Glencore Xstrata should avoid corruption and criminal projects like PORTO SUL, says Brazilian group

Porto Sul area

Article provided by AÇÃO ILHÉUS, Brazil

16 March 2014

As already published around the world,  Glencore Xstrata could be the possible buyer of Pedra de Ferro ( Bahia – Brazil ) project, owned by scandal-hit miner ENRC.

The project involves the construction of a complex consisting of an offshore port ( PORTO SUL ) and a public railway ( FIOL ), which will take the iron ore from the mine to the port . Both the port and the railroad will devastate a huge and important area of ​​the main Brazilian biosphere reserve, one of the five most important in the world, the Atlantic Forest, known for having the highest biodiversity in the planet. Furthermore, it will interfere in the lives of thousands of families and cause the erosion of more than 10 km of the Brazilian coastal line.

The Brazilian federal government andthe  State of Bahia, both controlled by the Workers Party ( PT), would initially participate in the port project, making it a public–private enterprise. This enabled the government to give approval to property expropriations  in the region, which it could not do on behalf of a multinational company .

After the expropriations were announced, the government changed the rules of the game by changing the Law of Ports and creating a Specific Purpose Partnership (SPE). In this way it created a way to pass the project to the private sector and continue as a minority partner, which theoretically, keeps the decision-making power.

Brazilian presidential elections will take place this year, in October. According to media reports, both the Workers Party  (PT) and ENRC are deeply shrouded in corruption. In London, ENRC had to withdraw from the stock market after numerous scandals, including the bribery of the President of Congo. Despite this, the Brazilian government has never broken off relations with BAMIN ( the ENRC Subsidiary in Brazil ). In fact, quite the opposite: the expropriation notices that landlords are receiving bear the name of the Government of the State of Bahia, but landlords  are  invited to go to the office of BAMIN ( ENRC ) to deal and sign the agreement.

In late February, after President Dilma Rousseff had replaced two ministers of the Supreme Court who had worked in a judicial process that convicted and  jailed corrupt members of the Workers Party (PT) who held high positions in the government and who are very close to the President, a new trial took place in the Brazilian Supreme Court. This time its outcome was different: it exonerated the President´s colleagues from the charge of conspiracy. New trials lie ahead, with the expectation that they will absolve the corrupt party members thanks to the involvement of President Dilma Roussef . As George Orwell said, on the eighth commandment in Animal Farm, ” All animals are equal but some are more equal than others.”

The promiscuous relationship between the Brazilian government, ENRC and criminal social and environmental projects, symbolizes all that the Brazilian people do not want to put up with any more. The Brazilian federal police sparked the Porto Seguro operation (Safe Port operation) in 2012, that  revealed the existence of a network of corruption involving key government officials, working to achieve favorable permits to companies in the port sector in exchange for personal favors. IBAMA , the Brazilian government institute created to defend and preserve the environment , continues signing all environmental permits, allowing this criminal project to go ahead.

It is known that Glencore, before merging with Xstrata, had a history of close proximity to Iran and its nuclear enrichment project. It had already been noted that Glencore  supplied aluminium for Iran´s nuclear programme. Maybe this is one of the reasons for the possible interest of Glencore Xstrata in the ENRC project in Brazil, because at the mine site of ENRC in Caetité – Bahia, there is uranium…. Furthermore, the iron ore produced by the mine is of a very low quality (33%), which makes it very expensive to process. We don´t know if Glencore is interested in the project so that it can exploit the uranium and export it to Iran, thus balancing the deficit of iron ore.

As 2014 is an election year in Brazil, the government´s promises may be empty. The country is on the verge of a social insurgency. Although the Workers Party  (PT) believe they will win the elections and continue in charge, everything leads us to believe that it will not happen. And having a new President of another party, everything may change and the project may finally gain the place it deserves….. the drawer .

The Executive Board of the NGO ACTION ILHÉUS says :
– ” It may be time for international organizations to begin to give attention to the looming problem. The Atlantic Forest is a world heritage that survived the hardships of the Ice Age , 12,000 years ago. It would not be fair to see it be destroyed by corruption . ”

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