The beginning of Lula’s third term in Brazil – his first six months in office in January-June 2023 - provides an interesting glimpse of the complexities of building and trying to maintain a pink-green ruling coalition. The returning president had a strong start. He promised to reverse his predecessor’s lack of concern for Amazon deforestation. Lula announced a 37-strong ministerial team (up from 23 under his predecessor). Signalling a change in approach as part of this restructuring, he created a new ministry for indigenous people, appointing Sonia Guajajara, an indigenous rights campaigner, as its new head. He also appointed the well-known climate change campaigner Marina Silva as the new environment minister. Lula and Silva have history. As a prominent green in a pink government, she had held the post before in an earlier Lula presidency but resigned after clashing with the president over the Belo Monte hydroelectric project, which he supported on developmentalist grounds, but she opposed, on environmental grounds. Her re-appointment was therefore interpreted as a sign that the new government would take environmental issues more seriously than it had done in the past.
Also in January, the new government declared a health emergency in the main Amazon reserve occupied by the Yanomani people. This was in response to reports that more than half of that 27,000 strong indigenous community were suffering a cocktail of diseases caused by large-scale incursions of illegal gold miners known as garimpeiros. The impact on the Yanomami included mercury and water poisoning, malaria, and malnutrion. The president ordered the security forces to evict up to 20,000 garimpeiros who had invaded the Yanomami’s protected lands.
At this early stage however, potential tensions were already making themselves felt within the ruling coalition. One of the issues facing it was whether or not to authorise Petrobras, the state oil company, to drill 16 exploratory oil and gas wells in the Equatorial Margin Area near the mouth of the Amazon. An earlier request to do so had been turned down by Ibama, the environmental regulator, on the grounds that the state-owned company had failed to complete a wider environmental impact study, nor presented adequate measures to communicate with indigenous communities and coordinate with neighbouring countries to deal with any eventual oil spills or other forms of contamination.
The offshore block in question is part of a long strip facing 2,200 kms of Brazil’s north Atlantic coastline, which is also close to Guyana, a country now enjoying an economic boom after an Exxon-led consortium made major deep-sea oil finds in 2015. Developing oil and gas exploration and production in the Equatorial Margin could offset falling output by the end of this decade in some of the country’s other fields such as Tupi and Búzios in the southeast. Mining minister Alexandre Silveira has described exploration in the region as a “passport to the future”. Estimates suggest that the block could add some 1.1m barrels per day of output – highly significant since current production levels are around 3.1m barrels. Since the north-eastern states are among the poorest in Brazil, local politicians are also enthusiastic over the prospects for job creation in offshore support services, along with using royalty payments for public works.
Against that, environmentalists point out that the wider area contains sensitive marine ecosystems, including mangroves, extended coral reefs, sea sponges, and unique and diverse fauna such as whales and dolphins which could be placed at risk. Some analysts say that an unregulated combination of onshore and offshore development could accelerate deforestation. Certainly, a decision to allow rapid fossil fuel development in the mouth of the Amazon would sit uncomfortably with the government’s pursuit of green credentials.
While Marina Silva seems to have fended off drilling – for the moment at least – she has suffered some political difficulties with a senator from REDE, her own green party, defecting and saying he now supports drilling because of the investment and employment it could bring to his home state of Amapá. With further ecological impact studies likely, Lula has so far avoided coming down on either side of the debate. He has however always been upbeat about increasing domestic oil output and commented that he finds it “difficult to believe” that offshore drilling 500kms from the rainforest might contribute to deforestation. Some journalists believe there is still a possibility that Lula and Marina Silva could end up on opposite sides of the Equatorial Margin debate, just as they did years earlier on the Belo Monte debate.
On other fronts, by May 2023 it looked as if the Lula administration might be facing a major pushback from supporters of the developmentalist school of thought. The problem is that the centre-left government lacks a majority in congress, which is controlled by often opportunist parties of the centre and far right. These parties and associated lobbies were able to deal the new government a series of blows. For example, they updated and passed a law known as the marco temporal which restricts indigenous land rights.
Under the 1988 constitution ancestral land rights are recognised and governments are required to assess claims and designate indigenous reserves. To date some 487 reserves, covering 14% of national territory, have been so designated. A further 200 are in the pipeline. But the marco temporal subverts this by restricting the process only to lands that were physically occupied on 5 October 1988, the day the constitution was approved. This effectively excludes indigenous communities who say they had been evicted from their traditional lands during the 1964-85 military regime. The marco temporal also creates loopholes permitting mining, farming, and public infrastructure construction on indigenous reserves.
In a second move, the opposition challenged a presidential decree creating his new 37-strong ministerial team and specifying the responsibilities and powers of each ministry. These decrees are known as medidas provisorias (MPs). They come into force immediately but are set to lapse automatically if not ratified by congress within 120 days. Under custom and practice, congress has almost always quickly approved a new president’s MP detailing how the executive power will function. But in this case opposition members of congress threatened to vote it down, demanding changes to the workings of the cabinet.
As part of these changes, control of the rural land registry – a key unit in the battle to reduce deforestation – was taken away from the environment ministry and awarded instead to the ministry for management and innovation. Responsibility for indigenous land demarcation passed from the indigenous affairs ministry to the ministry of justice. Both the ministries that suffered a loss of jurisdiction are led by the greenest members of government (Marina Silva and Sonia Guajajara) so the move can be seen as designed to weaken policies to protect the environment as well as promoting tensions within the ministerial team. Silva said the weakening of her ministry was a “setback”. Guajajara admitted to feeling “a certain degree of frustration” with Lula’s response.
In short, the Lula government will face an ongoing challenge to manage a pink-green coalition where there are both internal differences over specific policy issues and external threats from opposition political parties. This will require a high degree of political skill, as well as a communications strategy that challenges established stereotypes. For example, it is often assumed that commercial farming and livestock ranching maximises export revenues and therefore must be protected from environmental regulation and restrictions which do nothing more than add on costs. This is certainly an argument used by farmers allied to bolsonarismo – the movement led by former president Jair Bolsonaro. Yet there are at least two major reasons to question this profit maximisation approach. The first is that consumer sentiment in Europe and other key export markets has been changing. Lobby groups have called for boycotts of supermarket sales of Brazilian products linked to deforestation. In the long term, therefore, it may be in the interest of agro-industrial exporters to promote a cleaner and greener image, with transparent rules of origin.
The second factor is that if fears of a deforestation tipping point prove to be well-based, the deterioration of the Amazon will incur massive real-world financial losses. A rational commercial approach therefore would be to try and avoid them by investing in a campaign to stop deforestation. A World Bank report published in May 2023 attempted to quantify some of the losses that might be involved. It found that the degradation of the Amazon would jeopardise agricultural production, water supply, and the ability to generate hydroelectric energy. It estimated that the savannisation of the Amazon would cost the Brazilian economy US$184.1bn, or 9.7% of GDP, by 2050.
