Brazil to launch new deforestation program

Author

Gustavo Ribeiro
April 04, 2019 • Reading Time: 7 minutes

Good morning! Brazil to launch new deforestation program. Latest flop raises (more) doubts about reform’s viability. Brazil’s slavery ‘dirty list’ has 186 companies.

Latest flop raises (more) doubts about reform’s viability

Economy Minister Paulo Guedes’ much-awaited visit to the House’s Constitution and Justice Committee was a defeat from all angles. It once again exposed the government’s lack of political savvy, which allowed opposition congressmen to dominate the hearing and make a punching bag out of Mr. Guedes for the first three hours. The stock market and the Brazilian Real closed the day on a down.

Beyond opposition maneuvers, Mr. Guedes made a lot of mistakes of his own. He presented few technical arguments—leading to accusations that not even he was capable of defending the reform. Plus, his explosive temperament led him to take the bait of several provocative congressmen, including a shouting match with a congressman who called him a “sweetheart”—which led to the abrupt ending of the hearing.

Centrist parties rejoiced at the government’s 

flop. Mr. Guedes’ fiasco was more evidence for them of how the administration needs a so-called “shock unit” leading the legislative agenda. Six parties meet with President Bolsonaro today, but the president doesn’t want to engage in what he calls “old politics,” that is, handing out cabinet positions in exchange for votes in Congress.

Instead, he wants congressmen to sponsor the administration’s social programs—which would, in theory, generate political capital. But the cash-strapped government has limited investment capacity, which could prevent such an alliance. VP Hamilton Mourão has admitted to the possibility of giving parties the right to nominate 2nd- and 3rd-tier officials—which suffer much less public scrutiny.

Brazil to launch new deforestation program

The Brazilian government is set to launch a program this month integrating data matching rural properties to their owners, in order to monitor deforestation via satellite imaging. Today, 95% of all properties have been cataloged and, even if the government is set to miss this year’s deadline of registering every one, it will move ahead with the program—an important step towards more accountability for environmental crimes.

Brazil has been trying to implement this program since 2012, when a new Forest Code was approved by Congress. It is ironic that it becomes reality under the presidency of Jair Bolsonaro, who has been a vocal critic of environmental controls. Mr. Bolsonaro has called Brazil’s environmental agency an “industry of fines,” and moved forestry services from the Ministry of Environment to the Ministry of Agriculture—a clear conflict of interest.

According to officials, the remaining uncataloged 5% of rural properties are the hardest to assess. They are concentrated in the North and Northeast—the country’s poorest regions. In the case of the North, the Amazon rainforest poses as an additional hurdle to authorities. The country could reach 98% of registered properties by the end of the year.

Brazil’s slavery ‘dirty list’ has 186 companies

The Ministry of Labor has published its latest ‘dirty list’ of companies operating in Brazil and engaging in conditions analogous to slave labor—generally by imposing excessive hours for scarcely any pay. All 186 listed companies have been considered guilty in multiple levels of justice. In 2018, 1,700 cases of slave labor were identified, mostly in rural areas.

Brazil has started its crackdown on slave labor in 1995, under President Fernando Henrique Cardoso. His successor, Lula, took it up a notch and published the dirty list for the first time—one of the country’s most effective measures against labor exploitation. Companies are not only publicly shamed, but also barred from contracting loans with public banks for 2 years.

One of the biggest fashion companies in the country figures on the list. Fabula Confecção, responsible for women’s clothing brands A.Brand and Animale, sold products manufactured in three São Paulo workshops that kept Bolivian workers in slave-like conditions. The company claims it didn’t know about the practices, as the problems occurred in outsourced firms—a common thing in the fashion industry.

Brazil’s new fighter jet to make maiden flight in August

The first of the 36 Gripen fighter jets bought by Brazil from Swedish company Saab in 2013 are set to be delivered in 2021. Tests begin in August—and will be carried out by a team of Embraer and Saab professionals. The first batch of airplanes will be produced in Sweden. Another 15 will be manufactured in São Paulo state, with deliveries to begin in 2024.

The accord between Embraer and Saab includes technology transfer, with hundreds of Embraer employees taking an active role in the project. According to the company’s Defense and Security President, Jackson Schneider, the two firms are seeking to sell Brazil-made Gripen jets to other countries.

Meanwhile, Embraer is negotiating a deal to sell 5 KC-390 military cargo planes to Portugal—and is taking part in a bidding process to sell another 5 to New Zealand. The company has already secured a 28-plane deal for the Brazilian Air Force.

  • Budget. The Senate has modified a constitutional amendment that strips a large part of the government’s control over the budget, making it mandatory to honor parliamentary grants awarded to congressmen. Instead of mandating that 1% of the government’s net revenue be used for investments proposed by lawmakers, the rate will be 0.8%. However, with Brazil’s strict spending cap, even that could lead to a government shutdown.

  • Productivity. According to think tank Fundação Getulio Vargas, Brazilian workers have gotten slightly more productive—enough to add 2.1% to the value of goods and services produced in the country. Brazilian workers produce 25% as much as American workers, according to research organization Conference Board—mainly due to problems related to the quality of education in the country.

  • Cannes. A power struggle within the Brazilian Trade and Investment Promotion Agency (Apex) risks compromising Brazil’s participation at this year’s Cannes Film Festival, which takes place in June. The new administration has decided not to renew a contract between the agency and the union for audiovisual producers in São Paulo—which includes admakers. Meaning that Brazil’s ad agencies could be left out of the industry’s biggest event in the world.

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