The birds and the butterflies are long gone. Dead trees line the mountain ridges. And now the pollution here is cutting into the human population.

Labeled "the Valley of Death" by local environmental groups, Cubatao contains Latin America's largest petrochemical complex. It also suffers Brazil's highest infant mortality rate -- one third of Cubatao's children fail to make it through their first year. A recently released study indicates that 8 percent of live births suffer from such abnormalities as spinal problems, missing bones and brain deficiencies.

"The effects are similar to that of thalidomide," says Prof. Reinaldo Azoubel of the Riberao Preto school of medicine. "These people are like guinea pigs in an experimental laborabory," he added.

Azoubel recently concluded a year long survey of births in this city of 80,000 and this month he is to start submitting real guinea pigs to local pollution levels, seeking to determine a link between pollution and birth defects.

Most of the birth abnormalities are concentrated in Cubatao's Vila Parisi, widely considered the most polluted place in Brazil. About one hour outside Sao Paula, Vila Parisi is a gray slum of 15,000 residents, boxed in on four sides by a steel plant, a fertilizer plant, a cement plant and a mountain wall.

"Theoretically, by the level of pollution, there shouldn't be life there," Dr. Albert Pessoa de Souza, city health director, said in a recent interview. "It shows how extraordinarily adaptable the human organism is."

In 1977, a device was installed in Vila Parisi to monitor the clouds of smoke and gases that belch daily from the region's 30 heavy factories. But after 18 months the machine overloaded and broke down.

It recorded that the 50-square-mile area around this industrial complex received a daily barrage of 473 tons of carbon dioxide, 182 tons of sulfur, 148 tons of particulate matter, 41 tons of nitrogen oxide and 31 tons of hydro-carbons.

At Vila Parisi, residents receive a daily bombardment of 1,200 particulates per cubic meter, more than twice levels that the World Health Organization says provoke "excess mortality."

Plagued by water pollution, the slum is 18 inches below sea level and high tides regularly overflow the open sewers into the muddy streets. One river boils with chemical effluents, another is blanketed by detergents, and a third occasionally emits toxic clouds. Residents say that any fish pulled from these rivers are usually blind and skeletally deformed.

Once covered with lush tropical banana plantations, today the landscape is bleak. High tension pylons march over brown mountains, yellow flames burn at chimney mouths, and tube-shaped trailer trucks painted corrosivo rumble heavy through the valley.

At dusk, men in $2 shirts walk home against a backdrop of cement vats and fertilizer tanks. After dark, residents take in their laundry and close their shutters. Companies here routinely release their largest discharges under the cover of nightfall.

The city seal includes two billowing smokestacks. When risk of environmental pollution first became widely known a decade ago, Brazil and many other developing nations dismissed pollution controls as a luxury they could not afford. One Brazilian state, Goias, even went so far as to advertise for investment under the slogan: "We want your pollution."

Today, attitudes have moderated. Earlier this year, the Sao Paulo anti-pollution agency opened a $100 million credit line to help small and medium size factories buy equipment for cleanup. In Cubatao, where airborne corrosion has damaged metal structures, Sao Paulo Steel prides itself on having spent $10 million to eliminate rust-red clouds of ferrous oxide that used to billow from the plant's chimneys.

"If the air corrodes iron, imagine what it does to people's lungs," Randolfo Lobato, president of the Brazilian Association for the Prevention of Air Pollution, said.

Despite cleanup efforts, Lobato noted that from January to June of last year, Vila Parisi's first-aid clinic registered 4,400 visits for respiratory illnesses, up 50 percent over the year before.

Last February, when preliminary results of Prof. Azoubel's birth-defect research leaked out, the minister of interior hastened to announce that the slum residents would be moved to a healthier site. But last month a Cubatao city health official said the evacuation is still "under discussion" and no timetable has been set.

Many residents interviewed here say they do not want to move. Most are from the impoverished Northeast and some say they feel protected by the daily quart of milk that companies give them.

"If we have to move, we'll be far from work and have to pay for buses," said Jaimie Bradassi de Abreu. City bus fares cost about 20 cents, expensive for workers who earn the minimum salary of $100 per month.

One city councilman has circulated a petition against the move, reportedly obtaining 4,850 signatures from 5,000 surveyed.

Jose Benvindo da Silva, a longtime resident, complained: "if we have to leave here, I will be one of the last. It's a shame, my new house needs only doors and windows."