World Bank Does The Right Thing!

State of Mato Grosso and cattle ranching. Photo by Rhett A. Butler.

Being the cynical woman that I am, I always expect people; and, especially big corporations to stand on the side of money. I am delighted to say that one major corporation has taken a stand on the side of the environment.

The World Bank’ private lending arm has withdrawn a $90 million loan to Brazilian cattle giant Bertin after a report linked Bertin to illegal deforestation of the Amazon rainforest. (There are two small flags on the upper right corner of the Bertin homepage - one will change the language to English.)

The loan was initially granted by the International Finance Corporation (IFC) in March 2007. It was primarily to expand Bertin’s meat-processing in the Brazilian Amazon; but, was promoted as a way to promote environmentally-responsible beef production in the Amazon. Environmental groups – including Friends of the Earth-Brazil and Greenpeace – criticized the move.

Two weeks ago Greenpeace released it’s exposé of the Brazilian cattle industry. The report, aptly named Slaughtering the Amazon, linked many prominent brands to illegal deforestation in the Amazon in the name of cattle production. Earlier this week Brazil's three largest supermarket chains, Wal-Mart, Carrefour and Pão de Açúcar, said they will suspend contracts with suppliers found to be involved in Amazon deforestation.

William Laurance, a senior scientist with the Smithsonian Tropical Research Institute, said this to mongabay.com: "I am delighted to hear that the proposed IFC loan to Bertin, S.A. operation has been halted. Cattle ranching—often on illegally deforested lands—has emerged as one of the biggest killers of the Amazon rainforest; and, a threat to the region's indigenous peoples. Bertin has been profiting from this destruction."

Greenpeace and Friends of the Earth-Brazil also welcomed the IFC's decision saying, "It is good news that the World Bank is withdrawing these funds, yet scandalous that it was feeding a company that causes Amazon deforestation and climate change in the first place. It must now guarantee that it will not invest in such damaging projects in the future," said Paulo Adario, Greenpeace Brazil’s Amazon campaign director.

"We congratulate IFC for its decision and we hope that this serves as a lesson in the future," said Roberto Smeraldi, director of Friends of the Earth. "Now, it is important for the National Bank for Social and Economic Development (BNDES) to follow this example. How can a public bank continue as a partner of a company so involved in illegal activities?"

Last year BNDES, Brazil's giant development bank, loaned Bertin 2.5 billion reais (approximately $1.25 billion).

The map which follows reflects what mongabay.com says about cattle ranching:

Cattle ranching is the biggest driver of deforestation in the Brazilian Amazon, accounting for roughly 80 percent of forest clearing. More than 38,600 square miles has been cleared for pasture since 1996, bringing the total area occupied by cattle ranches in the Brazilian Amazon to 214,000 square miles, an area larger than France. The legal Amazon, an region consisting of rainforests and a biologically-rich grassland known as cerrado, is now home to more than 80 million head of cattle, more than 85 percent of the total U.S. herd.

The number of cattle bred in the Legal Amazon is growing fast: between 1990 and 2003, the bovine herd more than doubled, from 26.6 million to 64 million head of cattle – 60% of the herds are in the states of Mato Grosso and Pará. Caption and image courtesy of Greenpeace's Amazon Cattle Footprint.

Cattle and rainforest. Photo by Rhett A. Butler.