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Brazil highway auction fuels export hopes but Indigenous concerns | Business and Economy News

Sao Paulo, Brazil – A recent auction of a stretch of Brazil’s so-called “Soy Highway” – along which millions of tonnes of grains are transported annually – has spurred hopes that the country’s booming soy exports will get another welcome boost.

But the July 8 auction on the Sao Paulo Stock Exchange that saw private consortium Via Brasil win the bid to administer a 1,009km (626-mile) tract of the BR-163 highway has also sparked concern among local Indigenous groups.

Critics say the highway concession doesn’t adequately account for the costs of mitigating environmental impacts and constitutional commitments to Indigenous rights in the South American nation.

“We’re not against the auction itself,” said Melillo Denis, lawyer of the Kabu Institute, which represents 12 Indigenous villages of the Kayapo tribe in the region that borders the highway. “But there are several socio-environmental problems,” Denis told Al Jazeera.

Soybean production

Brazil is the world’s largest soybean producer and today its BR-163 Highway is one of the country’s most important commodities corridors.

Millions of tonnes of grains from the country’s midwest farming heartland are transported in trucks along the highway each year to Amazonian riverports, before being shipped abroad, mostly to China and Europe.

But the highway is also notorious for lawlessness and synonymous with illegal deforestation, wildcat mining and raging forest fires each year in the towns that straddle it, crimes which affect neighbouring Indigenous communities.

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

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

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

Bolsonaro, a former army captain, is widely criticised by the international community for presiding over rapidly rising Amazon deforestation and what advocacy groups say is an unprecedented rollback of Indigenous rights.

At home, however, he counts truckers and soy farmers among his most loyal supporters and he remains very popular in the region of the auctioned part of the highway.

In an email to Al Jazeera, a spokesperson from Brazil’s ministry of infrastructure said the highway’s paving “was sufficient to make life easier for truck drivers, reduce freight costs by around 26 percent and make the commodities produced in Brazil more attractive on the foreign market”.

Regarding opposition to the highway concession, the spokesman wrote: “The entire process for any concession carried out by the Ministry of Infrastructure is marked by transparency and legal certainty, fundamental points in attracting investors.”

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

Auctions common

Highway auctions to attract private investment have long been common in Brazil, a continent-sized country that depends greatly 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 main priority.

The auctioned part of the highway stretches 1,009km (626 miles) from soy city Sinop in the agricultural superstate Mato Grosso to the Miritituba port in Itaituba, in the Amazonian state of Para.

Via Brasil will also be responsible for maintenance, repairs and development of the roadway for 10 years and will build three toll booths on the auctioned stretch, according to local media.

Proponents in Brazil’s infrastructure and agribusiness sectors say the recent auction will help boost the country’s grain exports, which reached a near record 82.9 million tonnes last year.

As well as the highway concession, a separate “Soy Railway” project is also awaiting approval, part of a push to consolidate Brazil’s northern ports as the main international distributors of the country’s grains, which the government says will make exports more competitive.

Indigenous rights

But Indigenous reserves and forest conservation areas in the region of the auctioned part of the highway have suffered from a sharp uptick of invasions by illegal loggers, ranchers and miners in recent years.

And in Brazil, major infrastructure projects like roads or hydroelectric dams that affect nearby Indigenous lands can only go ahead if companies and the state consult communities and present plans to mitigate against any possible negative effects.

Nearby Indigenous groups received payments linked to the highway as part of a plan to address environmental impacts from 2010 up until last year, but the second phase from 2020 to 2024 has not been defined yet, mainly due to disagreements with the government.

A boy rides his bicycle past a line of trucks stuck along highway BR-163, in Lucas do Rio Verde, Mato Grosso state, in September 2012. [File: Nacho Doce/Reuters]

A federal judge recently suspended the auction due to the outstanding processes on the environmental impacts, but that ruling was overturned.

Despite the highway concession announced this week, the questions of who will make the payments and how much will they total remain unclear.

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

He said that without this clear cost definition, a blame game between the state and the concession company could develop, which could potentially last years, during which time Indigenous people would not have access to the resources to mitigate any environmental effects.

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


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