Brazil's Senate approves bill to loosen environmental licensing

By Ricardo Brito and Lisandra Paraguassu

BRASILIA (Reuters) -Brazil's Senate has approved legislation to loosen environmental licensing, despite criticism from climate policy groups and figures inside President Luiz Inacio Lula da Silva's government.

The bill, which was approved in the Senate by 54 votes to 13 late on Wednesday, would allow projects considered to have a small or mid-sized impact, such as dams and basic sanitation, to be built without the approval of environmental agencies.

The legislation, which still requires approval from Brazil's lower house of Congress, enjoys widespread support from the powerful agribusiness caucus, as well as high-ranking figures in Lula's government such as his chief of staff Rui Costa.

The bill highlights government divisions on environmental policy as Lula tries to burnish his green credentials before the country hosts the United Nations climate summit known as COP30 in the Amazonian city of Belem in November.

The approval is a blow to Environment Minister Marina Silva, who had said the bill would be a major setback that "dismantles" licensing in the country.

The government's role in negotiating the bill was limited by its internal divisions, sources told Reuters. It engaged in "harm reduction" by backing a version of the bill considered to have less impact on existing environmental law, they said.

Greenpeace and Brazil's Climate Observatory, a collective of environmental organizations, have criticized the proposal saying it deprives vulnerable populations such as Brazil's Indigenous of a say in projects that could affect their communities.

The bill was put to a vote as Brazil's environmental agency Ibama faces intense scrutiny for licensing delays, including a drilling request by state-run oil firm Petrobras hoping to explore for oil off the coast of the Amazonian state of Amapa.

Senate President Davi Alcolumbre, an important backer of the bill, hails from Amapa and has been pushing for the development of the oil industry in the region.

(Reporting by Ricardo Brito and Lisandra Paraguassu in BrasiliaWriting by Fabio TeixeiraEditing by Brad Haynes and Conor Humphries)

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