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CASE NUMBER: 340
CASE MNEMONIC: ITAIPU
CASE NAME: Itaipu Dam and Environment
1. The Issue
The Itaipu Hydroelectric Power Plant is located on the Parana
River and strands the countries of Brazil and Paraguay. Aside from
numerous superlatives due to its size and capacity, Itaipu
represents an interesting political and environmental case. The
political dimension is due to the dual ownership of the river and
the economic might of Brazil compared to Paraguay. The
environmental dimensions of the project revolve around resettlement
issues, compensation payments, and the Brazilian response to these
issues. Among the environmental consequences, the impact on the
natural vegetation, including rare fruit tree, brush, and orchid
species, were enormous. Much species endangerment and deforestation
took place in the initial stages of the projects construction.
However, with binational efforts, many of the endangered plant
species and a number of the doomed forests were salvaged. Today,
over 50 percent of what could have been lost in the region remains.
Given the precautions and environmental planning performed by the
Paraguayan and Brazilian governments, once the impacts on the
vegetation were realized after construction was begun, further
damage was monitored and controlled.
The world's largest hydroelectric power plant, situated on the
border of Paraguay and Brazil, has a generating capacity of 12,600
Mw, took eighteen years to build at a cost of about $U.S. 18
billion. The dam is administered by Itaipu Binacional, a joint
Paraguayan and Brazilian government commission. The project's
complex dam structures stretches 4.8 miles across the Parana River
and reaches a height of 643 ft. It impounds a reservoir 125 miles
long and contains 23.5 million acre-ft of water. The mammoth
project has involved several local, state, and national governments
of Paraguay and Brazil, in addition to a plethora of local and
multinational corporations, including the U.S., Argentina and Italy
through investment in the project.
First, the paper discusses the dams' impact in general. Secondly,
it looks at the Itaipu dam effects over environment.
2.1 Dams' Aspects in Overview 
This paper reviews the environmental factors associated with
the construction of Itaipu dam.
The term environmental effects, in its broad definition,
includes both the physical and social aspects. Changes in water
quantity or quality, or soil erosion and sedimentation, are
physical environmental effects. The resettlement of people and the
disruption of their productive systems and life styles are social
effects, as well as the impact of relocation on the populations
inhabiting the new host areas.
2. 2 Itaipu Case
Itaipu is the world's largest hydroelectric power plant. It is
situated on the border of Paraguay and Brazil, has a generating
capacity of 12,600 Mw, and took eighteen years to build at a cost
of about $U.S. 18 billion. The dam is administered by Itaipu
Binational, a joint Paraguayan and Brazilian government commission.
The project's complex dam structures stretches 4.8 miles
across the Parana River and reaches a height of 643 ft. It impounds
a reservoir 125 miles long and contains 23.5 million acre-ft of
water. The mammoth project has involved several local, state, and
national governments of Paraguay and Brazil, in addition to a
plethora of local and multinational corporations, including the
U.S., Argentina and Italy through investment in the project.
Although the dam's construction has had a variety of
environmental repercussions on the region's wildlife, aquatic life,
soil, and air, this report will focus on the project's impact on
the vegetation and fauna of the area. Two innovative programs
implemented by the Itaipu authorities are the "Mymba Kuera" and
"Gralha Azul" projects. The former program attempted to minimize
the effects of reservoir flooding on the fauna of the region by
catching animals and releasing them in biological reserves. The
"Gralha Azul" project is designed to create and afforest a
protective zone around the reservoir on the Brazilian side.
Gralha Azul Project
Despite the inclusion of forest protection in the initial
planning stages of the project, over 700 square kilometers of
forests have been negatively affected by the dam's construction.
The major effects have been the complete loss of forest lands,
particularly on the Paraguayan side, the general reduction in the
amount of forest lands, and the extinction of some plant types,
including a rare orchid. The majority of the damage occurred in the
first few years of construction. However, this process was retarded
when binational efforts stepped in to study and minimize any
further damage caused by the massive project.
Mymba Kuera Project
This program attempted to minimize the effects of reservoir
flooding on the fauna of the region by catching animals and
releasing them in biological reserves. During 1977, it was formally
launched when an inventory of birds, mammals, reptiles and insects
was ordered to use as a base of a future project to save them.
According to the study resulted from this inventory, the Biological
Reserve (that was created by the end of 1978) caught 27,150
animals. From this total, 7,547 were mammals, 1,848 were birds, and
5,674 were arachnids.
They also made an inventory of the Parana river fish resources
and of its tributary as well (between Monday and Yguazu rivers
mouth and above Salto del Guaira). They identified 129 species.
From this total, 44 species live above and below Salto del Guayra,
13 live exclusively above it, 60 only below it, and 12 live in it
tributary. They noted also that, above Salto del Guayra, there are
more quantity of fish but less variety of species. The reverse
situation is found below Salto del Guayra, where exist more variety
of species, but less volume of fish.
3. Related Cases
(1) South America
(3) Habitat Loss
4. Draft Authors: L. Valentina Delich and Patricia Greer (May,
B. Legal Cluster
5. Discourse and Status: Agreement and Complete
Both countries had designs on the great energy potential of
the Parana, which separates their territories, but given the
impossibility of deciding ownership, they split it. A 1966
agreement divided the energy in half. Seven years later, a treaty
outlined the arrangements for the creation of Itaipu. It
incorporated ANDE and ELECTROBRAS, Brazil's national electricity
company, in an entity called Itaipu Binational, designed to
administer the construction and operation of the dam. It also
spelled out rights to the energy produced -each country will be
entitled to one half, with 9 of the dam's 18 turbine-generators
compatible with each country's electrical cycle.
By 1974, almost 85 percent of the forest along the Paraguayan
portion of the Parana River had been destroyed. Such massive
degradation of the region's natural habitat gave rise to the
expansion of environmental impact studies and regulations.
The first of these measures began in 1977 with the formation
of the Forest Inventory Committee by the Institute of Forests at
the Federal University of Parana, Brazil. The committee's objective
was to become familiar with the structure of the forest's
vegetation and land affected by the Itaipu project. The committee
created five distinct sub-projects for study. They were: forest
management, forest exploitation, reforestation, forest soil, and
forest flora. By 1978 a joint document between the Forest Inventory
Committee and Itaipu Binational was produced entitled, "Automatic
Ecological Alarm for the Itaipu Region".
From this study came the Forest Management Project, which was
implemented shortly thereafter. The project set the stage for
maintaining a system of ecological equilibrium and a level of
forest sustainability. Of the objectives obtained by this first
real attempt at saving the vegetation from complete disappearance
were: a) the protection and prohibition of rare plant species and
those plants in danger of extinction; b) the creation of three one
hundred hectares forest reserves, where the trees, plants and brush
located at the sight of the awaited artificial lake, were
transplanted; c) reforestation of areas already stripped of their
These efforts were augmented with the support of the Minister
of Agriculture of Brazil, the Secretary of Agriculture of the
Brazilian state of Parana, and the municipal governments,
cooperatives and syndicated federations of the immediate Itaipu
region of Eloth Brazil and Paraguay. This movement was entitled,
Operation Gralha Azul (Operation Blue Crow), and had the following
a) justify and monitor the forest situation of the artificial lake.
b) promote and plant forest covers in exploited and deforested
c) plan the budgeting and process of development of forest areas
along river tributaries and streams for the ecological and
In order for these objectives to be efficiently implemented,
the operation was divided into two distinct programs:
a) preservation of the remaining forests.
b) the reforestation of the river banks and islands.
Upon the termination of Operacao Gralha Azul, the planning
director of the Itaipu forest reservations implemented Programa de
Reflorestamento na Faixa de Protecao do Reservatorio (Program for
the Reforestation of the Zone of Protection of the Reservation).
This program sought the continuation of reforestation and
transplantation of the vegetation affected by the Itaipu
hydroelectric project. In 1988 these efforts were stepped-up.
Consequently, 52% of a 28,000 hectare area of Itaipu had been
restored with the transplantation of 11.5 million plant species.
As a result of the recommendations and environmental impact
studies made by Itaipu Binational, approximately 105,000 hectares
affected by the Itaipu project have been protected by the creation
of forest preservations, refuges, and biological reserves. It can
be seen that the bilateral agreements signed by both countries has
proven effective in the salvaging of destroyed forest lands,
protection and preservation of various forest species, and placing
importance on the future maintenance of the region, given the
colossal impacts of a dam project of Itaipu's magnitude.
6. Forum and Scope: Law and Bilateral
Operacao Gralha Azul and a bi-national Treaty to establish "Itaipu
Binational", a bi-national organization to administer Itaipu dam.
7. Decision Breadth: 2
Primarily Itaipu's decisions involve Paraguay and Brazil. However,
Argentina suffers the environmental impact of being downstream. The
region is also affected due to the economic impact of having cheap
energy in the region.
8. Legal Standing: Treaty
C. Geographic Filters
a. Continental Domain: South America
b. Geographic Site: Southern South America
c. Geographic impact: Paraguay
The Itaipu Hydro Electric Power Plant is situated halfway
downstream of the Parana River between the cities of Guaira in
Brazil and Salto del Guaira in Paraguay on the South American
Continent. The reservoir created by the gigantic dam lies about
fourteen kilometers downstream between the cities of Foz do Iguacu
(Iguacu Falls) on the Brazilian side and Cuidad del Este (City of
the East) on the Paraguayan side. The complex system occupies
approximately 200 kilometers of the Parana River, and is considered
the largest hydroelectric power generation facility in the world.
The hydrographic basin of the Parana River, formed by the
Paraguay River and the Uruguay River, and is considered to be the
second largest fluvial basin in South America, consisting of
3,200,000 square kilometers of the countries of Brazil, Paraguay,
Argentina, Uruguay and Bolivia. The basin drainage of Itaipu is
820,000 square kilometers.
The Parana River originates at the confluence of the Paranaiba
and Grande rivers, initially running in Brazilian territory in a
northeast to southeast direction, until the Paraguayan~city of
Salto del Guaira, where it assumes a north to south direction
forming the border between Brazil and Paraguay. Shortly after
passing Foz do Iguacu, the river forms the border between Paraguay
The massive undertaking is situated in the western Parana
region of southwestern Brazil, where the river forms the far
western border of Brazil's Meridonal plateau. This region is
characterized by its richly fertile soils and intense agriculture,
producing large quantities of grains, principally soy beans.
Upon reaching the immediate project site, the river has run a
turbulent course of approximately 190 kilometers over several
waterfalls and dips through a steep valley large enough to be
considered a small canyon. Between 1920 and 1972 the river's annual
outflow averaged 8,300 m3/s.
Transportation on the river in the immediate dam site is no
longer existent, since the presence of the dam makes it impossible
to navigate around or beyond it. Transportation upstream has been
indirectly affected since, the small vessels which navigated the
river cannot get to their destinations downstream.
10. Sub-national factors: YES
11. Type of Habitat: TROPical
D. Trade Filters
12. Type of measure: Regulatory Standard
The Program for the Reforestation of the Zone of Protection of
the Reservation, transplanted thousands of tree and plant species
to a protected and forever-wild reservation. As a result, 11.5
million plant species were rescued from destruction. The foundation
of a Zoo saved hundreds animals, birds, and fish that were in
danger of extinction.
13. Direct vs. Indirect: INDIRect
14. Relation of Measure to Impact
a. Directly Related to Product: NO
b. Indirectly Related to Product: YES
Paraguay's 3 million inhabitants and little heavy industry,
compared to Brazil's 155 million inhabitants and intense industry,
uses less than two percent of the total. Energy sales to Brazil pay
for 25 to 35 percent of Paraguay's national budget. In turn, Itaipu
provides 35 percent of Brazil's electricity. Although Brazil has
first right to any unused power, Paraguay can sell any left over to
other countries. At $1,200 per installed kilowatt of capacity,
Itaipu's electricity is among the cheapest in the world. At the
peak of the Itaipu's construction over forty thousand Brazilian and
Paraguayan workers were employed, increasing the population and
modernization of the Puerto Presidente Stroessner area.
c. Not Related : No
d. Process Related: Yes Habitat Loss
15. Trade Product Identification: Electricity
16. Economic Data
As noted, each country was entitled to half of the energy
produced, with 9 dam's turbine-generators compatible with each
country's electrical cycle. But Brazil, with energy-hungry
industries and a population of over 130 million, has seen an annual
increase in electricity consumption of some 10 percent over the
last 30 years. Its energy needs far outstrip those of industrially
undeveloped Paraguay with a population of 3.5 million, which uses
only 5% of Itaipu's output. Brazil has a first option right to the
unused portion of Paraguay's share and is expected to use it. If
Brazil decides it isn't interested in part or all of that, Paraguay
may negotiate with third parties.
Sales of energy to Brazil, Paraguay's sole client under the
terms of the 1973 treaty that created Itaipu Binational, pay for 25
to 35 percent of Paraguay's national budget. Since 1989, the Itaipu
Commission has paid Paraguay some $180 million in royalties and
energy purchases, based on a stipulated compensation of $1,200 per
kilowatt hour, though Paraguay is still owed $84 million for energy
sales and royalties during 1990.
17. Degree of Competitive Impact: Low
18. Industry Sector: UTILity
19. Exporters and Importers: Paraguay and Brazil
E. Environment Clusters
20. Environmental Problem Type: Habitat Loss
Nectandra megapotamica Lauraceae
Nectandra sp. Lauraceae
Cedrela fissilis Meliaceae
Matayba elaeagnoicles Sapindaceae
Cambrale agaudichandi Meliacea
Peltophorum dubium Leguminosae
Cecropia sp. Maraceae
Arecastrum romanzoffianum Palmae
Holocalix balansae Leguminosae
Luhea divaricata Tiliaceae
Annona cacans Annonaceae
Parapiptadenia rigida Leguminosae
Chrysophyllum gonocarpum Sapotaceae
Balfourodendron riedelianum Rutaceae
Eugenia uniflora Myrtaceae
Aspidosperma polyneuron Apocynaceae /
Euterpre edulis Palmae
Campomanesia guabiroba Myrtaceae
Patagonula americana Boraginaceae
Jaracatia spinosa Cariacaceae
Diatenopterys sorbifol ia Sapindaceae
Enterolobium cortortisiliquum Leguminosae
Lonchocarpus muelenbergianus Leguminosae
Inga marginata Leguminosae
Machaerium stiptatum Leguminosae
Unfortunately, these plants most are unique to the Itaipu
region and did not survive the transplant to the reservations.
Others, were destroyed before the transplant process took place.
About the fauna
There were several biological reserves created. On the
Paraguayan side are located: Itabo, Limoy, Tati Yupi and Mbaracay.
These reserves are cover 50,000 hectares and include two biological
shelters where environmental studies are performed. One of them is
close to Saltos del Guayra, named Binational Mbaracayu. There, it
can be seen "bog deer", "mboro-i", and "Tati Yupi (in the native
language "to rise the horn").
There on Museum dedicated to natural history and has a
collection of embalmed animals, typical of the zone, such as
"Taguato Ruvicha" and "Eira".
However, the zoo is, without any doubt, the most popular area
of the Complex. There are in captivity: among the mammals, puma and
yaguarete (kind of jaguar), "tanyka-ti", carpinchos (capibera) and
"tapitres" There are also several ostrich, as nandus, and the very
rare "mytu". Toucans, ducks, and parrots are preserved in the zoo.
In only few years, the zoo was able to reproduce "acuti sa" and
"criyu", and they improved the knowledge about "caraya" and
"cuati" that are woodlands inhabitants.
There is a special dedication to bog deer and "aguara guazu",
a canidae from sub tropical forest almost extinguished. Precisely
in the case of the "yagua yvbyguy"( speothos venaticus) the success
is evident: they had a few in cages and poultry yards while today
there are more than sixty. The zoo authorities are working in their
education process to transfer them to a more natural and wild
22 Impact and Effect: HIGH and REGULATORY
23 Urgency and Lifetime: LOW 10-100 YEARS
24. Substitutes : Recycling
F. Other Factors
25 Culture: YES
The Itaipu project had the following impacts on the local
culture of the Paraguayan and Brazilian peoples who live in the
vicinity of the Itaipu area:
* disappearance of local history
* inundation of local arqueological cites
* increase public health risk
* increase of tourism and recreation
* loss of the natural landscape
* change in the navigability of the river
* intermeshing of urban with rural culture
* Displaced rural dwellers
26. Human Rights: YES
Of the original settlers of the region in question were the
Ava-Guarani Indians and Mestisos. Beginning in 1970, these groups
were forced to relocate to reservations. Of the problems resulting
from this measure were:
i) conflict over the boundaries of the reservations,
ii) increase in the indigenous population,
iii) religious conflicts,
iv) immigration of provincial indigenous people to the Cobras and
v) the rejection of the new influx of indigenous peoples by those
who had settled on the reservations in years prior.
27. Trans-border Issues: YES
The Itaipu dam is located on the border of Paraguay and
Brazil, and is a joint effort of both nations to produce the
electricity and to ensure the preservation of the regions
28. Relevant Literature
BELLUOMINI, H.E., et al - "Metodologia de Manejo e Resgate
Seminar I on Itaipu - environmental impact, Binational, p. 151-158,
Asuncion, Paraguay, 1979.
CARAVALHO, E. de A. - "Sintese do Procedimentos da Itaipu
Binational na Questao Indigena 1975-1988", Itaipu Binational.
CEVERA, D.P. and HUERTA, E.N. - "Reservas e Refugios Biologicos"
IN. Seminar II on Itaipu - environmental impact - Binational,
p.97-104, Foz do Iguacu, 1987.
COMMISAO MISTA TECNICA BRASILEIRO-PARAGUAIA "Reconhecimento do
Efeitos Ecologicos do Projeto de Itaipu", Relatorio 4, 1972.
ELECTROBRAS - "Uhe Itaipu -Estudo de Caso da Usina" Habtec, 1992
KOHLHEPP, G. - "Itaipu: Basic Geopolitical and Energy Situation-
SocioEconomic and Ecological Consequences of the Itaipu Dam and
Reservoir on the Rio Parana", GTZ/Friedr Vieweg and Sohn,
LUXNER, L. - "What a Dam!", Americas v.43, no. 2, '91, p. 2-3.
PEREZ, N., VAN HUNBECK and ORTIZ, J. - "Estudos Faunistico. IN.
Seminar II on Itaipu - environmental impact - Binational, p.
117-136, Foz do Iguacu, 1987.
ROCHA, C.M. - "Legislacao de Conservacao da Natureza" FBCN, CESP,
Sao Paulo, 1986. SNIDER, T. - "The World's Biggest Dam" - Popular
Mechanics, v. 162, July '85, p.75-77.
WILLIAMS, A.R. - "The Mighty Itaipu" - Americas, v.37, May/June
'85, p.32 -55.
Notes and References
 About the environmental aspects and consequences related to
Hydroprojects in general, the World Bank, in "Dams and the
Environment", a World Bank Technical Paper Report, assessed the
a. Health. Some water-related diseases can increase unless
precautions are implemented (e.g. vector control, prevention)
schistosomiasis, onchocerciasis, encephalitis, malaria, etc.
b. Resettlement issues. Reservoir creation may involve inundation
of houses, villages, farms and infrastructure such as roads and
c. Wildlife. Loss and extinction of wildlife.
d. Fish. Fish migrations may be impaired without passage
e. Biomass removal. Related to whatever water quality is needed
downstream, to fisheries, and to navigation.
d. Water weeds proliferation can increase disease vectors, and
transpiration increases water loss and impairs fish and water
quality. Clogging impairs navigation, recreation and irrigation.
f. Erosion upstream. It leads to sedimentation which can impair
storage; increased erosivity below dam.
g. Cultural property. Archeological, historic, paleaontologic,
religious and esthetics or natural unique values may be endangered
by the dam construction.
h. Induced seismicity. Tectonic movements may increase or decrease.
The pressure applied to often fragile geological structures by the
vast mass of water impounded by a large dam can -and often does-
give rise to earthquakes.
i. Local climate may be modified by large reservoirs, especially in
terms of humidity and local fog
j. Temperature of released water may be higher or lower than
ambient river temperature (depending on pattern of release); this
will have varying impacts on downstream water users.
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May 6, 1996