Brazil to revamp Amazon Fund after finding irregularities: minister

May 17, 2019

By Lais Martins

SAO PAULO (Reuters) – Brazil will overhaul rules for selecting projects to reduce deforestation supported by the Amazon Fund, which is financed by Norway and Germany, after discovering irregularities in spending, Environment Minister Ricardo Salles said on Friday.

Salles said non-governmental organizations (NGOs) had failed to account for the way they use money disbursed to them from the $1.28 billion fund administered by Brazil’s state development bank BNDES.

Salles, a climate change skeptic, told reporters he and BNDES had agreed that the governance and rules for awards must be changed to better direct spending.

Salles said 82% of the awards that the ministry had inspected were granted without a bidding process and that he was recommending no new funding of projects for now.

The fund supports Brazil’s environmental agency Ibama in its efforts to go after illegal loggers in the world largest rainforest, which scientists see as vital to fight climate change because it absorbs vast amounts of carbon dioxide.

At the local community level, the fund helps develop sustainable livelihoods on forest products so they do not need to cut down trees.

Members of Brazil’s new right-wing government believe climate change is a leftist conspiracy aimed at hindering the country’s development and they accuse foreign NGO’s of meddling in its affairs.

President Jair Bolsonaro has said he wants to open the Amazon region to commercial agriculture and mining.

After he took office in January, his government withdrew its offer to host the 2019 United Nations conference on climate change, maintaining that Brazil’s sovereignty over the Amazon was at stake.

Norway has donated $1.2 billion to the fund, and Germany $68 million, with Brazil’s state-run oil company contributing $7.7 million. More than 60% of awards have gone to environmental projects by federal, state and municipal governments.

Its annual funding is linked to Brazil’s success in reducing Amazon deforestation in the prior year. Norway has cut its support for the fund in the past when deforestation spiked.

Announcing a $70 million donation for 2017 in December, the Norwegian government said it was concerned over a new surge in destruction of the Amazon rainforest.

(Reporting by Lais Martin; Writing by Anthony Boadle; Editing by Richard Chang)

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