Indigenous people debut “shareholder activism” in Brazil

. Apr 25, 2019
rumo guarani indigenous Photo: Pedro Biava/Comitê Interaldeias

Relations between indigenous groups and private corporations in Brazil have always been tense—with clashes being observed in over 400 areas across the country. More often than not, the original peoples end up on the losing side of disputes. This time, however, a Guarani tribe has decided to fight the system from within, becoming shareholders of Rumo Logística, the company interfering in their land.

Rumo is Brazil’s largest railway operator, managing 12,000 kilometers of railroads. Among them is a connection between the port of Santos and the countryside town of Itirapina. Five separate indigenous lands are located along the course of the line. Works to double the tracks and improve transportation have disturbed roughly 5,000 indigenous people.

In 2013, the company signed an agreement with local communities and Funai, Brazil’s agency for indigenous affairs, to provide compensatory measures, relating to sanitation, education, healthcare, and environmental management. However, according to indigenous leadership, Rumo’s licensing team is still not listening to the community’s needs—with 72 of 101 foreseen measures currently stalled.

Tired of waiting, the indigenous group decided to act, denouncing Rumo at its own shareholders’ meeting. Five Guarani leaders bought six BRL 17.00 shares—out of the company’s almost 900 million listed on the stock market.

“Did you know Rumo is acting this way?”

Reading a letter to their fellow shareholders, Priscila Poty, a leader from the Tenendé Porã community, was clear about how bad their situation was: “We sleep and wake up every day with the noise of heavy trains crossing our lands. Walking with our children to teach them what we’ve learned from our elders has become a concern, to guarantee no one is run over by the trains.”

The action has been a first in Brazil, a country known for disrespecting indigenous rights, especially in favor of infrastructure projects. So far, the majority of negotiations have been meddled with by the government with cases often taking years in court. In the case of the Belo Monte hydroelectric plant, both the federal government and company Nova Energia were fined in BRL 1.8 million in court for delays in restructuring the Funai office in the area, causing “severe damages to indigenous people.”

By going directly to Rumo’s board, the indigenous leaders were “looking for autonomy,” said indigenous leader and teacher Tiago dos Santos, to Valor. In fact, they established a precedent: it is the first time a group opts for so-called “shareholders activism” in Brazil, a rising trend abroad.  

According to a CNN report, in the U.S., “environmental, social and governance resolutions are gaining support from a broader range of shareholders. The average percentage of shares voting for those resolutions rose to an all-time high of 25.7 percent in 2018, up from about 19 percent in 2010.” One of the main reasons for the performance is the support from some of the most important asset managers in the country, such as BlackRock, State Street, and Vanguard.

The move has also surprised the company. “We were not expecting this, the topic was not on the schedule,” said Fabrício Mascarenhas, an independent member of an auditing committee linked to the board which aims to deal with matters that may put Rumo’s reputation at risk, to newspaper Valor.


In an emailed statement to The Brazilian Report, Rumo said it was fulfilling the projects as usual, but it was informed last July that an indigenous association called the Interaldeias Committee intended to receive the money destined for the projects and execute them by themselves, which was not agreed upon previously. “Rumo has no guarantee the Committee will perform the obligations with the necessary quality and, therefore, hopes Funai and [Brazil’s environmental agency] will help to make sure the works may be fully executed.”

The indigenous leaders tell another story. In an interview with Folha de S. Paulo, Mr. Santos said Rumo representatives were excited about the possibility and were willing to cooperate in the partnership. The newspaper quotes a document signed by a Rumo representative saying the “proposal was received with enthusiasm by their representatives, Funai, Ecology (a third company) and the Federal Prosecution Office, which reaffirmed how valuable and important it is for indigenous people to be protagonists of their own destinies.”

The Federal Prosecution Office stated that it has promoted five meetings between Rumo, Funai and Interaldeias Committee from November 2018 and March 2019. The goal was to stop the violations but “because of Rumo’s lack of disposition, every attempt was frustrated.” The organ has recommended Ibama to fine Rumo BRL 10 million, plus a daily fine of up to BRL 1 million, and to revoke the railway’s licenses.  

Rumo told The Brazilian Report that the works to double the trails across the 215-kilometer railway have been “largely concluded (…), with proper licensing,” including the 55-kilometer stretch cutting through indigenous lands. However, the company gave no details about how it intends to solve the matter, nor a timeline for the project’s conclusion.

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