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8 Nov 2022

Society for Threatened Peoples

Brazil: STP denounces alleged financing of UBS and Banco do Brasil investment bank to agricultural companies linked to illegal deforestation and squatting of indigenous lands

"Deforestation in Brazil: UBS finances controversial agribusinesses", October 2022

...UBS...[,]...major Swiss bank has provided the two agricultural corporations BrasilAgro and Marfrig with money from global investors. The two corporations are involved in severe cases regarding illegal deforestation, environmental destruction and the violation of indigenous rights. This is shown by research carried out for the STP by the Center for Climate Crime Analysis (CCCA).

...Illegal clearing often occurs in order to obtain land for crop and livestock farming...The consequences are borne by indigenous as well as traditional communities...Those who stand up against the industry are often massively threatened or even killed...

Since 2020, it has been clear that the major Swiss bank UBS also wants to make money from the Brazilian agricultural sector: Together with state-owned Banco do Brasil, it founded the investment bank UBS BB, which provides the Brazilian agricultural sector with money from global investors...UBS BB organized the issue of so-called “Agribusiness Receivables Certificates” (CRA) using this financial instrument to help the Brazilian agricultural sector gain international investors. BrasilAgro and Marfrig thus received capital to finance their at times controversial business.

According to Sylvia Coutinho, president of UBS in Brazil, the bank wants to contribute to the transformation of Brazilian agriculture into a greener industry. She said, the sector understood that without the environmental issue and a “green label,” growth in the industry was limited. The priority, therefore, was to increase productivity, not to open up new areas.  Asset management for corporate families in the agricultural sector is UBS BB’s second pillar...

By providing financial services for firms like Marfrig and BrasilAgro, UBS BB is supporting a sector that is contributing to the exploitation of the environment and the violation of indigenous rights...

“Directly or indirectly, the Europeans are contributing to the devastation of the Amazon region, be it via financing from banks, or in trade. In any case, they are complicit in what is happening in Brazil’s indigenous territories. When Europe provides funding, it contributes to the death of indigenous peoples and the death of our lands.”

...The STP asked the bank what measures it was taking to reduce the risk of its CRA activities having a negative impact on the environment and human rights. UBS replied: “Due to bank client confidentiality, we cannot provide any information about (potential) clients or client relationships” (translated by STP).

...Marfrig itself acknowledges the fact that meat suppliers are invading indigenous territories and nature reserves, and illegally clearing rainforest...In response to STP’s inquiry, Marfrig commented: “Even though it does not operate in the state of Pará, Marfrig is aware, however, that obtaining reliable information from indirect suppliers is still a major challenge.“ (E-Mail by Marfrig to STP, September 12, 2022)

At the time, when UBS BB entered into the business relationship with Marfrig, there were already numerous indications that Marfrig had failed to prevent links to illegal logging in its supply chains...