Brazil: NGO report alleges companies complicit in deforestation & human rights abuses in the Amazon

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[To read this story in Portuguese, please, click here]

The Business and Human Rights Resource Centre invited 55 companies to respond to allegations of their involvement in the deforestation of the Amazon as well as human rights abuses. The report from Amazon Watch and Articulação dos Povos Indígenas do Brasil-APIB (National Articulation of the Indigenous Peoples of Brazil) , "Complicity in Destruction II: How northern consumers and financiers enable Bolsonaro's assault on the Brazilian Amazon", states that European and North American businesses that finance and source from Brazil are connected to the Brazilian government´s roll-back of socio-environmental standards that are fundamental to preserving the Amazon's ecological integrity and the well-being of indigenous people. The report analysed Brazilian companies that were fined for environmental crimes in the Amazon since 2017, and identified a range of northern commercial interests that do business with them. There are allegations that agribusiness companies operated in areas of indigenous land conflicts and extracted resources from protected areas.

The companies that responded to these allegations, and whose responses can be found below are the following: Acai GmbH Fine Fruits Club, ASR Group, ABN Amro, Azimut Group, Boa-Franc, Barclays, BNP Paribas, Brandes Investment Partners, Citigroup, Conceria Cristina, Crédit Agricole, Credit Suisse, Fidelity, Global Timber, HSBC, ING Group, JPMorgan Chase, Louis Dreyfus Company, Marfrig, Robinson Lumber Company, Storebrand, Tradelink, Rino Mastrotto Group, Van den Berg Hardhout and Vogel Import & Export. The responses from Argus Comercio e Exportação de Alimentos, Benevides Madeiras, Marfrig, and Minerva are available here in Portuguese. Archer Daniels Midland (ADM) and Bunge previously responded to these allegations here (also included below) and State Street and Vanguard declined to respond at that time. ADM, AgroSB, Argus Comercio e Exportação de Alimentos, Bunge, Cargill, Frigorífico Xingara, GWW Houtimport, JBS, and Nordisk Timber Eireli commented on the allegations in the Mongabay article below. Algar Agro, owner of ABC Inco and ABC Indústria e Comércio SA, Agro SB, Bunge, Cargill and Frigorifico Xingara commented on the allegations in the Epoca article in Portuguese here (and also below).

Bank of America, BlackRock, Brighton Collectibles, Capital Group, Conceria Cadore, ED&F Man, Faeda, Invesco, Santander, Thompson Mahogany Company and Vandecasteele Houtimport did not respond. Deutsche Bank, T.Rowe Price, Guillemette & Cie declined to respond. Agropecuária Rio da Areia, Groupe Rougier, Grupo BIHL: Agropecuária MALP & Frigorífico Redentor, Hoogendoorn Hout, Italpelli, JJ Samara Agronegócios Eireli, Keflico, Uniggel Proteção de Plantas, Usina Trapiche & Temape Group have not yet responded and we will add their responses if they reply in the near future. We were not able to reach Farm Credit Services or Northwest Hardwoods.

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Company response
22 July 2019

ABN Amro response

Author: ABN Amro

…ABN AMRO strives to create long-term value for its stakeholders, to respect human rights and safeguard the environment. The bank recognizes that in its role as a financial service provider it may be exposed to social, environmental and ethical risks through the activities of clients. To manage these sustainability risks, ABN AMRO operates a Sustainability Risk Policy Framework in line with the banks moderate risk profile.  More specifically, ABN AMRO has formulated sustainability requirements for clients in the agri-commodity sector. ABN AMRO acknowledges that the agri sector poses sustainability risks, such as: Deforestation: Agriculture may involve clear-cutting of forest. Deforestation is of concern as forests are a prerequisite for biodiversity. Forests also serve as carbon sinks and therefore play an important role in climate change mitigation. Peatland degradation: Peatlands may be drained for agricultural purposes. This causes degradation and the emission of methane into the atmosphere contributing to climate change. Also, drainage increases the risk of fire and flooding.  Land issues: Large-scale land acquisitions for the purpose of plantations for agriculture may lead to land disputes with local communities.  Working conditions: Working conditions in the agri sector may be hazardous, for example because of lack of protection and the use of chemicals and pesticides. Also child labour is may be an issue…

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Company response
22 July 2019

Acai GmbH response

Author: Acai GmbH

ACAI GmbH confirms to have purchased 8,860 kg (net weight) of acai puree for testing purposes from ARGUS. We consider initiatives to uncover illegal rainforest use and prevent any cooperation with the actors involved to be very important and are happy to support them through our business practices. However, the mentioned legal processes have nothing to do with the production of the acai puree, which we obtained uniquely from ARGUS/GOOLA at the time. The fruit pulp-producing company ARGUS/GOOLA has, according to our knowledge, at no time made itself liable to prosecution for illegal rainforest use. The products purchased from us therefore do not originate from illegal rainforest use... Even though the activities of ARGUS/GOOLA are clean, we will not support any companies with shareholders who are exploiting the rainforest as part of other companies. However, this question does not currently arise for us, as we currently no longer have any business relations with ARGUS/GOOLA.

The press release not only implies that we have imported products resulting from illegal deforestation but also that we pass these on to the two named retail partners. This is not true in two respects: First of all, the acai puree from ARGUS/GOOLA did not originate from illegal deforestation (see explanation above). Moreover, the acai products supplied to these retail chains do not come from ARGUS but from another manufacturer...

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Article
22 July 2019

ASR Group response

Author: ASR Group

At ASR Group, Corporate Social Responsibility (CSR) and Operational Sustainability are key business platforms that contribute to our global growth and help us manage our actions in a lawful and ethical manner... We are unwavering in the demand that our suppliers abide by our Ethical Sourcing Policy (ESP) and Supplier Code of Conduct... We work to ensure that the sugar we buy is produced and delivered under conditions that uphold fundamental human rights, minimize negative impacts on the environment and improve the well-being of farmers, including smallholders and women... In order to ensure compliance, we have instituted 3rd-party, independent social auditing of our suppliers... Audits help us monitor progress in these areas, identify where non-conformity exists, and work with our stakeholders to rectify them... We have performed verification audits of our suppliers in Brazil, and the independent auditors have not found evidence of the non-compliance being alleged.

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Company response
22 July 2019

Azimut Group response

Author: Azimut Group

...We have two business lines in Brasil. The first one is to manage open ended funds. Our holding company controls Az Quest Investimentos, a pure asset manager that manages a complete portfolio of funds in several markets like fixed income, hedge funds, macro funds, and equity funds. The second business line is a wealth management and investment distribution segment that provides to Brazilian investors a complete platform of sophisticated products and services according to individual needs. In this segment, our Holding Company controls Azimut Brasil Wealth Management and Azimut Brasil DTVM, a financial institution subordinated to Brazilian Central Bank rules and regulatory environment. In AZ QUEST, our asset management unit in Brazil, we have an investment process, developed over the company's 18-year history, which has always combined an in-depth fundamentalist micro-analysis of companies with the macroeconomic scenario. The process starts with a fundamentalist analysis which includes field research in companies that are candidates to receive investments, the evaluation of their business model, generation of cash, corporate management, sector perspective, among other variables. In this analysis, we look for stocks whose intrinsic value diverges from market value as well as performance drivers and asymmetries of results through the sensitivity analysis of the main variables used in these models... 

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Company response
22 July 2019

Barclays response

Author: Barclays

Thank you for bringing the report to our attention, we have read it and recognise the serious nature of the themes in the report and the issues being raised. Barclays recognises that the bank’s major impacts tend to be indirect, via business relationships, arising from the provision of financial services to business customers operating in sensitive sectors. As such, appropriate risk management of these impacts is both a business imperative and the right thing to do. Our newly published Forestry and Palm Oil Statement outlines our approach to the forestry and agribusiness industry, and also provides specific restrictions on what we will finance, as well as our commitment to conducting enhanced due diligence to many projects. As part of our approach, we consider the risks and impacts of deforestation. We continue to keep our approach under review, and expect it to continue to evolve over time. We are also committed to operating in accordance with internationally recognised human rights instruments and principles, including the United Nations Guiding Principles on Business and Human Rights. Our own statement, Barclays Group Statement on Human Rights outlines our approach to managing human rights related issues, including those associated with our clients, products and services.

Company response
22 July 2019

BNP Paribas response

Author: BNP Paribas

...We thank you for giving us the opportunity to comment the Amazon Watch’s report ahead of your “Weekly Update” newsletter. We welcome this initiative favorably. BNP Paribas has been strengthening its sector policies related to deforestation for several years (palm oil, released in 2011 and last updated in 2017; wood pulp, released in 2011 and currently under review). Besides, and as a part of its engagement in the Banking Environment Initiative, the Group committed itself towards a “Zero Net Deforestation” goal in its financing and investment activities. Moreover, through its Agriculture sector policy, BNP Paribas covers agricultural raw materials and commodities, and is prompting its clients to protect natural ecosystems and preserve biodiversity to the best of their abilities. In particular, this policy provides traders with a comprehensive framework and asks them to have a policy on the traceability of the goods they are handling. Furthermore, we are currently working with our Brazilian teams towards an enhancement of the criteria addressing soybean-induced deforestation. Finally, as a signatory of the Cerrado Manifesto, BNP Paribas Asset Management supports the protection of the Cerrado savanna and its unique ecosystem...

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Company response
22 July 2019

Brandes Investment Partners response

Author: Brandes Investment Partners

In accordance with Brandes' compliance policy, the firm is unable to publicly comment on individual securities.

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Company response
22 July 2019

Citigroup response

Author: Citigroup

Citi has had a public commitment to respect human rights across its value chain since it first issued a Statement on Human Rights in 2007, which we updated most recently in 2018. As noted in our Environmental and Social Policy Framework, deforestation risk is addressed through our forestry sector and palm oil sector standards, as well as through our Area of High Caution triggering escalated due diligence for projects built in close proximity to areas of critical habitat, high conservation value and high biodiversity. We only proceed with project transactions if our due diligence indicates that all potential risks will be adequately addressed.

In addition, Citi has initiated reviews of additional sectors to assess the alignment of our clients’ policies and practices for managing sector-specific risks with industry best practice and international norms. At the start of 2019, we initiated a review of our clients in the soy and beef sectors to evaluate their efforts at monitoring deforestation in their operations and supply chain.

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Company non-response
22 July 2019

Conceria Cadore did not respond

Company response
22 July 2019

Crédit Agricole response

Author: Crédit Agricole

…Please find below our analysis and our answer to these allegations. The funding from Crédit Agricole Group concerns three traders and no producer. Crédit Agricole has developed a system to assess and manage the risks arising from the environmental and social impacts relating to both transactions and customers (for the Corporate Investment Banking activity), by factoring in the main sustainable development issues, i.e. combating climate change, biodiversity protection and respect for human rights. According to Amazon Watch, Louis Dreyfus is the only corporate for which our position is significant. Our opinion is positive on this corporate which communicates on a very pro-active CSR policy. Louis Dreyfus is actively involved in responsible sourcing initiatives ("responsible soy" policy, including strong commitments to non-deforestation and respect for human rights of workers/ founding member of the Soft Commodities Forum whose aim is to formalize a common reporting framework and monitoring on soy supply chains) and has committed not to buy soy from land recently cleared. We are therefore comfortable with the financing we provide to the companies mentioned in the Amazon Watch report…

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