The Brazilian Government has approved a controversial hydroelectric dam, which activists claim will devastate parts of the Amazon rainforest, displace over 20,000 people and threaten the survival of indigenous communities.

Opposed by international celebrities Sting, Sigourney Weaver and James Cameron, as well as Indigenous and environmental groups around the world, the Belo Monte Dam is set to be constructed on one of the Amazon’s major tributaries, the Xingu River.

In a video produced by US-based Amazon Watch, which opposes the dam, narrator Sigourney Weaver says that the Xingu is one of the most important rivers in the vast Amazon basin.

“It sustains the livelihoods of over 25,000 Indigenous people from 18 ethnic groups, riverbank populations and innumerable species of plants and animals,” she said.

Belo Monte, which will be the third-largest hydroelectric dam in the world, will be constructed in a turn on the Xingu called the Big Bend, which is known for its rapids and biodiversity.

It will divert most of the flow of the Xingu to generate electricity for aluminium and iron ore smelters.

Amazon Watch Program Director Leila Salazar-López said the effects of the controversial dam would be disastrous, displacing Indigenous communities and damaging the Amazon’s ecosystem.

“While Indigenous people will not be ‘flooded’, they will lose access to water, river transportation, fish, hunting grounds, and therefore their culture and their way of life,” she said.

“If construction continues, 80 per cent of the flow of the Xingu River will be diverted into artificial channels and canals, devastating the riverine ecosystem and the cultural survival of Indigenous and traditional communities including the Xikrín, Juruna, Arara, Xipaia, Kuruaya, Kayapó and other ethnic groups in this region.”

“Officially, 19,000 people would be forcibly displaced for Belo Monte…but the independent review of the project found the real number of directly affected people could be twice the official estimate.”

In the Amazon Watch video, local Indigenous woman, Sheyla Juruna of the Juruna people, said the Xingu River was vital to her people’s traditional way of life, which relies on fishing and farming.

“The river is our home and the basis of our survival…The river and all of its nature,” she said.

“Therefore, we feel threatened because this large project is not viable for our region.”

“It will be a disgrace, causing serious damage and bringing suffering to our communities.”

Ms Salazar-López said that for the 1000 indigenous people living in the Big Bend, the negative impacts were already becoming a reality.

She said the dam consortium, Norte Energia, began clearing forest on Pimental Island in early January and is installing coffer dams between the riverbank and the Island on the Big Bend.

Coffer dams are earthen walls built to dry out sections of river to make way for dam construction.

“In a visit to Xikrín communities by Amazon Watch staff last week, we were informed that the coffer dams have already caused the water level to drop and the water they depend on to become stagnant," she said.

The hydro-electric dam construction is part of the Brazilian Government’s Plan to accelerate growth, designed to cope with Brazil’s emerging economy and reliance on cheap energy.

Ms Salazar-López said some people claim that dams are necessary to prepare Brazil for upcoming world events such as Rio+20/Earth Summit in June 2012, the World Cup in 2014 and the Olympics in 2016.

But she said the belief that large dams such as Belo Monte produce clean energy is wrong.

“Dams like Belo Monte release methane, which can be up to 40 times more polluting than carbon.”

“It is true that energy is needed, but clean energy is needed. There are alternatives, such as solar and wind. There is a need for energy efficiency as well.”

“The Brazilian government needs to invest in alternatives to dirty dams in the Amazon instead of destroying it.” 

However, Norte Energia Director of Institutional Relations Joao Pimentel told Al Jazeera in late January that “Brazil needs Belo Monte”.

“The design of Belo Monte was changed in the last year precisely to reduce the social impacts,” he said.

“The population that has been or will be removed during the process of the building of Belo Monte will only be in those areas that are necessary for the reservoir.”

“And that is a small population... Yes, there are social impacts of a big project like Belo Monte, but we are mitigating those.”

The dam was given the green-light by the government in June 2011, but has been wrought with controversy since it was first proposed over 20 years ago.

“This plan was stopped in the late 80's after the World Bank cancelled financing, but the project came back a couple years ago and now has 80 to 90 per cent financing by the Brazilian National Development Bank,” Ms Salazar-López said.

“In 2008, a historic gathering took place in Altamira called the Xingu Encontro (Xingu Encounter) uniting the Indigenous tribes with riverine communities, urban dwellers and NGO allies in a local, national and international campaign to stop the dam.”

In February 2010, the Brazilian environmental agency (IBAMA) issued an environmental licence for the Belo Monte dam, after stalling for almost three months amid concerns about the huge impact zone of the project.

Two senior IBAMA officials resigned three months before, after claiming they had been subjected to political pressure to approve the licence.

Days before the licence was granted, civil society group Movimento Xingu Vivo Para Sempre, distributed a document signed by six environmental analysts from IBAMA voicing concern that Belo Monte's impacts had not been adequately studied.

Last year saw nationwide protests in Brazil after a ruling allowed dam construction to begin on the Xingu, overturning an earlier ruling which stopped the development due to concerns that the project would devastate local fish stocks.

Ms Salazar-López said the Government issued the final installation notice in violation of 40 social and environmental conditions, ignoring 14 lawsuits filed by public and federal prosecutors and ignoring requests for ‘precautionary measures’ by the Inter-American Commission on Human Rights.

“[Indigenous people] have been resisting and mobilizing for the last 20 years,” she said.

“At this point, it's local resistance on the Xingu that is going to delay or stop the project.”