Retired military officer lobbies to favor Canadian mining companies in the Amazon.

By Caio de Freitas Paes, Agência Pública -  

Barroso Magno built a renowned career in the Armed Forces and led troops in the UN peacekeeping mission in Haiti. 

The Public Defender's Office and the Federal Public Prosecutor's Office maintain they were not informed of the inclusion of Forbes & Manhattan mining companies in the government's new strategic policy. 

Recent deals even include the purchase of a Petrobras refinery by the Canadian group. 

The Canadian bank Forbes & Manhattan was facing difficulties with its multi-billion dollar business in the Amazon before Jair Bolsonaro (PL) took office as president of the Republic in 2019. But in the last three years the scenario has changed.

Gradually, the group approached members linked to the Armed Forces in the Executive branch, even reaching the Vice President of the Republic and retired Army General Hamilton Mourão (PRTB) – with whom they dealt directly in exclusive meetings in Brasília. For years, the Canadian bank has been trying to release environmental licenses for mining companies linked to it in Amazonas and Pará.

Based on a set of documents, Agência Pública reveals behind-the-scenes dealings between the Bolsonaro government and Forbes & Manhattan with their associated companies. Among them is the controversial mining company Belo Sun, which for more than ten years has been trying to build the world's largest open-pit gold mine in the Volta Grande do Xingu. If successful, Belo Sun will install a tailings dam in the region even larger than the Vale dam that collapsed in Mariana (MG).

The Canadian bank has accumulated victories in securing approval for its projects in the Amazon during the last three months of 2021. During this period, the Brazilian government also released areas originally designated for agrarian reform so that the same group could establish a gold mine in the heart of the Xingu River – an agreement that, despite allegations of irregularities, remains valid according to the Official Gazette.

Furthermore, another report from Pública shows that, in November of last year, Forbes & Manhattan finalized the purchase of a shale refinery from Petrobras in southern Paraná, including the entire technological infrastructure developed from scratch on-site since the 1970s.

In this case, as our report shows, Petrobras ignored its own suspicions about this same group to close the deal. The report sent a series of questions to the Forbes & Manhattan group to better understand their projects in Brazil, but there was no response.

The Strategic Minerals Policy

In Toronto, Canada's financial center, billionaire Stan Bharti paces restlessly through the corridors of Forbes & Manhattan, which he founded in 2001. Also the CEO of this bank focused on high-risk businesses, particularly mining, he shows off the headquarters' decor – a collection of paintings and political posters from the Soviet Union under Joseph Stalin (1927-1953) – for almost five minutes before showing his office, where he comes across a poster on the floor. "Ah, this is an interesting poster: we have a company, Potássio do Brasil, Brazil Potash, that we are developing; it should be in production soon," says the executive.

 

The scene above aired on November 4, 2019. A week later, on the 11th, amidst the BRICS summit in Brasília, Stan Bharti and Tao Yang – president of the Chinese construction company CITIC, a partner of the mining company Potássio do Brasil – discussed the company's plans with Vice President Hamilton Mourão, as shown in the official government agenda.

The meeting was part of an approach initiated months earlier by Forbes & Manhattan thanks to the access of a reserve military officer to the top levels of the Planalto Palace. Materials obtained by Pública show how Army Brigadier General Cláudio Barroso Magno Filho helped build the bridge between the Canadian group and the government from the beginning of the current administration, a situation detailed below.

Executive decisions under Jair Bolsonaro and his reserve military officers have favored Stan Bharti's bank. In 2021, for example, the government created the Strategic Minerals Policy, through which it intends to "prioritize government efforts" in favor of projects included in this new guideline. Mining companies linked to Forbes & Manhattan in the Amazon, Belo Sun and Potássio do Brasil, are among the first to benefit from this new policy.

In practice, the federal government has been acting "in the necessary coordination to minimize risks and resolve conflicts that may be identified" in the projects, providing "support for the environmental licensing" of mining companies linked to the Canadian group. Pública found that the decision was made without consulting the Public Defender's Office of the Union and the Federal Public Prosecutor's Office (MPF), both of which have filed lawsuits against the Belo Sun and Potássio do Brasil projects in the courts.

The two Canadian mining companies are clashing with settlers, indigenous people, and riverside communities in the Amazon and Pará states. The most notorious case involves Belo Sun, with which the Forbes & Manhattan group shares some of its top executives – such as billionaire Stan Bharthi.

In a statement to Pública, both the Public Defender's Office (DPU) and the Federal Public Prosecutor's Office (MPF) assert that they have not been officially notified of the inclusion of the Forbes & Manhattan mining companies in the government's new strategic policy. The MPF also stated that it will "request clarifications from the Union" regarding "any measures that may already be underway, for analysis of appropriate actions."

The news report contacted the ministries that signed the decree creating the Strategic Minerals Policy. The Ministry of Mines and Energy stated that the approval of projects under the Strategic Minerals Policy "does not require coordination with the aforementioned bodies"—the Public Defender's Office and the Federal Public Prosecutor's Office, in this case. According to the ministry, "it is not necessary to address the technical and legal issues surrounding the environmental licensing" of the proposals, as "the environmental agencies remain fully responsible." The Ministry of Economy, another signatory, did not respond.

Belo Sun's mining operation has repercussions for the BlackRock group.

Belo Sun's plans for the Amazon seemed to finally be coming to fruition at the end of 2021. On November 26th, the mining company reached an agreement with the federal government to mine for gold in agrarian reform settlements within the same area as its project, called Volta Grande.

Belo Sun secured the agreement after illegally purchasing, according to a report by Estadão, plots of land from families settled in the so-called Vila Ressaca, in Senador Porfírio (PA). The deal was made with the National Institute for Colonization and Agrarian Reform (Incra), which, according to the newspaper, will receive a share of the profits from this mining operation in the Xingu region.

The agreement with the Canadian mining company came under scrutiny from the Federal Public Prosecutor's Office and the Public Defender's Office, but not even the controversy surrounding the case deterred the government. The president of the board of directors of Incra, Geraldo de Melo Filho, endorsed the agreement, as reported in the Official Gazette of the Union on January 21, 2022.

“It’s very strange: Incra now says it will meet with the families of Vila Ressaca, but at no point were these families consulted during the process and drafting of the agreement,” Elisângela Côrtes, a public defender who coordinates the regional human rights center in Altamira (PA) and has been following the Belo Sun case for years, told Pública.

Contacted by Pública, Incra stated that the concession for the use of lands destined for agrarian reform “represents approximately 3,5% [of the total area] of the settlement” where Vila Ressaca is located, that “there has been no declassification of the area” – meaning, the lands have not yet been transferred to Belo Sun – and that, “if there is a need to relocate the residents, this [sic] will be discussed in the environmental licensing process with the state environmental agency”.

Who ultimately profits from the project's approval? Reports from the mining company submitted to tax authorities in Canada indicate that, as of September 2021, Belo Sun shared its top executives with Forbes & Manhattan: managers Mark Eaton and Ryan Ptolemy, as well as the group's CEO and founder, Stan Bharti.

There are potentially powerful partners behind Belo Sun. According to material obtained by Pública, as of November 2020, the mining company's partners included Deutsche Bank of Germany and the Royal Bank of Canada, the second-largest shareholder in this gold mining company, as well as the BlackRock investment fund from the United States – accused by indigenous organizations of threatening the Amazon and its peoples.

The news outlet sent questions to these investors to understand their relationship with Belo Sun. Only Deutsche Bank responded, stating that it “does not hold shares” nor “any equity stake in any company” in general.

“For us, above all, the Belo Sun project is unfeasible, both from a social and an environmental perspective, as it is planned for a region with significant impacts that have not yet been mitigated due to the Belo Monte hydroelectric plant,” says Elisângela Cortês.

The DPU (Federal Public Defender's Office) is one of the agencies trying to stop the initiative. Last October, the DPU recommended halting the environmental licensing of Belo Sun. Less than two months after the recommendation, however, the Canadian mining company's project became "strategic" for the federal government.

The proposal was included in the government's Strategic Minerals Policy, a decision announced by Belo Sun itself to the Canadian financial market last December.

“From the government’s side, there is pressure to approve the Volta Grande project,” states Elisângela Côrtes. According to the Public Defender’s Office, the project cannot be licensed without proper “free, prior, and informed consultation with the Mebengokre-Xikrin people and the displaced indigenous peoples” in Senador Porfírio and the surrounding region.

In a statement to Pública, Belo Sun said that "the management team has been communicating and consulting with local communities, the municipality, and the region in an open and honest manner." "Volta Grande is a responsible mining project, governed by Brazilian laws and regulations," the mining company further stated.

A brigadier general who paves the way.

According to documents obtained by Pública, since 2019 Belo Sun's plans have progressed as Brigadier General Cláudio Barroso Magno Filho became involved in negotiations with the Bolsonaro administration.

The official government agenda shows the reserve military officer present at talks between the Canadian mining company and the federal government. In September 2019, for example, Barroso Magno met on behalf of Belo Sun with the leadership of the Secretariat of Geology and Mining of the Ministry of Mines and Energy.

After several waves of Covid-19 had ravaged Brazil, in May 2021, there was another meeting between the government and Belo Sun, once again with the presence of the brigadier general from the Canadian mining company.

On November 25, 2021, Barroso Magno was part of the delegation of representatives from Belo Sun that met with the president of the board of directors of Incra, Geraldo de Melo Filho, and with the director of Development and Consolidation of Settlement Projects of the agency, Giuseppe Serra Seca Vieira. The meeting took place at the request of the Canadian mining company, as reported by Incra to Pública.

The following day, the 26th, a contract was signed between the Presidency of Incra and the company Belo Sun Mineração Ltda for the concession of use of an area of ​​2.428,00 hectares, with 1.439,00 hectares overlapping the Ressaca Settlement Project and 989,00 hectares overlapping the Ituna Glebe, located in the municipality of Senador José Porfírio, in the state of Pará, for mining exploration purposes.

However, in an interview with Pública, the brigadier general said that he only works with the other mining company linked to Forbes & Manhattan in the Amazon, Potássio do Brasil. "I don't know of any other projects," said Barroso Magno, who also stated: "I have no reason to hide my connections."

The retired military officer is not listed among directors, managers, or any other position on Belo Sun's website, but he is credited as a consultant for the company linked to Forbes & Manhattan bank, according to the federal government. One of the documents obtained by Pública credits Barroso Magno as "vice president of government relations" for the Canadian group in Brazil.

Before becoming a business advisor and consultant, Barroso Magno built a renowned career in the Armed Forces. He led troops in the UN peacekeeping mission in Haiti – MINUSTAH, commanded by the Brazilian Army – and participated in armed conflicts in the region. Shortly after returning in 2008, he went into reserve with gross earnings of around R$ 30 per month, according to the Transparency Portal.

It wasn't long before Barroso Magno entered the consulting and equipment sales business. Between September 2008 and June 2014, the brigadier general worked as "charterer of business in the public sector, in Brazil and in South American countries," for another Canadian company called Weatherhaven.

“We also work in the government sector, mainly with its armed forces,” Weatherhaven states on its website. The company presents a series of completed projects, such as the delivery of equipment to the Brazilian Army during MINUSTAH, and partnerships in Brazil with several construction companies investigated by the Lava Jato task force.

The dates of most of the projects coincide with Barroso Magno's time as an employee of Weatherhaven, according to the military officer's profile on LinkedIn.

When contacted by Pública, the brigadier general did not answer how long he has been working with the Forbes & Manhattan group, stating: “I don’t have a formal commitment [with the Canadian bank], but I was hired, in a way, for my management experience. I’m not a door-opening lobbyist, but rather a project development lobbyist,” he told the reporter.

Facing Mourão

Barroso Magno's decades-long career in the Army is said to have guaranteed him access to influential members of the current government. The retired brigadier general has known, for example, Vice President Hamilton Mourão for over 40 years. Both attended the Agulhas Negras Military Academy (Aman) around the same time – Mourão entered Aman in 1975, Barroso Magno in 1976.

Years passed, but the contact was not lost. In the second month of Bolsonaro's government, Barroso Magno officially met with Mourão. The agenda of this initial meeting is unknown, but it is known that shortly afterwards, in June, the retired brigadier general attended the first exclusive meeting between Stan Bharti of Forbes & Manhattan and the Vice President of the Republic.

From then on, Barroso Magno continued meeting with the government, sometimes as an advisor, sometimes as a consultant for the Canadian group and its associated companies, which includes, in addition to Belo Sun, Potássio do Brasil.

Since February 2019, directors of this other mining company, Forbes & Manhattan, had been making the rounds of the departments of the Ministry of Mines and Energy, as shown in documents obtained by Pública via the Access to Information Law (LAI). But it was only after Hamilton Mourão's first meeting with the CEO of the Canadian group, in June of that year, that the mining company managed to get a meeting with the Minister of Mines and Energy, retired Navy Admiral Bento Albuquerque.

The minister's meeting with Potássio do Brasil was not on the government's public agenda until Pública contacted them on February 9th.

The meeting, which took place on September 25, 2019, also involved federal deputy Silas Câmara (Republicanos) from Amazonas, who was then president of the Mines and Energy committee of the Chamber of Deputies. Through the Access to Information Law (LAI), the ministry confirmed the presence of directors from the Canadian mining company at the meeting, as well as the director-general of the National Mining Agency at the time, Victor Bicca.

At the time of writing, the ministry had not responded as to why Potássio do Brasil was not listed on the minister's official agenda until our contact.

A year after that meeting, Minister Bento Albuquerque defended the Canadian group's potassium mining project before the National Observatory on Environmental Issues, composed of members of the National Council of Justice (CNJ) and the National Council of the Public Prosecutor's Office (CNMP). The retired admiral defended the proposal accompanied by the then Secretary of Geology and Mining of the ministry, Alexandre Vidigal de Oliveira, who had officially met with Potássio do Brasil five times before this visit to the National Observatory. A former federal judge, Oliveira later left the government to create the mining area of ​​a renowned law firm in Brasília.

According to a second article about the meeting at the National Observatory, published on the website of the Ministry of Mines and Energy, a "solution"—environmental licensing, in this case—for the Canadian mining company was "essential" for Brazil.

Between 2020 and 2021 alone, there were at least seven other government meetings with representatives from Potássio do Brasil. During the same period, the federal government created the Strategic Minerals Policy, which today provides "support for the environmental licensing" of the Canadian mining company.

One of the documents consulted by Pública shows that, in 2020, the company was already anticipating the classification of its project as "strategic." In the material, attributed to the mining company's parent company abroad, the phrase "Brazilian Potassium is considered of 'national importance' by the 'federal government' and the 'national observatory'" can be read in English on a slide with photos of the signing of contracts between the mining company and the Bolsonaro government, with the presence of billionaire Stan Bharti and Vice President Hamilton Mourão.

The news outlet contacted the Vice Presidency of the Republic and the Ministry of Mines and Energy. "The Ministry of Mines and Energy understands that projects aimed at the production of potassium and phosphate are important for the country," the agency told Pública. The Vice Presidency did not respond.

Impact on indigenous lands, lack of interest from Ibama.

The Canadian company Potássio do Brasil has had its activities in the Amazon paralyzed for five years. The group promises to invest more than R$ 10 billion in the creation of a potassium-based fertilizer hub in Autazes (AM), just over 100 km from Manaus, theoretically supplying 25% of the Brazilian demand for this type of fertilizer — widely used by agribusiness.

But their project, officially called Potássio Autazes, will affect indigenous and riverside communities at the confluence of the Madeira and Amazon rivers, an area with territories not demarcated by the federal government, such as the Jauary Indigenous Land, belonging to the Mura people.

In 2014, the company obtained an environmental license for the project through the Amazonas state government. However, the potential impact on indigenous territories in Autazes requires evaluation—and approval—of the project by the Brazilian Institute of Environment and Renewable Natural Resources (Ibama), according to the Federal Public Prosecutor's Office.

The Brazilian Federal Public Prosecutor's Office (MPF) has filed a public civil action against the Canadian mining company, a fact reported by InfoAmazonia. Federal Prosecutor Fernando Soave, who is working on the case, told the news outlet that the company drilled in the Autazes area without the proper federal authorization.

Some time later, the project was finally halted through an agreement between the mining company, the Federal Public Prosecutor's Office (MPF), and the Federal Government. The deal, approved by the Federal Court in Amazonas in 2017, temporarily suspended the state government's environmental license and halted the MPF's action against Potássio do Brasil.

“According to the Federal Public Prosecutor's Office, the environmental license granted by the state of Amazonas [to the mining company] is not valid because it involves lands belonging to the Mura people. Licensing is the responsibility of Ibama, and the indigenous people need to be consulted,” Soave told Pública.

As of the closing of this report, the consultation with the indigenous people remains incomplete. Meanwhile, IBAMA has exempted itself from licensing before the Federal Court. “IBAMA [sic] is not responsible for the environmental licensing of the Potássio do Brasil mining project because it does not develop or is not located on indigenous land,” states the Attorney General's Office (AGU) in a judicial statement consulted by the report. The argument of IBAMA's lack of jurisdiction is also found in a decision by the 1st Federal Court of Amazonas on the case, dated December 17th, consulted by Pública.

The report questioned Ibama about the reason for its lack of interest in licensing Potássio do Brasil. According to the agency, "it would be up to the entrepreneur and/or Funai to inform whether the project is located within Indigenous Land," and so far "there is no record of the opening of a process related to the Potássio do Brasil project." The mining company did not respond.

Economy Ministry provides “support to the environmental licensing process”

On the one hand, Ibama (Brazilian Institute of Environment and Renewable Natural Resources) understands that licensing Potássio do Brasil is not its responsibility. On the other hand, the Ministry of Economy assumed responsibility for providing "support to the environmental licensing process" of the Canadian mining company in September 2021. This assistance is provided through a federal employee who has been familiar with the case for years.

One of the signatories of the 2017 judicial agreement is prosecutor Frederico Munia Machado, then representative of the body corresponding to the current ANM (National Mining Agency). Since 2020, he has worked in the Investment Partnership Program (PPI) of the Ministry of Economy, the government's main interface with the private sector.

The same official also serves as the head, for the Special Secretariat of the PPI (Partnership Program for Investments), of the Interministerial Committee for the Analysis of Strategic Mineral Projects — responsible for implementing the Pro-Strategic Minerals Policy, which favored the Canadian group at the end of 2021.

According to the decree creating this policy, "the Special Secretariat of the Partnerships and Investments Program of the Ministry of Economy will be responsible for providing support to the environmental licensing process of the qualified projects." Furthermore, according to the federal government, this assistance is provided "in the necessary coordination to minimize risks and resolve conflicts that may be identified."

The committee's structure includes, in addition to the Ministry of Economy, the Institutional Security Office, the Ministry of Mines and Energy, and the Special Secretariat for Strategic Affairs of the Presidency of the Republic as participants with full voting rights. Furthermore, the Ministry of Science, Technology and Innovation also participates, but with voting power limited to rare earth mining projects, such as lithium and niobium.

There are no representatives from the Ministry of the Environment or its oversight agencies on the committee, nor are there any officials from other bodies involved in the environmental licensing of mining companies—such as Funai, Fundação Palmares, Incra, or Iphan.

The Ministry of Mines and Energy stated, in a press release, that "environmental agencies remain fully responsible for conducting and deciding on environmental licensing processes for projects approved under the Strategic Minerals Policy." The Ministry of Economy did not respond.

"Our history speaks for itself."

Stan Bharti doesn't hide his recipe for success in mining. "What do I do? I surround [our] companies with legal, financial, and public relations consultants, I hire a good geologist, a good engineer, a good operator of gold, silver, or copper mines," says the CEO of Forbes & Manhattan in another of the group's institutional videos.

At the same event, Bharti also explains the main objective of his investment bank. “We develop our companies for a period of three to five years, increasing their value and then reselling them,” he says, before adding: “Our track record speaks for itself, as we have sold more than ten companies in the last 15 years, selling them for ten times their original value.”

An old presentation by Forbes & Manhattan, consulted by Pública, shows that in 2014 the group announced at the main mining event in the country that it controlled at least six companies — Belo Sun and Potássio do Brasil among them — with mining rights over almost 3 million hectares. In other words, it had preferential mining rights over an area larger than the entire state of Alagoas.

The development method for future resale was applied in at least one of these six companies, the mining company Aguia Fertilizantes SA, which also prospects for minerals for fertilizer production. Currently controlled by an Australian group, the company operates in Rio Grande do Sul, in a region of the Pampa threatened by increasing disputes over mining.

Forbes & Manhattan's history goes even further, with the sale of a gold mining company in Bahia in the 2000s. Stan Bharti's bank was the first to develop, through its former company Desert Sun, the structure now operated by the also Canadian Yamana Gold. In 2006, Yamana acquired the exploration rights in Jacobina (BA), then controlled by Forbes & Manhattan, for 750 million Canadian dollars — more than R$ 3 billion at the current exchange rate.

Pública has already reported on the Yamana Gold case in Chapada Diamantina. Nearby residents fear the collapse of the company's dam in the area, and there are also records of concentrations of toxic substances derived from mining—such as cyanide and caustic soda—in water veins that supply the area. Even so, in January 2022, the government of Bahia authorized the expansion of the Canadian gold mining company's activities.

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