Brazilian Judge Rules Belo Monte Work Stoppage Illegal

A Brazilian court late Wednesday declared to be illegal a strike that stopped construction on the controversial Belo Monte dam.

A judge in the regional labor court of Para, the state where the 11,200 megawatt dam is being built, ruled Wednesday that the contract signed in November between workers and Consorcio Construtor Belo Monte, the group building the dam, is valid until October because the company did nothing to violate that agreement.

Workers are seeking improved pay and more time off to visit families, but the judge said clauses in the contract relative to those demands were upheld by the company and so workers can't strike. According to a statement on the court's website, should the employees not return to work they will be fined 200,000 Brazilian reais ($106,000) a day.

Roginel Gobbo, vice president of Sintrapav, or the Union of Heavy Construction Industry Workers, which represents the construction workers, told government news agency Agencia Brasil that he is awaiting official notification of the court decision before taking a vote on the matter.

Sintrapav didn't answer calls to its press office made by Dow Jones Newswires during regular business hours.

Sintrapav earlier this week said that all construction employees stopped work as of Monday, while support employees such as health and food services workers are working with limited staff.

Belo Monte is set to be the world's third-largest hydroelectric plant when it begins operations in 2015. The dam, one of many planned for Brazil's Amazon basin, has been criticized by environmentalists and indigenous-rights groups who fear the dam will increase often violent struggles over access to land in the contentious region.

Andrade Gutierrez, Camargo Correa and Odebrecht, three of Brazil's biggest construction companies, are all part of CCBM, which is building the dam. Once built, the dam will be operated by Norte Energia, which is composed of government-controlled utility Centrais Eletricas Brasileiras, or Eletrobras (EBR, ELET6.BR); the pension funds of state-run oil company Petroleo Brasileiro (PBR, PETR3.BR, PETR4.BR) and government lender Caixa Economica; as well as utilities Neoenergia (GNAN3B.SM) and Cemig (CIG, CMIG4.BR) and mining company Vale (VALE, VALE3.BR, VALE5.FR, VALE5.BR). Eletrobras is the biggest shareholder, with a 49.98% stake.

The strike at Belo Monte follows work stoppages at other major hydroelectric dams in the Amazon basin. Workers at the Santo Antonio and Jirau dams, being built on the Madeira river close to the Bolivian border, returned to work at the start of this month after the most recent strike led to wage increases.

The government alleged that middlemen between construction companies and workers were making promises to workers that weren't kept by construction companies. As a result, the government pushed for more universal contract terms at future dams to avoid such problems at other work sites.

-By Paulo Winterstein, Dow Jones Newswires; 55-11-3544-7073; [e-mail]