The Brazilian insurance company Essor, part of the giant French reinsurance group Scor, sold agribusiness insurance for the illegal cultivation of soy within the Monte Caseros Indigenous Land, in the towns of Ibiraiaras and Muliterno, both in the state of Rio Grande do Sul, southern Brazil.
The sale was subsidized by the Rural Insurance Premium Subsidy Program (PSR, in Portuguese), an initiative through which the federal government subsidizes part of insurance purchases with public money. The PSR funds come from the Harvest Plan.
The insurance policies were hired between 2020 and 2021 by Pedemar Cirino Rodrigues and Sandro Vazzoler, two men claiming to be farmers in Rio Grande do Sul. The area insured by Essor within the Monte Caseros Indigenous Lands totals 110.7 hectares.
At the beginning of 2022, Essor unilaterally broke off the contract with the two men, claiming it was Indigenous land, a state asset. At that time, intense droughts in southern Brazil doubled the compensation paid to farmers, threatening the financial health of insurance companies.
When Brazil’s Foundation for Indigenous Peoples (Funai, in Portuguese) became aware of the case in September 2023, it called in the Brazilian Institute for the Environment and Renewable Natural Resources (Ibama, in Portuguese) and the Federal Police with a request for an investigation on suspicion of usurpation of public property and leasing Indigenous land.
Leasing occurs when landowners assign the rights to use their property to another person or company. But in Brazil, Indigenous lands are public property belonging to the state and for the exclusive use of native populations, so they cannot be used for the benefit of non-Indigenous people.
With these considerations in mind, a 2023 internal technical report by Funai states that the lease insured by Essor has evidence of illegality. Brazilian so-called Indigenous Statute and the Constitution prohibit leasing Indigenous land.
Therefore, the 4,500 hectares of Monte Caseros Indigenous Land could only be used economically by the Kaingang Indigenous people living in the area.
Scor, the company that owns Essor, says its pillars are sustainability, the fight against global warming and biodiversity preservation.
By insuring commodity crops on Indigenous land, however, the company is helping to consolidate the deforestation of the little Atlantic Forest still standing in Monte Caseros Indigenous Land and the state of Rio Grande do Sul.
The conclusions of this news story are based on documents obtained exclusively by Brasil de Fato: the initial petition of a lawsuit by the two farmers against Essor, as well as letters sent by Funai to the Federal Police, Ibama and the Court of Appeals, in which the Indigenous foundation reports on the case.
When contacted, the farmers' defense denied the lease and called the practice a "partnership". The full allegation can be read at the end of the text.
Through its press office, Essor said in a statement that "since June 2021, it has had a process and tool for identifying Indigenous lands and lands under environmental protection, based on which it has identified such situations and refused the respective insurance proposals, including those related to the Monte Caseros Indigenous Land." Essor also stressed that the company "has a sustainability policy available on its website and is constantly improving ESG practices in its operations."
Funai and the Private Insurance Superintendence (Susep, in Portuguese) did not respond by the time this report was published.
Essor terminates lease contract on Indigenous land
Sandro Vazzoler and Pedemar Cirino identified themselves to the courts and admitted to irregularly planting soy on Indigenous land. The confession took place in February 2022, when the pair sued Essor and asked to receive BRL 465,000 (US$ 81,000) for moral and material damages.
In the lawsuit, the alleged tenants of the Monte Caseros Indigenous land claim that the insurance company unilaterally terminated the contract at the end of 2021, returning all the money paid by the clients until that moment, but leaving them without any coverage against the damages droughts caused in Rio Grande do Sul in 2021.
According to Vazzoler and Cirino, the reason Essor gave for terminating the contract without prior notice was that private plantations were inside Monte Caseros. The farmers contest the company's justification and say they had informed the insurance company of the location of the plantations at the time of contracting.
"(...) Before taking out the insurance that is the subject of these proceedings, as well as the others that have been completed, the geographical coordinates of the plantations were sent to the insurance company in advance. In other words, the company always knew where the plantations that would be insured were," wrote lawyer Fernando dos Santos in his initial petition.
To prove that the insurance company had prior knowledge of the location of the plantations, the farmers presented to the court two insurance policies previously taken out by Vazzoller for wheat and corn crops. The documents, to which Brasil de Fato had access, contain geographical coordinates and satellite images that place the insured areas within Monte Caseros Indigenous Land.
"The plaintiffs [Vazzoler and Pedemar Cirino] had already signed other agricultural insurance contracts for the same areas with the defendant insurance company. The claim made by the plaintiff to rescind the contracts in question should not advance. When these contracts were signed, the insurer was fully aware that the insured area was an Indigenous Area, and even attached maps of the insured areas to the contracts," continues the request from lawyer Fernando dos Santos.
Funai warned about pesticides and recommended apprehending crops
The lawsuit filed by Vazzoler and Pedemar Cirino was in the 3rd Judicial Court of Lagoa Vermelha, in Rio Grande do Sul. In June 2023, Judge Gerson Lira sent a letter to Funai asking if the plantation was within Monte Caseros Indigenous Land. In response to the judge, Funai confirmed the location of the plantation and sent a new letter to Ibama and the Federal Police.
"This act [on the part of the farmers] raises not only the suspicion of Usurpation of Public Assets, as exemplified by the legislation in force, but also suspicions about the practice of embezzlement," says the letter signed by Funai's regional coordinator in Rio Grande do Sul, Maria Inês de Freitas, and forwarded to Ibama and the Federal Police.
In the request, Funai asked for the machinery used in the illegal planting to be seized and pointed out that the use of transgenic seeds and pesticides on Indigenous lands constitutes an environmental crime, as does deforestation and the pollution of rivers and springs in areas set aside for Indigenous peoples. "Another possibility would be to seize the crops storage in silos," said the Indigenous agency.
In the letter, Funai recalls that people from outside Indigenous communities compromise territorial integrity and introduce transgenics and agrochemicals that "harm the soil and spread through the air where they are being applied, posing a risk also to the population and fauna in the surrounding area.”
“There is no justification”
Paulo Barreto, an associate researcher at Imazon and a master's student at Yale University, analyzed the case at the request of Brasil de Fato. According to him, there is no excuse for insurance companies or the Brazilian government not adequately controlling the insured areas.
Barreto says they need to use georeferencing tools and other public databases. "It's clear that the insurance company [Essor] didn't have a procedure for doing this. If they did, there was a flaw and then they tried to solve it [by terminating the insurance contract for Monte Caseros Indigenous Land].
The Ministry of Agriculture will cross-check socio-environmental data when granting insurance
The Ministry of Agriculture and Livestock told Brasil de Fato that it is implementing a socio-environmental cross-checking and information monitoring platform for areas insured by the Rural Insurance Premium Subsidy Program, also known as PSR.
"The system will allow insurance companies participating in the PSR program to previously consult the socio-environmental conditions of the plots they wish to insure with support from the federal subsidy. This will make it easier to identify areas that meet the requirements and avoid granting subsidies to areas that don't meet the criteria," the Ministry informed.
The platform will allow insurers to consult the socio-environmental conditions of the land in advance, including information on whether or not they are Indigenous territories. In addition, the Ministry has promised to carry out "continuous monitoring" after the insurance subsidy has been granted.
The aim is to integrate geospatial databases from the agricultural sector "with advanced modeling and data science methods to generate dynamic dashboards and comprehensive visualizations," the Ministry said.
Essor is number one in accessing federal subsidies
In 2023, Scor Brasil was the 6th largest company in the country's reinsurance sector, according to the Brazilian newspaper Valor Econômico. The company ended the year with BRL 702 million (US$ 122,6 million) in insurance sold, with a strong presence in the agribusiness segment.
Reinsurance is the "insurance of insurers", where a reinsurance company, such as Scor, takes on the responsibility of indemnifying the insurer for damage to its insurance policies.
Essor, controlled by the French company Scor, is a beneficiary of the Rural Insurance Premium Subsidy Program, which has been subsidizing the contracting of agricultural insurance for 19 years with funds from Brazil’s federal government.
With the subsidy, insurers can maintain high profitability while offering lower prices to customers. The advantage has caused this market – concentrated in a few corporations – to triple since 2018, according to data from Brazil’s National Confederation of Insurers (CNseg, in Portuguese).
In 2023, Essor was the fourth largest recipient of PSR subsidies, totaling R$162.5 million in public money, equivalent to 17.4% of the BRL 933.1 million (US$ 163 million) made available by the program. The data was released by the Ministry of Agriculture.
It was a partnership, not land leasing
Fernando dos Santos, the lawyer for the previously mentioned farmers, claimed that his clients were not leasing Indigenous land, but partnering with local native residents.
According to Santos, this type of partnership is common in the region due to the Indigenous’ lack of machinery and resources to cultivate the land on their own. The lawyer said that farmers come in with machinery and inputs, and then share the profits from the harvest with the Indigenous communities. He stressed that the situation does not constitute leasing, as there is no payment for land use, but rather a division of profits.
The "partnership", however, goes in the opposite direction of what the Indigenous Statute determines, which includes forbidding "anyone outside the tribal groups or Indigenous communities from hunting, fishing or gathering fruit, as well as farming or developing extractive activities" on Indigenous lands.
“Partnerships” are also forbidden
The Federal Police said it does not investigate leases of Indigenous land, based on the understanding of the Federal Regional Court of the 4th Region (TRF4, in Portuguese), which does not classify the practice as a crime, but rather as a civil offense.
"Mere leasing, in isolation, does not constitute a crime and is, therefore, outside the scope of the Federal Police," it said.
In contrast, the Federal Public Prosecutor's Office (MPF, in Portuguese) replied that it had not received specific information on the Monte Caseros case, but stressed that "partnerships" between Indigenous and non-indigenous people are also an illegal practice, as is lease, as established by the Indigenous Statute and article 231 of Brazil’s Constitution.
"It is prohibited any legal act or business that restricts the full exercise of direct possession and exclusive usufruct by Indigenous groups," the Federal Public Prosecutor's Office stated.
Land leasing is “agribusiness’ political violence”
"Scor has accelerated its sustainability journey, strengthening its commitment to investing in a more sustainable world." The quote comes from Scor's CEO, François de Varenne, and is highlighted on the company's official website.
However, the French group contradicts its own policy by indirectly participating in the leasing of Indigenous lands, a practice that encourages deforestation, agrarian conflicts and the illegal occupation of Indigenous lands by agribusiness.
The fight against the leasing of Indigenous lands is one of the central agendas defended by Indigenous organizations. For them, the practice is a violation of the territorial integrity and autonomy of native peoples.
Far from a one-off problem, the leasing of Indigenous lands has become commonplace in Rio Grande do Sul – and a threat to the Kaingang people. In recent years, the Federal Public Prosecutor's Office has filed several lawsuits to suspend leasing contracts or agricultural partnerships in the Nonoai, Serrinha and Ventarra Indigenous Lands.
"This is because, in addition to violating the right to exclusive usufruct over traditional territories, the practice has generated violent internal disputes over the control to exploit lands and resources," the MPF said in May last year.
Kretã Kaingang, the executive coordinator of the Articulation of Indigenous Peoples of Brazil (Apib, in Portuguese), has already stated that in southern Brazil the leasing of Indigenous lands was encouraged by the Brazilian state from the 1900s onwards.
"From the 1980s onwards, the Kaingang people began leasing lands and the conflicts continue to this day with the worsening of political violence fueled by agribusiness, which arms militias to persecute and kill our leaders," wrote Kretã Kaingang on Apib’s website.
Edited by: Nathallia Fonseca
