Exclusive: Flush with corruption cash, Brazilian states step up deforestation fight

[June 03, 2020]  By Jake Spring

BRASILIA (Reuters) - Brazilian states are bolstering the fight against destruction of the Amazon rainforest with millions of dollars from an oil company's corruption settlement that allows them to partially compensate for weakening environmental protections under President Jair Bolsonaro.

State environmental agencies will have a one-off windfall that Reuters calculates will total at least 140 million reais ($27 million). The cash, which comes from a massive settlement payment from state-run oil firm Petrobras, will be spent on patrol officers, jeeps, surveillance technology and other outlays to protect the rainforest, officials in all nine Amazon states told Reuters.

"It fell from the sky. You open and look at your bank balance and there's money you didn't even know that you had," said Roberio Nobre, the head of the environmental agency in Amapa state, on Brazil's northern border with French Guiana.

The amount of money going to the state environmental agencies has not been previously reported.

Deforestation in Brazil's Amazon climbed to an 11-year high in 2019 and continues to rise this year.

That has coincided with a decline in resources at Brazil's federal environment agency Ibama. Its budget has been repeatedly cut in recent years and it now has less than half the 1,600 field agents it had in 2009.

Although the fall in funding began before Bolsonaro, environmental advocates blame him for worsening the situation by weakening protections for the rainforest. Bolsonaro has railed against what he sees as overzealous environmental regulation getting in the way of economic development.

"The transfer of money from the Petrobras Fund comes at an opportune time. The states can fill the vacuum and act as a counterpoint to the federal government," said Ana Karine Pereira, an environmental policy professor at University of Brasilia.

Petroleo Brasileiro SA, as Petrobras is formally known, was the center of Brazil's largest-ever corruption scandal - the Car Wash probe - that involved bribes being paid to hundreds of politicians and business leaders to fix public construction contracts.

The oil company admitted wrongdoing related to record keeping and internal controls, ultimately agreeing to pay a $853 million fine to settle charges that it violated U.S. anti-corruption laws. U.S. authorities agreed to return most of the proceeds to the Brazilian government.

After fires surged in the Amazon rainforest last year and provoked international outcry, Brazil's Supreme Court decided to direct a chunk of the funds to environmental protection at the state level.

For normally cash-strapped states, the money has radically expanded budgets.

An aerial view shows a deforested plot of the Amazon near Porto Velho, Rondonia State, Brazil, September 17, 2019. REUTERS/Bruno Kelly

The environment agency in Pará, the Brazilian state with the highest level of deforestation last year, received 49 million reais, double their annual budget of 24 million reais. It will be spent over two years.

Pará is hiring an additional 100 environmental field agents to patrol for deforestation and other crimes, 10 times the number of agents they had before. They will conduct their first raids in June, Pará environmental chief Mauro O'de Almeida said.

Several of the states have lengthy written plans for how the money will be used.

Amapa's plan, for example, ranges from buying deforestation monitoring equipment to reassessing its protected reserve areas, Nobre said.

Roraima, which borders Venezuela, has a 35-page document that pledges to promote sustainable agriculture and educate locals on fire prevention. State environmental agency chief Ionilson Souza said some of the funds will be used to hire firefighters in October when forest fires usually peak.

Not all states will spend the money on the environment. The Supreme Court decided in May that four states would be allowed to redirect the funds, partially or in full, to fighting the coronavirus.

The Bolsonaro government has sought to militarize environmental enforcement, sending thousands of soldiers to the Amazon last month to combat deforestation.

Environmental advocates say the military cannot effectively replace permanent oversight by specialist agencies like Ibama.

Vice President Hamilton Mourao, a retired general presiding over the operation, has acknowledged sending in the military was not ideal but says it is the best option available to the cash-strapped government. He said last month that the ultimate goal is to build up Ibama's staffing and funding by 2022, when Bolsonaro's first term will end.

States say they are picking up the slack.

"We're not waiting for help. We're doing our part," Pará environment chief O'de Almeida said.

(Reporting by Jake Spring, Editing by Rosalba O'Brien)

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