Brazil’s highway auction fuels export hopes, but indigenous concerns business and economy news

São Paulo, Brazil – A recent auction of a section of Brazil’s so-called “soybean highway” – along which millions of tonnes of grain are transported each year – has raised hopes that booming soy exports across the country will receive another welcome boost.

But the July 8 auction on the Sao Paulo Stock Exchange, which saw the private Via Brasil consortium winning the bid to administer a 1,009 km (626 mile) section of the BR-163 highway, has also aroused concern among local indigenous groups.

Critics say the highway concession does not sufficiently consider the costs of mitigating environmental impacts and constitutional commitments to Indigenous rights in the South American nation.

“We are not against the auction itself,” said Melillo Denis, lawyer for the Kabu Institute, which represents 12 indigenous villages of the Kayapo tribe in the area bordering the highway. “But there are several socio-environmental issues,” Denis told Al Jazeera.

Soybean production

Brazil is the largest soybean producer in the world and today its BR-163 road is one of the most important freight corridors in the country.

Millions of tonnes of grain from the country’s Midwestern agricultural hub are trucked annually along the highway to Amazon river ports, before being shipped overseas, primarily to China and Europe.

But the highway is also known for its lawlessness and synonymous with illegal deforestation, savage mining and forest fires that rage every year in the towns that straddle it, crimes that plague neighboring indigenous communities.

Brazil’s BR-163 highway, built by the military in 1973, winds through what remains of the Amazon rainforest near the town of Novo Progresso, state of Para, in this 2005 file photo [File: Reuters]

For years it was also famous for its appalling conditions, with more than 4,000 trucks stopped for more than a week in 2017 due to heavy rains that made part of the then unpaved road impassable.

Inaugurated in 1976, during Brazil’s military dictatorship, the final 51 km (31 mile) section of the BR-163 was paved in 2019 during the first year of the presidency of far-right populist Jair Bolsonaro.

Bolsonaro, a former army captain, is widely criticized by the international community for presiding over the rapid increase in Amazon deforestation and what advocacy groups say is an unprecedented setback in the rights of indigenous peoples.

At home, however, he counts truckers and soybean growers among his most loyal supporters and he remains very popular in the area of ​​the auctioned portion of the highway.

In an email to Al Jazeera, a spokesperson for the Brazilian Ministry of Infrastructure said that the paving of the highway “was enough to make life easier for truck drivers, cut freight costs by around 26% and make products produced in Brazil more attractive on the foreign market “. .

Regarding the opposition to the highway concession, the spokesperson wrote: “The whole process of any concession carried out by the Ministry of Infrastructures is marked by transparency and legal certainty, fundamental points to attract investors. .

He added that the BR-163 was only one of 71 transport infrastructure assets granted to the private sector since 2019.

Joint auctions

Motorway auctions to attract private investment have long been common in Brazil, a continent-sized country that relies heavily on trucks to transport supplies across states, but the roads are often poorly maintained.

And with the country’s public accounts in the red, the Bolsonaro government has made infrastructure concessions a top priority.

The auctioned portion of the highway stretches 1,009 km (626 miles) from the soybean town of Sinop in the agricultural super-state of Mato Grosso to the port of Miritituba in Itaituba, in the Amazon state of Para.

Via Brasil will also be responsible for the maintenance, repairs and development of the pavement for 10 years and will build three toll booths on the section put up for auction, according to local media.

Supporters of Brazil’s infrastructure and agribusiness sectors say the recent auction will help boost the country’s grain exports, which hit a record close to 82.9 million tonnes last year.

In addition to the highway concession, a separate “soybean railroad” project is also pending approval, as part of a campaign to consolidate northern Brazilian ports as major distributors. international grain markets, which the government says will make exports more competitive.

Indigenous rights

But indigenous reserves and forest conservation areas in the area of ​​the auctioned portion of the highway have suffered from a surge in invasions by illegal loggers, ranchers and miners in recent years.

And in Brazil, large infrastructure projects such as roads or hydroelectric dams that affect neighboring indigenous lands can only move forward if companies and the state consult with communities and come up with plans to mitigate possible negative effects.

Indigenous groups nearby received highway-related payments as part of a plan to address environmental impacts from 2010 to last year, but the second phase from 2020 to 2024 has yet to be defined. , mainly due to disagreements with the government.

A boy cycles past a line of trucks stranded along the BR-163 road in Lucas do Rio Verde, Mato Grosso state, in September 2012. [File: Nacho Doce/Reuters]

A federal judge recently suspended the auction due to pending environmental impact processes, but that decision was overturned.

Despite the highway concession announced this week, the question of who will make the payments and what their total amount will be remains unclear.

“The problem is that the costs to assist (the demands) of indigenous communities have not been defined,” Ubiratan Cazetta, a federal prosecutor, said of the highway concession.

He said that without this clear definition of costs, a blame game between the state and the concessionaire company could develop, which could potentially last for years, during which indigenous peoples would not have access to the necessary resources to mitigate environmental effects.

“We are not against development,” said Doto Takak-Ire, a representative of the indigenous Kayapó tribe, whose lands are less than 50 km from the highway. “But the Brazilian government is trampling the law.”