Category Archives: Understanding Brazil

Também disponível em Português

Last week, Brazilian newspapers reported the aging of our population, following a pattern which has been observed worldwide. The old demographic wide-base pyramid, typical of the 1970s, is reconfiguring into a form of amphora (more adults than children, and a larger, more long-lived parcel of elders). Also projects for 2050 a larger percentage of individuals over 60 years old. According to some interviewed experts, a big risk for the social security, an important change in the patterns (and desires) of consumption, and some severe challenges to sustainability. After reading this matter, I decided to give to this “Understanding Brazil” a broader and philosophical content. I invite you to reflect on some questions, for which I believe the answers are critical to the Sustainability (including maintenance and support) of human populations on the Earth. I do not have the answers; this discussion may be more compatible with the articles from the “E Agora?” series (“Now what?” in a free translation).

This text begins by making reference to a real lived case. In October 2009, I was in Washington D.C. attending the annual Liaison Delegates Meeting of the World Business Council for Sustainable Development (WBCSD), on behalf of the Brazilian mining company VALE. These meetings provided delegates with the opportunity to catch up on the latest sustainability trends, to discuss related strategic issues, and to decide on the priorities of the WBCSD for the coming years.

Lectures and speeches during this Congress were based on the main assumption that humanity would reach a total of 9 billion inhabitants by 2050. Thus – they said – efforts could be applied to capture this “market opportunity”, and to assure that all basic needs would be provided to everyone, with the proper equity. During my final intervention in this meeting, I suggested that this premise was false: efforts should be applied in an intelligent way to avoid this overgrowth. Otherwise wars, barbarism, extreme climatic events, starvation, thirst and diseases would play their part in controlling human populations, not allowing our species to reach 9 billion on the face of the Earth by 2050.

The different pace between population growth and availability of resources seems to drive us back to the dilemma proposed in the 1972 report  “The Limits to Growth” , produced by members of the think-tank “The Club of Rome”. Or, even earlier, to the concerns originally introduced by Thomas Malthus in his “An Essay on the Principle of Population” of 1798. A current reading by Mary M. Kent and Carl Haub (Global Demographic Divide, 2005), under the so called Neo-Malthusian approach, leads us to suppose that our society has concentrated wealth throughout the unbalance of fertility rates: the poorer people give birth to a higher number of children, the wealthier couples have only one child – or even none. In this way, we seem to be sharing poverty among a progressively growing portion of the population: the poorest one. In fact, Kent and Haub affirm that “most population growth is occurring in places that already experience trouble feeding their people”.

Religious and cultural implications of the single idea of birth control turned my intervention at the WBCSD 2009’ Conference into a debate. Notwithstanding to this, if one assumes that such growth reduction must be considered as an adaptation strategy, how could it be implanted without severe offenses against cultural and-or religious traditions (which could result into resistance, instead of the desired adherence)? Educating women appears as the first answer concerning “what to do”. It is widely noticed that societies where women have less or no access to education often show fertility rates above 4 births per woman, whilst the most educated regions present figures below 2 – some of them lower than 1.3 births. The replacement-level fertility to assure worldwide population stability is of 2.1 children per couple of parents. Now, are World Bank’s data actually showing that women’s educational level in a society is inversely proportional to the fertility rate? Are statistics really confirming this axiom? What can be seen from the data is that fertility rates are decreasing spontaneously throughout the world. Among rich and poor. The difference is that, in rich countries and regions, dangerously below replacement; in poor regions, still far above that rate. Meanwhile, the total population is still growing…

In parallel, we see in some cantons of the globe the manifestation of religious and-or cultural-based constraints on women being educated. On October, 2012, Malala Yousafzai has survived the Pakistan Taliban’s headshot. More than 200 school girls were abducted in Nigeria by Boko Haram extremists on April, 2014. In both cases, the pretext was that female education was supposedly against religious and cultural rules and traditions. These two stories brought more and more strength to the women’s education cause worldwide. Nevertheless, is it “Educate Women!” an enough strong slogan that is able to reverse this situation? Are there complementary – or even alternative – messages to be conveyed? Is it possible to mediate such fundamental conflicting differences?

Another issue regarding “how to do” must be addressed: one must plan a growth reduction not jeopardizing the minimally adequate proportion between economically active and retired populations, having in mind the health of national social security accounts. An important path seems to be driving the growth reduction to a soft landing, not to a plane crash. Which reduction rate (and at what pace) could assure to mankind the amount of richness that could provide minimum acceptable welfare, goods and resources to an entire population getting old? Despite – as said – a fertility reduction is being observed all around the world in the last decades, even in the underdeveloped and developing countries, how an inertial higher fertility rate at the poorest areas (still above the replacement-level fertility) could increase the unbalance between the population growth, geographic distribution, and the availability and access to the resources? What level of interference would be acceptable without hurting the free will and the individual rights?

In my opinion, these are the most important and challenging issues that will define whether or not poverty can be intelligently reduced around the world – truly integrating the concept of sustainability to the social and economic theories. Controversial issues, it is true … But we cannot skip them anymore.

Também disponível em português

May, 1980. We had enthusiastically received the information that the United Nations Programme for the Environment (UNEP) had signed an agreement with FEEMA – at the time, the environmental agency of the State of Rio de Janeiro – to help us to carry out a comprehensive study to choose which Environmental Impact Assessment (EIA) methodologies would be suitable to be introduced in the institutional and legal framework of the State, consequently of the Country. The subject was new, as FEEMA also was. FEEMA had been created in 1975 by young professionals ideologically committed to the nascent environmental issue. As a pioneer, FEEMA had already implanted a Potentially Polluting Activities Licensing System (SLAP), within which the execution of an Environmental Impact Report (RIMA) was already defined as a mandatory requirement for the approval of large projects.

We were experiencing the very beginning of the Brazilian “Political Opening” under General João Figueiredo’s government. Less than a year earlier, in August 1979, the Amnesty Law was enacted. Five years would yet be necessary to the political wave called “Direct Elections, Now!” (“Diretas já!”), and eight years to the promulgation of the future Constitution, which would restore the democratic order in Brazil. That means we were still living in a closed regime, with restricted rights. At that time, decisions on the implementation of productive projects and infrastructure are used to come from the central government, top-down, without any participative mechanism. All large projects were evaluated by entrepreneurs only from two perspectives: engineering technical feasibility and economic feasibility. Private agents were in charge of manufacturing industries and real estate. Under the large umbrella of National Security, government used to undertake in the fields of infrastructure, “strategic” mining, oil and base industry.

The Environmental Studies Group (GEA) of FEEMA, headed by architect Iara Verocai, was appointed to be the leading team of that program with UNEP. Our thought was to add, in a methodologically consistent manner, the environmental vector into the engineering feasibility study. The goal would be bringing to the technical project the best environmental controls (not entailing excessive cost that could make the venture economically unfeasible), so that the operation could have its environmental impacts mitigated the best. With that, we would produce profitable projects, efficiently designed and environmentally adjusted as much as possible. The focus was on mitigating impacts by embarking the most appropriate (and feasible) technology.

Available methodologies were being developed, mainly in academic circles. Through the partnership with UNEP, we could have access to the best teachers and consultants, who presented us “ad hoc” methods (as the Experts’ Panels and Checklists), going through superposition of maps (as prescribed by the book “Design with Nature” by Ian McHarg), valuation matrices (Luna B. Leopold and the Battelle-Columbus Institute for Environmental Cost-Benefits Analysis – ECBA), and reaching to the complex “Adaptive Environmental Assessment and Management”, by the Canadian ecologist Crawford S. Holling. From the evaluation of these methods, we would come to the positioning later incorporated into all regulations: there was not “the right methodology”. Entrepreneurs should take advantage of the whole pack of appropriate and suitable methods to chose those ones that could properly assess the relevant environmental impacts of their projects. So, provisional environmental impact studies would become mandatory in the licensing process.

One fact, however, would be the spotlighted issue we face today. All methodologies had been originated in democratic countries. Thus, the so-called “socio-economic and cultural aspects” were introduced in all impact assessments. In addition to the “physical” and “biotic” aspects, also the human productions, plans and projects should be considered as a background for the impact assessment of a new venture. Various methodologies also foresaw mechanisms for public consultation of the stakeholders as important participants in the decision making. But we were still living in a dictatorship. The first environmental studies of federal projects were showing up “preciosities” in this field, such as the assertion that “the native indigenous groups will not be affected by the dam reservoir, once they are great swimmers”… Now, how it was possible to merge this frame into the Brazilian reality? To answer to this question, it was brought to the licensing process a period for public consultation of the EIA/RIMA, followed by the realization of one or more public hearings to collect the views of interested parties, before the issuance of the first of a series of three environmental permits – the Provisional License (LP).

In the context of an ideal and educated democracy, this idea seemed to be brilliant. However, in real Brazil, it has established a nefarious “business desks”, which is drowning in a Kafkaesque way, throughout legal disputes, the breath of the licensing process all around the Country, with serious effects on Brazilian competitiveness. The logic of the relationship of the project with stakeholders seems to stray away from the fair and appropriate clarification, by the entrepreneur to the community, about the impacts and risks of the new facility, as well as about the measures included in the project to mitigate the negative environmental effects and maximize the positive ones. Instead, this logic has entered in the swampy field of “compensations”. Treated as sin, profit seems to need paying a kind of “toll” to groups of stakeholders. Based on this concept, some governmental heads have made environmental licensing an opportunity on transferring their own obligations, enforcing entrepreneurs – as compensation for the environmental permit – to build streets, houses, parks, hospitals, schools, daycare centers, police stations, urban sanitation and what else one can invent in name of the infrastructure of the neighboring regions (sometimes not so nearby …), reducing margins, amplifying installation costs and delaying the return on investment. In other words, the so-called “Brazil Cost”.

We still have a long way to evolve our young democracy, especially in education. Today, this is it. However, in the shoes of one of those 1980s’ pioneers, I cannot vanish out of my mind a Spanish well-known adage: “cria cuervos y te sacarán los ojos “…

Disponível também em português

Throughout my life as an executive and consultant, I was approached several times by CEOs and foreign investors (and Brazilian too) completely lost while trying to understand the mechanisms of functioning of an environmental licensing agency in Brazil. At any governmental level. “Talk to their boss! Let’s schedule a meeting with the President / Governor / Mayor to resolve this matter once and forever!” they say. Whenever this happened, I had to show them a presentation I prepared especially for these occasions. It graphically describes the points listed below.

1.  The President, the Governor and the Mayor are elected office holders. Top level in the public administration, they believe in command and hierarchy. They have the power to dismiss (and sometimes they do) their immediate subordinates, who are entitled in commissioned positions. Once lower levels of decision exist, they are less subject to be prosecuted by the Public Attorneys. Focused on development, they usually have the mindset that the environmental permit should be granted, and that it is just one additional step in the installation process of a venture. For these reasons, they are more able and inclined to understand the language of business.
2. The Minister and Officers for the Environment, in general, follow the line of his or her boss. They usually have in mind that they should grant the environmental license, since it does not cause major crisis with the press, or legal disputes in Court. More technical than their political leaders, they will seek to make licensing roll, ensuring the shortest time possible, protecting the interests of the government and trying not to put their subordinates in risk.
3. The President of the Licensing Agency and its Director of Licensing are strongly pressured by the upper hierarchy, as they hold positions of political statement. They may be dismissed of their function. On the other hand, they are rather subjected to the pressure from the media and prosecutors. They are at personal risk of criminal prosecution involving their decisions on licensing. In a way, they understand they must grant the environmental license according to the interest of the Government, but they take strong care to preserve themselves. At the same time they suffer pressure from the upper hierarchy, they cannot disregard the technical opinion of their teams, over which they haven’t full control. The most charismatic ones influence the opinion of their teams. However, they do not have the authority to simply ignore a technical report produced by any member of their teams.
4. Technical coordinators and teams that analyze the previous environmental impact studies are career employees hired after a public exam. They are granted with functional stability, i.e., they cannot be fired – unless in cases of proven misconduct or in a few instances in which the dismissal is carried out “for the sake of public administration”. This stability gives them technical independence, practically disengaging them from the hierarchy. If they are pressured by bosses to change their technical advice, they may report this to the prosecutors, with the consequent risks for their chiefs. Managers usually do not confront subordinates. There is a rule in the government: “the subordinate of today can be the boss of tomorrow”… The mindset of this group is, therefore, to give assent only if everything is perfect, all information available, all impacts assessed and mitigated – which sometimes is not the practice among entrepreneurs.
5. The prosecutor of the Public Attorney Office is fully independent, and oversees with magnifying glass the licensing of all large ventures.

Given this situation, what can I recommend to my clients? First, give up the “pressure roller” approach. If you ask straight for the intervention of the “Almighty”, he or she will put top-down pressure, and say to you that everything is under control. But any pressure on the Head of Government, on the Environmental Minister or Officer or on the President of the Licensing Agency will not have the power to define or expedite the issuance of an Environmental Permit. The recipe for the success is based on an adequate professional relationship with the Licensing Agency technical teams, who evaluates the environmental studies. These technicians need to be well informed (and to be confident and comfortable with the information) about the project, its impacts and the efficiency of installed controls. Ultimately they are personally accountable on guiding licensing process to an “yes” or “no”.

Current “turn-key” type of contracts (in which the project and the solutions vary from supplier to supplier participating in a bidding process, and are defined only after the hire) are driving permits to be requested prior to defining what will be built, and – in some worse cases – even where! “Environmental impact” is the effect of the implementation of a defined set of objects over a particular site. By changing what will be built or the implantation site, the impacts will be different! I have always recommended that the environmental studies necessary to request Provisional License (LP) are carried out only after a certain stage of maturity of the project (what we might call “advanced conceptual design”), when location and some fundamental definitions on technology have reached a freezing point. Minor changes may occur, and they will be addressed in studies preceding the Installation License (LI), the second stage of the environmental licensing. But conceptual or geographic radical changes do not fit anymore. In case of occurring, the entrepreneur must understand that licensing returns to the first step. It is good to remember: the more detailed the design, the easier to get a license for it.

Finally, I recommend you never put pressure on the top levels to expedite the licensing process while the project is under review by the technical staff of the Licensing Agency. At this stage, the entrepreneur and their consultants can (and shall) put themselves at the disposal of the technical group, to provide clarification or supplementary information. This availability helps analysis. The pressure, however, can lead the technician  of the Licensing Agency to request additional data, simply to procrastinate, or even to decide by radically rejecting the license. Some kind of pressure can only be put to solve bureaucracy bottlenecks, only after the completion of the technical assessment of the design and the environmental studies. In this case, starting with lower levels and gradually rising up. After all, would you like if someone complains on you to your boss? Following this line improves the chances of licensing, in less time and with the best available legal certainty.