Case Studies

A study found that tax havens offer a major conduit through which investors can fund agribusiness in tropical areas; 68% of all investigated foreign capital flowing into nine of the top companies in the soy and beef sectors in the Brazilian Amazon was transferred through tax havens between 2000 and 2011. A large proportion of this was through the Cayman Islands. The report noted that the secrecy and transparency offered by such havens appear to be important to those investing large sums in agribusiness companies responsible for significant land conversion in the Amazon, likely because it protects them and allows them to more thoroughly conceal their involvement. 

Keywords: Latin America, Brazil, cattle, soy, primary production, tax evasion

Source: https://www.nature.com/articles/s41559-018-0497-3  

According to Mongabay, it was uncovered in February 2023 that three landowners had orchestrated the largest single instance of deforestation in the Brazilian Amazon's history, clearing 6,469 hectares of forest in Pará state. This large-scale land grab, conducted between February and May 2020, cost at least $2.5 million and is expected to yield nearly $20 million in profits from selling the land for soy farming or cattle ranching. This took place along the BR-163 highway, between the districts of Castelo dos Sonhos and Vila Isol, regions known for their economic activities, including gold mining, timber, cattle, and soy farming. The land, initially public and belonging to the Brazilian federal government, was illegally appropriated and cleared without environmental authorisation. This deforestation, larger than the area of Manhattan, represents a significant loss of biodiversity and a contribution to climate change, as well as a breach of Brazilian environmental laws. The three key figures behind this land grab are Jeferson de Andrade Rodrigues, Delmir José Alba, and his brother Augustinho Alba. They all have a history of environmental fines and infractions.

Keywords: Latin America, Brazil, cattle, primary production, illegal deforestation, agriculture

Sources: https://news.mongabay.com/2023/02/the-20m-flip-the-story-of-the-largest-land-grab-in-the-brazilian-amazon/

The Brazilian Federal Regional Court of the 1st Region convicted three companies for the illegal logging and subsequent transportation and trade of wood from the Rondônia region of the Legal Amazon. The companies involved are Celia Ceolin EPP, BV Indústria e Comércio de Madeiras Ltda ME, and Madeireira Mil Madeiras Ltda EPP. Each company was fined US$100,000 and ordered to plant 10 hectares of the protected Brazilian tree that had been illegally exploited. The conviction followed Operation Guardians of the Mountains in 2008, where authorities were able to seize 600 cubic metres of timber illegally logged in the Amazon, as well as 17 trucks. The wood had been sawn without authorisation, whereas Mil Madeiras had falsely advertised on their website that they operated in an environmentally conscious manner, claiming certification from Brazilian environmental authorities. However, the exploitation of Brazilian nut wood, found during the Operation, has been prohibited since the early 1990s. The court also found that, in addition to the illegal cutting of protected trees in the Amazon, the companies laundered the timber by mixing the illegally logged wood with legal logs, and their records never mention the Brazil nut. 
  

Keywords: Latin America, Brazil, timber, primary production, environmental crime, illegal timber trade
  

Sources:  https://www.occrp.org/en/daily/16100-brazil-sentences-three-companies-for-timber-laundering 

https://www.mpf.mp.br/regiao1/sala-de-imprensa/noticias-r1/empresas-sao-condenadas-pelo-transporte-e-comercio-ilegal-de-madeira-de-castanheira-extraida-da-amazonia-legal 

A report by InSight Crime demonstrates the growing ties between drug trafficking and illegal timber logging in Brazil’s Amazon. The report details how timber shipments from the Amazon are now being used to conceal drugs, primarily cocaine, for export to foreign countries. From 2017 to 2021, authorities seized nearly nine tons of cocaine hidden within timber shipments destined for European countries. In addition to drugs being hidden in timber shipments, the ties between illegal timber logging and drug trafficking is also the consequence of organised crime groups in Brazil diversifying their activity. Indeed, organised crime groups in Brazil have also become involved in illegal mining, land grabbing, logging, gold trading, and invading indigenous lands. Criminal gangs have been known to buy land illegally in the rainforest to profit from logging and to establish marijuana plantations, particularly in Pará’s “Marijuana Polygon.”. From 2015 to 2020, more than two million marijuana plants were seized across the Amazon region, with 55% of these seizures occurring in Pará. 

Keywords: Latin America, Brazil, timber, primary production, trade and transport, drug trafficking, serious organised crime, illegal logging, illegal mining

Sources:  https://insightcrime.org/news/intimate-relationship-between-cocaine-illegal-timber-brazil-amazon/ 

An investigatory report by Greenpeace led to allegations that South Korean machinery manufacturer HD Hyundai Construction Equipment (HD HCE) contributed to deforestation in the Amazon by providing excavators to illegal gold miners operating within Indigenous territories, in areas of Brazil which were degraded 202% more between 2019 and 2021 compared to the preceding decade. 
In the Indigenous lands of Yanomami, Munduruku, and Kayapó, 75 Hyundai excavators were identified during aerial surveys conducted between 2021 and 2023. Illicit mining activities have led to a humanitarian crisis in these areas; for example, contaminated rivers have posed health risks to Yanomami adults and children. 

Keywords: Latin America, Brazil, minerals, mining, supply of machinery/equipment, Indigenous rights

Source: https://www.theguardian.com/environment/2023/apr/12/hyundai-urged-to-stop-miners-using-its-machines-in-amazon , https://www.theguardian.com/world/2023/jan/22/lula-accuses-jair-bolsonaro-genocide-yanomami-indigenous-amazon  

According to the Organized Crime and Corruption Reporting Project (OCCRP), seven individuals were detained in Pará, Brazil after suspicions of illegal Amazon timber trade. Among those detained is a former employee of the Pará Environmental Secretariat (SEMAS). Investigation began in 2019, with the operation “Dark Wood” involving a total of nine search and seizure warrants and the freezing of bank accounts. The two-year investigation sought to dismantle the criminal scheme that enabled the illegal extraction of sale and timber. The scheme involved laundering wood from illegal deforestation, yielding significant profits. It disguised the origins of illicit wood, which was then exported to the United States. Yellow Ipê wood, highly valued in the U.S., was a primary target. During their investigation, the Brazilian Civil Police eventually uncovered forged documents used to simulate forest product auctions. These allowed companies to introduce fraudulent permits into the Forest Products Commercialization and Transportation System (Sisflora). Operation “Dark Wood” resulted in the detention of guilty sawmill owners and former SEMAS employees across various locations in Pará and the Federal District. The identities of the suspects and companies remain undisclosed. 

Keywords: Latin America, Brazil, timber, primary production, procurement of permits, illegal timber trade, illegal logging, fraudulent documentation

Sources:  https://www.occrp.org/en/daily/18805-brazil-detains-7-suspected-members-of-illegal-amazon-tiber-trade-ring 

A 2023 investigation uncovered that seven agribusiness giants, including Bunge, Cargill and COFCO, bought grains, notably soy, from Brazilian farmers fined for illegal cultivation on Indigenous lands in Mato Grosso. However, the grain sales invoices failed to identify the farms as being inside the Indigenous lands, falsely stating other lands of origin to allow the business to take place. In addition, the investigation found that five identified producers fined by IBAMA in 2018 for cultivating crops within Indigenous lands continued to make sales to large international grain traders during the periods of interdiction from 2018 to 2019. A practice of ‘grain laundering’ was used to facilitate this illegal trade. This practice involves mixing illegally produced grains from conservation units, seized lands, or interdicted areas with legally planted and harvested soy and corn, thereby concealing the irregular origin of a portion of the crop. The close proximity of these farms, listed on invoices as the origin of the produce, to Indigenous lands facilitated this ‘grain laundering’. Grain laundering was openly acknowledged by farmers in the Paresí Indigenous region in March 2019. 
  

Keywords: Latin America, Brazil, soy, primary production, Indigenous rights, fraudulent documentation, grain laundering
  

Sources:  https://news.mongabay.com/2023/05/agro-giants-buy-grains-from-farmers-fined-for-using-indigenous-land-in-brazil/ 

A criminal complaint has been fined against several French banks, accusing them of money laundering and financing meat companies driving deforestation in Brazil. From 2013 to 2021, the four French banks involved, BNP Paribas, Crédit Agricole, BPCE, and AXA, invested nearly $70 million in bonds issued by leading Brazilian meat companies, generating about $11.7 million in profits. An analysis of JBS and Marfrig slaughterhouses, financed by such investments, in Pará and Mato Grosso found that over 50% and 40% of suppliers, respectively, showed evidence of deforestation and intrusion into Indigenous lands. The founder of the NGO Harvest, that contributed to initiating the complaint, emphasised that banks have an obligation to prevent money laundering and must exclude actors profiting from illegal deforestation. In response to the complaint, Crédit Agricole and BPCE did not comment, while BNP Paribas and AXA provided statements emphasising their commitment to ESG standards.  

Keywords: Latin America, Brazil, cattle, primary production, money laundering, Indigenous rights, illegal deforestation

Sources:  https://news.mongabay.com/2023/11/french-banks-accused-of-money-laundering-linked-to-amazon-deforestation/ 

https://www.asso-sherpa.org/complaint-filed-against-french-banks-for-money-laundering-and-concealment-of-proceeds-from-illegal-deforestation-in-the-amazon 

A legal complaint against the US-based agricultural giant Cargill has been filed following its failure to adequately deal with its participation in soy-driven deforestation and human rights violations in Brazil. Cargill allegedly failed to implement adequate monitoring methods to oversee the vast quantities of soy it trades, handles at its ports, and ships to global markets. This deficiency prevented the company from identifying and eliminating links to deforestation and human rights abuses, thereby breaching its legal due diligence responsibilities. Due diligence deficiencies include a lack of proper environmental due diligence on soy bought from third-party traders, no due diligence on soy owned by other companies passing through its ports and failure to address indirect land use change. The complaint also highlights human rights failures, including forced displacement and violence against land defenders linked to Cargill’s operations, and the destruction of traditional ways of living due to deforestation.  

Keywords: Latin America, Brazil, soy, primary production, human rights violations

Sources: https://www.clientearth.org/latest/press-office/press/agricultural-giant-cargill-faces-legal-complaint-over-deforestation-and-human-rights-failings-in-brazil/ 

Belo Sun Mining Ltd, a Canadian company based in Toronto, has been developing the Volta Grande gold project in Pará State, Brazil since 2012. The project, including a planned open-pit gold mine, is the ancestral home of several Indigenous Peoples and riverine (Ribeirinho) communities. The project has faced numerous legal challenges and complaints. The main issues include inadequate impact studies on the impact to Indigenous Peoples, questionable licensing processes, insufficient consultation with Ribeirinho communities, and potential violations of land rights. Despite these challenges, the project was designated a priority under Brazil's 2021 Pro-Strategic Minerals Policy. Human rights defenders, including Indigenous Peoples, have faced ongoing threats and intimidation related to their opposition to the project. Belo Sun's security firm, Invictus, reportedly intimidated local communities with armed patrols and surveillance. For instance, in October 2023, Belo Sun filed a criminal complaint against 40 individuals accusing them of criminal activities related to land protests. 

Keywords: Latin America, Brazil, minerals, gold, primary production, Indigenous rights, human rights violations, land grabbing

Sources:  https://srdefenders.org/brazil-threats-intimidation-and-harassment-of-human-rights-defenders-in-the-context-of-the-volta-grande-gold-mining-project-joint-communication/