Brazil Imposes $64 Million Fine for Illegal Amazon Cattle Trade

Brazil's environmental regulatory agency IBAMA has imposed a total fine of 365 million reais (approximately 64 million dollars) on various cattle ranches and meat processing companies for their involvement in the cattle trade from illegally deforested areas of the Amazon. Among those penalized is JBS SA (OTC:JBSAY), the world's largest meatpacking company, which is accused of raising cattle or purchasing cattle from these prohibited zones.

IBAMA's investigation identified 69 properties selling about 18,000 cattle raised on deforested land in the states of Pará and Amazonas. Additionally, 23 meatpacking companies that purchased these cattle were identified. This action is part of a broader effort to combat deforestation in the Amazon by targeting supply chains that produce or sell cattle from illegally cleared areas.

However, JBS SA has denied the allegations made by IBAMA. The company insists that none of its purchases were from embargoed areas listed by the agency. JBS highlighted its use of a geospatial monitoring system to ensure that it does not buy animals from farms involved in illegal deforestation or encroachments on indigenous lands and conservation areas.

Cattle ranching, along with land clearing for timber sale and soybean planting, is a primary driver of deforestation in the Amazon. In 2013, many meatpackers, including JBS, reached agreements with prosecutors to avoid purchasing cattle from illegally cleared farms or farms blacklisted due to environmental violations.

Furthermore, JBS and other leading agricultural firms have committed to eliminating deforestation from their supply chains by 2025. This commitment also aims to address the issue of indirect suppliers that contribute to deforestation by selling to intermediaries who then supply meatpackers.

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