World Bank says MP creates obstacles to energy development


Author: Aguinaldo Novo

Source: O Globo, 03/06/2008

SAO PAULO - The World Bank released this Tuesday in São Paulo a study showing that in order to develop at an average of 4,2% per year, the

Brazil will need to have an annual growth rate of energy demand of 4,4% per year in the next decade.

Therefore, by 2015 the country will need to generate an additional 3 MW of energy per year and will need investments of US $ 40 billion annually. Most of these investments will have to be made in the Amazon, where 43% of the economic hydroelectric potential is concentrated, "which implies greater complexity in relation to environmental aspects and the treatment of indigenous issues", says the study by the World Bank office (Bird) in Brazil, discussed at the headquarters of the Federation of Industries of the State of São Paulo (Fiesp).

- Hydroelectric plants will run into environmental licensing, considered as a major obstacle for the expansion of electric power generation capacity to occur in a predictable manner and within reasonable periods, which, in turn, would represent a serious threat to economic growth ” , says the Bird study.

For the World Bank, the Public Ministry is one of those obstacles.

- The unlimited autonomy granted to members of the Public Ministry, which is unparalleled in the countries examined in the scope of the study, is an important factor for the lack of predictability and compliance with the schedules of the environmental licensing process, as it allows its members to participate in acts technical or administrative aspects typical of the environmental agency - criticizes the bank, which adds:

“The Constitutition of 88 gave the MP functional, material and technical conditions that far exceed those of other public administration bodies, including the judiciary. The role of the MP in these matters and its natural tendency to use judicial measures increases the frequency and the generation of conflicts within the scope of the licensing process ”.

The Bird ensures that "the environmental licensing of hydroelectric projects in Brazil is considered a major obstacle to the expansion of electricity generation capacity".

According to the bank, the reforms of the 90s created “a solid environment to attract new investments in the electricity sector”, but this effort is now being hampered by the delay in environmental licensing.

- The lack of medium-term energy alternatives and global warming make it imperative to mobilize Brazil's enormous hydroelectric potential, much of which is found in the Amazon. Brazil needs to be able to exploit this potential in an efficient and socially responsible manner. Failure to take advantage of the opportunity to attract investors, due to managerial deficiencies associated with political and bureaucratic decisions involved in environmental licensing, is detrimental to all Brazilians. Environmental and social risks create risks for investors, which lead to higher tariffs for consumers. Regulatory uncertainties translate into higher costs for energy consumers.

According to the World Bank, there is so much bureaucracy in the construction of a hydroelectric plant in Brazil that the process can take 4 to 10 years to be released.

- The combination of relugatory uncertainties caused by the environmental legal framework and, to a lesser extent, by the energy legal framework, represents a risk for potential investors. Brazil is one of the few countries, if not the only one, to have a three-phase process (prior license, installation license and operation license), which contributes to introducing conflicts and generating a high degree of uncertainty, long delays and with similar costs. high, he says.

The process for the construction of a hydroelectric plant in the country is slow thanks to Brazilian legislation, which has not adapted to the new times.

- Interviews with actors involved in the environmental licensing process for hydroelectric projects revealed the fear of employees of licensing agencies in suffering possible penalties imposed by the Environmental Crimes Law and administrative improbity. Such a law, which has precedents in a few countries, confers strict criminal liability on the licensing agent, even with acts of good faith and this causes risk-averse behavior among those responsible for issuing licenses.

In the end, the study entitled, “Environmental Licensing for Hydroelectric Enterprises in Brazil”, suggests eleven recommendations for Brazil to change the environmental licensing system. Among them is the creation of a Government Council, as already provided for in the National Environmental Policy Law.

- Such a Government Council will not replace Conama, but would have the competence to promote coordination between government agencies and contribute to the improvement of the planning process.