By Ben Tavener, Senior Contributing Reporter

RIO DE JANEIRO, BRAZIL – Authorities say some 150,000 people took to the streets in downtown Rio de Janeiro yesterday protesting against new legislation which is likely to take oil revenues away from oil-producing states, including Rio state. The protests – which centered on Cinelândia in central Rio – went off peacefully, police said, with no reports of rioting.

Protest in downtown Rio over Oil Royalties Distribution, Rio de Janeiro, Brazil News
An estimated 150,000 people flooded central Rio protesting against plans to redistribute oil royalties away from Rio state, photo by Vanor Correia/Governo do RJ.

The proposal has already been approved by the Senate and will mean royalties paid by oil companies to oil-producing states, such as Rio, São Paulo and Espírito Santo states, and redistribute them nationwide so that non-producing state can benefit from Brazil’s nature resources in a more even way.

Rio State Governor Sérgio Cabral, who has been the face of the long-running battle, did not take to the podium, instead preferring to release a brief statement saying that he “preferred society to express itself.”

However, a number of famous faces did make their presence known, including acclaimed actress Fernanda Montenegro, and famous singers Xuxa and Tony Garrido.

“You cannot start a game and then change the rules in the middle,” actress and presenter Regina Casé said, summing up the point protesters were trying to highlight.

This was the perhaps the largest demonstration in Rio de Janeiro since March 2010 brought a similar number to the streets following the earlier announcement of the then so-called Ibsen Amendment.

Read more in Portuguese.

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  1. Dilma punishes the rich south east for prefering Serra in the last elections. Her position is understandable – she needs money to buy votes in the poor and underdeveloped north east. And if she has no money she takes it from the people who did not vote for her anyway. Wonder why the fact that she will do it was not mae an issue during the pre election campaign, Serra could have used this to mobilize his supporters, now it is too late.

  2. The starting point is that the 1988 Federal Constitution provides that ALL resources under the ground belong to the Federal Government (the “União”) and ALL resources in or under the sea belong to the União. State and municipal borders cease at the water’s edge. So it’s not Rio de Janeiro oil that’s being produced, it’s Brazilian oil.
    The 1988 Constitution also provides that the VAT (“ICMS”) tax on the production or sale of goods is payable to the State where those goods are produced or sold. Offshore oil is NOT located in any state, so the Constitution carved out an exception for it–ICMS tax is payable to the state where the oil is delivered for refining–São Paulo being the biggest beneficiary of this change. [surprise, surprise]
    To compensate the “producing” states, a Federal law granted them more than 80% of all royalties from offshore oil; other states get next to nothing. Back in 1988 those royalties were minimal; today they’re mammoth. Last year Congress voted to change that law (the Ibsen Amendment mentioned in the story), to grant “producing” states far less benefits over oil produced offshore. President Lula vetoed that provision, and negotiations began this year on a new law.
    Incidentally, the next dispute will be over how you draw the imaginary lines heading offshore to the oil fields, so as to determine which States are “producing” and which are not. Criteria abound, all different, which is why the Spratly Islands in the South China Sea (with lots of oil) are claimed by China, Vietnam, Malaysia, Indonesia, the Philippines and perhaps others, each with its own map.

  3. Many thanks for a very clear explanation of the leagl position, which even it it wasn’t enshrined in law states the obvious that the oil is Brazil’s and is not the property of the states that border the coast. Reagrds, William Barron


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