Blow to Brazil's Lula as Congress curbs Indigenous and green plans

• Brazilian lawmakers back two bills in setback for Lula
• Indigenous and environment ministries to have less power
• Land decisions and deforestation efforts seen at risk

RIO DE JANEIRO - Brazilian lawmakers - many connected to the nation's powerful agriculture lobby - this week approved bills that would weaken or reverse human rights and environmental policies established by the new government of President Luiz Inácio Lula da Silva.

Bill 490, which limits the recognition of new Indigenous territories, was endorsed by Brazil's lower house of Congress on Tuesday but it still requires approval by the Senate and Lula.

On Thursday, the Senate - the upper house - passed a provisional measure that confirms leftist President Lula's cabinet revamp since taking office - but curbs the powers of the Environment Ministry and the newly-created Ministry of Indigenous Peoples.

The measure transfers land decisions from the Ministry of Indigenous Peoples back to the Justice Ministry, where they formerly resided.

It also strips the Environment Ministry of its control over the nation's water resources and over a register used to assess how much of rural properties are covered by forest, seen as a key tool to stop deforestation.

Indigenous groups this week blocked a major highway outside Sao Paulo in protest, and the country's Indigenous minister Sonia Guajajara criticized the measures in an interview.

"It took 523 years for the Ministry of Indigenous Peoples to be created, and now it takes five months for it to be attacked at this level", Guajajara said. She previously said that Bill 490 "explicitly attacks the lives of Indigenous peoples".

While Thursday's vote is a blow to Lula's green agenda, it was a case of damage limitation in a conservative Congress as he had faced the prospect of 17 of his ministries - including the new Indigenous peoples ministry - being disbanded if the measure had not passed.

After four years under far-right President Jair Bolsonaro, who held back the expansion of Indigenous land and oversaw a huge spike in deforestation of the Amazon rainforest, Lula was elected in part on promises to rebuild the nation's environmental protection system, promote the demarcation of Indigenous territories and achieve net zero deforestation.

In his first months in power, Lula cracked down on illegal mining in Indigenous territories and formally recognized six Indigenous reserves. But this week's setback in Congress highlights the frailty of his reforms - and the dominance of Brazil's farm lobby.

Indigenous minister defiant despite Congress setback

Agribusiness is the nation's most powerful political caucus, accounting for 347 of Brazil's 594 members of Congress.

Pedro Lupion, the caucus' president from the conservative Progressive Party, defended the push to return decision-making on new Indigenous reserves to the Ministry of Justice, saying that letting an Indigenous ministry unilaterally decide on demarcations was unfair.

"It is important that a matter involving so many rights has an unbiased stewardship," Lupion said.

However, Juliana de Paula Batista, a senior legal consultant at the non-profit Instituto Socioambiental (ISA), said that Lupion's argument could also be applied to other ministries.

"No one questions the neutrality of a white man running the Ministry of Agriculture but there are questions about Indigenous women from the Amazon running demarcations," she said.

Brazil's 1988 constitution recognizes Indigenous peoples' rights to the land they traditionally occupy. Currently, more than 200 areas in Brazil are in the long process of seeking recognition as Indigenous land, according to ISA.

The government also controls tens of millions of hectares of still "undesignated" public land, whose future as either private farms or protected areas is the focus of heated battles.

A growing body of research shows that designating land as Indigenous not only protects the people living there, but also the nature they control.

"President Lula told me that he will maintain the commitment to demarcate Indigenous territories and protect Indigenous rights," said Guajajara, the Indigenous minister, noting that Lula still has the power to approve or reject new territories.

Her ministry will continue to deal with the protection of Indigenous land, along with cultural and educational issues.

"Most of the areas already demarcated suffer with a violent process of invasion and illegal exploitation", Guajajara said, adding that her ministry still has a key role to play.

Warning over agribusiness and impact on farmers

Bill 490 set a cut-off date for recognizing Indigenous land claims, establishing that Indigenous people had to be on the land at the time that Brazil's constitution was enacted in 1988.

Many Indigenous people have lived on or moved around the same land for centuries - but they have often faced evictions, and some have tried to reoccupy territory they lost.

According to Indigenous rights activists, the new bill would make it impossible for communities to legally claim areas they have reoccupied since 1988, especially when that land has already been signed over by the government to private farmers.

Lupion, of the agribusiness caucus, said that without a cutoff date, large areas of land "could become an Indigenous territory from one day to the other, and agribusiness would lose all its prominence and the help it gives to the Brazilian economy".

Currently, 41% of the country's territory is occupied by farms, according to government data, while 12.6% is covered by fully recognized Indigenous areas, ISA has said.

Brazil's Supreme Court is also considering whether the 1988 cut-off date should be set on claims, as part of a case centered on an Indigenous territory that was reoccupied in the 1990s.

Among other provisions in Bill 490, it would allow genetically-modified crops to be grown in Indigenous territories and permit contact with isolated Indigenous communities if it was judged to be in the public interest, for example, to facilitate the building of power lines in a given area.

Beto Mesquita, director of the Brazilian Coalition on Climate, Forests and Agriculture, said the series of changes could ultimately backfire against Brazil's farmers.

Exporters, for example, increasingly have to prove their products are not produced as a result of deforestation or through illegal use of Indigenous land, he said.

That could become harder to prove if the systems for demarcation and mapping of forest destruction move between ministries, Mesquita said.

Nilto Tatto, head of the environmental caucus in Congress and a member of Lula's Workers Party, said he believes "the agribusiness caucus is shooting itself in the foot".

But Batista of ISA said Brazil's environment would ultimately be the biggest loser under the policy reversals.

"These changes show that the current biggest enemy of the Amazon is Congress," which is seeking less stringent environmental controls, she said.

(Reporting by Andre Cabette Fabio and Fabio Teixeira; Editing by Laurie Goering and Kieran Guilbert)