Cargill, Bunge and Cofco bought soybeans from companies allegedly supplied by a farmer fined for rainforest deforestation
Almost all of the illegal "dirty" soy featured in this article will be GM, since in 2018, 94% of all Brazilian soy was GM.
Global food giants sourced soya linked to illegal Amazon deforestation
by Lucy Jordan, Alice Ross, Andrew Wasley, Alexandra Heal, Andre Campos, Daniel Camargos
Unearthed, 19 May 2021
* Cargill, Bunge and Cofco bought soybeans from companies allegedly supplied by a farmer fined for rainforest deforestation
Three of the world’s biggest food corporations have bought soya from companies whose supply chains have been linked to deforestation and fires in the Brazilian Amazon, an investigation has revealed.
Bunge, Cofco and Cargill – which supply soya globally for livestock feed – have bought soya from Fiagril Ltda, a Chinese-owned company, and from multinational firm Aliança Agrícola do Cerrado. Both firms have sourced soya from a farmer sanctioned and fined for large swathes of deforestation in the Brazilian Amazon.
The investigation – a collaboration between Unearthed, Repórter Brasil and the Bureau of Investigative Journalism – cross-referenced environmental enforcement records, satellite images and other records to show how the farmer, who has been hit with multiple fines and legal action for deforestation, has illegally grown soya on embargoed land in Mato Grosso state, Brazil’s soya heartland. Embargoes are legal penalties imposed by government environmental agencies to prevent farmers using environmentally damaged land and allow it to recover.
The findings raise concerns that major traders are able to effectively circumvent a moratorium on purchases of soya linked to deforestation in the Amazon, potentially allowing “dirty” soya linked to destruction of the vital habitat to enter the global supply chain.
Brazil is the world’s biggest soya producer, exporting beans all over the world as feed for factory-farmed chickens, pigs, fish and cattle.
Deforestation linked to soya in the Amazon has reduced significantly thanks in large part to the Amazon Soy Moratorium, a major agreement between international soya traders and NGOs including Greenpeace, Imaflora and WWF. But this investigation raises serious questions about supply chain monitoring, at a time when deforestation in the region has surged to a 12-year high under Brazil’s populist President Jair Bolsonaro.
Our findings highlight a loophole in the moratorium, allowing soya traders to continue buying from farmers who are known to engage in deforestation, as long as they are not buying soya grown on the specific plots of land that have been cleared. But this process also increases the risk of deforestation-linked soya being laundered from deforesting farms to nearby “clean” ones, in a process known as “triangulation”.
Unlike embargoes, which are legally binding, the Soy Moratorium is a voluntary agreement.
Izabella Teixeira, Brazil’s environment minister when the Soy Moratorium was extended indefinitely in 2016, said the findings showed the need to keep adapting and improving the agreement. “It is absolutely possible to produce soy… in the Amazon without [it] coming from illegal deforestation,” she said.
“It is in the interest of Brazilian agriculture itself to ban those who promote illegal deforestation – and thereby contaminate a successful initiative such as the soy moratorium – and create all the security conditions and safeguards for anyone who buys products from Brazil to be sure that they do not come from deforestation,” Teixeira added.
Changing the rules to exclude any producers found to have broken environmental rules would give consumers more peace of mind, she said.
The state of Mato Grosso is huge, stretching across the southernmost part of the Amazon, the western Cerrado savannah and northern Pantanal wetlands. Literally translated as “thick forest,” it has become the largest soya-producing state in the largest soya-producing country in the world.
Before the 2006 introduction of the Soya Moratorium the state was rapidly losing rainforest to encroaching cropland, predominantly soya. By 2010, soybean crops in Mato Grosso had already consumed 40% of the state’s Amazon biome. Today, islands of dark green vegetation form a patchwork with monocrop fields of soya, cotton and corn.
Last July, satellites picked up large fires burning in stretches of forest in Marcêlandia, Mato Grosso, linked to soya, corn and cattle farmer Alexandra Aparecida Perinoto. Weeks earlier, Brazil’s president Jair Bolsonaro imposed a four-month emergency ban on setting fires to clear land, amid acute international concern over fires in the Amazon.
The 2020 fires appear to be the latest in a litany of environmental destruction connected to Perinoto – or family members and businesses connected to her – that have led to fines, embargoes and legal actions relating to deforestation and damage to flora.
Perinoto did not respond to multiple requests for comment.
More than 1,500 hectares of forest linked to Perinoto was placed under embargo in 2019 by Brazil’s environmental regulator, Ibama, after being deforested. Embargoes forbid the use of the damaged land to grow crops. They are imposed by the Brazilian government as a punishment and to allow land to recover and, unlike the Soy Moratorium, are legally binding.
Ibama also fined Perinoto more than R$10 million (£1.3 million) for environmental breaches between 2013 and 2019. Perinoto, her business and family members are also the subject of two civil actions by Mato Grosso’s public prosecutor for illegal deforestation under the “Protect Amazon” initiative.
In 2016, Mato Grosso’s environment agency SEMA named Perinoto in a separate embargo for illegal deforestation that had taken place between 2011 and 2016 on one of her Marcelandia properties, called Fazenda Formosa II. Satellite image analysis from MapBiomas indicates that soya was grown during 2018 and 2019 on this piece of recently deforested and embargoed land.
If traders bought soya from this piece of land, it would be a breach of the moratorium. Unearthed understands that Perinoto has at least one property on the Soy Moratorium “blacklist” circulated annually to traders, indicating properties that they may not buy from.
Despite this, and publicly available records of Perinoto’s fines and embargoes, documents seen by Unearthed reveal Fiagril and Aliança Agrícola bought soya from Perinoto during the 2019 harvest, although it is not clear from which of the plots of land linked to Perinoto the soya originated. Social media posts suggest the Perinoto family continued to supply Fiagril last year.
Both Fiagril and Aliança Agrícola insisted they had complied with the moratorium, and neither trading company specified which of Perinoto’s properties they purchased soya from. When asked how it could be certain that soya grown on Perinoto’s nearby, deforested land had not contaminated its purchases, Fiagril said it monitored “the production of all customers through technical reports in the various stages of production and harvest.”
The landmark voluntary agreement was signed in 2006 between NGOs, including Greenpeace, Imaflora and the WWF, and the main soya trade associations. The Brazilian government joined the moratorium in 2008. Before it came into effect, Amazon deforestation was out of control, with an area the size of Hawaii cut down in 2004 alone. Under the deal, traders who belong to Abiove or Anec – the main soya trade associations, between them covering 85 percent of Brazilian soybean purchases – agreed not to buy soya from rainforest cleared after July 2008.
Deforestation plummeted, falling 84% by 2012. But soya is a fungible commodity: it is basically impossible to prove the source of a single bean, and this makes it hard for traders to know for certain that the soya they are buying is definitely not grown on deforested land.
Andre Nassar, executive president of Abiove, said it was up to traders to decide how conservative an approach to take when purchasing soya.
Say, for example, “you have a person that owns a farm that is noncompliant with the moratorium,” Nassar said, “And the same person has another farm with an embargo from Ibama… [traders might] look at that and say “it is too risky, I won’t buy from them [at all],” he said. “But that is an individual decision. That is not part of the moratorium rules.”
He added: “Moratorium governance has several layers to guarantee that soybeans from non-compliant farms are not entering the supply chain.”
Some traders who continue to buy from ”risky” farmers – that is, producers who own another blacklisted or embargoed farm – may limit how much they buy, based on calculations of the farm’s productivity, to minimise the risk of exposure to “triangulated” or “laundered” soy, moved from a non-compliant farm to a clean one.
However, talking to other traders about how much soya they are buying from particular farms would breach commercial guidelines, said Lisandro Inakake de Souza, coordinator for the Imaflora programme on climate and agricultural production chains. This raises the question of how traders can be sure a farmer is not exceeding its “clean” production limits by selling to multiple traders.
“There is no way to know, unless it was a crop financed by the trader, as in this case they would have more control during cultivation,” said Inakake de Souza. “Even then, they cannot guarantee that a farmer is not triangulating soy.”
Another method used by some traders to minimise risk, said Inakake de Souza, is to voluntarily adopt a minimum distance of 200 kilometres between the properties to be confident dirty soybeans haven’t been transported to a clean farm.
Perinoto’s Marcêlandia farms are less than 20km apart.
Professor Antonio Ioris, a geographer at Cardiff University who has written several books on agriculture in the Amazon, said he believed that deforestation for soya was increasing again under President Bolsonaro.
“The central problem is the extractivist ideology of and the immense power of large-scale landowners,” he said, adding: “The conservation and the future of the Amazon depend on meaningful steps towards democracy, social inclusion and environmental justice.”
Local farms, global supply chains
Global soya trader Fiagril is based in Sinop but owned by the Chinese corporation Hunan Dakang Pasture Farming, which is in turn owned by the huge PengxinGroup. Documents seen by Unearthed show that Perinoto sold soya from a property in Marcêlandia to Fiagril in the town of Sinop, 180km away, in February and April 2019. Fiagril shipped soya from Sinop to Bunge, in Spain, in June.
Since August 2015, Fiagril has exported at least 755,000 tonnes of Brazilian soya internationally, including to China, Japan, Spain, Portugal and other markets. They are currently partly financed by a £300m, three-year revolving loan granted in 2019 by the state-controlled China Development Bank.
In an emailed statement, Fiagril said it does “not buy soybeans from areas with environment[al] interdiction.”
Aliança Agrícola do Cerrado is partly-owned by the Russian conglomerate Sodrugestvo and has exported at least 1.89 million tonnes of Brazilian soya since August 2015, including to Russia, China, Poland and other markets. Documents show Perinoto sold Marcelandia soya to Aliança Agrícola in Matupá municipality in May 2019, and Aliança shipped soya from Matupá to Sodrugestvo in Russia later that month, and to Cofco in China in June. Aliança shipped soy from Sao Paulo state to Cargill in China in January 2020.
Aliança said that it monitors data on areas that are embargoed by the Brazilian environmental authorities, as well as on illegal deforestation, known users of modern slavery, and the Soy Moratorium exclusion list. “All transactions of Aliança are performed in strict accordance with these lists and requirements of Ibama,” the statement said.
When approached with the findings of the investigation, both Fiagril and Aliança said an independent audit had found their purchases to be in compliance with the rules of the moratorium.
But Greenpeace Brazil, a member of the Soy Moratorium Working Group, said: “The 2019/20 audit process evaluation is still ongoing … Some reports are incomplete and inconclusive, so further clarifications were required from the companies. The findings of this investigation linking Fiagril to potentially illegal soy are extremely concerning and we will make sure they are fully investigated and appropriate action taken.”
The statement added: “The soya moratorium has been very significant in reducing direct deforestation for soya in the Amazon. However, we recognise the system is not perfect and, as part of our role within the Group, we are pushing for improvements including greater transparency and proper scrutiny of indirect suppliers and strategies to avoid soy triangulation.”
Cargill said it does not source directly from Perinoto. It added: “We have firmly upheld the Brazilian Soy Moratorium in the Amazon since 2006.”
The company wrote in a statement that for its direct suppliers, it monitors government lists of embargoed farms, as well as the exclusion lists compiled by the Amazon Soy Moratorium’s monitoring team: “When a farm is blocked in our system for being on one of these lists, we also block other farms registered to the same person or entity either in the local area or the entire country, depending on the violation involved. These affiliated farms are only unblocked once we have conducted an analysis to ensure that product from the violating farm is not being rerouted and sold to us through an affiliated operation.
“We will investigate Fiagril and Aliança [Agricola] do Cerrado in accordance with our soy grievance process.”
Cofco said that in addition to annual external audits on suppliers’ compliance with the Moratorium, the company conducts monthly internal audits.
“The 2019 audit confirmed that all our suppliers complied with Moratorium requirements in the past season,” the company added.
Bunge said: “As a signatory of the Amazon Soy Moratorium, purchases made by Fiagril are audited by independent entities and approved by the Soy Working Group – an organization formed by representatives of the Government, NGOs and Abiove (Association of Vegetable oils Industries). In addition, Bunge’s contracts with suppliers have clauses in which the supplier expressly commits to supply grains in accordance with the applicable legislation, including environmental laws.”
It added that it had recently launched an initiative to monitor indirect suppliers more closely.
A version of this story appeared in the Guardian, The Bureau of Investigative Journalism, and Repórter Brasil