Amazon forest fires: Brazil's government is finally feeling the heat

Brazil's failure to protect forests and indigenous rights is hurting the economy, investors and businesses warn.

The Brazilian government indicated today that they would introduce a four-month fire ban in the Amazon and the Pantanal biomes. The starting date is yet unclear, but it is expected to come into effect shortly. 

The statement came in a press conference today following a meeting between several international investors and key ministers from Brazil’s government and the Governor of the Central Bank in an online meeting discussing environmental and human rights issues in the country.

Enforcement is key

”This is potentially great news, and an important step to prevent a repeat of last year’s catastrophic forest fires, but it remains to be seen whether it will be enforced,” says Vemund Olsen, senior advisor in Rainforest Foundation Norway. 

“The fire ban affects already deforested areas, so the real question is whether the government will crack down on new deforestation, he adds.”

The meeting was set up after 34 investors from nine different countries sent a joint letter to the Brazilian government at the end of June expressing concern over the increased deforestation and attacks on indigenous people’s rights.

Investors believe it is "creating widespread uncertainty about the conditions for investing in or providing financial services to Brazil.”

The Brazilian rainforest has not had as many fires in June for 13 years. Photo: Edmar Barros/Rainforest Foundation Norway.

The 34 international investors are from the USA, UK, Japan, the Netherlands, France, Brazil, Norway, Sweden and Denmark. In total, the 34 international investors manage US$ 4,6 trillion. 

Brazilian companies are piling on pressure, too.

This week, 38 major Brazilian and international companies followed suit, demanding that the authorities crack down on illegal deforestation in the Amazon. They fear that the country's financial interests are harmed by what they refer to as Brazil's negative international reputation.

Among the companies are both agricultural giants such as Cargill and Amaggi, large banks such as Santander and Itaú, and companies such as Shell, Siemens, Eletrobras, and Vale.

The letters to the Brazilian authorities come as a record number of fires are burning in the Amazon, the highest number of fires in June for 13 years. At the same time, the indigenous population is particularly threatened by a critical combination of smoke from forest fire, corona virus and illegal activity within the indigenous peoples' territories. 

- No one wants to do business with someone who deliberately destroys nature, says Marcio Astrini, CEO of Observatorio do Clima in Brazil. Photo: Márcia Alves/Observatório do Clima

'Collision course with the rest of the world'

“Bolsonaro is on a collision course with the rest of the world. While everyone else is increasingly concerned about the environment, his government has created a series of environmental setbacks. These setbacks have led to increased deforestation and destruction of the Amazon. He even risks destroying global efforts to combat climate change,” says Marcio Astrini.

He is the CEO of the organisation Observatório do Clima, one of Rainforest Foundation Norway's partners in Brazil.

“No one wants to do business with someone who deliberately destroys nature and biodiversity. Bolsonaro's government is isolating Brazil from the rest of the world and will cause great damage to the country. It will exacerbate the economic crisis in a country already seriously shaken by the effects of the corona pandemic,” he says. 

Investor pressure works 

It is rare to see Brazilian business leaders coming together to urge the authorities to increase environmental protection. So is the letter from investors. 

“This clearly shows that businesses fear the loss of capital and market access as long as Brazil continues to destroy the rainforest. What we see here is that the pressure from investors is making a difference,” says Vemund Olsen, senior adviser to Rainforest Foundation Norway.

“It will be more difficult to dismiss the investor initiative as foreign interference when Brazilian companies act in a similar way,” he says. 

Pressure from investors works, says Vemund Olsen at Rainforest Foundation Norway. Photo: Håvard Sæbø

Missing big Norwegian businesses

Several large Norwegian businesses were not among the 38 companies operating in Brazil who signed the letter this week.

“We are disappointed that none of the major Norwegian companies in Brazil have signed this letter. When large Brazilian companies take such a stance, it's startling that Equinor, Yara and Norsk Hydro look the other way while the rainforest is being ravaged,” says Vemund Olsen at Rainforest Foundation Norway.