RIO GRANDE DO SUL FLOODS: SECURITY CHALLENGES AND ECONOMIC LOSSES

The Floods

In just over a week, more than 400 cities in Rio Grande do Sul suffered from constant rain, resulting in the greatest climate tragedy in the state’s history. The floods that took over Rio Grande do Sul after the storms that devastated the state completed one month on 29 May. According to Civil Defense, 169 deaths were confirmed, 44 are still missing and 629,200 had to leave their homes.

Heavy rain began on 27 April in Santa Cruz do Sul, in the Vales Region. Without stopping, it lasted for more than 10 consecutive days, overloading the basins of the Taquari, Caí, Pardo, Jacuí, Sinos, and Gravataí rivers, which overflowed, and the water invaded cities, leveling entire communities and destroying lives. As they are interconnected, the water from the basins reached Guaíba, in Porto Alegre, and Lagoa dos Patos, in Pelotas and Rio Grande, which also overflowed, flooding these locations, and driving families out of their homes. Lake Guaíba surpassed the historic mark set in 1941, reaching an unprecedented level of 4.77 meters. The Serra Region also suffered an impact from the rain, but due to landslides.

The combination of a hot air mass over the central area of the country, which blocked the cold front in the southern region, and the influence of the El Niño phenomenon, which warms the waters of the Pacific Ocean, caused continuous and intense rain. Global warming has increased these climate events, making them more frequent and severe.

Public Security Challenges

The humanitarian crisis caused by the floods in Rio Grande do Sul created a scenario that led to additional difficulties in dealing with crime; in addition to the looting of houses and other buildings that had to be evacuated; the theft of supplies donated to victims; and cases of violence at the shelters.

Most of the crimes during the floods were coordinated by the state’s main criminal faction, called “Os Manos”. In several areas, the police could not go, or they had to use jet skis or boats. The forces were also called to help complete other emergency tasks. Organized crime and common criminals noticed that police and other public security services were overburdened, and with mobility issues and seized the moment to profit.

According to public security experts, the risk is that violence will worsen in the medium to long term. In Rio Grande do Sul, there is also the aggravating factor that criminal factions also suffered losses and were displaced by the rain. This may lead them to seek replacement for financial losses.

Economic Losses

The floods also seriously affected companies in the region, which now fear a crisis in the productive sector and the consequent impoverishment of the state. The Federation of Industries of the State of Rio Grande do Sul (Fiergs) reports that 91% of factories are flooded, predicting a lost decade for the state.

All economic activities in the affected areas, comprising at least 83% of ICMS collection, were hit hard by the floods. Companies still submerged face dire situations, with displaced employees and halted production, prompting owners to explore solutions like outsourcing and renegotiating deadlines.

The L&PM publishing house in Porto Alegre suffered significant losses, estimating damages of 30,000 to 40,000 books due to flooding. Companies that are not underwater also face heavy losses, with logistical and employee problems affecting production. Road obstructions make transportation difficult, and many employees are unable to reach work.

Given Rio Grande do Sul’s substantial contribution to Brazil’s GDP – in 2021, RS had the third GDP among other states, with 857.6 billion, according to the IBGE –, the flood crisis has ripple effects nationwide. With 91% of the state’s industrial GDP submerged, logistical problems and the absence of employees worsen the situation, complicating transport, and production, and resulting in large losses for companies.

In the automotive market, Volkswagen gave a two-week collective vacation (between 20 May and 3 June) at three factories in the country: São Bernardo do Campo (SP), Taubaté (SP), and São Carlos (SP). This is due to supply chain disruptions caused by the floods in Rio Grande do Sul, further exacerbating the economic strain.

The floods resulted in a significant drop in grain harvests, particularly impacting rice, soybeans, and wheat production. Initial assessments project losses of 202,000 tons of rice and 457,000 tons of soybeans, with the wheat situation uncertain and planting threatened by soil conditions.

Responding to Crises

Risk assessment is a crucial process involving the identification, analysis, and evaluation of risks that may impact an organization. This is essential for making informed decisions and crafting strategies to minimize potential negative impacts. In the context of climate change, where extreme events like the recent floods in Rio Grande do Sul can have devastating effects, risk assessment is especially vital.

According to ASIS International, the world’s largest membership organization for security management professionals, risk assessment is a systematic process that identifies potential hazards, assesses the likelihood of their occurrence and impact, and develops strategies to mitigate them. This involves cataloging all possible risks—natural, technological, financial, operational, and security-related as stated in the 2009 Organizational Resilience: Security, Preparedness, and Continuity Management Systems – Requirements with Guidance for Use.

Risk analysis or assessment then evaluates the probability and severity of each risk using qualitative, quantitative methods, or a combination of both. Risks are then prioritized based on their severity and likelihood. Risk assessment is an essential tool for the effective management of any company, especially in a world where threats are increasingly prevalent. By proactively identifying, analyzing, and managing risks, companies can protect their assets, ensuring the continuity of their operations. It is normally accompanied by an impact analysis consisting of the identification of critical business assets, functions, processes, and resources as well as an evaluation of the potential damage or loss that may be caused to the organization resulting from a disruption.

The next step, called Contingency Risk Planning (CRP) or Organizational Resilience Management Program, is to develop mitigation strategies and creating plans and policies to minimize the likelihood of risks and to reduce the negative impacts of the adverse events identified. This can be done through the crafting of detailed scenarios outlining potential risks and their consequences. For each scenario, specific response plans are created, detailing actions to take before, during, and after the risk event. This process identifies necessary resources, including personnel, equipment, and funding, and assigns clear responsibilities for executing each part of the plan.

Then, continuous monitoring and reviewing of the plans is necessary to ensure the effectiveness of these strategies.

Climate change has increased the frequency and intensity of extreme weather events, such as storms, floods, and droughts. The recent floods in Rio Grande do Sul are a clear example of the risks that companies face due to these phenomena. The floods caused enormous economic losses, destroying infrastructure, disrupting operations, and affecting agricultural production.

Companies across a range of sectors have suffered from loss of stock, damage to facilities, disruption to supply chains, and problems concerning public security. At Interlira, we assisted clients with the logistics necessary to circulate in areas deeply affected by flood and landslide in Rio Grande do Sul.

Government Response

The Rio Grande do Sul naturally-caused disaster impacted 452 cities in Rio Grande do Sul and highlighted the lack of maintenance in the city’s dikes and pumping systems. Although the state government allocated R$117 million for natural disasters in 2024, only R$10.75 million was dedicated to prevention, with just R$640,000 spent by the month of May. Governor Eduardo Leite cited other fiscal priorities for the lack of investment, despite previous reports emphasizing the need for greater preventive measures.

In response to the tragedy, authorities are now working to rebuild affected areas. President Lula (PT) announced an aid package for Rio Grande do Sul with a potential economic impact of R$50.95 billion, including R$7.7 billion directly affecting state finances. Most of the funds will be used to lower financing costs for businesses and rural producers. The package also includes the early payment of social benefits and temporary tax suspension for affected companies.

Additionally, Rio Grande do Sul’s debt to the Union will be suspended for three years, with zero interest, providing R$11 billion in relief for reconstruction. Another measure is the payment of R$5,100 in Reconstruction Aid to 44,592 families impacted by the floods. Further measures, including over R$10 billion in credit lines for affected companies, are yet to be announced.

Conclusion

The recent catastrophe caused by floods in Rio Grande do Sul highlighted the vulnerability of companies and communities in the face of extreme weather events and the direct and indirect costs of the loss events that took place in the region.

The economic, social, and infrastructural losses underscore the need for public and private organizations to assess the likelihood and the impacts of natural crises and disasters and to be prepared with prevention, protection, and mitigation strategies. As the climate crisis intensifies extreme weather events worldwide, it is now essential to implement such strategies, especially regarding critical infrastructures.