Beef now includes the Amazon Rainforest as a side dish.

SELVA-Vida Sin Fronteras

AMAZON PINK DOLPHIN

02/07/2019

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Rampant deforestation of Amazon driven by global greed for meat.

Investigation exposes how Brazil’s huge beef sector continues to threaten health of world’s largest rainforest

Cowherds move cattle from farms in the Terra do Meio
Cowherders move cattle from farms in the Terra do Meio, where some ranchers have been found to flout embargos against deforestation. Photograph: João Laet/The Guardian

The cows grazed under the midday Amazon sun, near a wooden bridge spanning a river. It was an idyllic scene of pastoral quiet, occasionally broken by a motorbike growling on the dirt road that cuts through part of the Lagoa do Triunfo cattle farm to a nearby community.

But this pasture is land that the farm has been forbidden to use for cattle since 2010, when it was embargoed by Brazil’s government environment agency Ibama for illegal deforestation. Nearby were more signs of fresh pasture: short grass, feeding troughs, and salt for cattle.

The vast 145,000-hectare (358,302-acre) farm is one of several owned by the company AgroSB Agropecuária SA – known in the region as Santa Bárbara. Located in an environmentally protected area, Lagoa do Triunfo is more than 600km (372 miles) from the capital of the Amazon state of Pará on the western fringes of Brazil’s “agricultural frontier” – where farming eats into the rainforest. To get there takes hours of driving along dirt roads and a ferry ride from nearby São Félix do Xingu, a cattle town accessible only by plane until a few decades ago.

AgroSB supplies cattle to JBS, the world’s biggest meat packing company and single biggest supplier of beef, chicken and leather globally, with 350,000 customers in more than 150 countries.

A joint investigation by the Guardian, Repórter Brasil and the Bureau of Investigative Journalism found that during 2018, the Lagoa do Triunfo farm delivered hundreds of heads of cattle to other farms also owned by AgroSB for fattening. Cattle was sent from those farms to slaughter in JBS plants.

Cattle on the Lagoa do Triunfo farm
In 2018 the Lagoa do Triunfo farm delivered hundreds of heads of cattle to farms owned by AgroSB for fattening. Photograph: João Laet/The Guardian

Embargos are imposed for environmental violations, such as farmers or landowners cutting down trees and deforesting illegally, and serve both as a punishment and protective measure to allow land to recover. Between 2010-2013 at least 12 areas of land on Lagoa do Triunfo were embargoed, and Ibama fined AgroSB more than $18m (£14m) – at current rates – for deforestation on the Lagoa do Triunfo farm.

Our investigative team visited land clearly demarcated as embargoed on government websites, and found cows grazing there. A farm worker said cattle were allowed to roam in areas employees knew were embargoed. “You can’t cut down the vegetation,” the employee said. “The vegetation grows and we work the cattle inside.” The Guardian is withholding their name in case of retaliation.

Work by Stockholm-based NGO Trase, seen exclusively by our team, this week reveals the extent to which the international demand for beef is driving deforestation, with thousands of hectares of Amazon being felled every year to provide meat for world markets.

AgroSB is a powerful farming empire owned by the Opportunity group, co-founded by Daniel Dantas, a controversial businessman Bloomberg described as the “bad boy” of Brazilian finance. It owns half a million hectares across Pará and has long attracted controversy. Over the past decade, AgroSB has been accused of illegal deforestation, keeping workers in slave-like conditions, and spraying a community occupying one of its farms with pesticides – accusations it has strongly denied.

Scandal has also surrounded JBS, which is supplied by AgroSB. In 2017, following an Ibama investigation, the meat company was fined $7.7m for buying cattle from farms with embargoed areas, including another farm owned by AgroSB. The company pledged to stop buying cattle from the farm.

That same year, Joesley Batista, CEO of its controlling company, almost brought down the government of President Michel Temer after secretly recording him appearing to endorse bribery – Temer was indicted but never tried and has always denied the charges, claiming the recording was edited. Joesley and his brother Wesley, then JBS CEO, admitted an extensive web of bribery in a plea bargain deal.

Rations for cattle in an embargoed area on the Lagoa do Triunfo farm.
Rations for cattle in an embargoed area on the Lagoa do Triunfo farm. Photograph: João Laet/The Guardian

In an email, a spokesman for AgroSB said any deforestation had occurred before the company acquired Lagoa do Triunfo in 2008. “AgroSB does not carry out deforestation in order to increase its area, but rather it recovers degraded areas. This brings social and environmental progress for all, because in the same area it is possible to produce more, without deforestation, in respect to the environment,” the spokesman said.

“AgroSB’s business model is anchored in the acquisition of degraded open and pastured areas, which are fertilised, reclaimed and transformed into high-intensity pastures or grain plantations – which increases food production per hectare and also captures carbon dioxide (CO2) of the atmosphere in the plantations and in more than 250,000 hectares of forests (legal reserve) maintained on its properties.” He pointed out that: “There is no irregularity in the marketing/transfer of livestock.”

He said just 7% of the farm was embargoed, and added that as AgroSB have been successful in appealing against some of the other embargos on their land, the company believes it will also overturn the embargos on Lagoa do Triunfo.

São Félix do Xingu with the Xingu River in the background.
The town of São Félix do Xingu with the Xingu river in the background. Photograph: João Laet/The Guardian

The ‘wild west’ fringe of the Amazon rainforest

With a population of 125,000 and more than two million cattle, the town of São Félix do Xingu covers an area bigger than Scotland. Cattle farming fed its growth from remote Amazon outpost to busy town, and there are clear signs of wealth here.

Just outside town, big money was being splashed at a horse racing meet in a field full of 4x4s. As two jockeys spurred their horses down the rudimentary race track, a commentator bellowed and men waved wads of cash as their bets came in.

There was more than $35,000 in prizes over two days of racing, said Valdiron Bueno, owner of two agricultural supplies shops and the race organiser. Bueno built his business more than 20 years after arriving here with just the clothes on his back. “It wasn’t easy. I cried a lot,” he said.

A horse racing event outside the town of São Félix do Xingu.
A horse racing event outside the town of São Félix do Xingu. Photograph: João Laet/The Guardian

São Félix do Xingu was mostly forest when Arlindo Rosa, now president of the town’s union of rural producers, arrived in 1993. “There was practically none of this farming … there was no highway, there was nothing,” he said. “People came from outside with the spirit to raise cattle,” said his vice-president, Francisco Torres, who arrived in 1987.

Both men were critical of what they saw as overzealous environmental controls. Torres criticised Ibama as a “fines industry”, borrowing a phrase from President Jair Bolsonaro, who has dismantled environment protection and enjoys support from farmers like these. “How are you going to work if you can’t deforest an area, principally a small one?” said Rosa.

But the embargos do not appear to have affected AgroSB’s business, the Guardian and Réporter Brasil investigation found.

A JBS spokesman said: “The facts pointed out do not correspond to the standards and processes adopted by the Company”, indicating an independent 2018 audit that showed that “more than 99.9% of JBS’s cattle purchases meet the company’s socio-environmental criteria and the ‘Public Livestock Commitment’” – a deal signed between big cattle companies and Greenpeace in 2009. It was followed in 2011 by an agreement JBS and other meat companies signed with federal prosecutors not to buy cattle directly from embargoed or illegally deforested areas.

A spokesman told the Guardian via email: “JBS has a responsible purchase policy for raw materials and does not purchase animals from farms involved in deforestation of native forests, invasion of indigenous reserves or environmental conservation areas, or that are embargoed by the Brazilian Institute of Environment and Renewable Natural Resources (Ibama).”

The independent audit found the company had made impressive progress in tightening up procedures and shutting out farms with areas embargoed by Ibama. However, although the system excludes farms that have embargoed areas, the audit noted that other farms owned by the same company may still sell to JBS. It concluded that: “Indirect suppliers of cattle to JBS are not yet checked systematically, since JBS has not yet managed to adopt auditable procedures for its indirect suppliers.”

Cattle grazing in Terra do Meio, in the municipality of Sao Felix do Xingu, in the state of Para.
Cattle grazing in Terra do Meio, in the municipality of São Félix do Xingu. Photograph: João Laet/The Guardian

Official state documents seen by the Guardian and Repórter Brasil show that from January to October 2018, Santa Bárbara delivered at least 296 cattle from the Lagoa do Triunfo farm to its Espiríto Santo farm in Xinguara, in the same state.

Between July and December 2018, Santa Bárbara sent least 1,977 cattle from the Espiríto Santo farm to two JBS slaughterhouses in Pará. In January at least 936 cattle were sent from the Espírito Santo farm to JBS’s slaughterhouse in Redenção in Pará.

The Lagoa do Triunfo farm.
The Lagoa do Triunfo farm. Photograph: João Laet/The Guardian

Throughout 2018, Santa Bárbara also sent at least 729 cattle from the Lagoa do Triunfo farm to be fattened at its Porto Rico farm in Xinguara. In April 2018, 36 cattle from the Porto Rico farm were sent to slaughter at JBS’s plant in Tucumã in Pará.

Growing international demand for beef has become a key driver in the destruction of the Amazon rainforest, with new figures seen by our team revealing the full extent of deforestation directly linked to a handful of major food corporations. Beef linked to deforestation is exported globally, including to key markets in the east Asia and Europe.

An investigation by Trase has uncovered how up to 5,800 sq km of forest is being felled in the Amazon and other areas annually to be converted into pasture used for cattle farming, with livestock from deforested areas found to be supplying abattoirs producing beef for global markets.

Companies in JBS’s supply chain are potentially responsible for the destruction of between 28,000 and 32,000 hectares (280-320 sq km) of forest each year for exported beef, according to data assembled by Trase. There is no suggestion Lagoa do Triunfo beef is exported. AgroSB state that they purchased the land in 2008, after the deforestation had already happened. JBS points out that it has “one of the largest private supplier monitoring systems in the world… which covers the legal Amazon region.” It has been working on the GTA-Verde concept, which would cover all links in the supply chain and “prevent the entry of cattle from illegally deforested areas into the meat industry”.

The latest data shows that deforestation in the Brazilian Amazon has been on the rise since 2012. Between August 2017 and July 2018, about 7,900 sq km was destroyed.

Cowboys transport livestock in Terra do Meio
Transporting livestock in Terra do Meio, in the municipality of São Félix do Xingu, in the Amazon state of Pará. Photograph: Joao Laet/The Guardian

In the most comprehensive study of its kind ever produced, TRASE used customs, agricultural, sanitary inspection, and deforestation data to map Brazilian cattle exports from the international markets which consume them back to the more than 3000 municipalities where the cattle were raised.

The analysis includes data on “indirect” suppliers, which are often intermediate farms that don’t sell directly to abattoirs, but supply other farms which may truck cattle to slaughter. This is a “previously invisible” part of the beef chain, say researchers, which is not monitored for deforestation risks.

The supply chain “map” was then cross-referenced with official datasets on pasture expansion, deforestation rates and figures on regional cattle production in order to calculate a deforestation “risk” associated with specific companies and the main international export markets.

Because of the high volume of Brazilian beef shipped to China and Hong Kong, these markets are associated with the highest amount of deforestation in total – 16,000 and 22,500 hectares per year – according to the analysis. The EU also imports more than $600m worth of beef from Brazil each year. And that will increase if the EU and member states approve a new trade deal with Brazil, Uruguay, Argentina and Paraguay to gradually let 99,000 tonnes of low-tariff South American beef into Europe every year.

Erasmus zu Ermgassen, lead researcher at Trase, said that while some slaughterhouses monitor their direct suppliers, none monitor their indirect suppliers. “There is enormous potential to use land more efficiently and sustainably in the Brazilian beef sector, and to improve rural livelihoods by investing in cattle ranching on existing pasturelands.”

Source: The Guardian

 

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The swashbuckling meat tycoons who nearly brought down a government

How the strange case of a former president secretly taped by industry executives revealed where power lies in Brazil

Brazil’s billionaire businessman Joesley Batista
Brazil’s billionaire businessman Joesley Batista. Photograph: Adriano Machado/Reuters

In Brazilian financial circles 17 May 2017 is dubbed “Joesley Day”. It’s the date when the power and influence of Brazil’s meat industry was exposed in all its ugly glory and gave the stock market a sucker punch.

It was the date that Joesley Batista, at that point one of the controllers of the world’s biggest meat-packing company, family-run JBS, went to meet then-President Michel Temer, and secretly recorded him endorsing payments to a notoriously corrupt politician imprisoned for political corruption.

News of Batista’s recording, part of a plea bargain deal he and his brother Wesley signed to avert an investigation into corruption themselves, was published by the O Globo newspaper site and caused an uproar.

JBS executive Ricardo Saud subsequently testified that the company had bribed 1,829 political candidates from across the political spectrum. “It was the rule of the game. And what’s most important, corruption was on the upper floor, with the authorities,” Joesley told Época magazine’s Diego Escosteguy. At the time he was CEO of J&F Investimentos, the family empire’s holding company.

Graffiti with the image of President Michel Temer running with a suitcase of money in central Sao Paulo.
Graffiti with the image of President Michel Temer running with a suitcase of money, in central São Paulo. Photograph: NurPhoto/Getty Images

The day after Joesley Day, the Brazilian stock market plunged nearly 9%, its worst collapse in nine years. The dollar soared to an 18-year high against the Brazilian real. Temer’s mandate only survived when Congress blocked corruption charges after he agreed to budgets for individual lawmakers’ projects and made concessions to the powerful agribusiness lobby. Since leaving office, he has twice been arrested in a separate corruption probe. Temer denies that he solicited, participated in or authorised the payments to prevent cooperation with justice officials. He currently faces a raft of charges including corruption, money laundering and racketeering – which he denies.

It’s a story that gives a sense of the power of the Brazilian meat tycoons. “The agribusiness sector has always been at the forefront of everything in Brazil and politicians have always needed their support,” said economist Monica de Bolle, director of the Latin American programme at John Hopkins University in the US.

“The sector is very powerful and does not show much will politically to be more transparent,” said Adriana Charoux, a senior forest campaigner at Greenpeace Brazil, adding that pasture makes up more than 60% of deforested Amazon areas.

Agribusiness is worth more than a fifth of Brazil’s GDP, one of the few successes in an economy stumbling from one crisis to another. Continent-sized Brazil has perfect conditions for cattle farming and is the world’s biggest beef exporter.

“When you analyse the quality of water, climate, soil, the big advantage is Brazilian,” said Thiago de Carvalho, a professor of rural economy and agribusiness management at the University of São Paulo.

Brazil’s huge meat companies mostly started out as family businesses that transformed into slick multinationals, he said. The giant BRF came out of the 2009 merger between the Perdigão and Sadia companies – both founded in southern Santa Catarina state in the 1930s and 1940s by Italian immigrants and their descendants, who built businesses selling chicken, pork, sausages and ready meals.

Now BRF is weighing up a merger with Marfrig, a beef giant founded by former butcher and salesman Marcos Molina dos Santos in 2000 with a beef processing unit in Bataguassu, a small town in Mato Grosso do Sul. Marfrig grew through buying other companies, including turkey and chicken producers, before buying US beef processor National Beef last year.

JBS, the largest of all, was founded in 1953 when Joesley Batista’s father, José Batista Sobrinho, and uncle Juvensor bought a small slaughterhouse in Anápolis, in Goiás. Three years later, they began supplying meat to workers building the new capital of Brasília. By 2005 the company had begun expanding internationally to become the world’s biggest meat processing company.

Workers prep poultry at the meatpacking company JBS, in Lapa, in the Brazilian state of Parana, in 2017.
Workers prep poultry at the meatpacking company JBS, in Lapa, in the Brazilian state of Parana. Photograph: Eraldo Peres/AP

From 2008-2013, under Workers’ Party presidents Luiz Inácio Lula da Silva and Dilma Rousseff, Brazil pushed a “national champions” policy, helping to turn companies into multinationals. The Brazilian Development Bank (BNDES) extended low-interest loans to the meat tycoons, helping to accelerate their expansion both at home and overseas.

BNDES invested 400m reais (£83m) in the initial public offering for BRF in 2009 – 7.6% of shares – and provided “billions” in financing to Sadia and Perdigão. It put so much money into Marfrig that it now owns a third of the company. Within a few years, with the help of BNDES, the Brazil meat sector would become one of the largest, most powerful in the world. In 2009, the bank injected $2.8bn into JBS as it bought American chicken corporation Pilgrim’s, becoming its single biggest shareholder.

Today Brazil is the world’s second biggest beef and veal producer – behind the US – and produced a record 1.6m tonnes of beef last year, up 11% on 2017 and worth $6.6bn.

In March this year Brazilian prosecutors filed charges against 12 people, including Joesley Batista, arguing that JBS had bribed its way to cheap financing and investments from BNDES. A judge has since accepted financial crimes charges against former BNDES president and finance minister Guido Mantega and former bank president Luciano Coutinho – which both have denied – and three others. Charges against Batista were rejected because of his plea bargain deal.

Carvalho pointed out that JBS was already expanding when it got BNDES funding. It grew because it cut costs and increased efficiency in companies it bought, he said. “Joesley and Wesley understand the business of buying cattle and selling meat.”

JBS’s tumultuous story is told in Why Not, a new book by business reporter Raquel Landim. She described Wesley as a smart manager with a close eye for detail and the more flamboyant Joesley as the risk taker. “Joesley is very intelligent,” she said. “He has no scruples.”

As JBS rose, Joesley bought yachts, a Lamborghini and luxury apartments in New York, and married television presenter Ticiana Villas Boas in a sumptuous ceremony at company headquarters in São Paulo, with performances by Brazilian popstars Ivete Sangalo and Bruno & Marrone.

Protesters watch a TV report on the corruption trial against former president Michel Temer, in August 2017.
Protesters watch a TV report on the corruption trial against former president Michel Temer, in August 2017. Photograph: Victor Moriyama/Getty Images

Joesley Batista’s ego may have got the better of him. He used a cheap device to record Temer and the poor sound quality muddied subsequent legal proceedings. He and JBS executive Ricardo Saud also sabotaged their plea bargain deal when they delivered prosecutors four hours of accidentally recorded, alcohol-fuelled conversation during which Joesley said he could read people’s minds and they inadvertently revealed they’d broken the terms of the deal.

Joesley and Saud were subsequently imprisoned for six months and Brazil’s supreme court has yet to decide whether to revoke their deal or not. Wesley was jailed for nearly six months after both he and Joesley were accused and later charged with insider trading – profiting from selling shares and trading in foreign currency – before their plea bargain deal emerged.

The brothers have since been released but their court cases continue and neither plays an active role in company management. Their companies are close to completing an internal investigation as part of a $2.66bn leniency deal.

And JBS ? It’s thriving: shares are up and its Brazilian profits soared nearly 116% in the first quarter of this year.

Source: The Guardian

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EDITORIAL COMMITTEE:

Mariana Almeida

Arno Ambrosius

David Dunham

Gustavo López Ospina

Gertjan Storm

Editor: Pieter Jan Brouwer

 

“Amazon Pink Dolphin” is the official blog of SELVA-Vida Sin Fronteras. The intention of the blog is to generate debate on environmental issues; the Amazon Rain forest in particular. Contributions and support are done on a voluntary basis and do not imply institutional affiliation.  Similarly opinions expressed in this blog do not necessarily represent the official position of SVSF.

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All Title photographs of the Amazon Pink fresh water Dolphin are the creation of Kevin Schafer.

~ by SELVA-Vida Sin Fronteras on 2 July, 2019.

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