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By Matthew Flynn

[The author writes for Business News Americas in Sao Paulo.]

After years of waiting, numerous congressional investigations, and over a billion dollars invested, Brazil will finally be able to assert sovereign control over the vast Amazon region. On July 26, President Fernando Henrique Cardoso inaugurated the Sistema de Vigilancia da Amazonia (SIVAM) in the jungle capital of Manaus.

Touted as the largest environmental monitoring system in the world, SIVAM will be the "eyes and ears" of Brazil's federal government in an area twice the size of France where the lack of an effective state presence has contributed to numerous illicit activities.

SIVAM, an integrated telecommunications network of radars, airplanes, satellites, and supercomputers, will allow authorities to control air traffic, detect fires and illegal deforestation, control epidemics, predict weather patterns, and contribute to numerous other projects requiring government monitoring.

But the project and its implementation have produced criticism and accusations of favoritism that have left Cardoso on the defensive. "SIVAM was always questioned by pessimists, by some who did not believe in Brazil," Cardoso said. "It was also questioned by defeatists, who had difficulty understanding the greatness of the project that incorporated foreign equipment but that was conceived and developed by Brazilians."

Bidding process investigated numerous times

SIVAM will cost the Brazilian government US$1.4 billion, payable over ten years starting in 2005 at attractive interest rates. Of this amount, US$1.3 billion is slated for equipment and services. The entire system includes 19 fixed radars, six mobile radars, five AWACS-type airplanes, three remote- controlled airplanes, three regional surveillance centers, and 914 VSAT data transmission stations.

One reason for the favorable financing terms, claims an article in the Folha de Sao Paulo newspaper, is that US-based defense company Raytheon Corporation and the US government had an inside track in the bidding process.

"Sources from the intelligence service confirm that, while the Brazilian government sees Raytheon's package as being technologically superior to that of Thomson-Alcatel, the French have offered more comprehensive and attractive financing," read a State Department document obtained by the newspaper using the US Freedom of Information Act (FOIA).

To improve the financing terms of the contracts, US officials in Brazil convinced Brazilian authorities to state that the system would be used for combating drug trafficking, thus allowing the US Eximbank to offer better loan terms.

Raytheon won the contract in 1994 over French-based Thomson (now known as Thales) to supply and install the advanced radar equipment. Brazilian officials say that Eximbank's attractive terms were decisive in the selection. Accusations of irregularities and favoritism in the bidding process resulted in seven audits by federal audit courts and a legislative investigation (Comissao Parlamentar de Inquerito, CPI).

While officials denied wrongdoing and Raytheon kept the contract, the scandal led to the removal of Aeronautics Minister Mauro Gandra and Cardoso's chief of protocol Julio Cesar Gomes dos Santos (see NotiSur, 1995-12-08).

US officials, meanwhile, considered the US company's winning of the auction a geopolitical victory. Raytheon's capture of the SIVAM contract confirmed earlier US objectives. The contract "represents an opportunity to foment the interests of the US government in the areas of environmental monitoring, air-traffic security, and activities combating narcotics to cite some examples," read a State Department cable sent by former US Ambassador Melvin Levitsky on June 13, 1994.

Concern over US accessing sensitive information

The main concern regarding the choice of the Pentagon's fourth-largest contractor to install the system is that information gathered will slip through Brazilian hands into those at US intelligence agencies.

"A better improvement of hemispheric cooperation would occur if the SIVAM network were integrated in the Caribbean Basin Radar Network [CBRN]. Brigadier Oliveira, manager of the SIVAM program, made an offer regarding such an integration during a meeting with the ambassador in June 1994," read a cable sent from the ambassador.

Brazilians have long feared that outsiders will take away their Amazon. Widely circulated tales hold that text books in the US teach students that the Amazon is international territory and even that the latest loan agreement from the International Monetary Fund (IMF) to Brazil included the Amazon as collateral.

Many fear that extending Brazil's sovereignty over the Amazon will just be a cover for the US to increase its presence in the ecologically rich and contentious area.

"SIVAM will in truth be an extension of Plan Colombia with the difference being that there it is the US that finances the project; here, we do," wrote Fernando Gabeira, a congressman for the center-left Partido dos Trabalhadores (PT), in an op-ed piece.

Brazilian officials deny that outsiders, especially the US, will have free access to the data collected. Even Raytheon, feeling on the hot seat from the accusations, guaranteed the integrity of its equipment. "SIVAM will also be installed with important participation of Brazilian industry and technicians and will be operated exclusively by Brazilians, thus conserving the strategic destination of Brazilian resources in Brazilian hands," read company propaganda.

The US Embassy in Brazil put out a similar statement saying that SIVAM offers Brazil an "opportunity for leadership in the hemisphere. How that leadership will be exercised will be up to Brazil, working together with other countries of the hemisphere, including the United States."

Air Force Col. Paullo Esteves, one of the program's directors, said that the system is "absolutely inviolable" since all information sent and received is encrypted. But he admitted that the possibility always exists that someone working in the system's operations could be bribed to pass on sensitive material.

Militarization of the Amazon region increasing

One of the stated goals of the investment in SIVAM is to protect the Amazon's ecological heritage, but environmentalists remain skeptical.

"I think we should use whatever data comes from it," said Philip Fearnside, an American specialist in deforestation working with the Instituto Nacional de Pesquisas da Amazonia (INPA) in Manaus. "But if you were going to invest a lot of money in the environment you probably wouldn't invest in SIVAM."

Even if the government discovered illicit activity, enforcement officials lack resources to carry out their work. "We have three problems: information, communication, and mobility," said Joao Carlos de Albuquerque Valenca, head of the Federal Police in Manaus. "SIVAM will solve the first, which is very important. But we don't have people or sufficient resources to work."

Others believe the electronic-surveillance system is just another step in increasing the Brazilian military's presence in the sparsely inhabited land. "Like the example of the Calha Norte (northern corridor) program, SIVAM was conceived within the bias of the old National Security Doctrine, according to which the indigenous populations who live on the borders of the country are potential enemies of Brazil," said the Conselho Indigenista Missionario (CIMI).

The Calha Norte program is aimed at populating Brazil's extensive northern border that it shares with Colombia, Venezuela, Guyana, Suriname, and French Guyana. The program was created in 1985 after forces from the Colombian rebel group Fuerzas Armadas Revolucionarias de Colombia (FARC) crossed into Brazil and took hostages to obtain ransom money.

Brasilia has always said that it is concerned about the military approach to Colombia's internal conflict that the US has been pushing, but that will not prevent Brazilian authorities from passing on vital information collected from SIVAM to Colombia.

"SIVAM will generate important information. We hope to share this with our neighbors," said Brazil's Foreign Minister Celso Lafer during a meeting with Colombia's then president- elect Alvaro Uribe. The foreign minister said the reason for sharing the information was to fight drug trafficking.

Air control and updating Brazil's air force

With SIVAM's high-tech infrared and heat sensors capable of detecting movements of objects as small as three meters long, Brazil's Congress is debating new rules of engagement to allow the country's air force to shoot down intruder planes that do not respond to orders. The bill is extremely controversial, in part because of the accidental shooting of a plane killing a US missionary and her daughter in Peru last year (see NotiSur, 2001-05-18).

But before South America's largest country can effectively control its air space, the country needs to update its dilapidated air force. Its 12 aging French Mirages are slated for retirement in 2005. Government watchdogs are monitoring the process to ensure that another multimillion contract will not involve more industrial espionage.

In the running for the US$700 million contract, which should be awarded by the end of the year, are Lockheed Martin (F-16), a consortium made up of France's Dassault and Brazilian aircraft maker Embraer (Mirage 2000BR), Russia's Rosoboronexoport (Sukhoi Su-35), and a partnership between British Aerospace and Saab (Gripen).

While the F-16 has not received good marks because of US restrictions on exporting sensitive technology, the US has been pushing the Gripen because of the large amount of US components in the aircraft. Cardoso said other issues on the bargaining table include market access for Brazil's exports.

COPYRIGHT 2002 Latin American Data Base/Latin American Institute
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Publication:NotiSur - South American Political and Economic Affairs
Geographic Code:3BRAZ
Date:Aug 30, 2002

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