Royalties, a New Indigenous Right for Hydroelectric Damages in Brazil

The Belo Monte hydroelectric plant on the Xingu River in the eastern Brazilian Amazon. With a capacity of 11,233 megawatts, it began operating in 2016 and caused severe environmental and social damage in the Volta Grande do Xingu, a river curve where most of the water was diverted into a channel for power generation. Credit: Joédson Alves / Agência Brasil

By Mario Osava
RIO DE JANEIRO, Mar 25 2025 (IPS)

Indigenous peoples in Brazil have won a new right: a share in the profits of hydroelectric plants that cause them harm when built on or near their lands. 

This was established in a preliminary ruling by Supreme Court Justice Flavio Dino, who on Tuesday, March 11, recognized this right for Indigenous communities living in the Volta Grande do Xingu (VGX), a 100-kilometer stretch of the Amazon’s Xingu River. Most of its water flow was diverted into a channel for electricity generation.

The ruling responds to a petition from seven Indigenous associations in the VGX and still awaits ratification by the other 10 Supreme Court justices by late March. However, approval is virtually certain, as it aligns with Brazil’s 1988 Constitution.

It took 37 years for this constitutional benefit to take effect because the National Congress failed to pass a law regulating compensation for the impacts of energy and mining projects on Indigenous lands, Justice Dino noted in his 115-point, 61-page ruling.

Now, 100% of the royalties that the Belo Monte hydroelectric plant paid to the federal government as compensation for water use will go to the residents of three Indigenous territories affected by the permanent “drought” in the VGX, home to 1,324 people according to the 2022 national census.

Lawyers representing the Indigenous cause estimate this amounts to around 210 million reais per year (approximately US$36 million at current exchange rates).

The funds will be used collectively for community benefit. Justice Dino specified purposes such as expanding the Bolsa Família (a direct income transfer program) in affected villages, sustainable development projects, improving educational and health infrastructure, territorial security, reforestation, and demarcation of additional Indigenous lands.

A Right for All

This right extends to other similar cases—though not to mining—as there is still no legislation regulating constitutional provisions ensuring affected communities’ share in profits from hydroelectric and mining activities in “border zones or Indigenous lands.”

Justice Dino also set a 24-month deadline for Congress to finally approve regulations for such cases.

“Royalties are a victory. For the first time, we’ve gained a benefit—all we’ve had so far are losses because of the Belo Monte dam,” said Gilliard Juruna, chief of the Miratu village of the Juruna people (who are reclaiming their original name, Yudjá, meaning “the river’s owners”).

“Since 2019, fish no longer reproduce normally in the Volta Grande do Xingu,” the Indigenous leader told IPS by phone from his village in the municipality of Vitória do Xingu. Like most Brazilian Indigenous groups, the Juruna use their ethnic name as their surname.

The reason is that Belo Monte’s operation “steals” too much water from the VGX, a U-shaped stretch. The original dam project, designed in the 1970s under Brazil’s military dictatorship (1964–1985), planned to flood 1,225 square kilometers of forest in the Volta Grande, including two Indigenous territories along its banks.

Stalled by Indigenous resistance and surplus energy from other large dams, the project was revived this century with a redesign to avoid flooding the VGX by diverting water through a channel.

But diverting enough water for a 11,000-megawatt plant (the world’s fourth-largest, operating at full capacity since 2019) has condemned the VGX to permanent drought, destroying the Indigenous and riverside communities’ way of life, which depended on fishing and river transport.

A constant legal battle pits Norte Energía, Belo Monte’s private operator, against environmental authorities demanding higher water flows in the VGX to ensure fish reproduction and ecosystem survival.

Court rulings have fluctuated, especially after environmental disasters and the expiration of Belo Monte’s operating license in 2021. The Brazilian Institute of the Environment now seeks to tie license renewal to a more ecosystem-friendly water flow schedule (hydrogram).

While awaiting renewal, the plant operates at only 31% capacity. Water releases for the river bend are dictated by power generation targets, ignoring the dehydrated stretch’s ecological needs.

The Juruna lead an Independent Territorial Environmental Monitoring (Mati) initiative, tracking fish populations and other indicators based on water flow variations. Other Indigenous groups, riverside communities, and researchers also participate.

Their findings show that higher water levels from December to March (fish spawning season) are essential for life in the VGX. They’ve proposed a new hydrogram that, while not restoring natural flows, would mitigate current damage.

The piracema, the local spawning season for the inhabitants of the Xingu, must have enough water for the females to lay their eggs and for the fry to feed and grow. Without water, this process cannot occur, and sometimes—due to the sudden reduction in water flow caused by Belo Monte—the eggs or fry die on dry land, according to Josiel Juruna, coordinator of Mati.

“We’ll keep fighting for more water in the Volta Grande—for us, it’s life,” said Gilliard Juruna. But his people are adapting, turning to farming after commercial fishing collapsed. They are no longer commercial fishermen, only fishing for their own consumption—which is no longer guaranteed either.

The Juruna leader now grows cacao, whose price is on the rise, but they need technical support, irrigation, and fertilizers.

The compensation programs that Belo Monte is required to implement and fund, as a counterpart to harnessing the river’s energy potential, are not progressing. The company’s initiatives to support Juruna agriculture contribute little.

While schools are improving, and the village will have secondary education starting in 2026, there are no income-generating projects to replace lost fishing livelihoods, Gilliard Juruna lamented.

Though welcomed, royalties may further erode traditional Indigenous life.

One concern is that financial compensation could make it easier to license new hydro and mining projects, harming nature and Indigenous ways of life.

There have long been efforts to open Indigenous lands to destructive activities like mining—now under discussion in the Supreme Court, led by Justice Gilmar Mendes.

Royalties can encourage harmful projects to exploit mining and water resources in indigenous lands, “the most protected areas in Brazil”, agrees biologist Juarez Pezutti, a professor at the Federal University of Pará, who has participated in several environmental research projects in the Vuelta Grande.

Predatory activities in indigenous areas destroy their ecosystem services, cause social disasters, as seen in the Xingu, and lead to obesity, diabetes and other diseases, such as those that occur among Native peoples in the United States and Canada, whose territories are occupied by mining, he told IPS by telephone from Belém, capital of the Amazonian state of Pará, where Belo Monte is located.

Judge Dino is aware of these risks, which is why he insisted several times in his ruling that the decision on Belo Monte’s royalties “does not release any and all exploitation of the energy potential of water resources on indigenous lands.”

Such projects still require state approval and compliance with International Labour Organization Convention 169, which mandates free, prior, and informed consent from affected Indigenous communities.