Letter to GDF Suez Protesting the Company's Destructive Role in the Madeira River Complex

The following letter was sent by a coalition of civil society organizations from Brazil, France, the United States and Peru to Mr. Gérard Mestrallet, the President of French company GDF Suez, due to the company's unethical involvement in the construction of the immensely destructive Jirau hydroelectric dam on Brazil's Madeira River.

Mr. Gérard Mestrallet
2, Rue du Docteur Lancreaux
75392, Paris Cedex 08, France
Fax: +33-1-40-06-67-33

Paris and São Paulo, January 14, 2010

Re: Corporate responsibility of GDF Suez for social and environmental impacts and risks associated with the Jirau hydroelectric dam on the Madeira River in the Brazilian Amazon

Dear Mr. Mestrallet,

We are writing to voice our concerns regarding GDF Suez's participation in the planning and construction of the Jirau hydroelectric dam on the Madeira River in the Brazilian Amazon. As the majority shareholder (50.1%) in the construction consortium Energia Sustentável do Brasil S.A. (ESBR), GDF Suez is responsible for a series of violations of Brazilian and international law, hydropower-industry safeguards and standards and the company's own policies on corporate responsibility. These violations have led to damage of tremendous dimensions as well as social and environmental risks in this region of enormous ecological and socio-cultural importance.

GDF Suez and its affiliates have displayed a lack of due diligence in the planning and construction phases of the Jirau dam, along with a disregard for human rights and environmental protection, for which the company is both legally and ethically accountable. The principal examples may be summarized as follows:

i) Preparation of a highly-flawed environmental impact study for the Jirau and Santo Antônio dams on the Madeira river (by GDF Suez subsidiary firm Leme Engenharia, under contract to the Brazilian construction giant Odebrecht and the state-owned energy company Furnas) which, among other major shortcomings and in violation of Brazilian environmental law, simply ignored impacts of these mega-hydroprojects on neighboring Bolivia and Peru, which share the Madeira River basin.

ii) Lack of free, prior and informed consent of Indigenous peoples, as mandated by Convention 169 of the International Labor Organization, the United Nations Declaration on the Rights of Indigenous Peoples and national legislation of Brazil, Bolivia and Peru.

iii) Initiation of dam construction in spite of overwhelming evidence of the presence of isolated and highly-vulnerable Indigenous peoples; following confirmation of the presence of isolated groups close to the Jirau construction site, dam construction has continued unabated.

iv) Lack of a prior assessment of the risks to local livelihoods caused by dam construction on river-dwelling communities residing on tributaries upstream, within the reservoir area and downstream from the Jirau dam. Such an assessment would necessarily include risks associated with loss of access to natural resources, including common property and public access resources (fisheries, floodplain agriculture, forest extractive products), loss of river transportation and involuntary/compulsory resettlement. Subsequent compensation/indemnification for families directly affected by the dam reservoir has been highly inadequate, reflecting this incomplete and biased evaluation of impacts on river-dwelling populations.

v) A unilateral decision by ESBR to relocate the dam to a new construction site on the Madeira River after the official bidding process had been completed for the original site at Jirau without performing new environmental impact studies, as required by Brazilian environmental law;

vi) Illegal deforestation carried out directly by GDF Suez and its partner companies in the ESBR consortium, resulting in fines issued by the federal environmental agency (IBAMA) which remain unpaid;

vii) Existence of inhumane labor conditions among sub-contractors working for the ESBR consortia.

These problems constitute serious violations of both Brazilian and international law regarding environmental protection and human rights. In this regard, GDF Suez's subsidiary in the ESBR consortium (Suez Energy South America Participações, Ltda.) is already a co-defendant in civil action lawsuits in Brazil filed by the State and Federal Public Prosecutors' Office (Ministério Público) and non-governmental organizations.

Moreover, GDF Suez´s involvement in the Jirau dam constitutes a serious violation of industry standards it claims to adopt, including the 2004 Sustainability Guidelines of the International Hydropower Association (IHA), of which it is a leading member. Evidently, there have also been violations of the company's commitments to the United Nations Global Compact initiative, which requires avoidance of commercial enterprises associated with human rights abuses, as well as disregard for the OECD Guidelines for Multinational Enterprises.

Finally, GDF Suez´s participation in the Jirau hydroelectric dam contradicts and violates the company's own values and internal policies, demonstrating serious inconsistencies between official discourse on "sustainable" infrastructure development and social responsibility. The company's actual practices gravely disrespect the people and ecosystems affected by projects in which it is directly involved.

Clearly, irregular and illegal practices by government agencies, such as those associated with the granting of environmental licenses for the Jirau dam, do not exempt GDF Suez from its legal and ethical responsibility with regard to damages caused by and risks associated with the project. Prior to making decisions on involvement at various stages of the project cycle, GDF Suez and its subsidiaries should have verified that all applicable norms had been respected, particularly with regard to environmental protection and human rights. In this regard, GDF Suez's role in the Jirau hydroelectric dam has demonstrated both complicity and direct involvement in the aforementioned violations. Consequently, the company is liable for related social and environmental risks and impacts, both direct and indirect.

Given the overwhelming evidence of GDF Suez's lack of due diligence in the planning and construction phases of the Jirau hydroelectric project - associated with significant violations of relevant human rights and environmental legislation, as well as enormous risks of additional social and environmental damage - the following list of demands require urgent and immediate action on the part of the company.

1. GDF Suez should immediately suspend all activities related to construction of the Jirau dam on the Madeira River.

2. Emergency actions should be immediately undertaken by GDF Suez to address the grave social and environmental impacts and risks already posed by the Jirau dam, including:

a) Restoring the territorial, physical and cultural integrity of isolated Indigenous groups threatened by dam construction, together with organizations that defend the rights of Indigenous peoples;

b) Reaching full compliance with international norms regarding prior consultation and free, prior and informed consent with Indigenous peoples (ILO Convention 169, UN Declaration on the Rights of Indigenous Peoples);

c) Elaborating new social and environmental impact studies regarding: i) impacts of the Jirau dam on territories of Bolivia and Peru located within the Madeira basin (including uncertainties regarding the area to be flooded by the reservoir and impacts on fisheries) in consultation with the governments of both countries; and ii) relocation of the dam construction site, including impacts on legally-protected areas;

d) Developing independent analysis of risks and impacts of the Jirau dam in terms of the impoverishment of river-dwelling populations, including loss of access to public property and public access resources (e.g. fisheries, floodplain agriculture, and forest extractive products) and loss of river transportation. The analysis should include populations residing within the projected reservoir area, upstream from the reservoir on the Madeira River and tributaries, and downstream from the dam. Negotiations on compensation/indemnification must be transparent and take into account the above-mentioned analysis of risks and impacts. All possible measures should be taken to re-establish analogous conditions of access to natural resources, subsistence production and income generation among affected populations;

e) Paying all fines issued by environmental agencies for illegal deforestation;

f) Guaranteeing that due reparations have been made to all workers that have suffered inhumane working conditions, including those within firms sub-contracted by the ESBR consortium.

3. Implementation of emergency actions should be monitored and verified by an independent committee composed of representatives of the State and Federal Public Prosecutor's Office (Ministério Público Federal – MPF; Ministério Público Estadual - MPE) and renowned specialists from the scientific community and civil society of Brazil, Bolivia and Peru. A plan for implementation of emergency actions should include time-bound targets and indicators, as well as institutional responsibilities.

4. Construction of the Jirau dam should only be re-initiated if GDF Suez can effectively demonstrate that the grave social and environmental risks and impacts associated with this mega-project have been adequately addressed through the above-mentioned emergency actions and other needed measures. If GDF Suez is unable or unwilling to meet such conditions, the company and its affiliates should immediately and permanently withdraw from the ESBR consortium, refraining from participation in any activities related to construction of the Jirau dam.

5. Finally, GDF Suez should guarantee that similar violations which occurred in Jirau will not be repeated. Prior to becoming involved in the bidding process for other hydroelectric projects, the company must drastically improve the design and implementation of policies regarding corporate responsibility, with particular attention to screening of hydroprojects in terms of social and ecological risks and compliance with relevant human rights and environmental legislation.

Given the fundamental role of the Government of France as the most important single shareholder of GDF Suez (36%), we are sending copies of this correspondence to relevant French authorities.

Thank you for your attention to this letter. We await appropriate action from your part.


Amazon Watch
Christian Poirier : christian@amazonwatch.org

Amigos da Terra – Amazônia Brasileira
Roland Widmer : roland.widmer@amazonia.org.br

Associação de Defesa Etnoambiental Kanindé
Telma Monteiro : kaninde@kaninde.org.br

Survival International
Jean Patrick Razon : jp@survivalfrance.org

AIDA - The Inter-American Association for Environmental Defense

BIC - Bank Information Center

CIMI-RO - Conselho Indigenista Missionário

COIAB - Coordenação das Organizações Indígenas da Amazônia Brasileira

CPT-RO - Comissão Pastoral da Terra / Rondônia

DAR - Derecho, Ambiente y Recursos Naturales


GTA - Grupo de Trabalho Amazônico

IMV- Instituto Madeira Vivo

International Rivers Network

MAB- Movimento dos Atingidos por Barragens


France Libertés – Fondation Danielle Mitterrand

Cc: M. le Président de Suez Energy South America Participações, Ltda ; M. le Président d'Energia Sustentável do Brasil S.A. ; M. Nicolas Sarkozy ; M. Christian Estrosi ; M. Eric Besson ; M. Bernard Kouchner ; Mme. Christine Lagarde ; M. Jean-Louis Borlo.

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