Good morning! Here’s what you need to know today in Brazil. A Senate investigation committee recommended indictments for the Brumadinho dam collapse. Despite concessions, lawmakers haven’t agreed on the pension reform report. Brazil tries a deal with the UK before Brexit. And a new airline to fly in Brazil. Enjoy your read!


Senate recommends 14 indictments for Brumadinho disaster

A Senate investigation committee (CPI) on the Brumadinho dam collapse approved its final report. Lawmakers recommended Vale (the owner of the dam) and German consultancy Tüd Süv (which attested to the dam&#8217;s safety, despite glaring structural issues) be liable for the disaster, as well as 14 individuals—including Vale&#8217;s former CEO.</span></p> <p><span style="font-weight: 400;">On January 25, 2019, a dam collapsed in the town of Brumadinho, spilling billions of liters of mud—which killed 246 people and left 24 missing. Over 133 hectares of Atlantic Forest were covered in a wave of sludge, which has since reached the São Francisco River—the waterway responsible for 70% of available fresh water in the Northeast, the most arid region in the country.</span></p> <p><span style="font-weight: 400;">Vale avoided major consequences following the 2015 Mariana disaster—which killed 19 people, but spilled much more toxic sludge. And that showed the company learned little from its past mistakes. The committee accused those involved of &#8220;malpractice, recklessness, and negligence,&#8221; and recommended they be indicted for murder. The report also recommended new laws for the mining sector, forbidding the licensing of new tailings dams for 10 years, more taxes to miners, and harsher laws on environmental crimes.</span></p> <p><span style="font-weight: 400;">Brazil has 769 tailings dams, 42% of which operate without proper licenses. According to regulators, 19 &#8220;extremely severe&#8221; accidents are forecast until 2027.</span></p> <div class="flourish-embed" data-src="visualisation/461214"></div> <p><script src="https://public.flourish.studio/resources/embed.js"></script></p> <ul> <li><b>Go deeper: </b><a href="https://brazilian.report/society/2019/03/24/brumadinho-sao-francisco-river/"><span style="font-weight: 400;">Fallout from Brumadinho dam collapse harming crucial Brazilian river</span></a></li> </ul> <hr /> <h2>Despite concessions, pension reform vote stalls</h2> <p><span style="font-weight: 400;">Congressman Samuel Moreira, the rapporteur of the pension reform in the House, tried to cater to the requests of multiple interest groups in the House, tweaking his report in the most conciliatory way possible: state- and municipal-level servants were not included, and teachers and cops got better retirement conditions. But that wasn&#8217;t enough for the House special committee to vote on the report.</span></p> <p><span style="font-weight: 400;">A decision about the next steps is expected for today in a meeting between caucus leaders and the special committee president. It is safe to say that the reform has the necessary votes to pass in the committee, but the opposition&#8217;s obstructionist strategy could stall the process—meaning a roll call vote on the House floor could come only after Congress&#8217; July vacations, which start in two weeks.</span></p> <p><span style="font-weight: 400;">The estimated savings with this new version of the reform are at BRL 1 trillion in 10 years, according to the experts which drafted the report. But the numbers are beginning to be contested, with many market analysts calling them overly optimistic.</span></p> <ul> <li><b>Go deeper:</b> <a href="https://brazilian.report/opinion/2019/06/15/best-pension-reform-brazil-levante/"><span style="font-weight: 400;">What is the best pension reform for Brazil?</span></a></li> </ul> <hr /> <h2>A deal before Brexit</h2> <p><span style="font-weight: 400;">While still a member of the European Union, the United Kingdom was part of the negotiations around the Mercosur-EU trade deal. But with Brexit looming, Brazilian diplomats have decided to start direct conversations about a possible trade deal with the British. Foreign Minister Ernesto Araújo met with UK businessmen in Brasília and has started studies on the issue.</span></p> <p><span style="font-weight: 400;">People familiar with the initial discussions say the terms would be similar to the deal struck on Friday with the EU. Any negotiations, however, depend on the agreement of Argentina, Paraguay, and Uruguay. Mercosur rules establish that countries can&#8217;t sign trade deals on their own—only as a bloc. </span></p> <p><span style="font-weight: 400;">Right now, Mercosur is in free-trade negotiations with Canada, Singapore, South Korea, Japan, and the European Free Trade Association (EFTA, formed by Switzerland, Norway, Iceland, and Liechtenstein).</span></p> <ul> <li><b>Go deeper:</b> <a href="https://brazilian.report/money/2018/04/11/japan-brazil-mercosur-deal/"><span style="font-weight: 400;">Japan angles for space in Brazil with Mercosur deal</span></a></li> <li><strong>And:</strong> <a href="https://brazilian.report/money/2019/04/11/brexit-brazil-exports/">Could Brexit be good for Brazil?</a></li> </ul> <hr /> <h2>Also noteworthy</h2> <p><b>Agriculture.</b><span style="font-weight: 400;"> An OECD report to be published today shows that countries have increased aid to agricultural producers. Brazil, however, went against the tide, actually reducing its amount for subsidies. Between 2016 and 2018, aid represented 18% of producers&#8217; gross revenue in developed countries—in Brazil, the rate was 2.6%. The Brazilian number reflects budget cuts and the loss of value of the Brazilian Real.</span></p> <p><b>Basic rights.</b><span style="font-weight: 400;"> The Senate voted in favor of the inclusion of the right to data protection as a basic right protected by the Constitution.</span></p> <p><b>Moro. </b><span style="font-weight: 400;">Justice Minister Sergio Moro spoke before a House committee about the leaked messages between him and Operation Car Wash prosecutors which showed legal misconduct during the case against former President Lula. The session was tense, with Mr. Moro repeating the same arguments he had presented before: he doesn&#8217;t recognize the authenticity of the dialogues—but say that even if they are real, they show no illegality. Mr. Moro called it quits after being called a &#8220;thug judge&#8221; by a left-wing congressman.</span></p> <p><b>Freedom of speech.</b><span style="font-weight: 400;"> According to right-wing blog </span><a href="https://www.oantagonista.com/"><i><span style="font-weight: 400;">O Antagonista</span></i></a><span style="font-weight: 400;">, the Federal Police (which operates under Sergio Moro) has requested Brazil&#8217;s money laundering enforcement agency Coaf scrutinize the bank accounts of Glenn Greenwald, founder of </span><a href="https://theintercept.com/brasil/"><i><span style="font-weight: 400;">The Intercept</span></i></a><span style="font-weight: 400;">—the website behind the leaks. Speaking before a House committee, Mr. Moro didn&#8217;t confirm or deny the information, fueling suspicions that the move—an attempt against freedom of speech—is true.</span></p> <p><b>Intrigue.</b><span style="font-weight: 400;"> After the president&#8217;s son Carlos Bolsonaro attacked the government&#8217;s chief security officer, Augusto Heleno, an Army General called him a &#8220;useless idiot,&#8221; showing just how strained the relationship between the Armed Forces and the Bolsonaro clan is. Carlos Bolsonaro&#8217;s reaction was predictable: he posted more diatribes on Twitter.</span></p> <p><b>Aviation. </b><span style="font-weight: 400;">The National Civil Aviation Agency (Anac) has authorized Argentine low-cost carrier Flybondi to operate in Brazil. The airline plans to offer three weekly flights between Buenos Aires and Rio, starting in October. Flybondi is the third low-cost company in Brazil, after Chile&#8217;s Sky Airline and Air Norwegian.</span></p> <p><b>Prisons.</b><span style="font-weight: 400;"> The Senate began debates on a bill that would force inmates to reimburse the state for the money spent on them during their time in prison—including their names in the list of overdue federal tax liability. While researchers believe the discussion is legitimate, the way it&#8217;s being done could force former inmates to resort to criminal activity in order to clear their name—defeating the purpose.

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Daily BriefingJul 03, 2019

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BY Gustavo Ribeiro

An award-winning journalist with experience covering Brazilian politics and international affairs. His work has been featured across Brazilian and French media outlets.