Strike at Brazil’s environmental agencies starts to hit key parts of economy

A months-long strike by Brazil’s environmental enforcement agencies is starting to take its toll on Latin America’s largest economy, with thousands of cars stuck in ports and dozens of power projects caught in limbo.

Since the start of the year, some 4,000 public servants across a series of agencies controlling a swath of activities — including permits for oil and gas licences, as well as fines for illegal deforestation — have halted fieldwork in protest over low wages and poor conditions.

In spite of the pledges of the government of President Luiz Inácio Lula da Silva to boost the agencies that suffered under his predecessor, Jair Bolsonaro, the labour claims include low staffing levels and a lack of bonuses linked to the dangers they face dealing with environmental crime.

The strike also come as Brazil grapples with the human and economic costs of extreme weather events, including historic floods in the south.

The most immediate impact has been a sharp fall in the number of fines handed out for environmental infringements, down 89 per cent to 2,000 in the first four months this year compared with the same period last year, according to Ascema, an association representing environmental workers.

But as the strike drags into its fifth month, it has begun to hit several key infrastructure and economic sectors, which by law require licences and stamps of approval from the environmental agencies.

Overall national growth was being affected by the strike, said Juliana Inhasz, a professor of economics at Insper in São Paulo. “For an economy that is no longer [robust], the scenario is very problematic,” she said.

The National Association of Motor Vehicle Manufacturers estimates that 47,000 imported cars and vehicles are sitting in Brazilian ports awaiting approval from Ibama, the administrative arm of the Ministry of Environment.

The oil and gas sector has also been hit, with only three new licences for exploration granted since the beginning of the year. Crude oil is Brazil’s second largest export in dollar terms.

The Brazilian Institute for Oil and Gas, an industry lobby group, estimates the federal government has lost out on BRL$1bn ($200mn) in tax receipts as a result of the strike. Revenue across the sector was down by BRL$3.4bn due to the contraction of economic activity, it claimed.

Dozens of electricity generation projects, including four thermoelectric power stations and three windpower parks, have also been halted pending approval from the agencies, according to Ascema.

“With environmental agencies running slowly, financial, political, ecological and social losses are inevitable,” said Cleberson Zavaski, president of the union.

President Lula, a former trade unionist, has publicly supported the workers’ right to strike, but his government has to date been unable to reach an agreement with labour leaders.

The industrial action also threatens to tarnish Lula’s efforts to be seen as a green champion, and international standing as host of the UN COP30 climate summit next year.

Deforestation in the Amazon has fallen under Lula, following a sharp rise during the administration of his predecessor, and remained low at the early stage of the strike action. For the first two months of the year it was down by 63 per cent compared with the same period last year.

But the absence of field agents engaged in command and control activities through the agencies — which include Ibama, ICMBio, which manages national protected areas, and the Brazilian Forest Service, which watches forests’ concessions — could result in the destruction of Brazil’s biomes beginning to increase again, environmentalists warned.

“Brazil’s success in containing deforestation in 2023 was thanks to the increased commitment of these key environmental agencies and their current dysfunction will undoubtedly allow forest destruction and land invasions to increase,” said Christian Poirier, Amazon Watch programme director.

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