Credit finances 21 thousand farms that advance through forest – 04/08/2024 – Environment

A survey carried out by Greenpeace points out rural credit concessions to properties in the Amazon that overlap with conservation units, indigenous lands and public forests without specific destination, in addition to financing for rural properties with embargoes by Ibama (Brazilian Institute of the Environment and Resources Renewable Natural Resources).

The NGO’s report states that public and private banks allocated resources, from 2018 to 2022, to 41 rural properties located in strictly protected areas in the Amazon, in the states of Amazonas, Pará, Rondônia, Mato Grosso and Maranhão. Economic activities are prohibited in conservation units of this type.

Greenpeace mapped rural credit concessions, in the same period of analysis, to 15 properties that have some overlap with the Uru-Eu-Wau-Wau Indigenous Land, in Rondônia, where nine indigenous peoples live, including groups in voluntary isolation. The territory is one of the most pressured by land grabbing and deforestation in the Amazon.

Another six traditional territories –Kayabi (MT), Urubu Branco (MT), Amanayé (PA), Alto Rio Guamá (PA), Rio Omerê (RO) and Arariboia (MA)– overlap with rural properties financed with bank credit, according to the pushing. In total, the overlaps involve 24 properties.

According to the NGO, rural credit also included 21,692 properties overlapping with non-designated public forests; 798 with areas embargoed by Ibama; and 29,502 properties with recent deforestation, taking into account the period from 2018 to 2022.

“The results of the analysis indicate the need for a more attentive and rigorous look at the granting of credit and the implementation of more restrictive measures to avoid or minimize environmental damage that occurs within gaps in current regulations”, says Greenpeace in the report.

“This and the continuous monitoring of financed properties will ensure greater progress towards the goal of zero deforestation in the biome”, he adds. “Public entities, companies, financial institutions and investors must act to immediately stop directing resources to those who deforest and violate the rights of indigenous peoples and traditional communities.”

The Lula (PT) government promised to eliminate deforestation in the Amazon by 2030, a goal that forms part of Brazil’s commitment to the Paris Agreement. Defined in 2015 within the scope of the UN (United Nations), the agreement seeks to limit global warming to 1.5°C in relation to pre-industrial levels.

In the last five years, the Amazon lost 54,600 km^two in Brazilian territory, according to Inpe (National Institute for Space Research). The rate of increase in devastation was interrupted in the first year of Lula’s government.

Banks operate rural credit for activities such as purchasing and maintaining animals, creating pasture, logging and purchasing machinery and equipment. The money with subsidized interest ends up paying for the deforestation of preserved areas of the Amazon, including conservation units, indigenous lands and undesignated forests, points out Greenpeace.

The NGO also states that the granting of credit without criteria fuels land grabbing, especially in forest areas where there has not yet been a allocation by the Union, such as the creation of a conservation unit or an agro-extractive settlement.

For 12 cases, the report details the rural credit granted and indicates irregularities and failures. The financing totals R$43 million.

Of the 12 cases, 7 had credit released by Banco da Amazônia and 5 by Banco do Brasil. The two banks have the Union as their main shareholder.

In a note, Banco da Amazônia says that it is improving socio-environmental and climate risk assessment criteria and that, today, it automatically checks for the occurrence of embargoes and overlaps with indigenous areas, quilombolas, public reserves and conservation units.

Banco do Brasil states that its credit policy follows socio-environmental criteria. An automated process, which involves artificial intelligence, checks whether the area to be financed has legal restrictions, said the institution, in a note.

“Credit borrowers are required to present documents that prove the socio-environmental regularity of the projects. Credit operations have clauses that allow early maturity to be declared and disbursements to be immediately suspended in the event of socio-environmental violations”, he says. the note.

According to Greenpeace, properties with CAR (rural environmental registration) canceled and which overlap the Uru-Eu-Wau-Wau land had access to rural credit.

“Surrounded by one of the areas where illegal deforestation is most prevalent in the Amazon region, the Uru-Eu-Wau-Wau Indigenous Land is today one of the most emblematic cases of the laxity that has marked the supply of credit”, says the NGO.

Banco do Brasil carried out 24 credit operations with 15 rural properties that overlap, to some degree, with the indigenous land or the park that is in the same area, according to the survey.

An overlap has been known since 2017 and even then, the bank made two loans, according to Greenpeace.

In Lábrea, in the south of Amazonas, one of the frontiers of Amazon deforestation, a 130,000-hectare farm overlaps the Iquiri National Forest — the overlap reaches 68% of the area, according to the NGO.

Banco da Amazônia carried out five credit operations related to the property, worth R$4.3 million, in 2019 and 2021, according to the report. The money was used to purchase animals and machinery.

The survey says that the owner of the farm is Ricardo Villares Lot Stoppe. The report sent questions to an email registered with the Federal Revenue Service, but there was no response.

“The credit operations were intended for forestry management activities, duly licensed by the competent body for issuing licenses for the extraction and commercialization of legal timber”, says Banco da Amazônia, in a note.

Another case cited in the report is that of a farm in Rio Branco, Acre, owned by Roque Reis Barreiros Júnior. There was deforestation in the area, with signs of illegality between 2019 and 2022.

Half of the area reported in the farm’s CAR overlaps with an undesignated public forest, according to the report, which lists a loan from Banco do Brasil and others from Banco da Amazônia for cattle farming, farming and the acquisition of machinery and vehicles. The value totals R$16.7 million.

The report sent questions to an email provided by the Barreiros Júnior company secretariat. There was no response.

Banco da Amazônia states that the analysis carried out did not find any overlap with public forests. “The customer’s CAR does not show any irregularity.”

A 2023 resolution from the CMN (National Monetary Council) expanded restrictions on the granting of rural credit, preventing loans to properties with canceled or suspended registration in the CAR; with overlap with conservation units, indigenous lands and non-designated public forests; and with embargoed areas.

“We recommend that banks review all credit operations granted before resolution and that are still in force,” says Greenpeace.