Brazil's Environment Agency Strike: Oil and Gas Projects at Standstill

Staff at Brazil's top environmental agency have voted to strike in at least 10 states, potentially delaying oil and gas licenses, slowing auto imports, and hindering Amazon rainforest preservation efforts. This move affects environmental licensing for numerous firms and may impact Brazil's energy sector and broader economy.

Staff at Brazil's top environment agency have voted to strike in at least 10 states, their union said on Friday, threatening to further delay oil and gas licenses, slow auto imports and impede efforts to combat the destruction of the Amazon rainforest. Workers in the Rio de Janeiro offices of environmental agency Ibama, which handles licensing of the petroleum industry, agreed late on Thursday to start striking on June 24, according to a statement from the national union Ascema. A union leader said Rio was one of 10 states where staff had joined the strike.

The freeze is expected to affect environmental licensing for more than a dozen firms in the oil and gas sector, including Brazil's state-run Petrobras and independent producers such as Equinor, 3R Petroleum, Enauta and Prio. "The lack of dialogue on the part of the government led us to this strike, which unfortunately will deepen the already significant impacts in several sectors, especially in oil and gas," said the director of the Rio union Asibama-RJ, Leandro Valentim, in a statement.

Ibama did not immediately respond to a request for comment. Since early 2024, the agency's staff have slow-walked environmental licensing and other services of interest to the government, without officially calling for a strike.

The slowdown has had effects across Brazil's economy from energy projects to vehicle imports. In May, Petrobras said the licensing delays could impact around 2% of the firm's annual production if they persist. Petrobras did not immediately respond to a request for comment on the vote to declare a strike.

Along with the Ibama workers union in at least 10 states, workers in the Federal District and a branch for Environment Ministry workers have also declared their plans to strike, national union leader Wallace Lopes told Reuters. Voting nationwide is set to conclude on Friday, he said.

Their decision could also hurt Brazilian President Luiz Inacio Lula da Silva's fight against the illegal destruction of the Amazon rainforest if the Ibama staff tasked with policing deforestation walk off the job.