BNDES: Banking on Amazon Destruction
The Brazilian National Development Bank (Banco Nacional de Desenvolvimento Econômico e Social - BNDES) is the second largest development bank in the world after the China Development Bank. Its enormous and growing portfolio plays a "fundamental role in stimulating the expansion of industry and infrastructure" in Brazil with a particular focus on energy infrastructure.
Some of most egregious impacts caused by BNDES financing are located in the Amazon, where the bank is funding the destruction of river systems to construct energy infrastructure and the razing of primary forests for agriculture and ranching. Many projects financed by BNDES in the Amazon demonstrate a disquieting level of socio-environmental injustice. Such projects generate grave social and environmental impacts, violate labor laws and human rights, disregard international accords and national law, while deepening social, economic and regional inequalities in the areas where they are established. These impacts accrue a set of liabilities on the part of the companies financed by BNDES and therefore on the bank itself, which is unquestionably co-responsible for these abuses.
BNDES's overwhelming financial role – banking up to 80% of project costs – is of critical importance given that the projects it finances often have highly dubious financial and economic viability and have attracted minimal private sector investments. As such, BNDES is the main financial enabler of some of the most unsustainable projects and destructive tendencies in today's Pan-Amazonian region.
As a critical financial lever to fuel the Brazilian government's development agenda, the bank is responsible for
Brazil's national bank, or Banco Nacional de Desenvolvimento Econômico e Social (BNDES), has grown dramatically in recent years, with its loans far exceeding that of the World Bank.1 Its gross disbursements reached US $69 billion in 2009, double the amount from two years prior, thanks to the surge in Brazil's economy, which is expected to grow more than five percent annually from 2010 to 2014.2 With BNDES' growth, its investments now extend beyond Brazil to all corners of Latin America. With this scope of investment and the responsibility attached to spending immense amounts of public funds, BNDES should demonstrate a high level of accountability, safeguards, and transparency. BNDES, however, trails in the industry and its track record falls short.
With its investments in cattle ranching, soybean plantations and mining, BNDES' funding of the dams will cement its ranking as the largest driver of deforestation in Brazil.