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11 Nov 2022


Brazil: JBS confirms the purchase of thousands of cattle from one of the largest deforesters in the Amazon; investigation points to bank financing; incl. companies' comments

Lilo Clareto/Repórter Brasil

"JBS admits to buying almost 9,000 cattle from ‘one of Brazil’s biggest deforesters’", 11 November 2022

...The world’s biggest meat company, JBS, has admitted to buying almost 9,000 cattle from a criminal described by prosecutors as “one of the biggest deforesters in Brazil”, following a joint investigation by Repórter Brasil, Greenpeace Brazil and Unearthed.

The cattle, which were bought between 2018 and 2022, came from farms in the Amazon owned by criminal rancher Chaules Pozzebon or his family that had been illegally stripped of at least 2,844 hectares of forest cover, the investigation found. Trade records suggest the beef may potentially have been shipped overseas, including to the US.

...JBS said it was the victim of a cattle laundering fraud and understood that the cows had been reared on a “clean” farm also owned by Pozzebon...Pozzebon is currently serving a 99-year sentence for crimes including leading a criminal gang. He has been separately convicted of slave labour. He is appealing both sentences, his lawyer told Unearthed, adding that all Pozzebon’s activities are “lawful and regular, without any fraud or disagreement”...

The joint investigation also highlights the links between major international banks and financial institutions and deforestation...[,]...including Santander, Barclays and BlackRock...

...[E]ven while Pozzebon was under investigation and trial, with the case covered in Brazil’s news outlets, JBS continued buying cattle from farms owned by the gang leader and his immediate family. 

When the reporting team presented JBS with the evidence, it confirmed that the purchase records are accurate and admitted to buying cattle from the group since 2015. But the meatpacker says it is a victim of collusion between slaughterhouse employees and Agropecuária Rio Preto Eireli, to register cattle purchases through Fazenda Akira, a farm owned by Chaules Pozzebon that is “clean”, without deforestation or slave labour violations. 

“From the information presented by Repórter Brasil, it became clear that the group, in bad faith, had been taking advantage of the leniency of JBS team members to circumvent the system, formalising sales through the Akira farm, but sending cattle produced on farms with social and environmental irregularities,” JBS said in a statement to Unearthed.  

“Considering this fraud, JBS blocked Agropecuária Rio Preto, its partners and all persons associated with the group, terminated the team members involved, and will seek compensation in court for the damages suffered, in addition to communicating to other actors in the sector about the activities of this group”... 

BlackRock declined to comment on the record for this article...

Santander told Unearthed that it could not comment on details relating to individual clients but was in “frequent contact with our beef processing clients on this matter.” 

“We expect all our beef processing clients to have a fully traceable supply chain that is deforestation free by 2025. If this cannot be established, we will stop providing credit,”  it added. 

In a statement, Barclays said “We apply due diligence to clients with significant beef processing or cattle sourcing operations in South America, including reviewing progress in areas such as traceability of cattle supply chains, and commitments to address deforestation.  We consider financing decisions on an entity by entity basis, taking into account our due diligence in relation to that entity and the proposed use of proceeds.”

JBS told Unearthed that it was “opportunistic and inappropriate” to link the “alleged fraudulent and criminal actions of Agropecuária Rio Preto Eireli” to international investors. 

Minerva is also heavily financed by foreign banks...The UK’s HSBC provided a further $64m.

In a statement, HSBC said: ​​“We proactively engage with and help our customers to ensure they operate in accordance with good international practice but end relationships with customers who do not comply with our policies. We are committed to tackling deforestation and will further evolve our policies and practices, in line with emerging best practice guidance.”

...Minerva’s biggest single investor is ABP...

ABP told Unearthed that it monitored JBS and Minerva closely and used its influence to hold them to account. 

“Periodically, we evaluate whether JBS and Minerva still meet our increasing sustainability requirements, and whether they have taken sufficient steps forward. As soon as these organisations no longer, or too slowly, meet our sustainability requirements, we can decide at any time to no longer invest in the company.” 

PFZW said it would look into the allegations made against Minerva and depending on the outcome, this could eventually lead to divestment.