Sep 20 2009

Plundering the Amazon

Alcoa and Cargill have bypassed laws designed to prevent destruction of the world’s largest rain forest, Brazilian prosecutors say. The damage wrought by scores of companies is robbing the earth of its best shield against global warming.

By Michael Smith and Adriana Brasileiro
Bloomberg Markets, September 2009

For four decades, Edimar Bentes and his family have survived by farming tiny clearings in the jungle near their dirt-floor shack in the state of Para in the Brazilian Amazon. On this April afternoon, Bentes, 56, squats in the driving rain and dips a glass into what just four years ago was a crystal-clear stream that provided drinking and bathing water. He frowns as the glass fills with brown silt. A thin man with short-cropped dark hair and a tanned, deeply wrinkled forehead, Bentes gazes around his land. There are no signs of the deer, armadillos and pacas he used to hunt to feed his wife and 10 children. For Bentes and thousands of others in the Juruti region of Para whose livelihood depends on wildlife and plants, everything changed in 2006.

That’s when New York-based Alcoa Inc., the world’s second-largest primary aluminum producer, started to bulldoze a 56-kilometer (35-mile) swath of the rain forest across hundreds of families’ properties to build a railway. This cleared corridor, 100 meters (109 yards) wide, will lead to a mine that will chew up 10,500 hectares (25,900 acres) of virgin jungle over three decades. More than half of the mine will lie inside a forest that by Brazilian federal law is supposed to be preserved unharmed forever for local residents. By year’s end, Alcoa says, the railway will transport 7,000 tons a day of bauxite, the dark red ore that’s used to make aluminum, from the mine to a port on the Amazon River.

‘Want to Cry’

“It makes you want to cry when you see this stream,” says Bentes, his bare feet sinking into the mud. He views a wasteland of uprooted trees and brown rivulets seeping into the water. “It reminds me of everything bad that Alcoa did to our land.” A growing array of evidence in court documents puts Alcoa among the multinational corporations that prosecutors accuse of destroying or causing destruction of the world’s largest rain forest.

Brazilian federal and Para state prosecutors sued Alcoa’s Brazilian mining subsidiary in 2005 in an effort to block the Juruti mine, saying the company had circumvented the law by not applying for a federal permit and instead seeking a license from the state of Para. After four years of legal haggling, the suit is still pending. Alcoa, which denies any wrongdoing, has already completed construction of the railway, port and processing plants. It’s now ready to start mining. “The state agency has no power to give anyone full rights to exploit land, especially in the case of a reserve,” state prosecutor Raimundo Moraes says. “Alcoa invaded the area, undeterred. Alcoa has no shame.”

‘All Necessary Licenses’

In written responses to questions from Bloomberg News, Alcoa says it “has all necessary government licenses to implement the Juruti mining project.” The Amazon, which spans nine countries and is roughly the size of Australia, has for centuries been the lungs of the Earth, its plants and trees absorbing pollution from the air. But that strength is fading. The world’s largest inhaler of carbon dioxide is shrinking — thus aggravating, instead of slowing, global warming.

Every week, federal prosecutors say, people acting outside the law use bulldozers, chain saws or fire to wipe out parts of the jungle to make way for crops, cattle and mines. The fires men set to clear land for ranches and farms create 6 percent of the carbon dioxide spewed into the air worldwide, according to the Cambridge, Massachusetts-based Union of Concerned Scientists. That equates to half of all the emissions from cars, trucks, planes, trains and ships in the world.

‘Amazon is the Key’

Brazil has become the planet’s fourth-biggest polluter. The fires that rage across the Amazon could help increase Earth’s average surface temperature by as much as 11.5 degrees this century, says the Intergovernmental Panel on Climate Change, a group of scientists from 194 countries.

Global warming threatens to melt glaciers, raise sea levels and lead to drinking water shortages, the United Nations- sanctioned panel says. “We are not going to reduce global warming if we don’t do something about deforestation in the Amazon,” says Doug Boucher, director of the Tropical Forest and Climate Initiative at Concerned Scientists. “It’s that simple, and very alarming. The Amazon is a big part — if not the key part — of a solution to deal with global warming.”

Wal-Mart, McDonald’s

To date, companies and individuals have destroyed more than 857,000 square kilometers (331,000 square miles) of the Amazon, an area almost the size of France and England combined, according to the UN Environment Programme. Cattle ranchers have caused 80 percent of the illegal deforestation, according to Brazil’s environment ministry. They sell steers to Brazil’s three biggest beef producers. One of them, Sao Paulo-based JBS SA, is the world’s largest; the others are Santo Andre-based Marfrig Alimentos SA and Bertin SA of Lins.

Wal-Mart Stores Inc., the world’s biggest retailer; French supermarket chain Carrefour SA; and McDonald’s Corp. have purchased beef from those companies, according to Brazilian internal revenue service sales and export records. Ford Motor Co., General Motors Co. and Daimler AG’s Mercedes-Benz have bought leather for car and truck seats from Auburn Hills, Michigan-based Eagle Ottawa LLC, a leather company supplied with materials from illegally deforested ranches, the records show. These multinationals say they’re working to avoid buying products originating in deforested land.

Cargill’s Port

Alcoa is the latest company in a decade-long legacy of global corporations that have thwarted Brazil’s environmental regulations, federal prosecutors say. Minneapolis-based Cargill Inc., the largest privately held company in the U.S., spent $20 million to build a grain port on the Amazon River in 2003 that led to farmers illegally destroying thousands of hectares of rain forest to grow soybeans, says Felicio Pontes, a federal prosecutor who sued to block the project. In early February, soybeans were piled high in a storage area at Cargill’s Amazon port, waiting to be loaded onto a ship bound for Europe. The company ships about 60,000 tons of soybeans a year grown near the town of Santarem. Before Cargill built the port, there was no large-scale soybean production in the area.

‘Completely Obvious’

Cargill hired The Nature Conservancy, an Arlington, Virginia-based nonprofit group, to confirm that soybean farmers aren’t clearing the Amazon around Santarem. The group says it has certified this year that 155 of 383 farms weren’t deforesting. “It’s completely obvious that Cargill’s port gave an incentive that led to deforestation,” Pontes says.

Both Alcoa and Cargill, prosecutors say, have persuaded local officials to sign off on their plans, flouting federal law. Brazil’s constitution says minerals are national resources that should be overseen by tougher federal agencies, says Daniel Azeredo, a federal prosecutor in the Amazon port of Belem, who specializes in environmental lawsuits. “The problem is that in Brazil we have weak institutions and laws, and companies take advantage of that,” he says. “We have laws, but they are impossible to enforce, which gives companies complete impunity to do whatever they want to profit.” Alcoa says it has abided by the law.

‘Any and All’

“In Brazil, public attorneys tend to challenge in court any and all major industrial and infrastructure projects,” Alcoa wrote in responses to questions from Bloomberg News. Alcoa says it doesn’t need federal approval for its mine in Juruti. Cargill also says it has done the right thing in Brazil. The company won proper state approval to build its river transport center, says Afonso Champi Jr., Cargill’s external affairs director in Brazil. He says the company strives to guarantee the soybeans it buys don’t come from deforested land.

Alcoa, which mines and produces aluminum in 31 countries, champions itself as a responsible steward of global resources. “Operating in a manner that protects and promotes the health and well-being of the environment is a core value to Alcoa,” the company says on its Web site. Cargill, whose products worldwide include animal feed, salt, steel and financial services, says, “Being socially responsible as a corporation means that we care about the environment.”

EPA Settlement

Alcoa has clashed with regulators and environmentalists in other countries. The University of Massachusetts’s Political Economy Research Institute ranks Alcoa as the 15th-most-toxic company in the U.S. In 2003, Alcoa agreed with the U.S. Environmental Protection Agency and the Justice Department to pay about $330 million to clean up air pollution at a power plant within an aluminum factory in Rockdale, Texas — a plant it has since shut down.

Alcoa has received mixed notices in Australia. In 1990, the UN Environment Programme gave the company an award for replanting forests it had destroyed to build a bauxite mine there. Alcoa, which generates electricity to process aluminum, obtained the lowest score in a 2008 review of utilities by the World Wildlife Fund. The WWF said Alcoa had failed to adopt targets to cut greenhouse gas emissions by its coal-fired power plant in Victoria state.

Slashed Emissions

Alcoa says it gets rapped by environmentalists because its electrical power plants emit carbon. The company says it should get credit for all of the pollution it’s preventing by supplying the lightweight aluminum that makes cars and trucks more energy- efficient. Alcoa says it has slashed its greenhouse gas emissions by 36 percent since 1990.

In Brazil, Alcoa is doing business in a political climate that regulators say is favorable to polluters. Luciano Evaristo, a director at Ibama, the federal environmental agency, says forces in the government — starting at the very top — promote and finance industries that feed on illegal destruction of the rain forest. President Luiz Inacio Lula da Silva calls himself an environmentalist. In 2003, he introduced a plan to protect the Amazon, creating task forces to raid areas being deforested.

Copenhagen Conference

In December, Lula will join leaders from almost 200 other countries in Copenhagen at a UN-sponsored conference to discuss a successor to the 1997 Kyoto Protocol, the first major international pact on global warming.“ At Copenhagen, we will have to reach a global agreement that will be both just and ambitious if we want to bequeath a viable planet to future generations,” Lula said in a July 7 speech. Lula set a goal of reducing deforestation by 80 percent by 2020.

At the same time, Lula has authorized the building of new roads and power plants in the Amazon and has increased funding for ranches and factories in deforested areas. In June, he congratulated people for tearing down trees to create farms spurring economic growth. “No one can say that someone is a criminal because he deforested,” Lula told a crowd of cheering ranchers in the Amazon city of Alta Floresta as he announced plans to legalize almost 300,000 ranches and farms built on illegally cleared land that once was rain forest.

‘Schizophrenic Government’

“It’s a completely schizophrenic government,” says Paulo Adario, who directs the Amazon campaign for nonprofit environmental group Greenpeace. “On one hand, they are combating deforestation. On the other, they are financing it.” Foreigners have been cutting down Latin America’s rain forests since the 1600s, when Spanish and Portuguese conquerors cleared jungles from Mexico to Brazil to build ships, farms and cities. In the 1960s and 1970s, Texaco Inc. drilled dozens of oil wells in Ecuador’s Amazon, destroying rain forest and polluting the region with poisonous wastes.

Alcoa, which produced the first commercially available aluminum in 1888, has 63,000 employees around the world. The company produces enough sheeting to make 100 billion cans of beer and soda a year. America’s largest aluminum producer sells ingots, sheets, wheels, fasteners and building materials to customers in the aerospace, packaging and automotive industries.

Stock Recovery

The company reported $26.9 billion in revenue last year. Its share price, which peaked at $47.35 in July 2007, slid as low as $5.22 on March 6 during the global economic meltdown. The stock value has since increased to $11.46, as of July 30, up 1.8 percent in the year-to-date. Brazil has the world’s third-largest reserves of bauxite. In 1979, a group led by Rio de Janeiro-based Vale SA built a bauxite mine in Porto Trombetas, 60 kilometers from Juruti. In 1994, Alcoa joined Vale in the venture, whose other members today include Melbourne-based BHP Billiton Ltd. and Rio Tinto Plc of London.

The scarred land and fouled water around Porto Trombetas bears witness to the impact of the mine. Nearby, a lake called Lago Batata still turns bright red from bauxite wastes workers dumped for a decade. The venture says it stopped polluting the lake in 1989 and now uses sealed holding ponds to contain overflow. The consortium replanted trees on the banks of the lake, but they’re low to the ground and brittle. Ademar Cavalcanti, the mine’s environmental director, says the cleanup will go on indefinitely.

Revived Project

Alcoa inherited its Juruti mining rights from Reynolds Inc., which it bought in 2000. Alcoa revived the project in 2003, as global economic growth increased demand. Simao Jatene, the governor of Para, supported the Alcoa project. BNDES, Brazil’s national development bank, provided the company with 1.9 billion reais ($1 billion) of financing for construction.

In January 2005, Alcoa requested state permits to build the $1.7 billion mine. Gabriel Guerreiro, who was then Para’s environment secretary, says the company submitted an impact study done by an independent firm, Sao Paulo-based CNEC Engenharia SA. Guerreiro says his agency analyzed Alcoa’s proposal and concluded the mine would be modern and efficient. Guerreiro says Para’s mineral riches must be explored for the good of the state’s 7.1 million residents, 50 percent of whom live in poverty.

‘Rich Civilization’

“Nobody is going to build a rich civilization without using the natural resources of the tropics,” he says. Guerreiro gave Alcoa a preliminary license in June 2005 and asked for 35 improvements to the impact study. After Alcoa made adjustments, he recommended the project be accepted by the state environmental council, called Coema, which approved it in August 2005.

A month later, federal and state prosecutors sued Omnia Minerios Ltda., the Santarem-based Alcoa subsidiary running the mine; Para’s state government; and Ibama, the federal regulator. The government’s civil suit, filed in federal court in Santarem, says Omnia Minerios was required to seek and obtain a federal environmental permit. Prosecutors say Ibama failed by not taking control of the licensing process. In court filings, Alcoa and the two regulators each say they followed proper procedures.

Court to Court

The case against Alcoa has languished for four years as the participants argue over which level of the Brazilian judicial system — federal or state — should have jurisdiction. Franklin Feder, Alcoa’s Sao Paulo-based president for Latin America and the Caribbean, says Ibama advised Alcoa to get state approval for the mine.

Marcus Luiz Barroso Barros, Ibama’s president from 2003 to 2007, says no one told him about such a decision. He says he didn’t know about Alcoa’s project until after the company had applied for licensing with Para. At that point, he decided it would be too complicated for Ibama to get involved — a position he now regrets. “Now that I know more about Alcoa’s mine, looking at the significant impact it’s having in the area, I’d say it’s a major project that should have been handled by the federal agency,” says Barros, 61, a physician who’s now in private practice in the Amazon city of Manaus.

Licensing Guidelines

A government advisory panel called Conama lays out guidelines for when Ibama should get involved in reviewing a project. “Ibama shall be responsible for the environmental licensing for projects and activities with a significant environmental impact of a national or regional scope,” Conama Resolution 237 says.

State regulators aren’t as reliable as the federal government, Barros says. “The main problem with licensing by state agencies is that they are often too close to projects and fall victim more easily to political and economic pressures than Ibama,” he says. “They may be more easily manipulated.” The state licensing of the Juruti mine was riddled with irregularities, the prosecutors’ suit says. Alcoa’s consultants limited their environmental research to two separate one-month periods during the dry season, in a jungle with some of the highest rainfall levels in the world, prosecutors say.


The researchers didn’t analyze how the mine, which will consume 505 cubic meters (133,407 gallons) of water per hour from an Amazon River inlet, will affect fishing. They also didn’t study how heavy ship traffic would affect fish populations near the port, prosecutors say. “All environmental studies, conducted by qualified specialists, were comprehensive, as demonstrated by the fact that all necessary licenses were duly granted,” Alcoa said in its responses to questions from Bloomberg News.

Fatima de Sousa Paiva, a nun and community organizer who’s spent almost a decade near the Juruti mine area, says Alcoa approached the rain forest community like Portuguese explorers who grabbed Brazil in the 16th century. “Alcoa offered gifts like plastic sandals, thermoses and bicycles,” says Paiva, 48, who teaches at a local elementary school. “To them, we were just some ignorant Indians in the way of their plans to make billions.” In its written response, Alcoa said, “This is a groundless allegation.”

‘Provide for the People’

In granting Alcoa permission to mine in the Juruti preserve, Para officials clashed with Incra, the federal government’s land reform institute. By law, the reserve can be used only by residents to hunt, fish and gather nuts to sustain their families. “The reserve allows a way to make sure the land is able to provide for the people,” the law says. All decisions about land use must be made by residents of the community, according to the law.

“Maybe the state wanted to play Alcoa’s game by approving an environmental licensing process that was full of holes, but we didn’t,” says Luciano Brunet, who runs Incra’s office in Santarem. Brunet says Alcoa told residents that they didn’t have a right to stop the mine because they didn’t have title to the land.

Public Land

Most of the ground in the Amazon is owned by the government, according to Imazon, a Belem-based nonprofit group. Incra gave descendants of Mundurucu and Muirapinima Indians the right to use the land in 1981 without granting titles to the families. Incra certified the land as a federal reserve in November 2005. Brazil’s laws regarding property deeds in the Amazon have always been lax, Brunet says, because until recently no one has challenged them. “Those people don’t own the land,” says Alcoa’s Tiniti Matsumoto Jr., who has run the mine since 2005 and has worked at Alcoa for 40 years.

“That land issue is Incra’s problem, not Alcoa’s.” Alcoa doesn’t own the property either, prosecutor Moraes says. “Alcoa simply assumed it was authorized to mine an area that is protected, where people live off the land,” Moraes says. Soon after Alcoa received approval from the state to build the mine, Bricio Lima, the company’s community affairs director, went from house to house, asking families to cede part of their land. In the end, Alcoa secured the right of way through land where 81 families live.

No Choice

Bentes, the farmer whose stream is now filled with brown silt, says Lima told his family and their neighbors that residents had no choice but to cooperate because Alcoa had approval from the state. Lima said Alcoa offered the family 23,000 reais, which equals about 17 months of the median income in Brazil, to use 2.5 hectares of their land, Bentes says. He says he agreed to the deal because he had no choice. “He told us the railroad would go through our land whether we accepted the offer or not,” Bentes says, as he prepares to roast half a deer he hunted for two days with a friend.

Alcoa wanted to pay them something, even though it wasn’t required by law, Lima says. “There was nothing forcing us to pay any compensation,” says Lima, who confirms Bentes’s account of their discussions.

‘The Right Thing’

Brunet says his agency plans to grant land titles to local residents, allowing them to request royalty payments from Alcoa’s mine production.

Matsumoto, 59, a Brazilian of Japanese descent, says the company is willing to pay people who live in the reserve part of its royalty payments to the government — 1.5 percent of the mine’s revenue — if that’s what officials want. “We want to be here for at least 70 years, so of course we want to do the right thing,” he says.

Alcoa is paying Conservation International, an Arlington- based nonprofit group, $100,000 a year to create a trust fund to finance the preservation of 10 million hectares of parks and preserves around Juruti. Since 2005, the company has spent 10 million reais to improve roads and build schools, water treatment units, a health-care center and a government building in Juruti, Alcoa says.

Replanting Trees

In 2008, the company commissioned a poll of 600 people in the region, finding that 61 percent said the mine project had improved their lives. Two-thirds of those questioned didn’t live close to the mine, Alcoa says.

Matsumoto says Alcoa will replant every tree it destroys. It will send forestry engineers and biologists ahead of the excavators to catalog plants and animals in all of the jungle Alcoa cuts down. “When we start planting trees at the mine, we want to make it richer than the original forest,” Matsumoto says.

Patricia Elias, a forestry expert for the Union of Concerned Scientists, says Matsumoto’s goal is impossible to achieve. “It would take centuries for trees to grow to their original density and height — and it would never be better than virgin forest,” she says. “It’s of greater value in combating climate change to avoid deforestation in the first place.”

‘Just Doesn’t Work’

Andre Clewell, a botanist in Ellenton, Florida, who is a consultant on restoration of mines, says it’s difficult to quickly restore tropical trees. “You can try to grow 200-year-old trees in 50 years, but it just doesn’t work,” Clewell, 75, says. “And some of it never comes back.”

About 160 kilometers from the Juruti mine, green fields of soybeans stretch to the horizon near Santarem, flanked by narrow stands of the rain forest that once covered all of the area. Scorched trees lie on the ground at the far end of Edno Cortezia’s farm, where workers set fire to the forest to make way for crops. Cortezia says he’s growing soybeans where the jungle once stood because Cargill built a port 30 kilometers away at the confluence of the Amazon and Tapajos rivers. “We came here because of the port,” Cortezia says. Cargill’s Champi says the company will remove Cortezia as a supplier if it can confirm the deforestation.

Pot-Holed Highways

Before Cargill built its port, there were no soybean farms near Santarem, says Marcus Bistene, chief of enforcement at Ibama’s Santarem office. Pontes, the federal prosecutor, says Cargill bypassed federal environmental law to build a port without properly studying how it would affect the Amazon.

In the mid-1990s, Cargill, the world’s largest agricultural company by revenue, was looking for an alternative to trucking grains down pot-holed highways from the fields of Mato Grosso state in western Brazil to the ports of Santos and Paranagua, 2,000 kilometers south.

They set their sights on a highway through the heart of the soybean belt from the Amazon to Santarem, Champi says. At the time, Cortezia farmed land in the state of Mato Grosso, near the southern border of the Amazon. He says Cargill officials came to town, urging farmers to move to Santarem, where it would be less expensive to grow soybeans. This season, he’s harvesting soybeans on his farm near Santarem that he plans to sell to Cargill.

EPA Brushes

Cargill has 160,000 employees in 67 countries and reported $120 billion in revenue in 2008. Founded in 1855 by William Cargill, it’s still primarily family owned. It has been in Brazil since 1965, when it started producing and selling hybrid corn seeds. Within two decades, Cargill grew into Brazil’s top trader and exporter of soybeans and oilseed.

Like Alcoa, Cargill has had brushes with environmental regulators. In the U.S., the EPA has cited the company for polluting rivers and killing fish populations. In 2005, Cargill signed an agreement with the EPA and the Justice Department settling charges that the company had underestimated air pollution at corn and soybean processing plants in 13 states. Cargill agreed to spend $130 million to reduce pollution at 27 plants, pay a fine of $1.6 million and finance $3.5 million in environmental programs.

‘Long History’

Cargill standards for protecting the environment are stricter than the EPA’s in some cases, spokeswoman Lori Johnson says. “Cargill has a long history of voluntarily reducing its emissions and other environmental impacts,” Johnson says. In 2000, Pontes filed suit in federal court to halt construction of Cargill’s port, arguing that the company hadn’t done a proper environmental study. Cargill contested the suit, saying it had approval from Para’s environmental agency.

As the case was pending, Cargill finished the port in 2003. In March 2007, a Brazilian federal judge shut down the port until the company did a comprehensive environmental study. Cargill won a reversal of that decision on appeal. In 2006, Greenpeace reported it had traced soybeans from the port to illegally deforested land. Since then, Cargill has refused to buy soybeans grown on newly deforested land, Champi says. Three days ago, Cargill and other grain exporter in Brazil extended until July 2010 a commitment not to buy soybeans from farms that were cleared from the Amazon since 2006.

74 Million Cows

Ranchers, more than anyone else, have illegally flattened thousands of square kilometers of publicly owned rain forest to create pastures for cattle, Pontes says. More than 74 million cows graze in the Amazon today, covering a combined area larger than Spain. Ranchers are proud of what they have done to improve the local economy. Ataides Gomes de Oliveira, a foreman on the Itacaiunas ranch near Xinguara, walks among a wasteland of scorched logs and splintered stumps. He stops as cattle appear amid the ragged ferns and saplings.

“There are 6,000 cows here, where there used to be unproductive jungle,” he says. Sao Paulo-based Agropecuaria Santa Barbara Xinguara SA, which owns Itacaiunas, says it’s not responsible for managing the ranch and has never illegally cleared jungle. McDonald’s gets some of the beef for its Big Macs from a meatpacker supplied by ranches cleared from the Amazon, cattle sales permits show.

Deforesting Fines

McDonald’s supplier of hamburger patties in Brazil, Braslo Produtos de Carne Ltda. in Sao Paulo, has bought beef from its parent, Marfrig Alimentos. Four ranchers that supply Marfrig have been fined a total of 13.5 million reais for illegally clearing the rain forest, public records show. Marfrig has never bought “regularly” from ranches that don’t follow Brazil’s environmental law, says Ricardo Florence, director of planning and investor relations. The company demands its suppliers follow all laws. It won’t buy from suppliers that Ibama has placed on a list of “embargoed” ranches cited for illegal deforestation, Florence says.

The ranchers who were fined aren’t on that list, so Marfrig has no way of knowing their background on deforestation, he says. “The Marfrig Group does not buy from suppliers that contribute to deforestation of the Amazon,” Florence says.

McDonald’s Policy

Oak Brook, Illinois-based McDonald’s, which has had a policy of not buying beef from deforested land since 1989, says it relies on its suppliers to follow the law. “Every McDonald’s beef supplier has signed and affirmed its compliance with this policy,” says Bob Langert, McDonald’s vice president of corporate social responsibility. “They are aware that McDonald’s will immediately cease accepting raw materials from any facility that is found to source cattle for McDonald’s from within the Amazon.” Marfrig complies with McDonald’s policy, Florence says.

JBS, the world’s biggest meat company, has purchased cattle from fined ranchers. JBS owns Swift & Co. and part of Smithfield Foods Inc. in the U.S. and has nine plants in the Amazon. Kraft Foods Inc.’s division in Italy and a unit of H.J. Heinz Co. have bought beef from JBS, according to sales and export records. The number of slaughterhouses in the Amazon has tripled to 87 since 2004, as international meat exporters expanded into the rain forest, prosecutors say.

‘It’s the Meatpackers’

“If you want to know who is financing the deforestation, it’s the meatpackers,” Ibama director Evaristo says.

Angela Garcia, director of environmental affairs at JBS, says the company counts on government enforcement records to ensure cattle come from land that wasn’t illegally deforested. “We’re not in enforcement,” she says. “We don’t have the resources. I hope the ranches are complying with the law, but I cannot say whether they are.”

Evaristo says virtually all Amazon ranchers built pastures on land that was illegally deforested. “These are people who operate with 100 percent illegality,” he says. “They steal public land, destroy the rain forest, plant grass and let the cows graze until they’re fat enough to sell.”

In Sao Felix do Xingu, the municipality in the Amazon with the most cattle, only one ranch out of hundreds has a license. On June 1, Ibama and federal prosecutors filed suit against 21 cattle ranches, accusing them of illegally deforesting 150,000 hectares of rain forest.

Stopped Buying Beef

Prosecutors say that meatpacker Bertin sold beef from cattle that had been raised on illegal ranches to 41 of its customers –including Carrefour and Wal-Mart. Prosecutors sent a letter to all Bertin customers recommending they stop buying meat that comes from deforested land. By June 19, Carrefour, Wal-Mart and 33 other buyers had told Azeredo that they had stopped buying from Bertin and other meatpackers named in the lawsuit.

Bertin says it stopped buying from 14 ranches named in the suit and signed an agreement with prosecutors to develop tighter controls to ensure cattle suppliers follow the law. “We’ve suspended cattle purchases from deforested ranches and will help ranchers stop deforesting the Amazon and replant areas that have been devastated,” Bertin spokeswoman Simone Soares says.

‘A Matter of Cost’

Bentonville, Arkansas-based Wal-Mart says it wants to buy only beef raised on ranches that follow the law. The company had suspected that ranchers were destroying the Amazon, says Daniela De Fiori, Wal-Mart’s vice president for sustainability in Brazil. “The truth is, Brazil’s retail sectors rely on these companies,” De Fiori says. “And it’s a matter of cost.”

On July 17, Wal-Mart launched a global initiative to urge all of its suppliers to assess and label the environmental impact of all their products, going back to the source of raw materials. Spokespeople for Carrefour, Heinz, Kraft and car companies Ford, GM and Mercedes say they have policies against buying products from deforested land and requiring suppliers to assure them they follow the law. Leather producer Eagle Ottawa, which is a unit of Whitehall, Michigan-based Everett Smith Group Ltd., says it’s satisfied with Bertin’s agreement with prosecutors to stop buying from illegally deforested ranches.

Shrinking Amazon

In Juruti, where Alcoa has its bauxite mine, the jungle is dotted with mahogany, Brazil nut trees and marble-textured angelin-pedra trees. These hardwoods can grow to almost 50 meters. Under the thick canopy of that timber are giant ferns and palms. This Amazonian vegetation, which has long absorbed the world’s carbon dioxide, is now shrinking at a rate of 163 square kilometers a week, exacerbating the global warming that threatens to wreak havoc worldwide. Lima, Alcoa’s community relations manager, a heavyset man with thinning hair, drives a pickup truck on the freshly cleared land for the mine. The rain forest gives way to a 700-meter-wide muddy pit that steams in the sun after a cloudburst.

Jungle topsoil and clay have been stripped away, exposing bauxite 15 meters down. Dump trucks are lined up, waiting for work to begin. Lima points to the pit, saying that beginning in late August, excavators will fill trucks with 90-ton hauls of bauxite once mining starts. Bulldozers will move ahead, clearing the rain forest to make way for heavy machinery to advance in a mining trench 50 meters wide.

Train Sits Empty

In a clearing a few kilometers away, conveyor belts lead to a tower where clay and other waste material will be washed from the ore. Not far from the pit, a train sits empty, ready to be loaded with bauxite. Alcoa has already torn down 900 hectares of rain forest, Lima says. Within 30 years, the mine will consume more than 10 times that much jungle, according to the company.

Bentes and his family show where Alcoa workers strip the rain forest. “We don’t know many things, and we are very simple people,” Bentes says, adding that he does understand the value of economic development in Brazil. “But they should find a way to do that without destroying the rain forest,” he says. “That is not right.”

Michael Smith is a senior writer at Bloomberg News in Santiago,; Adriana Brasileiro is a reporter in Rio de Janeiro,