Currently embroiled in a massive investigation of graft and down-line corruption, arrests in Brazil have sparked alarm and put blockchain on the agenda as a means of combating future illegal activity.
Property Rights and the Imperative for Farming
Reporting from Rio de Janeiro, Reuters has detailed how local blockchain supporters are testing the watertight methodology in hopes of stemming future shenanigans. One little-discussed effect of an improved mechanism for property registration would be the millions of trees in the Amazon rainforest that would be spared illicit development of which thousands of acres have already fallen prey.
While Brazil is often applauded for its egalitarian productivity, especially in agriculture, the soy and beef fraternities have also clearly been trading on the country’s strange property laws and political corruption.
Serpo, the Brazilian parastatal technology, launched a platform in November 2017 and is currently in the process of rolling out the blockchain technology across the large country, the fifth largest in the world. Gloria Guimaraes, head of Serpo, stated the most obvious benefit:
“It is a good tool to reduce corruption and fraud. I see it as one more way for us to help citizens, businesses, and the government to improve their controls, reduce their fraud and improve their records.”
Billed as the “Car Wash” investigation, the last four years have seen Brazil rocked by collusion, kickbacks and rampant corruption between private contractors, state officials, and even parastatals’ executives.
This has unfortunately allowed the less scrupulous to mine this weakness and exploit the land for selfish interests. All players so far prosecuted have made a mockery of protocols surrounding public projects, having weaseled their way into lucrative contracts or land concessions for personal gain.
Involving former presidents, assorted politicians, and business executives, many have already earned jail time. Petrobras, the parastatal petrochemical giant, has also had to pay out nearly $3 billion to settle a class action lawsuit, filed by US complainants.
A New Way of Doing Business
Many countries’ governments have blockchain platforms at least in trial, if not already established, to handle large public ledgers. Quite apart from the private capital interest that seeks to develop these platforms for business gain, the legitimately valuable aspects of an available yet stable digital ledger could very well be the answer to addressing the corruption of processes going forward.
No central registry deals with land rights in Brazil. Instead, cartorios, or private agents, register land and, with some 3,400 licensed in Brazil, it’s not hard to see where it all goes wrong. Guimaraes is insistent that blockchain presents the solution, saying:
“It is a reliable network with the safest protocols possible and with the lowest risk of fraud and hacking.”
Not everyone agrees, however. Pablo Cerdeira, a technology fundi at FGV, Brazil’s largest think tank, feels that “This technology has been sold as the solution to all problems and it is not.”
Guimaraes also has bigger ambitions, hoping to apply Serpo’s platform successfully to many local businesses and across the globe. She said: “It is for any businesses that require the obtaining of reliable, valid, credible information.”
The land conflicts and outrage that stem from such corruption also accounted for a quarter of land rights activists’ deaths in 2016, based on research by London-based campaigners Global Witness.
Blockchain to the Rescue
A cartorio in Pelotas, a southern city of Brazil, is already trialing the platform. Marina Reznik of Ubiquity summed it up by expressing that the present aim of the organization is to produce trusted records.
On the blockchain, any attempts at corrupt deletion, falsification or duplication show a visible trail that can be immediately addressed. The trail in Pelotas is also the first to be wholly computerized, eliminating easily lost paperwork and the chance for obfuscation. “It just promotes clarity,” said Reznik.
Describing herself as a “blockchain technology evangelist,” Reznik faces much opposition. In spite of the Delaware-based technology startup looking to other cities in Brazil, Chile and its home base in the USA for expansion, the Pelotas project needs to work and work well to gain acceptance.
Ruy Veridiano, a cartorio official from Osasco, said: “What personally annoys me is the hype that blockchain will substitute a lawyer in a cartorio. We may use blockchain, but we still have to have a lawyer to ensure the document is legal.”
Corruption has been blamed for fueling conflicts over land in Para, a northern state, where indigenous people have resisted land exploitation by cattle ranchers. This state of affairs has dire consequences for the Amazon rainforest too. US research shows that quadruple the amount of existing land in Para has been registered privately, making legislative measures untenable.