Dossier | Neoliberal Performances for Local Development: The Case of Perdões (MG)

*By Kayah Nicholas de Souza

In 2020, VLI Logistics, a subsidiary company of Vale do Rio Doce S.A working in the multimodal logistics sector, tried to carry out a repossession of territories it never owned. The company claimed non-buildable areas at the margins of the Ferrovia Centro-Atlântica (FCA), a privately owned railway in Brazil. Despite the claim being made under the aegis of ‘social responsibility’, there has not been any consideration for the communities occupying the area, which falls under the municipality of Perdões, a small city in southwest Minas Gerais in Brazil. Perdões is a territory that has historically been of interest to railroad companies because of its strategic location between export areas and productive regions in the Brazilian countryside. In what follows, I will discuss this dispossession claim and its background within the scope of the emergence of neoliberal governmentality technologies and the restructuring of the state in Brazil.

The Recent History of the Brazilian Rail Network
To better grasp why the municipality is a territory of interest and what factors shifted the state’s control over the administration of the Brazilian rail network, we first need to sketch out to a brief political history of this subject.

During the late 1950s, the state-owned company Rede Ferroviária Federal S.A. (RFFSA) was established to nationalize the Brazilian railway network and manage the state’s interests in the transport sector. This initiative was a central component of then-president Juscelino Kubitschek’s technocratic project, which envisaged “50 years [of development] in 5 [years of mandate]” as in the slogan he famously used, by the massive industrialization of the country and the improvement of Brazilian transport infrastructure. The project invested all of the state’s available resources to accelerate economic development and boost the domestic and foreign private sectors, being the most profound economic intervention the country had ever seen since it became a Republic.

However, the nationalization of the Brazilian economy led to the extreme indebtedness of the public sector and, primarily, a lack of resources for investments in infrastructure. These events culminated in the National Privatization Programme, created in 1990. The Programme broadened the scope of the concept of ‘privatization’ exponentially, allowing the acquisition of shares in state-owned companies by foreign capital and created the possibility of transferring the control of companies to the private sector after three years of privatization. Encompassing the global market openings in the 1990s, it also shifted the state’s position from a sovereign entity into a mediator for private companies’ operation in national strategic sectors—such as the oil, mining, and railway sectors.

The privatization process took place between 1996–98, supported by the National Bank of Economic and Social Development, which recommended the transfer of rail freight transport services to the private sector. Seemingly, it encompassed the public company RFFSA and its tributaries being liquidated in 1999, resulting in the lease of its operational assets such as infrastructure, locomotives, wagons, and other goods linked to railway operations by the subsidiary companies operating the railways. After the privatization process, the stretch of the railway that crosses Perdões (MG) became the responsibility of the concessionary Ferrovia Centro-Atlântica (FCA), a former consortium of the mining company Vale do Rio Doce S.A. (or simply Vale) with groups of national and transnational capital. As of 2011, the FCA administration became VLI Logistics’s responsibility, a holding company in which Vale is currently the largest shareholder.

Thus, it is clear that we are dealing with a relatively central territory to export and import interests, pervaded by oscillating tensions based on nationalizations and openings of a strategic sector of the economy. Hence, we can extrapolate that, currently, Vale is a central actor in administrating and determining what happens alongside the railway in Perdões (MG). As we shall see in what follows, there seems to be national-transnational partnerships that regularly restructure the composition of capital that operate in Brazil and the governmentality in the country, which conceives of private companies as central actors in promoting developmental interests.

Performances (Under)Mining Democracy: the Case of Companhia Vale do Rio Doce S.A.
Vale is the second-largest mining and ore extraction company in the diversified mining sector in the world. It was created by the Brazilian Federal Government in 1942, during the Second World War, as a result of negotiations between the governments of the United States, England, and Brazil, aiming at ensuring a steady supply of strategic Brazilian minerals for strategic ores to support the countries’ war efforts. In the following decades, when the Brazilian military government adopted policies for the ‘occupation’ and development of the Amazon territory, the company expanded its activities to the Brazilian Amazon. The government partnered with transnational capital to ensure a cheap supply of the resources needed for industrialization in countries like Japan and the United States.
After the Privatization Programme of 1990, Vale became a considerable investor in strategic formerly state-owned companies. It also restructured the Vale Foundation—created in 1968 due to the severe social and environmental impacts caused by the relentless exploitation of the Amazon during the Military Regime (1964–85)—thus expanding its ‘social investments’ and ‘social development’ actions. This process reinforced Vale’s intention to interfere in social development as a substitute for state action, restricting the spaces for public discussion about the conditions for implementing the company’s projects. In 1997, a consortium of private and state holdings and state-owned companies’ pension funds bought the company. During the early 2000s, along with the expansion of the privatization process, the company entered the international capital markets. While the state could still play a central role in the company’s direction—via funding from state agencies, environmental agencies, etc.—the interests of individual and institutional investors became more important.

It is worth noting that Vale is also widely associated with two major mining tailings dam bursts. The first one happened in late 2015 in the municipality of Mariana (MG), where Samarco—a company controlled by Vale and the Anglo-Australian company BHP Billiton—executed its mining operations. The dam burst killed 19 people, and its rupture resulted in a volume of 43.7 million cubic metres of tailings being dumped into the surrounding area. In 2016, the Federal Public Prosecutor’s Office denounced Samarco and the company, finding them responsible for the report that previously considered the dam’s stability. The processing of this finding has already been paralysed twice by the Federal Court, and still has no trial date.

The second mining tailing dam burst occurred in early 2019 in Brumadinho (MG), a site where Vale directly operates its mining activities. There were approximately 270 deaths in this case, and 11 people are still missing. The Federal Government has not concluded its investigations yet, and so far, no one has been arrested. In the state court, Vale was ordered to pay more than BRL 3 billion—approximately USD 600 million—for the consequences of the tragedy. In the history of mining globally, these events are among the greatest tragedies, both concerning the ecological impacts and the number of fatalities.
According to a recent study based on the sustainability reports published by Vale between 2009 and 2019, we cannot restrict the environmental conflicts and damages involving the company to mining practices. In addition to the ecological harms, the detrimental consequences of the company’s operations affect vulnerable segments of society whose livelihoods were threatened by the imminent risk of land expropriation. With its association with the International Council on Mining and Metals in 2006, the company began to assume a pivotal role in composing the measures proposing local development and published sustainability reports periodically to this end. Such reports publicize the Corporate Social Responsibility (CSR) practices developed by the company, which attest to its commitment to ‘social issues’ while launching procedures and programmes aimed at local communities. These programmes claimed the promotion of environmental and consumer protection, medical and educational assistance, urban improvement, culture, arts, and recreation, etc.

These practices seem to develop an authoritarian regulation of everyday life, contemplated in measures established by the interests of a private company. There is a materialistic perspective towards the communities, in which people are approached as tools or parts for making the machinery of transnational capital work properly. Thus, those practices are based on exclusionary mechanisms since they reject popular participation in decision-making, founding the basis for neoliberal state measures. The company meddles with the everyday life of populations affected by its corporative policies, resulting in the infiltration of market-driven truths and calculations into the domain of politics. On the other hand, engagement in CSR practices could be typified as a ‘technology of subjection’ since it informs political strategies that regulate populations for optimal productivity, expanding through spatial proceedings that engage market forces. Thus, concerning market-driven interests associated with governance regimes space is re-designed, producing conditions focused on changing bureaucratic strategies and citizenship practices. The case of Perdões (MG) is an example of how those elements establish the basis for neoliberal performances regarding increasing revenues for transnational capital by exploiting communities and territories.

Messianic Reports to a Mediator State: Similarities to the case of VLI Logistics S.A. in Perdões (MG)
In September 2020, a few months after the state declared that COVID-19 presented a public health crisis, VLI Logistics filed a repossession of land suit against 36 citizens of Perdões (MG). Based on Law No. 6.766 (1979), which regulates the parcelling off of urban land, the company alleged that some properties were not in compliance with the legislation. Also, the citizens were at risk since they built residential and commercial units upon a non-buildable safety streakless than 15 metres from the railway. Foremost, we must question not just the company’s request but also the application of the term ‘repossession’ in this case. The company filed a suit to claim a territory that, according to the same law, recurred, has an administrative limitation that impedes any constructions not aimed at specific activities: it is not necessarily public or private property but an area administered by the Federal Government. VLI Logistics did not seek to reintegrate territories of its property that were unduly occupied but instead, claimed the usufruct of territories administered by the state and inhabited by citizens even before the promulgation of the law that defined them as administrative boundaries. In other words, the company reclaimed a repossession of what it never owned: in this sense, was the process a request for repossession or a claim to confiscate new territories?

Nonetheless, it is worth mentioning that there is very little information about the process: only some local media reports attest to these occurrences. Even citizens affected by the process did not know anything about the plans to claim the land until the order of repossession: the company did not publicize its reasons. The court rejected the company’s request for repossession, thus not resulting in an effective disappropriation of land for the moment. On the other hand, Perdões is a city outside of the areas of interest for the national media as it is located in the countryside of Minas Gerais, with approximately 21,500 inhabitants and few investments in tourism and industry. These factors likely contribute to the lack of data and media interest regarding the dispossession case.

The residents and merchants of Perdões (MG) report that their families lived in those territories for over 50 years. Between the development of the railway station and the law of 1979, people constructed residential and commercial units in those areas without extensive obstacles. The notion of local and territorial development mobilized by VLI Logistics does not seem to provide for any real interests of the communities. At the same time, those communities are still under the risk of getting deprived of their land by the company’s ‘security measures’. Furthermore, such proposals create practical misunderstandings of the company’s role in the state, creating new tensions between citizenship and governance—always justified by the messianic promise of new technology and entrepreneurs that will save the poor from dangerous situations.

This case shows how VLI Logistics, a megacorporation, tries to take the responsibility of reporting possible irregularities in its territories of interest to the state upon itself. While doing so, it seeks to undertake interventions while claiming it follows the rule of law to consolidate practices somewhat similar to the CSR discourses of its major shareholder, Vale. Here, history repeats itself: a subsidiary of Vale approaches local communities based on purely technical justifications and reports, aiming to conduct an operation of local development in which there was no participation by the population whose lives are affected. The company focused only on the structural security of the railway by proposing purely technical interventions. It also claimed, based on former legislative orders, territories owned by communities—sustaining a neoliberal performance by appropriating the state’s functions to make private interests become a reality.

Towards Neoliberal Governmentality in the Countryside?
This discussion reveals that companies still (re)produce environmental injustices even when presenting their performance as responsible and exemplary, hence practising what can be called ‘corporate social irresponsibility’. Such injustices restrict the field of action of affected populations, which could be expanded by collective movements of resistance, such as through public lawsuits and protests. In that regard, this case exemplifies how companies deploy the notion of social responsibility to increase their power, aiming to become the central political agent developing policies regarding the territories of their interest.

Furthermore, these developments taking place in Perdões (MG) call for some theoretical discussions on the changing role of the state under neoliberalism. According to Loïc Wacquant, neoliberalism brings a restructuring of the state as the primary actor that actively shapes subjectivities, social relations, and collective representations in suitable ways to make the fiction of markets accurate and relevant. We could note that the liberal ideology that prevailed in Brazil in the 1990s continuously reverberates in Vale’s political behaviour, reinforcing—and recreating—the role of the state as a mediator of the relations between citizenship and the market through its actions.

The presence of people in risk areas adjacent to or owned by the railway and the performances by VLI Logistics so far attest to the inefficiency of the state in promoting access to safe and quality housing in Brazil’s countryside areas. Hence, we are faced with deficiencies in the domain of social policies and the gradual undermining of democracy by a transnational company that proposes interventions denying the participation of local populations in decision-making processes. The situation characterizes a corporative movement toward a neoliberal governmentality that relies on a constellation of legal, administrative, and coercive state apparatuses to legitimize and shield itself from political and social contestation. Aihwa Ong postulates that this kind of governmentality rests upon a new relationship between government and knowledge in which governance activities celebrate the abstract virtues of the market by reengineering state responsibilities, recasting them as non-political and non-ideological problems requiring technical solutions.

The neoliberal technology of government contributes to transferring many state functions to supranational institutions or the market. Ian Bruff and Cemal Burak Tansel point out that the tensions created by the political organization of capitalism continually build barriers against substantial democratization while many instances of neoliberal reforms across the world are materialized through the deployment of highly coercive state strategies. The monitoring and intervention in territorial inequalities by private companies relegates the state to the position of a mediating agent, influenced by purely technical interests—shifting the paradigm of a democracy-driven state into a new calculative, authoritarian order. Their actions also seek to silence local populations by elevating their perspectives and proposals to the public sphere, positioning them as the most appropriate while suppressing the voices of the communities that will be affected.

*This text is part of the Dossier IRGAC LECTURE SERIES – New Faces of Authoritarianism: Interdisciplinary Perspectives from the Global South

**All footnotes and references can be found in the PDF version