I've also had to do something similar, adapting it to you example it would look like:

definition folder {
  relation parent: site | folder
  relation child: folder | document

  // more

  permission view_self = edit + reader
  permission view_up = view_self + parent->view_up
  permission view_down = view_self + child->view_down
  permission view = view_up + view_down
}