Rio Demands Dilma Veto Royalties Bill

An estimated 200,000 people have taken to the streets of Rio in a mass protest demanding Brazilian President Dilma Rousseff veto a bill which would change how oil royalties are shared throughout the country.

200,000 people in Rio Royalties Protest occupy Centro district, 26 Nov 2012. Photo by Carlos Magno/Governo do RJ.

“Against injustice, for Rio”: 200,000 people occupy Rio’s Centro district in protest at the proposed “illegal” Royalties Bill on 26 November. Photo by Carlos Magno/Governo do RJ.

The bill would take revenue away from the oil-producing states of Rio, São Paulo and Espírito Santo and redistribute it in part to non-producing states.

Rio government officials argue the state would lose R$77.3 billion (US$37.2 billion) by 2020, and R$2 billion (US$1 billion) in 2013 alone, if the bill passes.

President Rousseff has until 30 November to decide whether she will ratify the bill as it stands, approved by both the Senators last year and the Deputies last week, or veto it partially or in full.

If the new bill is passed, oil producing states’ royalties will be cut from the 26.25% to 20% for states. However for municipalities, it would be cut to 15% in 2013, and to 4% by 2020, according to O Globo newspaper.

Of 92 municipalities in Rio state, 87 currently receive the royalties.

The federal government paid royalties of R$12.99 billion in 2011, up 31% on 2010. Rio state received the biggest slice – R$2.46 billion – up from R$2.03 billion. Producing states argue they are entitled to the royalties as they foot the bill – both financially and ecologically – for offshore oil exploration.

One of the biggest bones of contention is that the bill would allow the government to rewrite already-signed contracts – something they say would be “illegal”. Rio Governor Sérgio Cabral told crowds this would set “an extremely dangerous precedent”. He said he is confident the president would veto the bill, but that Rio would appeal if not.

Read the full article on The Rio Times site.

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