The prosecutor who lassoed deforestation

Three years after getting his law degree at the age of 26, Daniel César Azeredo Avelino moved to the Amazon region. He arrived in Belém, capital of the state of Pará, in October 2007. He was already a prosecutor for the Federal Public Ministry (MPF) with one year of experience in Brasília, Brazil’s capital, and another six months in Santarém, Pará.

The Public Prosecutor’s office had a team of nine, distributed amongst various issue areas. Azeredo chose to be in charge of environment lawsuits. From his season in Santarém, he had concluded that “criminal issues, corruption in public agencies, everything in the Amazon ends up connected to damaging the environment.” And the worst problem was deforestation.

The traditional ways of combating deforestation had been used for two decades without any result. “There was no point in going into the fields, fining ranchers. This had caused no fear or practical effect,” Azeredo said. “The fine ended up being charged to a patsy, or the true owner hid property under the name of his wife and children.” A way to shake up the livestock supply chain was missing, but he had high hopes of impacting illegal deforestation throughout the Amazon.

Azeredo’s first step was to study the causes behind the clearing of the forest. Experts pointed to cattle ranching as a major culprit. Work by the NGO Institute of Man and Environment in the Amazon (Imazon), for instance, had shown that livestock accounted for 80 percent of total deforestation in the Amazon.

“We spent one year and a half investigating business dealings of the livestock chain to be able to prove that the cattle produced on illegally deforested areas in the region was being sold in São Paulo, Rio de Janeiro, and other major cities of Brazil,” Azeredo said. “And it was also being exported and used by major companies worldwide.”

The next step was to sue ranchers and slaughterhouses caught selling cattle raised on deforested land. Then the MPF sent more than 200 supermarket chains a “Recommendation” — a legal term for the warning that precedes a lawsuit — not to buy beef from suppliers that had caused illegal deforestation.

“We said, look, your supplier has beef and leather from deforestation, from slave labor, no environmental permit or is located on indigenous land,” according to Azeredo. “So you need to adapt your supply chain.”

Brazilian law provides for joint liability, meaning a supermarket becomes an accomplice to the environmental crime when buying from these suppliers. The large supermarket chains accepted the MPF’s recommendation, but argued that they did not have the means to supervise ranches.

That was when Azeredo had an idea that even the staunchest ruralist opponents have recognized as brilliant. The state of Pará has about 250,000 ranches, and there are hundreds of supermarket chains with more than 80,000 stores spread across the country. But the link between those cattle ranches and the supermarkets is formed by just a few dozen medium and large slaughterhouse operators that are responsible for butchering the cattle and distributing the resulting “cattle products” – companies such as JBS, Bertin (later bought by JBS), Marfrig, and Minerva.

Azeredo’s plan was to turn those slaughterhouse operators into guardians against deforestation.

Migrants

Since the 70’s, ranching has attracted to Pará people coming from the southern states, such as Rio Grande do Sul, Santa Catarina, Paraná, and later from Goiás, Mato Grosso, São Paulo, and Minas Gerais. The state of Pará itself contains 1,247,955 square kilometers (about 482,000 square miles), making it about 3.5 times the size of Germany. Today, the herd in Pará exceeds 19 million head of cattle, more than two cows for each of its eight million inhabitants. The municipality with the largest herd is Sao Félix do Xingu, which went from 22,500 heads in 1980 to 2.2 million in 2014.

Carlos Xavier, 61, a native of the state of Bahia, a rancher, and the president of the Federation of Agriculture and Livestock of Pará (FAEPA), has said that “cattle have colonized Brazil, cattle you just keep driving on, and there is no need for roads or logistics.” The federal government invited Brazilian people to colonize the North with the motto “Landless men for land without man.” It was then, Xavier said, that “We all came here.”

Mauricio Fraga Filho, 48, grew up vacationing in his father’s farm in the southeast of Pará, in the municipalities of Xinguara and Eldorado dos Carajás. The family’s history is a common one in the region: It began in 1973, when Fraga’s father sold land in Bauru, in the state of São Paulo, to multiply it in the North.

Fraga’s father never left São Paulo, managing the family’s farms from afar with the help of monthly visits. But Maurício had always enjoyed living in the southeast of Pará, where he moved and lived for five years after graduating from veterinary school. He returned to the family’s base in São Paulo for a while, when his children were in school. But when the children grew up, he and his wife moved back to Pará for good.

“In general, what comes first is logging,” Fraga said, “but here we had Brazil nut production. Then came cattle, and the deforestation and the planting of pastures began. Cattle are much more profitable than Brazil nuts.” The three farms owned by Fraga’s father total 27,000 hectares (66,700 acres) and have cattle equivalent to the population of a small town: Throughout the year, its stock varies between 30 and 40 thousand head of cattle.

It was a summer day in 1995, the rainy season in the Amazon, when Jordan Timo first came to the Pontal mining area, in the region of São Felix do Xingu, after two days traveling down 100 kilometers of fake roads full of quagmires. Timo traveled with a friend and partner in a small 4×4 Kia truck. In the trunk, he carried a live cow. Shortly after arrival, he shot the cow in the head and sold its flesh for gold.

At the time, the major activities in this region were mining and deforestation to extract hardwoods, such as mahogany. Timo discovered that a nearby mine was not able to find a regular supply of food in the rainy season, because of how difficult it was to access the area. So he came up with the scheme to exchange a cow for gold.

Today, after 22 years, Timo is the president of the Rural Union in Redenção, a town of 80,000 inhabitants in the southeast of Pará, 300 kilometers (about 185 miles) south of Marabá, the region’s largest city with 200,000 inhabitants. However, contrary to what his past might suggest and what one might have imagined, he now fights deforestation.

Timo had received a degree in agricultural engineering in February 1994, and two weeks later came to the region of São Felix do Xingu to take care of his family’s land. His native town is Teófilo Otoni, Minas Gerais, where his father worked in a bank and owned a farm. He persuaded his father to exchange his 450-hectare farm in Minas for another that was almost eight times larger, totaling 3,500 hectares (about 8,700 acres) on the “frontier of Pará” — as, even today, they call the areas where the push to clear and appropriate forest is taking place.

In the 1990s, according to Timo, “In São Felix do Xingu, farmers used to form consortia to hire workers to clear and open farms in the Amazon forest.” Each farmer looking for laborers would go to the boarding houses of the city that lodged people who generally came from the Northeast region of the country and were looking for work. As they were usually indebted for the lodging, hiring the laborers meant paying their debts to the boarding house, an advance nicknamed an “allowance,” which sealed the work arrangement. There was no return.

Timo said that the so-called “peons” were taken to a warehouse guarded by security, where they slept and ate until the desired number of workers was achieved, and then they were taken to a boat that left the subgroups on the banks of the Xingu River, close to the areas of each contractor. “That was what we now call work analogous to slavery,” Timo said. “But without this scheme, the peons would run away with the allowance. There was no other way.”

Lassoing slaughterhouses

Prosecutor Daniel Azeredo’s idea was simple and effective. The MPF had caught slaughterhouses buying deforestation cattle and applied fines totaling two billion Brazilian real (about $500 million). But an even more powerful instrument of pressure was the fear that buying illegal beef provoked in large supermarkets, such as Pão de Açucar and Walmart. With the possibility of being sued, they would rather avoid beef from Pará, which would be perhaps a fatal blow to the state’s slaughterhouses.

Azeredo and the MPF’s quest to stop illegal deforestation for cattle ranching also benefited from the pressure that Greenpeace was putting on multinational brands such as Adidas and McDonald’s in Europe, companies that bought large quantities of leather and beef. The Greenpeace campaign, called “Farra do Boi,” warned against the use of raw materials from deforestation cattle coming from the Amazon. The fear of the damage that this could cause to their reputations made these brands threaten to stop buying cattle products from sources in the region. So when Azeredo offered the agreement known as the “Beef Agreement,” the large slaughterhouses signed it – and thereby became responsible for the supervision of the farmers who were their suppliers.

In each transaction, the slaughterhouses would have to guarantee that the producer fulfilled five requirements: to not appear on the list of embargoes and environmental fines of Ibama (Brazil’s federal environmental agency); to not have deforested areas detected through satellites by the National Institute for Space Research; to have a Rural Environmental Registry (known as CAR, a map of the property that shows where forest should be protected); to not operate on land that overlaps with protected areas or indigenous lands; and to not be on the list of slave labor violators kept by the Ministry of Labour.

Monitoring all of this seemed like a Herculean task for the slaughterhouses, but in practice, it worked easily and at low cost. By then, Jordan Timo had created a consulting business named Apoio that works with slaughterhouses to monitor the requirements of the Beef Agreement on livestock farms. Installed in two small rooms in Redenção, his company is able to do this check in a few minutes for seven different slaughterhouse customers, at a cost of one Brazilian real (BRL) per animal (close to 25 cents), or 0.05 percent of the total animal value, which is around BRL$2000 ($500). There are other companies that perform the same service, such as Terras, a startup created by researchers from the NGO Imazon.

What these consultants do is use software to mine public databases and verify if a specific farmer fails in any of the Beef Agreement requirements. This means that the chances of making a sale drop precipitously for any farmer who breaks the law. This producer will have to rely on the informal market or resort to a dwindling number of slaughterhouses that risk buying illegal cattle. Either way, it is bad business, and ranchers in violation of the Agreement’s requirements command lower prices per head of cattle.

Painful Law

Azeredo remembers well one morning in June 2009, on the eve of signing the Beef Agreement, when he attended a meeting that showed just how outlandish environmental responsibilities seemed to businesses at the time.

He and several colleagues from the MPF met with a group of lawyers from Bertin Slaughterhouse. During the conversation, the lawyers were enthusiastic when the prosecutors suggested an agreement, for which they had the concept in mind but had yet to put in writing. Bertin’s lawyers were willing to wait for it to be written down, so they spent the day at the MPF building in Belém.

“In the evening, we gave them the proposal,” says Azeredo. “They were already taking care of the proxy to sign it, but were shocked by the proposed terms and retreated.”

According to Azeredo, that initial rejection was against the entire agreement, not against a specific point or two.

Mauricio Fraga said of the initial impact of the Beef Agreement: “It was forced down our throats at once, and created a number of difficulties.” He said he lost a sale to a major exporter because of a monitoring failure, a “false positive” that detected a clearing on adjacent lands as if it were on his.

In 2009, Jordan Timo was one of the most outspoken ranch leaders against the government measure against deforesters. “I was against it because I did not think it right. The government wanted something sophisticated from the producer, but was not able to give anything in return, not even the land regularization of properties,” he said. Timo is still outraged by what he considers the dramatic inefficiency of the environmental and land agencies, but he now works against deforestation and makes money from it.

One of Timo’s current customers is the mid-size slaughterhouse Rio Maria, which butchers 400 head of cattle per day and is located in the municipality of the same name, adjacent to the town of Redenção. Before buying each batch of cattle, Rio Maria waits for the verdict of Timo’s company’s computer program. In order to evade the law, there are ranchers who divide their properties to exclude pieces where there was deforestation. However, as the boundaries of each farm must be declared in the Rural Environmental Registry, when this registry changes, it is a sign that something is wrong. Then, there is generally no sale.

Sometimes a rancher is blacklisted without being guilty. Timo tells the story of a large ranch in the municipality of Bannach, with about 4,000 hectares, where there was a mountainous and remote forest. Behind it, there was another property. This neighbor deforested about 10 hectares of the first owner’s land, causing an unexpected loss. When the rancher tried to sell his cattle, he was barred by the slaughterhouse. To access the cleared locality, the rancher would have to drive 40 kilometers. He did not even suspect the illegal deforestation on his land, but that made no difference to the satellite monitoring, and the slaughterhouse opted not to take the risk.

Loopholes

“The Zero Deforestation Beef Agreement has obtained an important victory against the so-called ‘deforestation cattle,’ but is still partial,” said Paulo Barreto, a researcher at Imazon.

Together with Holly Gibbs, a researcher at the University of Wisconsin, Barreto analyzed the effects that the Beef Agreement has had on the industry. The two looked at four large slaughterhouses of the JBS group in southeast Pará. They found that, before the agreement, only two percent of the slaughterhouses’ suppliers had their Rural Environmental Registry, compared to 96 percent after the agreement. Likewise, the number of supplier farms that showed deforestation spots fell from 36 percent to four percent.

However, Barreto notes that there are loopholes and various types of fraud that have weakened the Beef Agreement. “Even the largest slaughterhouses cannot control the calving ranches, which produce calves and sell to fattening ranches. The slaughterhouses buy from the fatstock farms.”

Moreover, he said, there are frauds like the so-called “laundering” that occurs when ranches with deforestation pass on their cattle to ranches operating within the law, which, in turn, sell without problems to slaughterhouses. The next step to improve the Beef Agreement is finding ways to close these loopholes.

Although the indirect producers have not been controlled yet, and there are possibilities of fraud, the Beef Agreement is very successful. Since being pioneered by Azeredo and the MPF in Pará, this type of agreement has spread to six of the seven Brazilian states that encompass the Amazon rainforest. The only exception is the state of Roraima, where no agreement has been signed.

So far, 342 slaughterhouses have signed a Beef Agreement.

Meanwhile, folks from the Southeast region of Brazil remain oblivious to the changes that have occurred in the North. Back in Rio de Janeiro, while chatting with a friend, this story’s reporters had the following exchange:

– Why were you in the Amazon? That’s cool! Have you penetrated in the forest, navigated some great river?

– No, we’ve visited some cattle ranches and large slaughterhouses.

– What do you mean? Are there cows in the Amazon?

This report is part of a project that seeks to improve the efficiency of zero deforestation beef and soy legal agreements, carried out in partnership with Imazon and support from the Gordon and Betty Moore Foundation. The Portuguese version appears here.