IFC Investment in Hidrovias do Brasil

The International Finance Corporation (IFC) investment helped Hidrovias do Brasil (HDB) expand its ports and river transportation platform to address logistics bottlenecks mainly for agricultural and mining commodities. It also supported regional development by promoting investment in northern Brazil and integration in the Southern Cone through projects in the Parana-Paraguay waterway.

BIC worked with our Brazilian partner, the Institute for Socioeconomic Studies (INESC) to evaluate HDB’s compliance with IFC’s Performance Standards (PS) and IFC’s role in supervising the environmental and social impact of HDB’s work in the Miritituba region and Itaituba city. We identified the following concerns:

Performance Standards, including compliance with national laws and international agreements, have not been fully followed — for example, Agreement 008/2013 signed between the City Government of Itaituba and the Association of Port Terminals and Cargo Transhipment Stations on the Tapajós Waterway (ATAP), now going by the name of AMPORT. The agreement contains a checklist with minimum requirements for social and environmental compensation actions to be carried out by AMPORT, regarding infrastructure, basic sanitation, and social assistance, among others. In 2018, a group of residents of Miritituba established the Management Council for the Supervision of Enterprises and Investments in the District of Miritituba (CONGEFIMI) to monitor this agreement, among other actions. CONGEFIMI states that only 20 percent of the measures established by the agreement have been implemented.

The project impact area, which includes not only the headquarters of HDB but also Miritituba and Itaituba, was not accurately identified, exacerbating project risks and impacts.

HDB’s work has resulted in negative environmental and community impacts that are not being addressed by the company. During the peak harvest season, the traffic in this small district can reach 1,500 trucks per day. In interviews, local people reported impacts including private appropriation of roads and streets by HDB or its suppliers, pollution, and increases in violence, drug trafficking, and prostitution. Also reported were noise pollution, soy scattered throughout the town, and traffic accidents in the district. In addition, dust clouds known as “soybean powder” — which contain residues of pesticides, cereals, soil, and vegetables — cause illnesses to workers and are carried by wind beyond the company’s property. The intense circulation of trucks makes it difficult for the residents to commute or carry out other daily activities, such as attending school or accessing the local hospital. In Hidrovias’ Environmental Impact Assessment (RIMA, Relatório de Impacto sobre o Meio Ambiente), these impacts were mostly ignored, or only vague actions were proposed to mitigate them.

The port construction in Miritituba negatively affected the local fishermen. Fishermen can no longer fish near their homes, which was less expensive given lower fuel consumption and no need for the use of ice for transportation. With the port’s construction, fishermen need to travel up to four hours along the river, spending the week away from Miritituba and living in their boats to ensure their means of survival. With the decrease in the number of fish and the added costs, both the number and the income of Itaituba residents who can survive by artisanal fishing have been reduced.

The IFC’s failure to apply specific protections for Indigenous Peoples as required by PS 7 has adversely impacted Indigenous communities. The impacts of the ports spread through the kinship network that links Indigenous communities, affecting other Indigenous territories in the region, which have over 800 Indigenous inhabitants. During project appraisal, the IFC failed to identify impacts on Indigenous Peoples. Accordingly, the IFC and HDB did not apply PS 7, and the Munduruku people were not consulted during project design and implementation. The two urban villages of the Munduruku Indigenous People on the banks of the Tapajós live daily with the ports and their effects.

Last Updated

September 23, 2021

Location

Brazil, Pará

Institution

World Bank Group

Campaigns

Climate, Forests and Biodiversity, Indigenous Peoples, Stakeholder Engagement

Total Cost

$30 million

Funding

International Finance Corporation equity investment

MDB Financing Status

Active

Monitored by

Carolina
Juaneda