The name Greenpeace is not one that will earn you many smiles in the São Paulo offices of JBS.
The world’s biggest exporter of meat by sales has just had another run-in with the international environmental activist group over a report accusing JBS of sourcing beef from farms in the Amazon region that allegedly fail to comply with environmental laws, by either illegally deforesting or invading indigenous land.
JBS, in one of its most vehement denials yet, threatened to sue Greenpeace for the report.
The controversy has already cost it an important customer, Tesco, the UK-based supermarket chain, which said it was no longer sourcing beef from the Brazilian company.
“We don’t buy cattle from farmers who are not compliant,” Wesley Batista, chief executive officer of JBS and one of the controlling family shareholders of the company, told the FT.
Not long ago JBS was only a small family-owned enterprise. Now it has extensive operations in the US and Australia as well as Brazil, processing beef and other meats, such as chicken.
Aside from the Batista family, the main shareholders of JBS include BNDES, the Brazilian state-owned development bank whose loan book is several times bigger than that of the World Bank.
The company’s family roots mean that few know better than Wesley Batista the challenges of dealing with a far-flung supply chain, in this case consisting of hundreds of fazendas or ranches, and trying to instil in it the standards required for the global export industry.
As a meatpacker, JBS sources its cattle from farmers across Brazil, mostly from the so-called Centre West area outside the Amazon but also within the region known as the Legal Amazon, which includes the state of Pará, Brazil’s frontline state in the illegal deforestation battle.
Cattle ranching is responsible for most of the deforestation in the Amazon, and in 2009 JBS and two other meat processors, Minerva and Marfrig, sought to placate customers in Europe by signing minimum criteria for industry practice agreed by the Brazilian Roundtable on Sustainable Livestock.
This group committed members to sustainable practices in the industry, including not sourcing animals from known deforesters.
Brazil’s environmental law, known as the forest code, maintains strict limits on forest cover, especially in the Amazon region.
Farmers must keep 80 per cent of the land as forest and maintain vegetation on creeks and water sources.
A new bill is making its way through congress, and environmentalists are concerned that the code is being watered down.
The general limits will still be in place, though, posing challenges for those sourcing products from the region, because of the difficulty of ensuring that farmers supplying goods are in compliance.
Mr Batista says JBS has always monitored whether its suppliers were in the so-called Ibama blacklist, containing the names of farmers accused of illegal deforestation by the governmental environmental agency.
It also monitors whether farmers are accused of slavery – a practice not uncommon in parts of the Amazon region – or of invading indigenous lands. JBS says it will not buy from farmers named on the list.
And in 2009, JBS began keeping satellite records of farmers’ lands to monitor whether property owners were illegally deforesting.
“If you cut one or two trees, the next time a picture was taken of your property, we would be able to see,” says Mr Batista.
In an extensive report, Greenpeace alleged, however, that the company’s satellite monitoring was not detailed enough and it was sourcing hundreds of cattle from farms that were illegally deforesting.
Some were also coming from farms whose owners had invaded indigenous lands or were accused of slavery, Greenpeace said.
In particular, the group alleged that three JBS slaughterhouses had sourced nearly 700 animals from five farms banned by Ibama.
JBS said the farms mentioned were either wrongly identified, not on its list of suppliers or not on the Ibama banned list.
But there were two cases where farms from which JBS admitted it had sourced cattle had ended up on the Ibama list.
Mr Batista said this illustrated one of the problems with trying to maintain a supply chain that followed sustainable practices.
He said government monitoring needed to be more vigilant to ensure that farms violating environmental law did not creep into the supply chain...
Source: Argentine Beef Packers S.A.
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