A study released on Tuesday (9) by Greenpeace Brasil reveals a direct connection between financial institutions and deforestation in the Amazon forest. The document revealed that, between 2018 and 2022, 798 rural properties embargoed by Ibama (Brazilian Institute for the Environment and Renewable Natural Resources) due to environmental crimes received financing from banks.
The report entitled “Bancando a extinção: bancos e investidores como sócios no desmatamento” (Banking on extinction: banks and investors as partners in deforestation, in a rough translation) shows that, between 2018 and 2023, more than BRL43 million were allocated to rural properties involved in various socio-environmental irregularities in the Amazon, such as land grabbing, cattle raising in protected areas and human rights violations.
"Funding for crimes that deforest and expand agribusiness production in the Amazon is not limited to resources from clandestine sources. Part of it is provided by large public and private banks which, without adequate control, give funds to illegal activities," said Cristiane Mazzetti, spokesperson for Greenpeace Brazil.
Read below some numbers found by Greenpeace Brazil about rural credit granted for properties and businesses in the Amazon:
- 10,074 properties overlapping conservation units
- 24 properties overlapping Indigenous lands;
- 21,692 properties overlapping non-designated public forests (FPND, in Portuguese)
- 29,502 properties where deforestation was recorded (2018-2023)
- 41 properties located in fully protected areas, where there should be no economic activity, according to the National System of Nature Conservation Units (SNUC, in Portuguese);
- 4 properties within 7 Indigenous territories
Banco do Brasil has 44% of all credit contracts on Amazon
The data reveals that one of the largest state-owned Brazilian banks, Banco do Brasil, stands out as the largest operator of rural credit in the Amazon, accounting for 44% of all contracts. However, other financial institutions are also implicated in it, including Caixa Econômica Federal and Banco da Amazônia.
One of the cases the study shows is the Arizona farm in Rio Branco, Acre state. Even with half of its area overlapping an Undesignated Public Forest, and 420 hectares of deforested area between 2016 and 2022, the owner got more than BRL16.7 million in rural credit from Brazilian public banks.
Another example Greenpeace Brasil mentions is the Cachoeira Dourada farm, in Pará. Fined by Ibama for illegal deforestation in 2016 and embargoed by this same federal agency, the property received more than BRL885,000 in financing from Banco da Amazônia in 2019.
The report also mentions farms on Indigenous lands financed through rural credit. In the Uru-Eu-Wau-Wau Indigenous Land, for example, farmers obtained credit for livestock activities, contributing to illegal deforestation and the expansion of pastures on Indigenous territory.
Reform of the financial system
Greenpeace Brasil said the financial system needs urgent reform, both at the national and global levels. The environmental NGO advocates effective measures to align financial flows with the commitments set out in the Paris Agreement and the Global Biodiversity Framework, to limit global warming and curb biodiversity loss.
"Nations need to take effective measures to ensure that all financial flows fulfill the commitments set out in the Paris Agreement and the Global Biodiversity Framework. We have no more time to lose. Money needs to stop flowing to farms and companies that destroy the environment and boost the multiple crises we are experiencing," says Cristiane Mazzetti, from Greenpeace Brasil.
The other side
In a statement, Banco do Brasil said the institution is aware of socio-environmental criteria when analyzing and granting loans and financing.
"Borrowers are required to present documents proving the socio-environmental regularity of their projects. Credit operations have clauses that allow the decree of early maturity and the immediate suspension of disbursements in the event of socio-environmental infringements," says Banco do Brasil.
Banco da Amazônia said that its socio-environmental risk assessment criteria are being improved, and is now automatically checking for embargoes and overlaps with Indigenous areas, Quilombola territories, public reserves and conservation units.
Edited by: Thalita Pires
