed and permanent spending. Brazil is lucky to have strong revenues in commodities. It can’t use something that is positive to cause structural damage,” he said.

Along these lines, according to Marcos Mollica, a manager at Opportunity Total, there is an important external component in the most recent stage of deterioration of Brazilian assets. After the 75-basis-points hike in U.S. interest rates by the Federal Reserve, the market began to price greater risks of a global recession. This, along with the lackluster signs from the Chinese economy, had an important impact on commodity prices.

“This is a very negative backdrop for Brazil. The stock market is impacted by it and there is great pressure on the exchange rate due to the worsening terms of trade. Vale has plummeted to R$70 from nearly R$90, and this had little to do with the Brazilian domestic risks,” the manager said. On top of that, however, there was also all the recent discussion of the government trying to bring fuel prices down. “We still haven’t managed to figure it out, as measures [studied by the government] started at R$20 billion and now are reaching R$50 billion.”

André Kitahara, AZ Quest’s macro portfolio manager, understands that, like several other governments around the world, the federal government is trying to attack an exogenous problem with the least damaging solution it can find. His major concern is that none of the solutions presented solve the problem in the long term, since no investment has been made for decades to expand the global supply of the commodity.

“As we are in the final year of a presidential term, we can’t expect anything great to happen. The more pressure the energy industry is under, the more heated the debate will be. But I am not pessimistic about Brazil. We are great exporters of commodities, the growth revisions have been positive, and the end of the monetary tightening cycle is also expected to help,” he said.

*By Victor Rezende, Matheus Prado, Gabriel Roca — São Paulo

Source: Valor International

https://valorinternational.globo.com/
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Manaus to have cap new factory for cans

CanPack plans to invest R$250m to produce 37 billion caps a year by the end of 2023

06/24/2022

With CanPack’s cap factory, the capital of Amazonas now houses four such units in its industrial district — Foto: Reprodução/CanPack

With CanPack’s cap factory, the capital of Amazonas now houses four such units in its industrial district — Foto: Reprodução/CanPack

CanPack, a Polish company that makes aluminum cans for beverages, will invest R$250 million in the construction of a cap factory for cans in Manaus. The company already produces cans in two units — one in Ceará and another in Goiás.

With CanPack’s cap factory, the capital of Amazonas now houses four such units in its industrial district. Companies typically set up these operations in Manaus to take advantage of the Free Trade Zone’s tax breaks.

Currently, three multinationals already operate in the city of Manaus — Ball Corporation, a leader in the cans market in the country, the also U.S.-based Crown Embalagens and the Irish group Ardag, through its subsidiary AMP.

According to a note by Abralatas, the manufacturers’ trade group in Brazil, the first can factory was installed in Manaus in 2006. With the arrival of the others, the industrial hub in the capital is already part of the largest production cluster of this product in the world.

AMP’s unit, for example, is reaching a capacity of 5 billion units, and this figure is expected to double in two years to meet its expansion program in Brazil.

“The can market is in a unique moment. And Manaus is the city that has become the world’s producing hub for can caps, and it will become even stronger with this new unit in 2023,” said Abralatas head Cátilo Cândido in the note.

With 25 manufacturing units installed, the Brazilian production reached 33.4 billion packages of several sizes last year. The most recent investments are three units in the state of Minas Gerais — Frutal (Ball), Uberaba (Crown) and Juiz de Fora (AMP).

CanPack, according to Abralatas, informed that it will start assembling the cap factory in 2023. According to Mr. Cândido, Manaus is also logistically important for the manufacture of caps. “The city already accounts for more than 80% of the total production of this packaging component,” he said.

Manaus is now expected to jump to 37 billion by the end of 2023 from the current 25 billion caps produced per year.

The sales of aluminum cans for beverages in Brazil grew 81% in the last decade (2011 to 2021) with an average growth of 8% per year in the past five years, says Abralatas. One advantage of this segment is the high rate of recycling — almost 99% last year, the highest in the world.

*By Ivo Ribeiro — São Paulo

Source: Valor International

https://valorinternational.globo.com/
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Federal funds for environment protection at lowest level in 12 years

In 2021, R$3.8bn were spent in this field; in 2010, amount was R$15.3bn, highest in the series

24/06/2022

A central theme in the negotiations for Brazil’s admission to the Organization for Economic Cooperation and Development (OECD), environmental protection received last year, under President Jair Bolsonaro, the lowest amount of funds in 12 years, according to data from the National Treasury Secretariat: R$3.87 billion. In 2010, under Luiz Inácio Lula da Silva, the federal government disbursed R$15.34 billion on this front, the highest in the series.

Spending on environmental protection in 2021 was equivalent to 0.04% of the GDP, while spending on military defense, for example, reached 0.56% of GDP. With civil defense, the expense was 0.01% of the GDP.

The data are in the Central Government Expenditure by Function (COFOG), which organizes federal government spending according to the methodology developed by the OECD with the United Nations. This data allows for comparisons with other countries.

According to COFOG’s data, total central government expenses reached R$2.7 trillion last year. It was down in comparison with the previous year, when the pandemic impacted public accounts. As a proportion of the GDP, total spending fell to 31.43% from 36.61%.

In the comparison between 2021 and 2020, the only government function that registered an increase was public services, which reached 12.03% of GDP, compared to 11.64% of GDP in the previous year. According to the National Treasury, the main reason is interest on public debt, which reached 6.93% of the GDP.

Another justification is transfers between different levels of government, which reached 4.18% of GDP. The figure reflects a larger volume of money distributed by the federal government to states and municipalities, according to the rules set out in the Constitution. Revenues from income tax and the Industrialized Products Tax (IPI) are shared.

Of the 10 functions that make up total spending, the largest is social protection, which consumed the equivalent of 39.9% of GDP last year, compared to 47.6% of GDP in 2020. The National Treasury reports that this is due to the maintenance of part of the measures to tackle the Covid-19 last year.

Health spending reached 2.43% of GDP last year, compared to 2.67% in the year before. In this group, the biggest item was hospital services, with 1.18% of GDP in 2021.

On the Education front, spending reached 2.15% of GDP in 2021, compared to 2.16% of GDP in 2020. The largest share, 0.81%, was spent on higher education, while education at the junior high school and high school levels received 0.35% of GDP. Spending on basic and elementary education was 0.75% of GDP.

The COFOG analysis combines the economic and functional classifications of expenditure, so that it is possible to evaluate which inputs were used to perform the functions. In this cut, the most relevant expense is employee payments, which accounted for 11.4% of total central government spending last year.

*By Lu Aiko Otta — Brasília

Source: Valor International

https://valorinternational.globo.com/
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Arauco to build $3bn pulp mill in Mato Grosso do Sul

Future mill will have a capacity of 2.5 million tonnes of eucalyptus pulp per year and is expected to start operating in 2028

06/23/2022

With an average distance of 150 kilometers between the plant and the forests, the unit will be the most competitive of the Chilean group — Foto: Divulgação/Zig Koch

With an average distance of 150 kilometers between the plant and the forests, the unit will be the most competitive of the Chilean group — Foto: Divulgação/Zig Koch

Arauco signed an agreement with the government of Mato Grosso do Sul on Wednesday to build a mega pulp mill in the state. With investments of $3 billion, the new unit will be located in Inocência, 337 kilometers far from Campo Grande.

The future mill, which still depends on certain conditions to get off the drawing board, will have a capacity of 2.5 million tonnes of eucalyptus pulp per year and is expected to start operating in the first quarter of 2028. A second phase of the project is planned for the future.

After the signing of the agreement, in a ceremony attended by Arauco CEO Matias Domeyko Cassel and Governor Reinaldo Azambuja Silva, the company will seek an environmental permit, which is a condition for the investment to be executed.

“There are legal proceedings to fulfill. This is the beginning of a journey,” said Carlos Altimiras, Arauco CEO in Brazil. The project is expected to be submitted for approval by the board of directors in the second half of 2024, with construction starting in January 2025.

In addition to environmental permits and confirmation of the investment by the board, the execution of the project relies on the availability of wood for pulp production.

According to Mr. Altimiras, the project requires nearly 380,000 hectares of gross area to be developed. Arauco already has 60,000 hectares, 40,000 of which are planted with eucalyptus, and has several negotiation fronts open to ensure enough wood to start operations in 2028. The company expects to reach 2024 with 70% to 80% of the total area needed.

With an average distance of 150 kilometers between the plant and the forests, the unit will be the most competitive of the Chilean group. Installed on the left bank of the Sucuriú River, it will have quick access to pulp distribution channels, including the MS 377 highway, the Paraná River (100 kilometers away) and the railroad network (47 kilometers away).

The logistical structure was key in choosing the location, said Mario José de Souza Neto, Arauco’s head of development and new business in Brazil. “We are evaluating the alternatives to see which are the most viable,” he said.

The future mill will be self-sufficient in energy, using a renewable source, with the capacity to generate 400 megawatts from the reuse of biomass. The surplus energy, or 200 MW, will be sold in the free market.

The implementation of the Sucuriú project will mark the arrival of the Chilean group to the pulp industry in Brazil – Arauco was already present in the country with forestry operations and four wood panel plants.

In addition, it will increase by about 50% its production capacity of the raw material, from 5.2 million tonnes per year, including the expansion underway in Chile, the Mapa project, to 7.7 million tonnes per year.

With Mapa, which is expected to go online in the second half of the year, Arauco will become the second-largest market pulp producer in the world, only behind Suzano. The group has fiber mills in Chile, Argentina and Uruguay, where it is a partner of Stora Enso in the Montes del Plata joint venture.

During construction, the Sucuriú project will employ more than 12,000 workers, benefiting around 20,000 families in the region, according to the Chilean group. In operation, the unit will employ 2,350 people, 550 of which in the plant, between direct and indirect jobs, and 1,800 in forestry.

The governor of Mato Grosso do Sul highlighted that the project will be located in a region that is part of the state’s Forest East Coast, but has not yet had a pulp mill.

“This plant shows the confidence of investors in Mato Grosso do Sul, in our tax incentive policy, in the legal security of those who invest, and in the logistical structure we are creating for those who need to distribute their output,” he said.

By Stella Fontes — São Paulo

Source: Valor International

https://valorinternational.globo.com/business
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UN experts ask Brazilian Senate to reject bill on pesticides

Group says adoption would be “monumental setback for human rights”

06/23/2022

A group of independent experts from the United Nations released a statement in Geneva on Wednesday urging the Brazilian Senate to reject a bill on pesticides, warning that its adoption will mean a “monumental setback for human rights in the country.”

The experts are Marcos A. Orellana, special rapporteur on the implications for human rights of the environmentally sound management and disposal of hazardous substances and wastes; Melissa Upreti (chair/rapporteur), Dorothy Estrada Tanck (vice-chair), Elizabeth Broderick, Ivana Radačić, and Meskerem Geset Techane, with the Working Group on discrimination against women and girls; Michael Fakhri, special rapporteur on the right to food; Francisco Cali Tzay, special rapporteur on the rights of indigenous peoples; and Claudia Mahler, independent expert on the enjoyment of all human rights by older persons.

Ahead of the key Senate hearings on the bill PL 6,299/2002, which the report says is better known as the “poison package,” these experts warned that if the legislation is adopted, it will weaken regulations governing pesticide use in Brazil and expose people of all ages, including farmers, workers, indigenous peoples and peasant communities to hazardous substances with potentially devastating consequences for their health and well-being.

For them, it will mean a step backward in environmental regulations in the country. And they say they are alarmed by the bill’s provisions “that would allow the use of carcinogenic pesticides and those that carry a greater risk of reproductive and hormonal problems, and malformations in babies.”

In the statement, these experts call it a “myth” that pesticides are necessary to feed the world. “Pesticides present serious risks for human health and environment at a local and global scale,” they say.

The experts consider that the approval of the bill would aggravate the serious human rights issues in Brazil related to pesticides and call on the Brazilian government to approve and effectively enforce measures including a ban on aerial spraying and on the use of pesticides near housing, schools, water resources and other protected areas.

“Without further measures to ensure businesses respect human rights and the environment, abuses will continue to proliferate if this draft bill is adopted,” they said. The statement said these experts are in dialogue with the Bolsonaro administration on the issue.

The special rapporteurs, independent experts and working groups are part of what is known as the Special Procedures of the Human Rights Council. Special Procedures, the largest body of independent experts in the UN Human Rights system, is the general name of the independent fact-finding and monitoring mechanisms that address either specific country situations or thematic issues in all parts of the world.

The United Nations explains that the Special Procedures’ experts work on a voluntary basis; they are not UN staff and do not receive a salary for their work. They are independent of any government or organization and serve in their individual capacity.

By Assis Moreira — Geneva

Source: Valor International

https://valorinternational.globo.com/
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Dutch court to decide whether to accept case of contamination in Brazil

Lawsuit is against Norwegian Norsk Hydro for pollution in Pará

06/23/2022

Tailings treatment system at the Hydro Alunorte mining facility that caused a spill in Barcarena, Pará — Foto: Igor Brandão/Agência Pará via Agência Brasil

Tailings treatment system at the Hydro Alunorte mining facility that caused a spill in Barcarena, Pará — Foto: Igor Brandão/Agência Pará via Agência Brasil

The courts in the Netherlands will decide this Friday whether to accept the lawsuit filed by quilombolas and indigenous people from the municipality of Barcarena, in Pará state, against Norwegian aluminum manufacturer Norsk Hydro.

In the lawsuit, a group of nine people and the Association of Caboclos, Indigenous, and Quilombolas of the Amazon (Cainquiama) — which represents 11,000 people — allege that the toxic waste pollution from the aluminum manufacturer’s operations in Barcarena has caused health problems for the inhabitants, besides economic losses.

The litigants are seeking compensation for the damage caused. The victims are represented by PGMBM, a firm specializing in collective environmental litigation, the Brazilian law firm Ismael Morais Advocacia, and the Dutch law firm Lemstra van der Korst.

In the petition, Norsk Hydro is accused of being responsible for at least 10 environmental disasters caused by its mining and aluminum production activities. The company operates a refinery, a smelting plant and a bauxite mine in Pará.

The most recent disaster, in February 2018, caused toxic sludge to spill into the reservoirs of the Alunorte and Albrás operations, turning the rivers red. Brazilian authorities investigated the case and discovered three covert pipelines that dispensed toxic waste in the environment, according to the petition.

“Until now, those affected have had no voice in the current actions in Brazil. We want to change that to ensure they are protected and receive the justice they deserve. It is clear that Norsk Hydro carried out risky contaminating activities in a vulnerable region of Brazil, in a way that violated the law and caused catastrophic effects for the nature and the people who live there,” said Pedro Martins, partner and founder of PGMBM, in a statement.

Norsk Hydro said in a statement that the allegations are already being discussed in Brazilian courts. The opening of the lawsuit in the Netherlands generates a risk of duplication of actions and incompatible decisions. “We believe that these issues should be addressed locally and request that the Dutch court suspend the matter until a final decision is reached in the Brazilian cases. The Brazilian judicial system is robust and accessible, backed by constitutional guarantees of full right to defense and due process of law. Furthermore, Brazilian court orders can be executed in the Netherlands,” it added.

Norsk Hydro also stated that the public agencies have carried out more than 90 inspections and audits that attested that there was no transshipment of the waste deposits at Alunorte. Other allegations, according to the company, are unfounded and there is no evidence of contamination in communities caused by Alunorte, related to the February 2018 rain.

The company also said that its operations in Brazil “are in full compliance with the environmental permits required by law.” And it adds: “In addition, our operations have international management certifications, proving excellence in socio-environmental management. Therefore, Alunorte, Albras, and Hydro will continue to provide facts and clarifications necessary for the trial of the allegations, which they consider that should happen in Brazil.”

By Cibelle Bouças — Belo Horizonte

Source: Valor International

https://valorinternational.globo.com/
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Government, Congress mull R$600 aid for truck drivers

Talks have also begun to increase emergency aid, plans are underway to increase gas voucher

06/23/2022

Rodrigo Pacheco — Foto: Roque de Sá/Agência Senado

Rodrigo Pacheco — Foto: Roque de Sá/Agência Senado

Pressured by the crisis of high fuel prices and the preventive detention, on Wednesday, of former Education Minister Milton Ribeiro on suspicion of corruption, the federal government and the governing coalition in Congress have accelerated the formulation of vote-getting measures. Behind the scenes, the trucker voucher had its value raised to R$600 from R$400. Furthermore, talks have begun to increase the emergency aid and plans are also underway to increase the gas voucher.

The plan is to include all these measures in the constitutional amendment proposal (PEC) 16, which is being analyzed by the Senate. In its current version, the PEC authorizes the federal government to pay up to R$29.6 billion to states that reduce to zero the sales tax ICMS rate on diesel and cooking gas and sets a 12% rate for ethanol.

These negotiations are seen with concern by the economic team, given their impact on public accounts. The R$600 trucker voucher will cost R$3 billion; doubling the value or range of the gas voucher would cost nearly R$2 billion. The idea of raising the emergency aid surprise the government’s technical staff, although the political team never gave up the plan of raising the value to R$600.

All these additional expenses go in the opposite direction of the goal of closing the public sector accounts in the black and setting a downward trajectory for the public debt.

In relief to the economic team, Senate President Rodrigo Pacheco (Social Democratic Party, PSD, of Minas Gerais) said Wednesday that it is necessary to have responsibility with the spending cap. “Issues related to the fuel PEC must be preceded by impact studies and election-related barriers,” he added.

Behind the scenes there is a discussion about the feasibility of launching these aid measures, because of the electoral legislation. One hypothesis raised would be the decree of a new state of calamity. There is, however, no consensus on this. Economy Minister Paulo Guedes has been fighting this idea in recent months.

Ítalo Franca, with Santander’s team of economists, pointed out that “there is some doubt about the legal possibility” of implementing aid to truck drivers this year “even through a PEC, because electoral legislation restricts the creation of new benefits,” he said.

Gabriel Leal de Barros, a partner and chief economist at Ryo Asset, has a similar view. The trucker voucher would cost R$1.8 billion from July to December of this year if it were fixed at R$400 and R$2.7 billion if it were R$600, according to his calculations.

Mr. Barros says he has “reservations” about the proposal. “It doesn’t make economic sense to subsidize fossil fuel and still allocate taxpayer money that don’t benefit the poorest,” he said, also citing “the risk of loss of control” over spending during the analysis of the proposal, especially in an election year.

He also says that it is “very negative” the fact that “we are amending the Constitution every six months,” since the aid would be implemented by means of a PEC. “This is not good for the fiscal framework and for the predictability needed by economic agents,” he said.

The R$400 voucher was called “alms” and a “joke” by truck drivers’ leader Wallace “Chorão” Landim. The same comment had been made by him and other unionists last October, when the idea was unveiled by President Jair Bolsonaro.

By Renan Truffi, Lu Aiko Otta, Estevão Taiar, Raphael Di Cunto — Brasília

Source: Valor International

https://valorinternational.globo.com/
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