“The construction of the Belo Monte dam in the Amazon region of Brazil has come under heavy criticism because of the impact the dam may have on the environment and local residents. Experts anticipate that it will have adverse effects on the Amazon rainforest, particularly on species diversity, and hence also on the livelihoods of the indigenous inhabitants. Due to its involvement in this project, Munich Re has been excluded from the Global Challenges Index (GCX). By agreeing to provide cover for the construction phase of the project, the reinsurer violated the GCX’s strict environmental regulations.
Investors in general have started to realize that large dams in the Amazon are so destructive, so high-risk, that even lavish public subsidies and huge insurance policies can’t cover up what is clearly a bad investment. In fact, investments in massive dams such as Belo Monte may actually be drawing investment away from other sectors which could really benefit the public, reported this Bloomberg Markets Magazine story in April.
Investing in mega-dams in the Amazon is not only weakening Brazil’s standing as a player in international environmental sustainability and threatening the government’s compliance with international covenants such as ILO169.”
Read more: International Rivers