Foreign firms fined for environmental foul play

. Dec 15, 2019
Foreign firms fined for environmental foul play Photo: T photography/Shutterstock

Since the rise of President Jair Bolsonaro, Brazil has become something of an international pariah when it comes to environmental issues. The far-right sitting administration has overseen massive budget cuts to monitoring agencies, while the president himself casts doubt on government data about deforestation and passes legislation that could worsen Brazil’s situation.

But the fact that Mr. Bolsonaro is an easy target should not hide the fact that many foreign corporations—often from countries that have criticized Brazil’s handling of its biodiversity—have less-than-stellar track records when it comes to environmental practices.

Take the case of Alunorte, a company owned by Norwegian aluminum giant Norsk Hydro, which was caught <a href="">dumping toxic waste into the Amazonian town of Barcarena</a>. </p> <p>This is one of many cases of foreign companies adhering to much looser standards in Brazil than they would in their home countries.</p> <p>To explore the extent of the issue, we decided to check the fines slapped on foreign groups by Brazil&#8217;s environmental agency Ibama over the past decade. To identify them, we used the &#8220;<a href="">Valor 1000</a>&#8221; ranking, something of a Brazilian version of the Fortune 500 list. We clustered corporations according to size, sector, and origin of their capital—which is why Latam Airlines—which was created in Brazil but is partially Chilean—was included.</p> <div class="flourish-embed" data-src="visualisation/1095916"></div><script src=""></script> <h2>Environmental foul play: main findings</h2> <p>Of the 272 firms with foreign capital listed by Valor in 2019, 105 are mentioned in a database recently made public by Ibama, disclosing fines imposed upon companies and individuals for environmental violations.&nbsp;</p> <p>More than 40 percent of the environmental fines to these companies (roughly BRL 100 million) are concentrated in the mining sector—in the wake of high-profile dam failures in Mariana (2015) and Brumadinho (2019), companies have been under enhanced scrutiny.</p> <div class="flourish-embed" data-src="visualisation/1095937"></div><script src=""></script> <p>No company received more fines than multinational mining company Anglo American—which accounts for nearly 80 percent of the fines on miners. Five of them, worth a combined BRL 72.6 million, are related to a series of disasters caused by the company in March 2018.</p> <p>Over the space of 45 minutes, on March 12, 2018, a broken pipe leaked 450 cubic meters of iron ore sludge into a stream. Anglo American was given two fines, worth a total of BRL 25 million— for (1) polluting the river and (2) risking the health of the local population. Two weeks later, the firm resumed operations, only to shut down after two days, following another leak.&nbsp;</p> <p>In all, 170 tons of ore were spilled into the river and 470 tons in the surrounding area. Ibama duly dished out another BRL 32.5 million in fines. Disrupting the water supply in the region cost them another BRL 15 million. The tragedy (and the fines) caused only a momentary blip on Anglo American&#8217;s stock performance.&nbsp;</p> <div class="flourish-embed" data-src="visualisation/1095798"></div><script src=""></script> <div class="flourish-embed" data-src="visualisation/1095899"></div><script src=""></script> <h2>Other transgressors</h2> <p>While Anglo American got the most fines over the past decade, German giant automaker Volkswagen was the recipient of the most expensive penalty. In 2015, authorities fined the automaker BRL 50 million following the &#8220;dieselgate&#8221; scandal—Volkswagen cheated regulators by using so-called &#8220;defeat devices&#8221; in order to <a href="">comply with exhaust emission standards</a>.</p> <p>In the agricultural sector, frequently linked to environmental crimes, Norway&#8217;s Yara is the biggest transgressor. It was found guilty of releasing chemicals into the Lagoa dos Patos, a river in the southern city of Porto Alegre. The company was also accused of omitting information from authorities and unsafely storing diesel.</p> <p>The Ibama database shows no indications that these fines have been paid. 

Marcelo Soares

Marcelo Soares is a Brazilian journalist specializing in data journalism and reader engagement.

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