Of the 54 senators elected in 2018, 9 resorted to an old political habit: appointing wealthy businessmen as alternate members. One of them is Ogari de Castro Pacheco (DEM-TO), founding partner of the pharmaceutical company Cristália and 2nd substitute of Senator Eduardo Gomes (MDB-TO), who took office on February 1st.

Pacheco and seven other executives from the Cristália laboratory invested 2.1 million BRL (US$ 567,000) in Gomes’ candidacy, which represents 87% of the total collected by the campaign. “We are also going to innovate in politics,” says the businessman in an interview with Repórter Brasil. “I will have a sub-cabinet inside Eduardo’s office. The responsibility for health rests with me”.

Electoral donations are emblematic of the laboratory based in Itapira, in the interior of São Paulo. In the last three general elections, the group donated 7.3 million BRL (US$ 2 million) to candidates from 8 parties, such as PT, PSDB, MDB, DEM and PCdoB. The only politician benefited in the three elections was state deputy Barros Munhoz (PSB-SP). 300,000 BRL (US$ 81,000) were received in 2010, 475,000 BRL (US$ 128,000) in 2014 and 70,000 BRL (US$ 19,000) last year.

It came from Munhoz the idea of giving the laboratory a piece of land on the margins of the SP-147 highway, purchased by the city of Itapira, for Cristália to build a distribution center in the city. Munhoz also worked with the state government to release the funds that reformed the highway in front of the new Cristália unit. 

The state deputy said to Repórter Brasil that there is no relationship between electoral donations and his parliamentary actions. “Every year [donations] are made without any compensation, so only now is there a compensation?”, he asks. “The municipality gained an industrial district for free. Now, nobody is going to build an industry or business on a road without access”, he says.

See below the main excerpts from the interview with Ogari Pacheco, in which he denies conflict of interest in the laboratory’s donations and reveals that he entered politics influenced by economic interests. 

What was your motivation to participate in the 2018 election?

We are developing a product that requires large greenhouses with reduced humidity. Tocantins is a natural greenhouse. Looking for the best place to install [the new production unit], I met Eduardo Gomes, who sought, through local political leaders, to offer some advantages, such as tax incentives and land donations. This did not persuade me. After some back and forth [he said]: ‘Wouldn’t you be interested in being part of a Senate ticket that I lead?’ Then things changed, because we have been discussing in Abifina, Abiquim and in FarmaBrasil group issues of the country and the pharmaceutical industry for a long time. We always criticize that you have to eventually use an intermediary to explain what you think. Nothing better than someone from the field who can translate these problems. That was what led me to accept the nomination for alternate for Eduardo Gomes.

Cristália and its executives donated 7.3 million BRL (US$ 2 million) in the last three elections to 8 parties. What is the motivation for donations and what is the company’s expectation regarding the actions of these politicians?

The laboratory was never individually involved in politics. There is a group, FarmaBrasil, which brings together most national companies and leads the parliamentary front of the chemical industry. Our donation was made because the donations were not from FarmaBrasil to anyone, but they asked: “Look, the front is made up of A, B, C and D parliamentarians. You could contribute as follows: so-and-so donates to A, another to B, C…”. It is just like that. There was nothing else behind it, no motivation, nothing settled with anyone. 

As an alternate senator, will you be open to influencing the mandate of Eduardo Gomes and the Parliamentary Front of the Chemical Industry?

Cristália is known for its leadership in innovation. We will also innovate in politics. In the agreement I have with Eduardo [Gomes], he will take office, but I will start working now, I will not wait to assume the mandate to work. “I will have a sub-office inside Eduardo’s office. Health matters will be under my responsibility, and a series of projects that are already under development. He is going to present them, because he has the voice and the vote, but I will support him and provide the information necessary for him to try to approve these projects.

You criticize the dependence on the “intermediaries”, but Cristália received incentives from the city of Itapira…

[Interrupts] No, no. We don’t have any units that received incentives. Except in the case of Itapira. I needed to build a distribution center, and several other cities offered me advantages. When the city of Itapira found out, they offered land, a space at the entrance to the city, where our distribution center is located. Now, on the other hand, [there is] the demand from the population, the portion that supports the opposition, that asks: “How many jobs have you created? What is the quality of the jobs? How much will you increase in billing?”. A series of questions that I think are pertinent, but I did not want to be subject to such demands in Tocantins. I intend to install a unit with my own resources [there] and so I owe nothing to anyone.

The politician who stands out in Cristália’s donations is state deputy Barros Munhoz. He worked for the assignment of the land on which the distribution center was built. Is there a conflict of interest between the electoral donation and the deputy’s action?

Deputy Barros Munhoz is from Itapira, has served as mayor on several occasions, and has several deputy terms. He works in favor of the region as a whole and of Itapira in particular. We are the company that generates the most jobs, the largest contributor of the Tax on the Circulation of Goods and Services (ICMS in the Portuguese acronym) in the city. As Barros Munhoz works for the region and for Itapira, we do support him. I see no conflict of interest. On the contrary. 

What is your prevision for the national pharmaceutical industry for the coming years?

What Brazil is unable to produce is the pharmaceutical inputs, the raw material. Any project to stimulate the national pharmaceutical industry involves stimulating pharmacochemistry. You cannot make a medicine without an active ingredient, and therein lies the biggest drawback. 

The sector’s trade balance has a deficit of US$ 5 billion per year. Will foreign dependence increase in the coming years?

As it is, it will only get worse. I have a suggestion that can change this situation, but I will do it via a bill in the Senate. Going through the pharmacochemistry, if not it is pointless. Moreover, without using a penny of the public funds.

This story was originally published on 19th February 2019

O post Executive tells how he became an alternate member of the Senate after investing 1.5 million BRL in campaign apareceu primeiro em Repórter Brasil.

There were no doctors on the morning of April 2 to see Milena Kaiabi, who was born in the Paranaíta village, in the Xingu Indigenous Park, north of Mato Grosso. The 4 days old newborn was crying, feverish and unwilling to breastfeed, but the nurse that visited the community said it was nothing serious. The baby would die less than a month later in the city of Sinop, 200 km away, on suspicion of meningitis and a victim of the “white man’s confusion”.

The term is used by Mairawê Kaiabi, the main leader of his people in the Xingu, to portray public policies for indigenous healthcare in Brazil. The issue was never a priority in Brasilia, “but with this new government it got much worse, it got really worse,” he says. The departure of Cuban doctors from the Mais Médicos program in November last year, and the cut in funds from the Special Secretariat for Indigenous Health (Secretaria Especial de Saúde Indígena – Sesai), both of which occurred after the election of President Jair Bolsonaro, aggravated the already precarious assistance in indigenous territories. 

In addition to doctors, medicines such as antibiotics and anesthesia are lacking, which compromises basic care and generates costly air, river and land rescues to cities. Fuel is also insufficient for emergencies. Because of the cuts, health workers with unpaid salaries have abandoned their jobs – or are volunteering. Chaos seems to be installed in indigenous territories, but when they resort to the city, the Brazilian Public Health System (Sistema Único de Saúde – SUS) can be even more cruel. 

The deaths of three Kaiabi babies in a period of 11 days in April reveal how Brazil takes care of the health of its indigenous children. Jaqueline Kaiabi, 2 months old, died of pneumonia at the General Hospital of Cuiabá, more than a month after entering the endless wait for cardiac surgery. Nare Pedro, 2 years old, died after his fight against malnutrition aggravated with a maltreated pneumonia. Milena lived for only 28 days. If there were no doctors in the indigenous park for her, in the rich cities of Mato Grosso State there were no vacancies in hospitals.

Sitting on a sack of chestnuts in the village where Milena was born and is now buried, Makatu Kaiabi, 23, says in a low voice that he does not understand how he lost his daughter. His account, in the Kaiabi language, is translated by an indigenous man who lives in the region. Beside his wife, Severina, 16, and first-born Tairu, 2, Makatu says that his daughter continued “fretful” in the days following the consultation with the nurse. 

Sinop City Hall is refusing to assist the indigenous population in the municipal public health system

The family then decided to take the newborn to the Diauarum center, a reference in health among the Xingu. Milena was hospitalized for five days, according to her father, without seeing any doctors or undergoing more complex tests. No diagnosis. 

A second nurse, recently arrived at Diauarum with the vaccination team, reevaluated the baby and asked for her immediate transfer. Milena arrived in Sinop at 11 days of age in serious condition, with generalized infection, according to a medical report. 

Health cuts

The 7,500 indigenous people of the 16 ethnic groups living in the Xingu were left without doctors in early November, when Bolsonaro, then president-elect, proposed changes to the Mais Médicos program that were not accepted by Cuba. The departure of Cuban doctors directly affected health care in the villages, as of the 372 doctors who worked on indigenous lands, 301 were Cuban, including the six from Xingu.

It took the Ministry of Health more than five months to hire the six new doctors for the indigenous park, most of them Brazilians trained abroad. Repórter Brasil found that one of them has already given up the vacancy and another is on sick leave, which impacted the service in Diauarum in early April, when Milena was there. Asked, the Ministry of Health does not confirm whether there is currently a doctor on site. The office says that, of the 372 vacancies, 354 are occupied and 18 were offered in the May public notice for Mais Médicos program.

To make matters worse, Sesai froze part of the funds transferred to the country’s 34 Indigenous Health Districts, responsible for primary health care for 900,000 Brazilian indigenous people. The justification for the cuts is suspicion of corruption in service contracts, such as overpricing in car and plane rentals. 

Tasks and contracts are managed by eight social organizations accredited by the Ministry of Health. The office did not reveal the amount blocked since January 2019, which mainly affected the payment of health workers serving indigenous communities. In 2018, the Brazilian government spent 1.6 billion BRL (US$ 411 million) on the indigenous health program – 45% of which was transferred to the accredited companies. Until May 23 of this year, expenditures totaled 490 million BRL (US$ 126 million) – 25% below the monthly average of last year.

“The service provided by professionals within the indigenous territory was the most affected. There were 3 months of overdue wages, so some were unsure whether they continued working or not”, said Loike Kalapalo, president of the Xingu District Health Council, which is in charge of inspecting the agreement. Late payments were repeated in May.

The indigenous organizations and their leaders say that for many years they have been reporting fraud in contracts with the accredited parties. “This is due to the political nominations for management positions in indigenous health care. Minister Luiz Henrique Mandetta has all the means to investigate these cases. What he cannot do is harm indigenous communities and stop contracts and transfers,” says Eloy Terena, legal advisor to the Articulation of Indigenous Peoples in Brazil (Articulação dos Povos Indígenas do Brasil – Apib).

“Municipalization will be the end of our people”, says Matari Kaiabi, coordinator of the health post in the village Sobradinho, in Xingu

When contacted, the Ministry of Health said that there were “legal difficulties” to make payments to social organizations. “The resources allocated to the accredited entities have already been authorized. However, the financial implementation schedule of the resources for Caiuá Evangelical Mission, SPDM and IMIP is being adjusted with the National Health Fund. The installments must be paid by the end of May. It is important to highlight that there was no interruption of activities in the 34 Special Indigenous Sanitary Districts (Distrito Sanitário Especial Indígena- DSEI)”, says the office, in a note sent to Repórter Brasil (see the complete statement). 

Babies under threat

In the absence of doctors, nurses and nursing technicians take the front line of care, assisted by indigenous health agents. AIS, as these professionals are called for its acronym in Portuguese for “Agentes Indígenas de Saúde”, work in communities and maintain permanent communication with the health center, via radio. They are a reference in health in the indigenous territory. 

One of them is Wyrasingi Kaiabi, 34, who faced an outbreak of pneumonia in communities located on the Arraias and Manito rivers, west of the Xingu river. Brought by indigenous people returning from medical care in the city, the disease spread rapidly during April, affecting at least 35 indigenous children.

Serious respiratory infections are common in indigenous lands in the Amazon, especially at the beginning of the year, with the rainy season. But in 2019, the infection that hit this region seemed stronger, progressing to severe pneumonia in a day or two, according to reports by indigenous people working in health. Despite this, deaths from pneumonia are considered “preventable”, according to Doctor Clayton Coelho, from the Xingu Project, a health program at the Federal University of São Paulo (Universidade Federal de São Paulo – Unifesp) that has worked in the park for more than 50 years. 

Trained by the project, Wyrasingi can recognize pneumonia and start treatment still in the village. In mid-April, however, there was no amoxicillin, the most suitable antibiotic to fight the disease in children. “There were a lot of sick people and the medicine ran out,” says he, who works in the village Sobradinho, the largest in the region, with 150 residents. There is an improvised health post, which serves as an assistance point for its strategic location: it is a four hour drive from the municipality of Marcelândia. 

The distribution of medicines in the villages is the responsibility of the Ministry of Health, through the indigenous health districts. With the budget cuts this year, the amount of medicines sent has also decreased. The batches that arrive at Diauarum are not enough to supply the communities, causing Sobradinho to lose anesthesia and antibiotics. 

Without proper treatment, little Nare Pedro Kaiabi, 2, got worse in the village. With a history of low weight and fragile health condition, he was transferred to Marcelândia and later to Colíder, but he did not resist pneumonia. He died on April 18, the eve of Indigenous People’s Day.

Of the 461 babies who were born in the Xingu in the past four years, 20 died before they turned one year old. The infant mortality rate in the period, of 43 deaths per thousand inhabitants, is three times higher than the Brazilian average, of 13. The general rate of indigenous lands in Brazil is 30, according to data from the Ministry of Health. 

The most frequent causes for deaths are respiratory infections, malnutrition, diarrhea, poor diet, poor sanitation and poor health care, explains Coelho.

The Ministry of Health says that “it has intensified death surveillance in all DSEIs, with the objective of promoting the reduction of maternal and child mortality”, and that “it carries out a series of actions aimed at fighting indigenous infant mortality, such as food and nutritional surveillance, in addition to immunizing children ”. The office also states that it sent the antibiotic amoxicillin to the Diauarum center. Health officials in the village Sobradinho, however, claim that the drug had not reached the village in early April, when Nare Pedro caught pneumonia.

“Minister Luiz Henrique Mandetta has all the means to investigate suspected fraud. What he cannot do is harm indigenous communities and stop contracts and transfers,” says Eloy Terena, of the Articulation of Indigenous Peoples in Brazil (Articulação dos Povos Indígenas do Brasil – Apib)

Another sensitive group in the villages are pregnant women. On a hot Sunday afternoon, Naiara Kaiabi, 33, started experiencing severe pain in her lower abdomen and difficulty walking. With 32 weeks of gestation of her fourth child and risk of premature birth, she traveled three hours by boat at night to Sobradinho, on a trip guided by an indigenous volunteer, since the official boatman left the post after three months of overdue wages.

Then there was another 130 km by land to Marcelândia. In a pickup truck from the Ministry of Health, the volunteer driver took four hours to drive through the drenched and potholed road. The rescue, accompanied by the reporter, ended at 4 am in the emergency of the Municipal Hospital Maria Zélia. “I got sick on the car trip, but now I’m feeling good,” said Naiara the next day, no longer in pain and with a smile on her face. 

In the city, chaos

The healthcare void created in the villages forces the Xingu Indigenous people to seek assistance in urban areas, where city halls and the government of Mato Grosso are also facing a chaotic situation. In some cities, city governments prohibit health care for indigenous people. “In the past, we had a mini-hospital inside Xingu and the population did not go out so much. Now they go out to the city a lot, but it’s not working. People are dying,” says chief Sirawê Kaiabi, 69. 

Born in a village that no longer exists, on the outskirts of the city of Sinop, Sirawê and his family were taken from their lands more than 50 years ago to live in western Xingu, due to conflicts with the rubber tappers who occupied the Mato Grosso border of the Amazon.

Known as “the capital of Nortão”, Sinop is one of the richest agricultural cities in the country. Created in the 1970s in the wake of the BR-163 (Cuiabá-Santarém), the city with a timber tradition saw the surrounding Amazon be transformed into huge cattle farms and soybean and corn plantations.

However, wealth does not reach public health services. Since January, the local city government has prohibited indigenous patients from being assisted at the Basic Healthcare Unit (Unidade Básica de Saúde – UBS) and at the city’s medical center, where until last year around 40 indigenous people were tested and seen by specialist doctors every month. “This will be a surge in deaths,” says an indigenous health worker, who prefers not to be identified for fear of reprisals.

Sinop’s health secretary, Gerson Danzer, admits the end of the services in the municipal network and says that one of the reasons is the fact that the city does not have indigenous lands in its perimeter. “Today, Sinop does not receive State of Federal resources to serve the indigenous people, or from the municipalities to which the indigenous people belong.” he says. The leader Mairawê Kaiabi confirms the lack of funding for the municipality, but points out that Sinop’s borders have had an indigenous presence since long before the city’s emergence. 

Medical care is getting worse at a time when the Ministry of Health is re-discussing the indigenous health model. A decree signed by Bolsonaro on May 17 , extinguished Sesai positions and abolished the secretariat’s management department. The decision paves the way for the controversial “municipalization of indigenous health”, which provides for transferring the management of the service from the Nation to the municipalities. The indigenous movement has taken to the streets since February to criticize the proposal. “Municipalization will be the end of our people”, says Matari Kaiabi, coordinator of the health post in the village Sobradinho, in Xingu.

When contacted, the Ministry of Health did not comment on cuts in funds, municipalization, the deaths of children in the Xingu and the interruption of medical assistance in indigenous healthcare. 

In the middle of the “white people’s confusion”, Sinop’s Emergency Care Unit was the only available to receive the newborn Milena, 11 days old. She was seen by a doctor, underwent tests and started treatment for meningitis. With generalized infection, the baby needed neurological assessment and a bed in the neonatal ICU. 

The request made by the Emergency Care Unit (Unidade de Pronto Atendimento – UPA), however, was denied by the State Department of Health due to lack of vacancies. “Difficulty with ICU beds is a latent issue in Mato Grosso, a state that, in recent months, has been experiencing an unusual situation involving the closure of a philanthropic hospital, which had 30 ICU beds”, says the secretary in a note sent to Repórter Brasil. The Ministry of Health says the death is still under investigation and that meningitis could not be confirmed because the baby’s Cerebral spinal fluid was not collected in Sinop, a standard procedure in cases of suspected disease.

Milena spent her last 15 days in the UPA. Tests revealed an increase in pressure inside the skull. The child had decreased reflexes and suffered severe spasms. A court injunction forced the state government to hospitalize the baby. But it was in vain. Even the private hospitals in Mato Grosso did not open the doors to the small Native Brazilian. When Goiânia accepted the request, it was too late. Milena died on April 23, five days before completing a month.

This story was originally published on 2nd June 2019

O post 3 children die in 11 days in the Xingu during indigenous healthcare void apareceu primeiro em Repórter Brasil.

“Insane”, “foolish” and “preoccupying”. That is how Brazilian businessmen from the pharmaceutical industry and specialists in access to medicines evaluate the proposal of privatization of the Brazilian Institute of Industrial Property (Inpi from the acronym in Portuguese “Instituto Nacional da Propriedade Industrial”),  currently under consideration by the Ministry of Economy. 

For them, the measure will harm the national industry and favor multinational corporations, responsible for 80% of patent applications in Brazil. Experts warn that if the proposal is implemented, new drugs will become more expensive.

Inpi is the federal government agency responsible for evaluating applications for trademarks, patents, computer programs, among others, including new drugs. Upon receiving a patent, a company gains a monopoly on selling the product — and ends up charging more because there are no competitors in the market.

The Ministry of Economy, however, is considering extinguishing Inpi and creating the Brazilian Agency for Industrial Property and Development (Agência Brasileira de Desenvolvimento e Propriedade Industrial), which would be incorporated into the group of private management organizations known as Sistema S, which includes Sesc, Sesi and Senai. The change, which may be made via a provisional measure, has been criticized for opening a gap for the private sector lobby, in addition to the possible approval of undue patents.

“There is no industrial property office in the world that is not part of the government structure”, points out the head of the 13^th Federal Court of Rio de Janeiro, Judge Márcia Nunes de Barros, specialist in social security and intellectual property.

Industry lobby

Health will be one of the areas most affected by the change because pharmaceutical patents directly impact on the price of medicines. The effect is immediate in the public budget, since the largest buyer of medicines in the country is the Ministry of Health, with an annual expenditure of around 19 billion BRL (US$ 4.6 billion).

“This proposal transfers the responsibility of the State to the private sector. There is an evident conflict of interest”, says Jorge Bermudez, head of the Department of Medicines Policy and Pharmaceutical Assistance (Departamento de Política de Medicamentos e Assistência Farmacêutica) at Fiocruz. “With this [private] model, the chances of undue patents being granted increase,” says Reinaldo Guimarães, a researcher at the Federal University of Rio de Janeiro (Universidade Federal de Rio de Janeiro – UFRJ). 

Another problem of linking the analysis of pharmaceutical patents to a private entity is that it may weaken the exemption and impartiality of the examiners, who would be subject to corporate lobbying, say researchers.

“A weakened Inpi that is not public will not have the strength to regulate the private sector. And the private sector cannot regulate the private sector,” says Pedro Villardi, coordinator of the Working Group on Intellectual Property (Grupo de Trabalho Sobre Propriedade Intelectual), which assesses the impact of patents on public health.

When a drug patent is granted, the company gains exclusivity for 20 years to sell the product on the market. In the case of Brazil, Patent Law allows the monopoly time to extend over the international standard of two decades. This happens when the Inpi takes more than 10 years to confirm a patent — in the pharmaceutical sector, the average time is 13 years.

Proposal divides national and multinational industry

According to an internal document from the Ministry of Economy, the proposal aims to increase Inpi’s efficiency and a cut on public spending. The institute, however, is in the black. The forecast for 2020 is 513 million BRL (US$ 125 million) in revenues and 333 million BRL (US$ 81 million) in expenses — a positive balance of 180 million BRL (US$ 44 million).

“This argument [of the government] is not solid. If they want efficiency, Inpi’s revenues should remain in the agency, and not be directed to the Treasury, as is the case today,” says Guimarães, from UFRJ.

When contacted, the Inpi declined to comment. The Ministry of Economy did not answer the questions sent by the reporter and chose not to comment. 

Inpi’s president, Cláudio Furtado, denied that the agency will be extinguished, but did not exclude the possibility of it leaving the government structure. “INPI may, in fact, cease to be an autonomous [federal] agency, but with the objective of becoming a world-class office”, he stated at a meeting held in December at the Yacht Club in Rio de Janeiro.

Representatives of the national industry contacted by Repórter Brasil were concerned about the measure being considered by the ministry. “Today Inpi has autonomy as a regulatory agency, and that is why it makes independent decisions. Weakening the intellectual property body will cause legal uncertainty “, says Sérgio Frangioni, partner at Blanver and president of Abifina, an association that brings together the largest pharmaceutical companies in the country.

“Medicines prices go up when patents are granted beyond limits.” Reinaldo Guimarães, from UFRJ and Abrasco

The owner of the Brazilian record-breaking patent laboratory, Ogari Pacheco, from Cristália, evaluates the proposal as “insane”. “It is safer the way it is today, connected to a public agency”, he says.

Interfarma, an association that represents foreign companies in Brazil, avoided commenting on the withdrawal of Inpi from the federal government. The entity defends “a robust structure, with transparency and efficiency, to issue patents”, but did not answer whether this would be the case under private management.

“There needs to be a formal or public proposal by the government so that the productive and innovative sector can express its views”, says the pronouncement sent to Repórter Brasil.

Plan of attack

The proposal to privatize the Inpi comes just a few months after the agency put in place a plan to drastically reduce the queue of patent applications — which today has 155 thousand applications waiting for analysis, for a total of 320 examiners (484 requests per civil servant). 

“With the plan, we started to do a more precarious exam,” an INPI examiner told Repórter Brasil, on condition of anonymity. He says that the agency’s productivity has increased because the new management requires civil servants to do more patent analysis so that his salary remains the same.

The lawyer Luiz Edgard Montaury Pimenta, president of the Brazilian Intellectual Property Association (ABPI), recognizes that the quality of the exam has dropped with the government’s plan. But he sees advantages in a faster work by Inpi. “It is worse to take 13 years to grant a pharmaceutical patent and extend the monopoly time. Whoever feels harmed [by a wrongly granted patent] can ask for annulment”, he says.

Experts on access to medicines disagree and say that the solution to the problems of the INPI is not the precariousness of the agency or the work of the civil servants. “The worse the examination of an application, the more patents are granted. And the more drugs that are patented, the more expensive medicines are,” says Villardi.

“What makes medicine cheaper is competition,” summarizes Bermudez, noting that the price of other products will also be affected by the possible privatization of Inpi, such as pesticides.

This story was originally published on 9th January 2020

O post Brazilian Government considers privatization of the agency that analyzes patents, which may increase the price of medicines apareceu primeiro em Repórter Brasil.

“Who owns the patent for this vaccine?”, asks the journalist on TV. “The people, I would say. There is no patent,” replies the American doctor and scientist Jonas Salk in the famous interview he gave in 1955, after launching the first vaccine against polio, a contagious disease that challenged medicine at the time. “Could you patent the sun?”, continued the scientist, who became an inspiration for those who advocate medicines accessible to the population.

The researcher’s provocation makes sense. The price of medicines is directly linked to the existence (or not) of a patent – an instrument that guarantees exclusivity in the manufacture and sale of a product. Without competitors, drug prices tend to be higher – which guarantees a greater profit for the pharmaceutical industry.

In Brazil, however, a singularity in the legislation allows the monopoly on a drug to last longer than the world’s average, which delays the entry of cheaper generics in the market.

As a result, the Ministry of Health will waste 3.8 billion BRL (US$ 918 million) over the next 10 years with the purchase of nine drugs, indicated for the treatment of cancer, hepatitis C, rheumatism and rare diseases. The expense was estimated by researchers from the Innovation Economics Group at the Federal University of Rio de Janeiro (UFRJ).

While the term of a pharmaceutical patent is 20 years in other countries, in Brazil the average duration is 23 years. There are cases that it extends beyond 28 years. “Brazilian legislation gives companies an extra benefit that was not anticipated [in the international treaty that determined two decades as standard time]”, says economist Julia Paranhos, coordinator of the study.

Article 40

The problem in Brazil revolves around the Industrial Property Law, passed in 1996 under strong lobbying by the pharmaceutical sector. An article of the law authorizes extra time for patents if the National Institute of Industrial Property (INPI) takes more than 10 years to analyze an application. Currently, the agency takes an average of 13 years to complete an analysis of the pharmaceutical sector — which extends the monopoly on a drug to 23 years on average.

One example is dasatinib, used to treat leukemia. In the last five years, the Ministry of Health has spent an average of 69 BRL (US$ 16) for each pill. In India, the generic version is sold for 16 BRL (US$ 4). The similar drug could arrive in Brazil in April 2020, when the patent for dasatinib reaches its 20 years. However, the national market will remain closed until November 2028, because it took INPI 18 years to analyze the order.

The controversial part of the law is under debate in the Supreme Federal Court, where a 2016 action by the Attorney General’s Office calls for an end to the extension of patents in Brazil, but there is no schedule for the trial.

The INPI has granted 683 pharmaceutical patents since 1997, of which 630 (92%) have benefited from the extension over 20 years, according to a survey by the UFRJ research group, which has been investigating the sector for more than 10 years.

Even when the extension does not apply, as in the case of patents applied for before the law came into force, the pharmaceutical industry uses Article 40 to file lawsuits asking for the extension of the monopoly. This is the case of humira (for rheumatoid arthritis and other diseases), from the US laboratory Abbvie. A lawsuit guarantees the company exclusivity in Brazil until February 2020, although its patent expired in 2017.

As long as a final decision by the courts does not come out, legal uncertainty keeps competitors out of the market. With that, in the last five years, the Ministry of Health transferred 3.7 billion BRL (US$ 894 million) to Abbvie to buy humira. At the end of the three-year extension of the patent, the estimated loss for the Ministry of Health will be 990 million BRL (US$ 239 million), according to the study.

Humira is the highest-revenue drug in the world, with global sales of US$ 19.9 billion in 2018 alone. To get an idea of how the end of the patent impacts its price, in Europe, Abbvie offered 80% discounts after the arrival of the first similar drugs. So, what is the real price of this drug?

Patent Family

The extension of pharmaceutical patents has become standard in Brazil for two reasons: the high number of invention applications submitted by companies and the low number of INPI examiners.

There are currently 319 employees responsible for analyzing inventions from all sectors of the economy. But there are 160,000 pending orders in the queue, or 501 per examiner, according to the INPI. The scenario is worse than in the United States, Europe, Japan, India and Mexico.

The excess of pharmaceutical patent applications was investigated by the Oswaldo Cruz Foundation (Fiocruz), an agency linked to the Ministry of Health. In the case of adalimumab, the study identified 33 requests submitted to INPI by Abbvie and its competitors. Only two orders were granted, one was rejected, eight were filed and 22 remain in the queue.

In addition to piling up INPI’s work stack, multiple patent applications for the same active ingredient are a strategy by the pharmaceutical industry to “extend the exclusivity of a product”, says pharmacist Roberta Dorneles da Costa, a UERJ researcher and one of the authors of the Fiocruz study.

“The pharmaceutical industry resorts to different strategies to maintain a monopoly. The first step is to create this endless patent network”, says Carlos Portugal Gouvêa, professor of commercial law at USP. “Another strategy is the lawsuits, because while there is no final decision, the competitors are put back”, adds Paranhos.

INPI recognizes that the number of examiners is low and that “the delay in analyzing patent applications has led to the extension of the term of protection”. The agency said that in July it started a plan to reduce the time it takes to review patents to five years: the goal is to reduce the backlog by 80% by 2021.

When contacted, Abbvie did not comment on the extension of the humira monopoly or on the various patent applications for the drug. The laboratory told Repórter Brasil that the price of the drug has dropped in the past ten years.

The Ministry of Health told Repórter Brasil that it will comment after the study is published.

Negotiating prices

Another drug analyzed by UFRJ is sofosbuvir, indicated for hepatitis C, a disease that affects 71 million people worldwide and kills 400,000 a year, mostly in poor countries. Developed by Gilead, sofosbuvir looks as revolutionary as Salk’s vaccine, as it cures hepatitis C in 95% of cases. But the high price charged by Gilead and the barrier to generics keeps the eradication of the disease in a distant future.

In Brazil, the Ministry of Health has spent more than 1.7 billion BRL (US$ 410 million) on sofosbuvir since 2014, paying an average of 258 BRL (US$ 62) per pill, according to UFRJ’s survey. In low-income countries, however, it sells for 2.95 BRL (US$ 0,71 – 98% less), while in the United States it reaches 4,000 BRL (US$ 966). The patent application in Brazil was filed in March 2008, but after 11 years the analysis has not yet been completed. UFRJ estimates the extra cost to the Ministry of Health at 346 million BRL (US$ 83 million) for each year of the extension of the sofosbuvir patent.

In defending the extension of patents, Interfarma (representative of foreign companies in Brazil) says that the laboratories do not commercially take advantage of the 20 years of monopoly, since the first 10 years are dedicated to research and tests to create the drug. The organization says that pharmaceutical investments are high and that the sustainability of the business “requires the maintenance of the right to industrial property”.

The president of the Brazilian laboratory with the highest number of patents, however, defends a 20-year duration for the monopoly, “as it is recognized worldwide,” says Ogari Pacheco, from Cristália. For Libbs, which financed the UFRJ research, the extension of patents “delays the entry of generics” and “increases SUS (Public Health System) spending a lot”. Abifina, a representative of Brazilian pharmaceutical companies, classifies this section of the law as unconstitutional and says that some companies use the law to “artificially extend the term of patents”.

For researchers at UFRJ, in addition to showing the need for investments in the INPI, the study indicates that the Brazilian government can spend less on medicines. “It is possible for the Ministry of Health to look for ways to negotiate products and get lower prices,” says Paranhos.

“The future is in our hands,” said Salk in 1985. “To decide whether to use the science, technology and knowledge we have for the best, rather than the worst.”

This story was originally published on 30th August 2019

O post Learn about the law that will cause billionaire loss to the Ministry of Health and increase the profit of pharmaceutical companies apareceu primeiro em Repórter Brasil.

“I would certainly pay for my cure, but I don’t have 364,000 BRL (US$ 87,500),” says biologist Fabiana Sobral, 41, who has been waiting at SUS (Public Health System) for medications against hepatitis C for three months.

Like the biologist, about 100,000 Brazilians diagnosed with the disease may wait up to one year at SUS for treatment. And the reason is the high cost of drugs, especially sofosbuvir. The drug, which cures hepatitis C in 95% of cases, is sold by the North American laboratory Gilead to public agencies for between 65 BRL (US$ 15) and 1,428 BRL (US$ 343) per capsule, but its value could drop to 34 BRL (US$ 8) if it was not imported and produced in Brazil.

SUS can pay up to 42 times more because Gilead has owned the sofosbuvir patent since January, which guarantees exclusive sales on the national market. The monopoly is questioned by experts for preventing competition, which would make the drug cheaper.

One of the ways to circumvent this situation is to apply compulsory licensing, that is when the local manufacture of a product is authorized to increase the offer in SUS.

And that was exactly the request made by the Public Defender’s Office in October. Together with eight social organizations, the agency reported Gilead for economic abuse of the sofosbuvir patent before the  Administrative Council for Economic Defense (Conselho Administrativo de Defesa Econômica – Cade), responsible for overseeing competition in Brazil. If the decision is favorable to the group and compulsory patent licensing is issued, the price of the medicine would drop to at least 34 BRL (US$ 8).

It would be the second time that Brazil would apply compulsory licensing.

Compulsory patent licensing in Brazil

The first was in 2007, in an action that revolutionized the treatment of AIDS in the country. “The [drug] Efavirenz was effective, but its high price limited patient access,” recalls Moysés Toniolo, a member of the National AIDS Commission in 2007, when Brazil announced the compulsory license of efavirenz patent.

At that time, 35,000 new cases of HIV were detected each year, and purchases of efavirenz, used by 90% of patients, used up to 11% of the ministry’s budget for medicines.

But the government did not agree to pay the US laboratory Merck US$ 1.59 per pill, while Thailand paid US$ 0.65, and the generic cost US$ 0.45 in India. “There was a high risk of seriously affecting the AIDS program, so we opted for compulsory licensing,” recalls former minister José Gomes Temporão (2007-2011), in an interview with Repórter Brasil.

With compulsory licensing, which reduced the price to US$ 0.45, the government started saving 30 million BRL (US$ 7.2 million) per year with efavirenz, which allowed it to increase its offer in SUS and buy other anti-HIV drugs. As a result, the number of patients undergoing treatment jumped from 75,000 in 2007 to 230,000 in 2009.

“The funny thing is that, two years later, the president of the laboratory [Merck] publicly apologized for the company’s stance and said that compulsory licensing had been a fair decision by Brazil,” says Temporão.

Price abuse

Provided for in the international intellectual property treaty (known as Trips), compulsory licensing can be applied when there is economic abuse. About 20 countries have already issued compulsory licensing for patents, such as Canada (637 times), United States (105) and Italy (3), according to a survey by the Intellectual Property Working Group (GPTI).  Brazilian law also authorizes the measure in cases of abusive price or public interest.

“From the moment we see the price abuse of sofosbuvir, compulsory licensing is more than justified. Especially because universal access to the treatment of hepatitis C, a premise of the SUS, is being violated”, says Felipe Carvalho, coordinator in Brazil of the Campaign for Access to Medicines of Doctors Without Borders (MSF), who also signs the representation at Cade.

The action aims at the regulatory body because there is little chance that licensing will come out on the initiative of the current government. Health Minister Luiz Henrique Mandetta has said he is against it. “It is not a good thing to threaten with compulsory licensing. The country should never do that. We have to protect inventiveness and time spent on research,” he said in July during an event organized by multinational pharmaceutical companies. Contacted via  press office, the minister did not respond to Repórter Brasil about the treatment of hepatitis C.

The case of sofosbuvir is similar to that of the AIDS program, says Eloan Pinheiro, former director of the public laboratory Farmanguinhos. “As with efavirenz, there is a public interest in the licensing of sofosbuvir. The government has to think about patients, especially because hepatitis C is curable. “

For the former Minister Temporão, “the current government shows no signs that it is concerned with defending public health in the face of the greed of multinational laboratories”.

Negotiating prices

Between 2015 and 2017, the price of sofosbuvir negotiated by Gilead with the Ministry of Health went from 252 BRL to 160 BRL (US$ 60 to US$ 38). In 2018, the public laboratory Farmanguinhos and the national pharmaceutical Blanver developed the Brazilian generic for 8.50 USD a pill (34 BRL in the current exchange rate).

Last year’s purchase, called three weeks before Gilead had its patent confirmed, was the only one in which there was a price dispute between the U.S. laboratory and Blanver. The result was the lowest value ever practiced in Brazil, at 64 BRL (US$ 15) per capsule. “The tendency is to lower the price when there is some level of competition. But now that they have received the patent, they will not be threatened by competitors and may increase the value”, says Carvalho. Purchases, however, have not been sufficient to cover all patients.

Waiting months

Driver Cássio Araújo, 44, has been waiting for treatment in São Paulo for seven months. “So far it hasn’t arrived. They claim that the medicine is in short supply and that they are distributing it to those who requested it in last October,” he says, confessing that he fears for his health condition. Hepatitis C virus attacks the liver for several years and, without treatment, it advances to cirrhosis, cancer and even death. 

The solution found by some patients in face of the wait has been legal actions. This is one of Araújo’s plans. “I will wait until December for the medication. If they don’t arrive, I will sue”. It is in this scenario that the price of a patented medicine goes up even more.

In the past four years, public hospitals and state and municipal governments have paid 639 BRL (US$ 153) per pill to comply with court decisions. And the value increased even more this year after the patent was granted to Gilead, which sold sofosbuvir to the municipality of São Vicente (SP), through a distributor, for 1,428 BRL (US$ 343). The city government denies the expenditure, which is however registered with the Heath Prices Database (Banco de Preços em Saúde).

Contacted by Repórter Brasil, Gilead refuted “the accusations of abusive pricing and improper exploitation of the patent” and declared that the grant of the patent was “irrelevant in setting prices”. While the Ministry of Health reported that the sending of treatment kits to the states is working normally,

São Paulo Department of Health said it took the ministry a year to deliver the treatment kits scheduled for 2018, when the federal government expanded treatment to all patients, and not just for the most serious cases. The department justified the higher value because its purchases “are made only to meet legal demands and, in this case, are made individually […] while purchases by the Ministry of Health are made in bulk”. Read the complete statements.. 

The day after Repórter Brasil contacted São Paulo government, biologist Fabiana Sobral received information that her treatment was available. 

“My cure is coming,” she celebrated. “My illness is advanced. If I don’t take the medication in a year, I will go into the cirrhosis phase.”

Araújo, however, is still waiting.

This story was originally published on 8th November 2019

O post Why Brazil pays up to 1,400 BRL for a medicine that costs 34 BRL apareceu primeiro em Repórter Brasil.

What makes a millionaire businessman from São Paulo from the pharmaceutical industry to spend 1.5 million BRL (US$ 404,000) in the last electoral campaign and guarantee an alternate seat in the Senate for Tocantins? No longer needing “intermediaries”, explains Ogari Pacheco, founder of one of the largest Brazilian laboratories, Cristália.

At age 80, the doctor makes his debut in politics speaking his mind. He makes it clear that he will influence Congress in discussions that interest pharmaceutical companies. “We always criticize that we have to use an intermediary. But nothing better than someone from the industry”, says the businessman to Repórter Brasil.

An agreement with the head of the ticket, Senator Eduardo Gomes (MDB-TO), guarantees Pacheco an informal sub-office, which will be responsible for health projects during the term. “He [Gomes] is going to take office, but I’m going to start working now,” he says. The senator confirms the alternate’s “unrestricted participation” in the term.

With a personal fortune of 407 million BRL (US$ 110 million), Pacheco is not alone. Executives linked to 462 drug labs, distributors and pharmacies donated 13.7 million BRL (US$ 3,7 million) to 356 candidates in the last election, according to a survey by Repórter Brasil. Among them there are governor-elect João Doria (PSDB-SP), federal deputy Arlindo Chinaglia (PT-SP) and former deputies Rogério Rosso (PSD-DF) and Marcus Pestana (PSDB-MG), who were not elected. 

The survey listed the partners and managers of active companies registered with the Federal Revenue Service who manufacture, distribute or sell medicines, active pharmaceutical ingredients and pharmaceutical products. The names were cross-checked with the donors of the 2018 elections, according to the Superior Electoral Court (TSE).

The donation of individuals is permitted by law, but it can reveal influences of a sector that acts in Congress in favor of its interests. “The lobby works with campaign support and consultancy contracts, as it is everywhere in the world,” says Reinaldo Guimarães, a researcher at UFRJ and former secretary of Science, Technology and Strategic Inputs at the Ministry of Health (2007 to 2010). “The pharmaceutical market in the world is over US$ 1 trillion. The influence capacity of a market of this magnitude is enormous”.

In 2010 and 2014, when private campaign financing was still allowed, the pharmaceutical sector donated 26 million BRL (US$ 7 million) and 57 million BRL (US$ 15.3 million), respectively, to 1,404 candidates in total, according to the donations declared to the TSE. However, suspicions of unrecorded funds and payment of bribes put the leading donor company, Hypera Pharma (formerly Hypermarcas), in the Lava-Jato Investigation.

“The strength of money moves the lobby. And the elements linked to public health are very diluted in this chain of pressures”, says Reinaldo Guimarães

A former Hypera director admitted in a plea bargain that he transferred 30 million BRL (US$ 8 million), between 2011 and 2015, to politicians at the top of the MDB party, such as former federal deputy Eduardo Cunha. In return, parliamentarians would approve measures favorable to the company, such as the release for sale of non-prescription drugs in supermarkets – which was in fact approved by the Chamber in 2012, but vetoed by former President Dilma Rousseff (PT).

Away from the crisis, close to the politicians

Even in the face of the Brazilian economic crisis, the medicines market stood out for its continuous strong growth in the past years. In 2016, when the national GDP fell 3.6%, the sector advanced 18%, with 63 billion BRL (US$ 17 billion) in sales. Today Brazil is the seventh largest market in the world and is heading to be in the fifth position in two years.

Government spending and incentives play an important role in this market, which also explains the interest of the pharmaceutical sector in the political scene. On the one hand, the Unified Health System (Sistema Único de Saúde/SUS) accounts for about 19 billion BRL (US$ 5.1 billion) of medicine purchases in Brazil. On the other hand, the pharmaceutical sector receives generous tax exemptions annually, estimated today at 9.5 billion BRL (US$ 2.5 billion) according to the Federal Revenue Service.

Based in small town of Itapira (SP), Cristália has tripled sales in the last decade, reaching 2 billion BRL (US$ 540 million) in 2018. Its biggest client is SUS, which accounts for half of the revenue earned from hospitals.

In addition to investing heavily in expanding its industrial capacity, and also with the support of the public authorities, Cristália made millionaire donations in the last three elections. In 2014, they invested 4.3 million BRL (US$ 1.1 million) in candidates from different political backgrounds, such as then-president Dilma Rousseff, the PSDB’s national directory and parties such as MDB, DEM, PSC and PCdoB. The same happened in 2010, when donations reached 900,000 BRL (US$ 243,000).

“The laboratory has never individually been politically involved,” says Pacheco. He says that the donations were stimulated by FarmaBrasil, a group that represents national pharmaceutical companies and supports the Parliamentary Chemistry Front, created in 2012. “They asked: ‘The front is made up of A, B, C, D parliamentarians. You could contribute as follows: so-and-so donates to A, another to B, C…”. It was like that ”, he says. Read the interview with Ogari Pacheco here.

With leverage in the political scene, the laboratory welcomed President Dilma Rousseff and the then governor of São Paulo, Geraldo Alckmin (PSDB), in 2013, during the inauguration of a factory in the interior of São Paulo. The plant cost 208 million BRL (US$ 56 million) – of which 58 million BRL (US$ 15.6 million) came from federal funds, according to information from the Federal Government.

The governor of São Paulo, member of the Brazilian Social-Democratic Party (PSDB), returned to the region in 2017 to inaugurate the group’s new distribution center, a 400 million BRL (US$ 108 million) mega-investment built on a piece of land provided by the local city hall. In addition to the factory, the region also gained two marginal roads and a ring road on the SP-147 highway – built by the state government in front of Cristália’s new building, at a cost of 26 million BRL (US$ 7 million).

It was through the expansion of Cristália to Tocantins that the São Paulo businessman met Eduardo Gomes and went into politics for the state. “Through local political leaders, he [Gomes] sought to offer some advantages, such as tax incentives and land donations. This did not persuade me”, he says. The politician then invited him to join the Senate ticket. “Then things changed.”

Now in Congress, one of his goals will be to speed up the process of evaluating and approving drug patents, which today takes an average of 13 years for a final answer from the National Institute of Industrial Property (Inpi). The issue is of special interest to Cristália, the national record holder in number of patents, with 106 in total, 89 abroad. 

Its other front of action will be debates on the disposal of medicines, the subject of at least 15 bills in Congress. Currently there is no regulation on the issue, and the drugs end up being disposed of in the common garbage, causing damage to health and the environment.

Pacheco is against manufacturers to assume the costs for disposal alone and argues that the responsibility should be shared with pharmacies, health units and distributors. 

The governor and the pharmaceutical companies

Tax incentives for pharmaceutical companies and the disposal of medicines were the subject of an investigation by the São Paulo’s Public Prosecutor’s Office in 2017, after a report by CBN radio revealed that the São Paulo City Hall, at the time led by João Doria (PSDB-SP), had received donated medicines close to the expiration date and without paying taxes. 

Doria, current governor of São Paulo, was the tenth most supported candidate in the pharmaceutical sector in 2018. He received 270,000 BRL (US$ 73,000) from four executives, two of them connected to pharmacies and two other owners of medicines distributors – who provide services to laboratories and drugstores.

When he was in charge of the city hall, Doria devised a program that, in addition to donations, provided for the privatization of pharmaceutical assistance in the municipality, which would directly benefit pharmacies. The Quick Remedy program, presented at a press conference in February 2017, intended to transfer the distribution of medicines from the public network – made through Basic Health Units (UBS) and AMAs (Ambulatory Medical Assistance) – to private pharmacies. The idea, however, would hinder the distribution of medicines in peripheral and poorer areas of the city, where the presence of large pharmaceutical chains is lower. The proposal did not take off.

Doria announced, at the same press conference, that the municipality would receive 120 million BRL (US$ 32,5 million) in medicines donated from 12 pharmaceutical laboratories. The member of the PSDB Party convinced the then governor Geraldo Alckmin to exempt the ICMS (Tax on Circulation of Goods and Services) on donations, in favor of partner laboratories and carriers.

If the municipality had received the announced 120 million BRL, it would have failed to collect almost 66 million BRL (US$ 18 million) in taxes, but donations did not reach 10% of what was promised. In the end, 10 laboratories donated 8.8 million BRL (US$ 2.4 million) in products, with a tax waiver of 1.2 million BRL (US$ 324,000). The investigation by the São Paulo’s Public Prosecutor’s Office was shelved for failing to identify loss in municipal coffers.

The governor informed, through his press office, that the donations of medicines were part of an “innovative policy” in his administration. With regard to electoral donations, the staff said that “they were all made strictly within the terms of the Electoral Law” and that “they do not represent even 1% of the total collected by the campaign”. Strictly speaking, the amount represents 1.44%.

Rich industry, but dependent on the foreign

Of the three richest candidates last year, two are businessmen in the pharmaceutical sector. In addition to Ogari, in third position, there is Fernando de Castro Marques (SD-DF), main shareholder of União Química laboratory, a giant in the production of medicines for human and animal use, declared assets for 668 million BRL (US$ 180.5 million) to the TSE and led the ranking.

Defeated in the election for the Senate, the businessman donated 7.1 million BRL (US$ 1.9 million) to 14 politicians in 2018 – including 2.7 million BRL (US$ 729,000) for the campaign – and was the industry executive with more donations. Marques says he does not expect any particular retribution from the parliamentarians he supported. “They are people I admire and who are going to work for the development of the Federal District. This is my only interest, there is no other interest,” he said in an interview with Repórter Brasil.

Senator Eduardo Gomes said he invited Pacheco to the ticket as a representative of Democrats Party and for his business activities in Tocantins. “His participation in the mandate is unrestricted, as he and the first alternate are eventual substitutes in the vacancy of the elected Senator, as provided for in the electoral legislation,” he said in a statement, which highlights that the donations were made within the criteria established by law.

Deputy Arlindo Chinaglia said that “all donations from campaigns, not only these, never conditioned my actions”. Marcus Pestana, who was not re-elected, stated that the donations received are in accordance with Brazilian law. “There is absolutely no relation between my parliamentary role on the topic and donations”. Rogério Rosso did not answer. 

“The industry puts pressure on deputies, commissions [in Congress] and also on medical associations,” says Fiocruz researcher Jorge Bermudez. “Often the interest of the industry has nothing to do with health. The industry wants the most profitable product,” he says. 

Despite its size and public support, the pharmaceutical industry causes losses to the Brazilian trade balance year after year. In 2017, there was a deficit of at least US$ 5.3 billion, according to data from the then Ministry of Industry and Foreign Trade.

The weak point is the almost nonexistent production of raw materials, the so-called active pharmaceutical ingredients, ingredients used in the manufacture of medicines. The deficit leads the country to import 90% of all the raw material it needs. The exception is Cristália, who imports 47% and produces most of it in Brazil.

In his “sub-office” in the Senate, Pacheco promises to reverse this scenario. He says he is already preparing a bill to incentive the national production of inputs. “And without asking a penny for public money”, he assures.

(Illustration: Angelo Abu)

This story was originally published on 19th February 2019

O post With donations of 13 million BRL, the pharmaceutical industry wins a seat and expands the lobby in the new Congress apareceu primeiro em Repórter Brasil.

Facing breast cancer for six years, retired nurse Joyce Guimarães is unmoved. When she started treatment with a drug that she could get for free at Brazil’s publicly funded healthcare system (SUS), she started to feel more motivated. But the ampoule disappeared from the shelves between November 2018 and March 2019. That was when Guimarães discovered that if he wanted to continue the treatment, she would have to pay 12,000 BRL (US$ 4,000) per bottle. “Why is it so expensive?” she asks, who receives a retirement pension of 1,300 BRL (US$ 326).

Guimarães spent four months without herceptin, manufactured by the Swiss multinational Roche, because of a partnership signed by the manufacturer with the Ministry of Health and the public laboratory Tecpar in Paraná. Shortages are “recurring” in Belém (Pará), says the patient. But it got worse after the Federal Audit Court (TCU) paralyzed the agreement on suspicion of overpricing in sales to the federal government. The estimated loss is 61 million BRL (US$ 15,2 million).

In another lawsuit, Roche is accused by the Federal Prosecution Service of the Federal District of causing losses of 107 million BRL (US$ 27 million) to 11 Brazilian states – also on suspicion of overpricing of the medicine.

In both cases, investigations focus on the pharmaceutical industry’s lack of transparent pricing policy. The case of herceptin is emblematic because it reveals strategies in the sector to leverage profits in negotiations with the government. Which, this time, contributed to leaving patients without treatment in the Public Healthcare System, SUS.

The federal government and states are the largest Brazilian buyers of herceptin, whose active ingredient is trastuzumab, a reference against one of the most serious types of breast cancer and offered free of charge by SUS since 2013. Roche monopolizes the drug trade through millionaire contracts, earning 25 billion BRL (US$ 6,2 billion) in 2018 alone. The price of the ampoule today goes from 900 BRL to 12,000 BRL (US$ 225 to US$ 3,000) in Brazil, which makes it difficult to know its real value.

The expectation was that the drug would become cheaper in 2017, after a competing version arrived in Brazil. But this did not happen. With a threatened monopoly, Roche entered into a partnership with the federal government to produce the drug in the country together with Tecpar and Axis, a private laboratory in Rio de Janeiro State. As long as the technology transfer lasted, Roche would have guaranteed at least 40% of the SUS market.

The agreement took place under the PDPs (Partnership for Productive Development); a policy created in 2009 that provides for technology transfer from private companies to Brazilian public laboratories to empower Brazilian industry, increase national production of advanced medicines and lower their prices.

But the partnership between Roche and Tecpar, instead of reducing the price of the medicine, as usually happens with PDPs, caused the ministry to pay 37% more than it had previously paid (1,293 BRL against 939 BRL per ampoule). The purchase raised suspicions with TCU, which is investigating a possible loss of 61 million BRL (US$ 15.2 million) in this 222 million BRL (US$ 55.6 million) contract. The inspection agency intervened and stopped payments, demanding explanations from Tecpar and the ministry on the reasons for the price increase.

The Minister’s influence

The Court of Auditors’ suspicions went beyond overpricing. The backstage of the partnership reveals signs of political influence and the non-compliance with the PDP Legal Framework, which provides for analysis of each agreement by two ministry commissions, which did not happen.

Tecpar’s project with Roche was approved by the former Health Minister, Congressman Ricardo Barros (PP-PR), in record time: only one week, while the average processing time is six months. The former management also predicted an investment of 82 million BRL (US$ 20.5 million) for Tecpar to produce the ampoule in Maringá (PR), the political stronghold of the politician.

Barros denies that he favored Tecpar. “There was no privilege that has not been given to other public laboratories,” the former minister told Repórter Brasil. “PDP policy suffers a lot of political influence”, he adds. He states that the Tecpar project did not go through two commissions because it was an ongoing partnership. However, until 2017, Tecpar and Roche were not part of the PDPs in force at the time for the product.

Tecpar claims that it charged the Ministry of Health more expensive to invest the extra gain (61 million BRL/US$ 15.2 million) in the three partner companies and in the “technology transfer” activities. The Office of the General Attorney (Advocacia-Geral da União – AGU) raised suspicions of illegality and recommended the suspension of the agreement, which was provisionally accepted by the TCU. The case continues without a final decision.

Untreated patients

After the suspension of the partnership and an emergency purchase at the end of 2018, the Ministry of Health opened a tender to buy 435 thousand ampoules and supply SUS by January 2020, a contract of almost 400 million BRL (US$ 100 million). Axis and Roche, however, tried to block the bid. The objective was to prevent the generic version manufacturer, Libbs, from entering the public tender. But the request was not accepted by the ministry: postponed by two weeks, the bid was closed with a cheaper price for the ampoule, 894 BRL (US$ 224), 4.7% less over 939 BRL (US$ 235).

Suspicions involving the PDP and disputes on the bid affected the supply of the ampoule between the end of last year and the beginning of this year. During TCU’s trial, the Ministry of Health acknowledged that the stock of trastuzumab was limited to 15 vials in September 2018, and that some states were already running out of supplies.

“I was without medication for four months,” says Guimarães, who has been using herceptin for two years, after discovering that the cancer had advanced to the lungs and bones. Tests revealed that her health condition worsened in the period without the medicine. “It’s frustrating,” she laments.

In addition to Pará, there were shortages in Ceará, Santa Catarina, Espírito Santo, Alagoas, Rio de Janeiro and Paraná, according to a survey by Femama (Federation of Breast Health Support). There are also reports in Maranhão and Rio Grande do Norte.

More than 9,000 Brazilian women use trastuzumab via the SUS, according to the Ministry of Health. The office informed Repórter Brasil that “it has other sources to obtain the products in addition to those implemented within the scope of the current PDP and in the supply phase”. Tecpar did not comment on the shortage, which is currently normalized (read the positions of the Ministry of Health and Tecpar in full).

After the publication of the article, Roche informed Repórter Brasil that it does not overprice herceptin, that it maintained the value of the product when supplied it to Tecpar and that it is not responsible for shortages in SUS (read the full statement from Roche). 

The battle against generics

To contest bids, as Roche did with trastuzumab, or to start battles in court to hinder the emergence of generic versions, as Gilead does in the case of the antiviral sofosbuvir, are strategies of the pharmaceutical industry to expand the monopoly on an active ingredient. It is an attempt to buy time and keep competition away, says lawyer Vitor Ido, a researcher at the South Center and an expert in international negotiations

Another strategy of pharmaceutical companies to maintain market control is to submit several patent applications for the same active ingredient. In the case of trastuzumab, Roche filed 12 orders in Brazil alone, according to a study by Fiocruz.

The confusion generated by the excessive requests is so great that even the National Institute of Intellectual Property (INPI) was unable to inform which patent was in force over herceptin, after being questioned by Repórter Brasil. The agency recognizes that most medicines are protected by more than one patent, but points out that it does not cross-check information on brands and orders granted. Roche did not comment. 

Price abuse 

The doubt that afflicts Guimarães on the price of the medicine also puzzles academics, managers and even the World Health Organization (WHO). “Companies say research and development costs are very high, but these costs are not known. Governments do not even know how much neighboring countries pay for the same medicine,” says Ido.

Due to the mystery of prices, the WHO passed a resolution in May this year demanding greater transparency from manufacturers. The text is not mandatory for countries to adopt, which makes its results uncertain.

With the market monopoly, the way for price abuse opens up. This is what happens with herceptin. Roche is accused by the Distrito Federal’s Public Prosecutor’s Office (MPF-DF) of causing losses of 107 million BRL (US$ 27 million) to 11 states when charging for the drug, between 2012 and 2015, up to three times what it charged the Ministry of Health. The MPF investigation was carried out by the Law and Poverty group (Grupo Direito e Pobreza), from University of São Paulo Law School.

Prices are different because, while the ministry is negotiating a large-scale purchase with Roche, state departments bought the drug after a court order. “Then the opportunity for price abuse arises, because the manager does not have the capacity to negotiate,” says Carlos Portugal Gouvêa, professor of commercial law at USP and a member of Law and Poverty. He says it is common practice in the pharmaceutical market to “charge more when there is a court order”. In the state of São Paulo alone, there are 15,000 actions involving trastuzumab, according to the study group.

MPF’s action against Roche is unprecedented in Brazil and could change market regulation. In the appeal presented to the Federal Court, after a favorable decision to Roche in the 1st instance, the prosecutor Anna Carolina Garcia stated that the multinational directly harms SUS and public funds “by establishing a deliberate differentiation of prices, without reasonable justification”.

Research by Repórter Brasil confirms that Roche continues to differentiate prices in 2019: the Brazilian Navy pays three times what the Ministry of Health, considering the value per milligram. When contacted, the Navy says that the contract generated “savings to the public funds”, since the legislation allowed it to pay even more. (Read the full statement by the Navy).

Roche does not recognize price abuse in any of the cases cited in this report. The Swiss multinational says that pricing in Brazil “is public and defined” by the Medicines Market Regulation Chamber (Câmara de Regulação do Mercado de Medicamentos – CMED), under control of the Ministry of Health.

The maximum price adopted by the agency, however, is questioned by experts because it is based on amounts charged in high-income countries. Minister Aroldo Cedraz, from TCU, says that CMED prices “are not the most appropriate parameter” for public purchases. The aggravating factor is that the law does not authorize CMED to reduce the maximum price of medicines, even when their market value is falling, as in the case of trastuzumab.

It is also because of the price that perjeta, the new generation of herceptin, also by Roche, is not available at SUS. With more promising effects in the fight against breast cancer, it was expected in the public health system for June 2018, when it could be used by patients like Guimarães. But due to the market monopoly, Roche and the Ministry of Health have not yet reached an agreement on the price.

While waiting for the new cancer drug, the patient would feel more relieved if trastuzumab was not lacking in the public health system. “We hear several excuses, but it is the patient who really suffers,” says Guimarães.

This story was originally published on 15th August 2019

O post Investigation of the pharmaceutical sector reveals a 170 million BRL shortfall and cancer patients are left without treatment apareceu primeiro em Repórter Brasil.

Legal farms that receive cattle raised in banned areas and mask its illegal origin. Property titles that elude monitoring by meatpacking companies. Rural properties leased to third parties that elude control by meatpackers. These are common situations in the Amazonian livestock market. In practice, they contribute to circumvent restrictions that have been in force for a decade, banning sales of animals fed on pastures full of socio-environmental irregularities.

Since 2009, an agreement signed by the Federal Prosecution Service (MPF) and more than a hundred meatpacking companies – including JBS, Marfrig and Frigol – prohibits the slaughter of cattle raised on indigenous lands, environmental reserves, and farms deforested without environmental licenses, or those caught using slave labour.

The so-called “Meat TAC” (TAC stands for Conduct Adjustment Agreement in Portuguese) is considered one of the main tools to curb deforestation in the Amazon. This is because the establishment of pastures is recognized as the main vector for expanding the agricultural frontier and clear native forest.

“At first, the Agreement was very effective,” says Daniel Avelino, a Federal Prosecutor in Pará and one of the architects of the initiative. In its first year, deforestation saw and unprecedented reduction in the Amazon and was below 10,000 square kilometers. Three years later, in 2012, a record was reached: less than 5,000 square kilometers.

However, devastation in the planet’s largest tropical forest escalated again after 2013 and almost broke the disturbing symbolic barrier of 10,000 square kilometers last year. “That figure is absurd but considering the dismantling of the environmental policy and lack of enforcement, only the TAC kept it from reaching 15,000 or 20,000,” Avelino says.

“After 10 years of TAC, we still can’t say that any meatpacking company is really free of deforestation,” says Imazon researcher Ritaumaria Pereira 

The agreement signed with the MPF has been in force for more than eleven years, and meatpacking companies – especially larger ones – developed their own monitoring systems to comply with its clauses. WWF Brazil corporate engagement manager Daniela Teston sees progress in supplier management by companies, but she points out that “some technical problems remain, especially with regard to indirect suppliers.” When transferring cattle to legal producers, ranchers involved in socio-environmental violations leave the radar of meatpackers. It is the so-called ‘cattle laundering.’

According to the original terms of the Meat TAC, meatpackers should have created mechanisms to track indirect suppliers since 2011. “But they haven’t. And this will be the main agenda for 2021,” says Lisandro Souza, head of Imaflora (The Institute of Forest and Agricultural Management and Certification).

Together with the Prosecution Service and meat companies, Imaflora has been working on a protocol to standardize the enforcement of the rules provided for in the TAC. “There are many differences between companies’ monitoring systems,” Souza explains. “There are cases where a company sources from a supplier that is banned by another company – and vice versa,” he adds.

A first version of the protocol will be in force in July. The main novelty is the setting of a productivity ceiling to try to prevent fraud: each property will be allowed to sell only three heads of cattle per hectare per annum. Ranchers who exceed that figure will have to submit a report to prove their ability to supply more animals.

Fraud in the Rural Environmental Registry

Repórter Brasil investigated two cases that illustrate how cattle ranchers in the Amazon manage to circumvent the restrictions imposed by the Meat TAC.

The first case is that of the Leão Farm, in Jauru, MT. Satellite monitoring by the Prodes system, carried out by Inpe (Brazil’s National Institute for Space Research), shows that 36.5 hectares of vegetation were cut down on the property in 2016. The consultation system of Sema-MT (The Mato Grosso State Environment Department) shows no license for deforestation.

In February 2019, the Leão Farm sent animals to the JBS slaughterhouse in Araputanga, MT. JBS is the largest meat company in the world. According to the agreements signed by the company to fight Amazon devastation, the purchase should not have happened.

To monitor cattle supply farms, meatpackers use data from the Rural Environmental Register (CAR) – a federal government system in which landowners declare the geographical coordinates of their rural properties. In the case of the Leão Farm, its CAR registration was split into two different areas, even though they were contiguous. Irregular deforestation occurred in the larger portion, so that the other could keep on trading cattle with companies that signed the Meat TAC.

Split registration of land on the CAR goes against the rules established by the Ministry of the Environment (MMA). According to a normative instruction that regulates the matter, “owners or possessors of rural properties who have more than one property or possession in a continuous area must register them as a single property.”

“There are frauds of all kinds in the CAR and one is [split registration],” explains prosecutor Daniel Avelino, without specifically analyzing the case of the Leão Farm. The CAR is self-declaratory; no information is checked. At first, the federal government was in charge of the register. Then it passed to the states, which didn’t check it either. Since there is no validation, it is very easy to commit fraud,” he adds.

The Leão Farm is registered to Vanilda Ferreira Dutra. She was found by Repórter Brasil and asked about deforestation on rural property but did not respond to requests for clarification.

Cattle triangulation

The second case investigated also concerns three contiguous plots of land in Nova Ubiratã, MT. While they are all part of the Bianchin Farm, each area has its own CAR registration.

Altogether, Ibama (The Brazilian Institute of the Environment and Renewable Natural Resources) has already fined the Bianchin Farm BRL 29 million for various environmental violations – from unlicensed deforestation to non-compliance with environmental embargoes. Between 2012 and 2017, about 1,200 hectares of Amazon rainforest were cleared there according to satellite monitoring by the Prodes system. Cattle is not allowed in embargoed areas so that the native vegetation can recover.

In 2017, the farm was leased by Gustavo Vigano Piccoli, a major rural producer and former president of the Mato Grosso Association of Cotton Producers (Ampa) and the Social Cotton Institute (IAS). Renamed as Agropecuária GPC, the property started to supply cattle to the JBS meatpacking plant in Diamantino, MT. The lease is described in a technical report on livestock management at the farm, published by the Federal University of Paraná (UFPR).

Cattle from the leased area are also sent to another property belonging to Piccoli in Sorriso, MT – the Pedra Farm – which, in turn, supplies two JBS units in Mato Grosso. The so-called “triangulation” – transfer of cattle between farms of the same owner – is another practice that still goes undetected by meatpacking companies’ monitoring systems.

Gustavo Vigano Piccoli was contacted several times for this report. His aides said he was away and would answer questions as soon as he returned, but he had not done so Repórter Brasil until this article was finished.

On a statement, JBS said that “the Company’s cattle purchases and the entire supplier monitoring system are audited annually, independently.” According to the text, the results of the audits – published on the company’s website – “show that more than 99.9% of JBS’s cattle purchases from farms located in the Amazon region comply with the company’s socio-environmental criteria.”

Animal Transit Guides

One of the main bottlenecks for tracking cattle in the Amazon is the lack of transparency in Animal Transit Guides (GTAs). Issued by state agricultural defense agencies, these documents basically inform the origin and destination of any cattle shipment – between rural properties or between farms and meatpackers.

“Agricultural defense agencies do not enforce it enough, and that allow GTAs to be issued at random, allowing a huge amount of animals to be registered to a very small piece of legal land,” explains Ritaumaria Pereira, a researcher at the environmental organization Imazon. “An animal goes through two or three farms during its life cycle and only the direct supplier (the last farm) can be monitored by the companies that signed the TAC,” he adds.

She also criticizes the difficulty in accessing the information contained on GTAs. “These data are not presented in an ‘instructive way’. The agencies that provide this information do so aggregately, and the consultation system makes it impossible to monitor transactions in real time,” she says.

The current GTA system is also criticized by some slaughterhouses for making it difficult to monitor suppliers. JBS, for instance, states that it has been discussing with the Ministry of Agriculture, Livestock and Supply (MAPA) about reforming the procedure for issuing these documents. The company proposes the adoption of a new program that automatically crosses several data on properties requesting GTAs.

“JBS would start asking its direct suppliers (cattle fattening) to buy calves only from farms that are not involved in illegal deforestation, that is, from properties that sold their animals with the so-called “Green GTA” and do not appear on the public list of areas embargoed by Ibama,” the company says in a statement, which can be read in full here(in Portuguese).

“After 10 years of TAC, it is still not possible to say that a meatpacking company is really deforestation-free,” says Pereira from Imazon. And she cites another complicating factor: not all meat companies operating in the region are signatories to the Meat TAC. An Imazon study published in 2017 estimates that 70% of all slaughtering is done by companies that signed the agreement with the Federal Prosecution Office. Therefore, a considerable number of animals elude any control. “This creates unfair competition with the companies that signed the Meat TAC.”

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With 10% of its territory already deforested and almost 500 fire outbursts in the past year alone, part of the Apyterewa Indigenous Land (IL) in Pará is turning into pasture. And large multinational meat companies such as Marfrig – as well as regional ones like Frigol and Mercúrio – directly and indirectly source cattle from ranchers who raise cattle illegally in that protected area of the Amazon. These companies, in turn, supply the main supermarket chains in the country.

An agreement signed in 2009 by meat companies and the Federal Prosecution Service (MPF) bans the slaughter of cattle from illegally deforested farms, environmental reserves, and indigenous areas. However, a new investigation by Repórter Brasil identified the strategies used by ranchers to circumvent restrictions and give an appearance of legality to livestock illegally fattened at Apyterewa. In general, they rely on intermediary farms outside the indigenous territory to sell cattle raised in banned areas.

“Staff from [Brazil’s Indian Affairs Agency] Funai counted around 50 thousand heads of cattle in the indigenous land in March 2016,” says Nilton Tubino, who used to work at the Office of the Chief of Staff of the Presidency. He was one of the supervisors of the “disintrusion” process – a technical term for the removal of non-indigenous occupants from indigenous lands.

Officially given to the Parakanã people by a Presidential executive order in 2007, the Apyterewa Indigenous Land has face encroachers for years. A note released by the Parakanã stated: “As the world faces a pandemic, many non-indigenous people, encouraged by speeches and actions of several politicians, take the opportunity to increase encroachment into our territory, perpetrating crimes against our people and the Brazilian nation. We want our territory to be free from encroachers.”

“Many people who raised cattle there did not own the animals. They brought someone else’s animals for fattening,” Tubino explains. “We were there, and we saw the trucks passing by. Someone was ‘laundering’ the cattle for them,” he adds.

In this case, ‘laundering’ refers to the schemes created by ranchers to give an appearance of legality to cattle raised irregularly within the indigenous land. The cases analysed by Repórter Brasil show a variety of ploys used for that purpose. They also reveal how meatpacking companies’ monitoring systems still have flaws, especially when it comes to indirect suppliers.

An example of that is the Lucélia Farm, with 1,427 hectares overlapping Apyterewa. Documents obtained by Repórter Brasil show that, in December 2019, a shipment of cattle was sent to a rural property outside the indigenous land – the Carajás Farm. In the first three months of this year, the farm traded animals with Mercúrio’s meatpacking plant in Xinguara, PA.

Repórter Brasil tried to contact Antônio da Silva Arruda and Geremias Rocha de Freitas, respective owners of the Lucélia and Carajás farms, but could not locate them. Mercúrio was also asked about the purchase of cattle from the Apyterewa IL but had not responded until this article was finished.

Pirate cattle

The second case involves rancher Antonio Borges Belfort, who ran for city councillor in São Félix do Xingu in 2016 but was not elected. He owns Sol Nascente, one of the largest deforested farms in the Apyterewa IL, with almost 2,000 hectares. Between February 2018 and July 2019, dozens of animals were transported from that farm to another property belonging to Belfort and located outside the indigenous land – the Serra de Pedra farm. The two properties are included in the declaration he submitted to Brazil’s Higher Electoral Court (TSE) as a candidate. The value of the farm located within Apyterewa is estimated at BRL 1.1 million.

However, Serra de Pedra’s productivity raises suspicions. According to Program Boi na Linha, created by NGO Imaflora together with the Federal Prosecution Service and ratified by the country’s main meatpackers to curb fraud in the industry, the maximum productivity of a rural property in the Amazon hardly goes beyond three animals per hectare per annum.

This means that Serra de Pedra, with only 20 hectares of pasture according to the Rural Environmental Registry (CAR), would be able to supply 60 animals per year. However, in 2019, Marfrig’s plant in Tucumã, PA alone slaughtered 135 animals from that farm. Frigol’s plant in São Félix do Xingu also received hundreds of animals from the property.

The data indicate that Serra de Pedra would not be able to supply such a large number of cattle heads to slaughterhouses. The math reinforces the suspicion that they were originally bred on Antônio Borges Belfort’s farm located within the indigenous land.

Marfrig recognizes that the Serra de Pedra farm has ‘6.61 cattle heads per hectare’ – more than twice the figure set by Program Boi na Linha. The company’s statement also says that its criteria for cattle sourcing will be updated by July 2020. The company’s full answer can be read in Portuguese here.

“We want our territory free from encroachers”, the Parakanã say.

Frigol, in turn, says that the last cattle purchase from the property took place in August 2019. According to the statement, it was only in February 2020 that the company became aware of the productivity index established by Program Boi na Linha, even though it has not been “officially notified by the Prosecution Service about the new monitoring rules to be established.” The company also guarantees that it is already “taking steps to comply with the new protocol.”

Cattle rancher Antônio Borges Belfort was contacted by the president of a rural producers’ association at the request of Repórter Brasil, but he said he would not comment.

Supplier ‘within the margin of error’

Marfrig’s slaughterhouse in Tucumã, whose operations were shut down in March this year, also received cattle from a third farm investigated by Repórter Brasil. Between May 2018 and December 2019, the meatpacker received animals from the JR Farm. Eight percent of the property’s area overlaps the Apyterewa Indian Land, according to CAR coordinates. The CAR is a self-declaratory registration, that is, its information is provided by landowners themselves.

However, according to Funai maps and spreadsheets, rancher José Roberto Alves Resende, owner of the JR Farm, appears in the list of producers established inside Apyterewa. He claimed an area of ​​100 hectares within the indigenous land, but the federal agency considered it possession in bad faith. Resende was not located to clarify doubts about the precise location of his farm and about raising cattle in indigenous territory.

Marfrig states that the coordinates of the JR Farm that appear in the CAR place the property within the margin of error provided for in a rule issued by the competent authorities in 2010. “The equipment used for demarcation in the past was not as accurate and did not have the technology available today,” the statement says. The company argues that, in order to mitigate possible cartographic errors, the methodology used to analyse [land] overlaps considers a 10% tolerance margin. To read the full answer, click here.

The Parakanã: harassed in their own territory

Located in São Félix do Xingu, Pará, where there are 17 heads of cattle per resident, the Apyterewa Indigenous Land has been the target of illegal activity not only by cattle ranchers, but also by miners, loggers, and land grabbers. The situation is so critical that, in January, the Federal Prosecution Service asked Funai (Brazil’s National Indian Foundation) to resume the activities of the Working Group (WG) on disintrusion in Apyterewa.

“Funai is resisting to carry out disintrusion, and we are trying to overcome it,” says Federal Prosecutor Robert Lucht. In March, the Prosecution Service filed a lawsuit in a Federal Court asking the Federal Government to pay a daily fine of BRL 5,000 until non-indigenous people are removed. Funai had not commented until this article was published.

“Unfortunately, environmental violations have also increased there,” Lucht adds. That is why the Prosecution Service ordered Ibama (The Brazilian Institute of the Environment and Renewable Resources) to carry out inspections at Apyterewa.

In April, after an operation that apprehended irregular mining equipment in three indigenous lands, including Apyterewa, two of Ibama’s head inspectors lost their positions at the agency. The destruction of the machines displeased president Jair Bolsonaro. He had already signalled to miners about the possibility of revoking an executive order authorizing the destruction of equipment used for illegal mining. To date, the promise has not been kept.

“Funai is resisting to carry out disintrusion, and we are trying to overcome it”, explains Federal Prosecutor Robert Lucht

“Even after it was officially approved and regularized, the Parakanã people do not have full possession over the Apyterewa, causing their communities to be harassed in their own territory and live in permanent insecurity, both physical and cultural,” says Aluisio Azanha, a member of the Special Commission for the Defence of Indigenous Rights of the Brazilian Bar Association’s (OAB) Federal Council.

While Apyterewa’s homologation as indigenous territory has already been recognized by the Supreme Federal Court (STF), a provisional injunction granted on May 26 by Justice Gilmar Mendes summoned the Union for a proposed ‘conciliation.’ The measure encouraged the squatters who refuse to leave the indigenous land and worried those who work to preserve the territory of the Parakanã people.

Prosecutor Robert Lucht questions Justice Mendes’s decision. “There is no conciliation at this point. Not least because the encroachers filed numerous lawsuits and they have been tried at first and second-level jurisdictions, at the Superior Court of Justice and the Federal Supreme Court, and no decision has favoured them so far,” he adds.

Leaders of the Parakanã people released a note criticizing Justice Mendes’s decision. “We, the Parakanã people, do not accept the attempt at conciliation, since agreements have been signed in the past and the squatters kept encroaching on our territory,” the document reads. “The government owes us the eviction and removal of all non-indigenous people from our land.”

An old problem

During the process of demarcation of the Apyterewa IL in the 2000s, Funai identified 1,175 squatters in the area, according to data obtained by Repórter Brasil through the Access to Information Act. Of this total, the agency recognized 292 as occupants in good faith and therefore entitled to compensation for improvements. The other 883 were considered to be in bad faith, with no right to the land where they were. In all, BRL 6.8 million have already been paid by the Union in compensation for the removal of the squatters.

About 300 families were transferred to the Belauto Settlement Project in São Félix do Xingu. However, some squatters who had left the indigenous land ended up returning.

“They came back because they were thrown into the settlement without any condition, negligible compensation, which doesn’t even cover their moving expenses,” explains Vicente Paulo Lima, president of the Vale do Cedro Association, which went to court to challenge the demarcation of the Apyterewa IL.

New squatters also settled in the Parakanã territory. According to Lima, around 2,500 families are currently living in the area. He remains on the same farm, within the indigenous area, and demands that the anthropological analysis that supported the Apyterewa demarcation be conducted again.

The removal of non-indigenous occupants from Apyterewa was set by a 2009 court decision. Two operations with this aim were carried out by the Federal Government until 2016, without success. The removal of squatters was a socio-environmental condition to build the Belo Monte dam, on the Xingu River.

“Given the current political scenario, it tends to get worse, with encroachment increasing, occupations consolidating, conflicts getting harsher, and the harassment of Parakanã leaders intensifying,” says OAB’s Aluisio Azanha.

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As the breadbasket of Brazilian agribusiness and the ‘water tank’ of river basins in biomes such as the Amazon, Caatinga and Pantanal, Cerrado has already lost half of its original vegetation cover to pastures and crops such as soybean, corn and cotton. While the rate of deforestation has fallen in the past two years, illegal deforestation in new areas, from Mato Grosso to Bahia, is still happening – and causing concern.

While about 70% of Amazon land belong to the State and most of its territory is protected by conservation units and indigenous lands, the Cerrado is largely in private hands. And most environmentalists agree that both government policies and initiatives by rural producers and agribusiness companies fall short when it comes to preserving the Brazilian savanna.

In the meat industry, the differences between the two biomes are quite visible. “As a result of the pressure that has been going on for over 10 years, there has been significant progress in the management of meatpackers’ supply chain In the Amazon,” says Daniela Teston, corporate engagement manager at WWF Brazil. But that is not the case with Cerrado.

An investigation by Repórter Brasil found official documents and satellite images that point to unauthorized deforestation in Cerrado farms that supply cattle to the country’s two largest meat companies: JBS and Marfrig.

Both are already signatories to a 2009 agreement with Brazil’s Federal Prosecution Service (MPF) that has banned the slaughter of cattle from indigenous lands, environmental reserves, and farms deforested without permission from competent agencies in the Amazon biome. JBS signed a more comprehensive commitment in 2011, valid for the so-called ‘Legal Amazon’ – an administrative region that is not restricted to the Amazon biome and also encompasses Cerrado areas.

One of the examples examined by Repórter Brasil is the Prata Farm in Paranatinga, MT. The property, which belongs to the company RLA Gonçalves Agropecuária, has more than 41 thousand hectares – equivalent to 260 Ibirapuera Parks – the best-known park in the city of São Paulo. According to a technical report of May 2017, commissioned by the Mato Grosso State Prosecution Service (MP-MT), the property is located in an “important ecological zone with high biodiversity in a transition area between Cerrado and Amazon.” The report also highlights the “proximity to indigenous lands and the presence of 260 water sources that drain into the Upper Xingu River.”

The same report points out that, between 2011 and 2016, about 616 hectares of native vegetation were removed from the farm without environmental licenses. The company responsible for the Prata Farm even signed a Conduct Adjustment Agreement (TAC) with the state’s prosecution Service to recover the environmental liability. However, satellite monitoring by Inpe’s (National Institute for Space Research) Prodes/Cerrado system shows new unlicensed deforestation after this period.

From 2018 to 2019, the Prata Farm supplied animals to the JBS unit in Diamantino, MT, and to Marfrig’s slaughterhouse in Paranatinga. RLA Gonçalves Agropecuária also transferred animals from the Prata Farm for fattening at another property of the group, the Diamante Farm. Located in Poxoréu, MT, Diamante supplied cattle to two Marfrig meatpacking plants in Mato Grosso.

The two companies confirmed trade relations with RLA Gonçalves Agropecuária. Marfrig released a statement saying that its Paranatinga unit was closed in December 2019. It says that the company is “starting negotiations to expand geospatial monitoring to the Cerrado.”

“It is important to remember that, in the Cerrado biome, there are many different phytophysiognomies (about 25 patterns of natural vegetation) that need to be studied with caution for the process of geospatial monitoring of areas to be successful,” the company adds. “Even so, we have been collecting maps of our suppliers in the Cerrado since 2019 so that we’ll soon have enough elements to carry out the monitoring.”

JBS, in turn, made no specific comments on the case and stated that “tracking the entire meat chain is a complex task, but it can be achieved in the medium term.”

Repórter Brasil also spoke with RLA Gonçalves Agropecuária. According to a statement released by the company, “the [Prata] farm remains one of the most preserved areas in the entire region”. Regarding deforested areas, the company claims that they were cleared decades ago and fall under the concept of ‘consolidated use.’ Finally, the text says that “any liabilities that may exist have legal deadlines for regularization.” However, the explanations provided by the company do not match the satellite images and the MP’s technical reports, which point to recent deforestation on the property.

After this report was published, RLA Gonçalves Agropecuária sent an e-mail with further clarifications. Regarding the agreement signed with the Mato Grosso State Prosecution Service, it says that “legally, the TACs must be adjusted to the current legislation and, according to the new Forest Code, we are totally legal.” The company also maintains that the Prata Farm “has excess legal reserves, well preserved permanent preservation areas, and no environmental liabilities. Therefore, no restriction is justified.” The full answers can be read in Portuguese here.

Repórter Brasil also investigated another case involving a rural property that supplies cattle to JBS’s Diamantino plant: the Lua Clara farm, located in a Cerrado area in the municipality of Campos de Júlio, MT.

In 2015, an operation conducted by Sema-MT (the Mato Grosso State Environment Department) together with the State Police fined the farm’s owner Eric Von Wagner BRL 354,000 for cutting down forest without a license. Three years later, he was fined again by the same agency, this time for irregular deforestation near a road that crosses the farm.

Inpe’s monitoring system reveals that 835 hectares were deforested at the Lua Clara Farm between 2015 and 2016, and no license can be found on Sema-MT’s system.

Repórter Brasil tried to speak with Eric Von Wagner but he refused to answer questions about deforested areas. Sema-MT was also contacted and asked about the two cases investigated but had not responded until this article was finished. JBS, in turn, issued a statement saying that “in order to promote transparency in its actions, the Company’s cattle purchase operations and its entire supplier monitoring system are audited annually, independently.”

Tracking

“To control deforestation in the Cerrado, we need a commitment not only from companies that purchase cattle, but also from those that sell grains, together with the Federal Prosecution Service and civil society, just as it happens in the Amazon,” says Daniel Avelino, executive secretary of the Prosecution Service’s Environmental and Cultural Heritage Chamber.

Avelino is one of the coordinators of the Conduct Adjustment Agreement signed in 2009 with more than a hundred meatpacking companies operating in the Amazon. The agreement is considered one of the most effective mechanisms to combat the destruction of the planet’s largest forest. “We need to build something along that line for the Cerrado – its condition is worse”, he says.

In recent years, tools have emerged to map deforestation and clean up supply chains. The most significant is devastation tracking by satellite images. Since 2018, Inpe has extended to the Cerrado the same monitoring it has carried out for decades in the Amazon, with alerts on fire outbreaks and an image archive with a history of deforestation. “While Prodes/Cerrado has been publishing deforestation data for two years now, meatpacking companies have not yet incorporated this information into their monitoring system,” Teston says.

“It is unbelievable that there is still no efficient tracking system for meat and grains [in the Cerrado]. There is technology. There is know-how. There are systems to monitor this tracking. So there is no technical excuse for not doing it,” says André Guimarães, executive director of Ipam (Institute for Environmental Research in the Amazon).

The rhetoric of federal and state governments for encouraging agriculture expansion and loosening environmental policy is also a reason of concern.

“By and large, enforcement has been weakening. And in many states, it is also easy to obtain licenses to deforest”, says WWF Brazil’s director of conservation and restoration of ecosystems Edegar Oliveira. “There is a whole methodology available for combating deforestation in the Cerrado. The obstacles we face are political and operational; it’s a question of making things actually work”, he concludes.

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While health agent Quitéria Ferreira dos Santos checks the size of freshly caught traíras (tiger fish), she explains how life works in the outskirts of Presidente Kennedy, a town in the south of Espírito Santo where this state border with Rio de Janeiro. “Everything is connected here. Riverine people fish in the river and the lagoon while the quilombola [slave-descendant communities] work the fields with their plantations. And beach communities make their living out of the sea.” Everyone agrees that both the beach and this harmonious way of life have their days numbered: construction of Porto Central is underway. On its own website, the development funded by Brazilian and foreign capital is called a huge “industrial port complex,” which will be built less than 40 kilometres from Marataízes, a well-known tourist destination on the southern coast of Espírito Santo. 

In order to understand the project’s magnitude, one has to think that the port will be able to receive oil ships of almost 1 kilometre in length – the equivalent of ten football fields lined up. In total, it will occupy a 2,000-plus-hectare area now enclosed by barbed wire. The complex will also have a canal for ‘parking’ ships, containers, and cranes, penetrating about three kilometres into a strip of land now covered by undergrowth and Atlantic Forest. Until 2006, small farmers lived in the area, but they ended up selling their land to the enterprise.

The beach in Presidente Kennedy, from where fishermen will be expelled to make way for the construction of the gigantic port development (Photo by João Cesar Diaz/Repórter Brasil)

The project’s environmental liabilities are shocking even a for biologist who preferred not to have his name disclosed. He works for environmental analysis company Econservation, hired by Porto Central to carry out studies at the mouth of the Itabapoana River, in the neighbouring town of São João da Barra. “Thermoelectric power plants will be built along the river to take advantage of the port’s infrastructure. The impact on the local ecosystem will be huge,” he told Repórter Brasil.

According to the project’s CEO José Maria Vieira de Novaes, Porto Central has an initial investment of BRL 4 billion – and its main shareholder is Brazilian concrete company Polimix, which controls the holding company TPK Logística. Another partner was the Port of Rotterdam (The Netherlands), Europe’s largest, which ended up leaving the project after seeing no viability in the business. Dutch construction company Van Oord is also involved. It participated in the construction of Suape, in Pernambuco, a massive port denounced at the UN in 2017 for causing socio-environmental damages to local communities. These violations were described by Repórter Brasil.

According to its CEO, the operation will start gradually. In the first stage, “it will be used to ship out the most urgent cargo: oil extracted from places like the Campos Basin.” In the following stages, it should receive oil and gas refineries and shipyards for vessels transporting the output from the pre-salt oil area already auctioned but not yet explored in the region. “The task now is to sign contracts with the foreign companies that bought these oil wells at pre-salt auctions,” explains the CEO, who declined to reveal their names. He said that the project includes construction of several factories and facilities for other companies – “in its large industrial park”, including thermoelectric plants.

“Thinking of factory chimneys giving off smoke is terrifying. And, at sea, a line of oil tankers entering this canal that will tear the land up to the highway,” complains artisan Rosângela Maria da Rocha.

Always accompanied by music from his radio, Alfelino works with sandpaper to level a beam crossing the hull of the boat he is building on the banks of the Itabapoana River (Photo by João Cesar Diaz/Repórter Brasil)

 

“I was born and raised in this mangrove. I’d be lying if I said otherwise,” says 29-year-old Heloísa dos Santos Silva. Lit by a single bulb in a modest fishmonger’s store by the riverbank, she cleans peroás (Balistes capriscus), the local typical fish, at the speed of someone who has done it for over 15 years. “The entire community of the mouth of the Itabapoana River lives on this river and on this mangrove.”

The port claims to have the required environmental licenses, but Ibama says that no permission has been issued for so-called vegetation suppression (deforestation). An executive order issued by then President Michel Temer expedited the permission for vegetation suppression in the area, calling the port ‘infrastructure of national interest.’

As for social impact, Porto Central recognized that the work will harm the fishing activity. In a pamphlet distributed at the beginning of the project, the company states that it will directly affect the work of fishermen from Presidente Kennedy and neighbouring Marataízes and São Francisco do Itabapoana. To compensate for it, they promise to hold workshops to train those people so they can work in the construction.

Every day, as soon as Valdecir leaves his boat, he goes on a motorcycle to the quilombola community of Boa Esperança to sell his fish (Photo by Gustavo Louzada/Repórter Brasil)

Progress for whom?

However, for Presidente Kennedy’s mayor Dorlei Fontão (PSD), there is no need to worry about the impacts on the waters and the populations that depend on them, since there are no fishermen in town. “What you’ll find on the beach are some crooks who can’t even tie a line to a hook,” he says. “There is only the building of the fishing association here. If you look, you won’t find one fisherman.”

“If it were up to me, I’d put that port up there tomorrow,” he said in an interview with Repórter Brasil, adding that “the tractors will go over the entire area” in late August to start digging the canal. With his elbows over the table in his office, Fontão puts his palms together like someone who is tired of saying the same thing and repeats that fishing makes no contribution to the town’s tax revenues, while Porto Central will be beneficial to the population. “It will bring income, companies, all of that,” he adds, without giving details.

Fish scales dyed by a process created by Presidente Kennedy’s local artisans are used to make handcrafts (Photo by Gustavo Louzada/Repórter Brasil)

“Politicians and the port people say that this is progress coming. But what they are going to do here is to take the sea from the fisherfolk, the river from the riverine communities, the beach and nature from us,” says Mrs. Dora, as 65-year-old Maria Auxiliadora Araújo is known, while she sits in her room’s rocking chair, framed with flowers handmade out of local fish scales, branches and shells. “We don’t live on progress here but rather on what the sea and the land give us.”

CEO Novaes says that the progress to be brought by Porto Central will also come in the form of employment. He guarantees that there will be 4,000 jobs – 70% of which will be for local labour. But residents do not seem so confident. “Will there be work? Yes, but not for most of us,” objects Rosângela Maria da Rocha, secretary of the Association of Sea Artisans.

Fisherfolk are sure that their livelihoods have their days numbered. “I’ve been fishing since my teeth came out. That much-promised port will be the end of fish. The end of fishing. How are we going to work with all those tugs, oil tankers, and cargo ships around?,” says 66-year-old Valdecir, who lives by the river. Fisherman Haroldo dos Santos agrees: “With the port, the first thing they are going to do is to ban our little boats.” Alfelino Batista, a boat maker who learned the trade “from [his] father, who learned from [his] grandfather and there goes a lot of history,” says he is sure that his work will end as soon as Porto Central is ready.

Heloísa dos Santos says she can clean 50 kilograms of fish per hour and explains that the whole community lives on the river and the mangrove (Photo by João Cesar Diaz/Repórter Brasil)

‘Those royalties don’t belong to us’

When residents speak, they always sound like someone who seems tired of promises of improvement in their lives. It happened back in 1999, when the town began to receive royalties from oil and gas. Presidente Kennedy has the fourth highest GDP per capita and receives the highest oil and gas royalties among Brazilian municipalities – over BRL 160 million per year, according to the National Petroleum Agency. That is quite a lot for a population of 10,000.

But as it seems, the oil money has never reached the town’s dirt streets or the flooded roads around it. It has not reached the people either. “These royalties don’t belong to us; that’s our feeling,” says Efigênia Alves Peris, president of the Cacimbinha and Boa Esperança Quilombo Residents’ Association.

One of the most evident environmental impacts of the construction of Porto do Açu is the destruction of the beaches located south of the project, says UENF Professor Marcos Pedlowski. Streets in the neighbouring village of Grussaí are now part of what remains of beach sand (Photo by Gustavo Louzada/Repórter Brasil)

Riverine and quilombola communities are also wary because of the Port of Açu, built in 2013 in São João da Barra, 70 kilometres from Presidente Kennedy. “What they are saying about Porto Central is something we’ve heard before, but then nothing was delivered,” says Batista the boat maker, referring to the Port of Açu. “They promised employment, they promised courses, but after the construction finished, they only hired outsiders.” He worked at the port during construction and dredging: “It was a terrible job, pay was low and often late… We didn’t even know what we were building. For me it was like slave work, but we needed the money.”

Questioned by Repórter Brasil, Porto do Açu states that it “strictly complies with labour legislation” and its policy is to hire local labour “from São João da Barra and Campos dos Goytacazes.” Residents interviewed, however, say that most of the “good jobs” are for people brought from other places and who now live in the city of Campos.

Initially conceived by Brazilian businessman Eike Batista, Porto do Açu was one of the central pieces in the plea agreement signed by former Rio de Janeiro governor Sérgio Cabral (PMDB) in which he was to point to other people involved in corruption. Investigations under the so-called Car Wash (Lava Jato) Operation point to a connection between bribes paid by Batista and executive orders facilitating land expropriation for the development in São João da Barra. Control of Açu is now – as in the case of Porto Central – divided between a Brazilian logistics company (Prumo Logística) and a European port (Port of Antwerp).

According to fishermen from Presidente Kennedy, the Port of Açu is already disturbing their lives, since cargo ships coming from there scare part of the fish away, making it increasingly difficult to live on fishing. “I don’t want my son to be a fisherman, it’s not possible anymore” – said several fishermen.

Presidente Kennedy fishers claim recognition of their work by local authorities. For the Mayor, they are just “crooks who can’t even tie a line to a hook” (Photo by Gustavo Louzada/Repórter Brasil)

Ana Maria Almeida da Costa, a professor at the Department of Social Services of Fluminense Federal University (UFF) who studies the socioenvironmental impacts of Porto do Açu, points out its poor and degrading working conditions: “There are several reports of labour law violations and episodes that could be considered slave labour,” she says, emphasizing that labour inspectors have not yet looked into those cases. “The port was imposed overnight, expropriating the lands of about 1,500 families of small farmers and fisherfolk in a brutal and violent way.”

The professor says that Porto Central seems to repeat Açu. “Due to lack of transparency on the part of the port, residents will only be aware of the size of the ‘monster’ when it appears,” she says.

An oil platform anchored in the Açu canal, only 70 km from Presidente Kennedy; such proximity casts doubts upon the real need for a new port (Photo by Gustavo Louzada/Repórter Brasil)

From the Sea to the Parish

The future central area of ​​the port is located about four kilometres from the beach in Presidente Kennedy. There, disguised within the landscape of royal poinciana trees, cacti and shrubs, a dirt road leads to the Sanctuary of Our Lady of the Snows, built at the request of the Jesuits in the early 17th century. That is where 58-year-old Jovelina Alves Peris lives. She has looked after the sanctuary for 18 years and points to the place of the first house where the prayer group used to start – today in ruins taken by barbed wire and Porto Central signs.

Ruins of the community that used to have their dairy cattle on the lands now surrounded by the future Porto Central (Photo by João Cesar Diaz/Repórter Brasil)

The purchase of the area began in 2008, when the company Ferrous Resources do Brasil, which owns iron ore mines in Brumadinho, Minas Gerais, gradually purchased every lot and then sold them to Porto Central. “As soon as they bought it, they’d already pass the tractor over it to bring down the houses.” At the time, the mining company planned to build its own port and slurry pipeline to transport its product from Minas Gerais.

The model of Porto Central includes space for the Sanctuary among the industrial buildings. But even so, Peris fears that the church will be swallowed up by the sea. “They are going to cut the land to our gate.”

 

Jovelina Alves Peris offers stories and coffee to everyone passing by the church of which she is in charge; she fears that the place will be swallowed up by Porto Central’s canal (Photo by Gustavo Louzada/Repórter Brasil)

This report was made with support from DGB Bildungswerk and Fonds Pascal Decroos

O post The end of the beach: Giant port and thermal power plant with foreign partner threaten riverine and slave-descendants in Brazil apareceu primeiro em Repórter Brasil.

Environmental inspection teams in the Amazon have decades of experience, which helped to reduce deforested and burned areas from 2005 to 2015. Now they are being supplanted, as technicians and public servants are replaced – along with all their knowledge – by a military command concentrated in the Ministry of Defense, often without any expertise in environmental inspection or the biome. This process has created obstacles for agencies such as Ibama and ICMBio, undermining state environmental policies and aggravating the cycle of deforestation and burnings in the Amazon rainforest.

Satellite alerts showed an increase of 34.5% of area of deforestation in Brazilian Amazon during last year (from August of 2019 to July of 2020), compared to the year before (August of 2018 to July 2019). The extension of loss reached 9.204,58 km² vis-á-vis 6.843,91 km², according National Institution of Space Research (INPE)´s Real Time Deforestation Detection (DETER) system. 

Under strong criticism, decision power about the so-called ‘command and control’ operations and actions in the Amazon was regulated in May by a decree on Guarantee of Law and Order (GLO), authorizing the use of the Armed Forces in Operation Green Brazil 2. A paragraph was added to a similar GLO decree from 2019, establishing that federal environmental agencies “will be coordinated” by military commands reporting to the Ministry of Defense, in charge of “allocating available resources.”

“GLO is often presented as an environmental protection action, but it means even more humiliation to the Ministry of the Environment/Ibama, which, despite their experience, now have to follow orders from the military,” says researcher Antonio Oviedo from Instituto Socioambiental (ISA). In the state of Mato Grosso, Oviedo says, Ibama issued deforestation alerts in areas that were ignored by Operation Green Brazil 2, whose outdated, ineffective, and expensive strategies were criticized. “This shows their mistake. Agencies such as Ibama and ICMBio (Chico Mendes Institute for Biodiversity Conservation) – however limited their actions may be – work with information and planning using monitoring systems and territorial management teams.”

Brazil’s Vice President Hamilton Mourão is the head of the National Council for the Legal Amazon. He minimized the importance of this accumulation of power, saying that the Armed Forces just provide logistical and security support to inspections because the relevant agencies “have lost their operational capacity.” To Repórter Brasil, the Ministry of Defense informed that “all actions are decided by the Integrated Group for Protection of the Amazon (Gipam),” which gathers public security bodies and environmental agencies such as Ibama, ICMBio, National Institute for Space Research (Inpe), and the Brazilian Forest Service (SFB) – the latter has been transferred from the Ministry of the Environment to the Minister of Agriculture early in this administration.

A matter of concern is that, in addition to military intervention in leadership positions, the very ‘representation’ of federal environmental agencies in Gipam ends up being harmed and questioned. The current supervisors who seat in Ibama’s Environmental Protection Board have no expertise in the area. Officials speaking for Ibama and the Ministry of Defense – which communicates the government’s views on the subject, did not tell Repórter Brasil who represents the agencies in Gipam.

Former Ibama president Suely Araújo points out that several ministries are needed in the fight against deforestation. That had been the prevention and control policy for the region since 2004. She says that the agency’s role in defining priority areas also included Inpe, the Amazon Protection System’s (Censipam) Management and Operational Center, and the Brazilian Intelligence System (Sisbin). “In practice, the coordinating role played by the Ministry of the Environment in environmental inspection has been gradually deflated.”

“Banks look at Ibama’s list to provide rural credit. They may be providing loans to those who should not be receiving it,” says former Ibama president Suely Araújo

She also criticizes one-off inspections involving large staff, since violations are resumed as soon as they leave the sites. “With or without military support, inspectors have to go to the right places where they will solve the problems: these environmental violations are usually connected. It involves land grabbing, and its money fuels illegal mining, illegal deforestation: it’s all connected and must be solved together.”

In July, almost a year after the agency’s inspectors sent an open letter to Ibama saying they were “highly concerned about the way environmental policy is being conducted in Brazil” and presenting proposals, they released a new document stressing how serious the situation has become and warning about the “collapse of federal environmental management.” Two days after the document was publicized, the agency’s president, Eduardo Bin, dismissed two experienced employees who headed the Coordination of Inspection Control and Logistics and the Air Operations Center, and replaced them with an unexperienced public servant and a Navy officer.

Problems with fines and lack of transparency

Environmental policies have also suffered other restrictions besides the conflict between military views and the less hierarchical and more specialized environment of civilian-based public management. Flows and procedures related to environmental fines are being limited and inspections became less transparent, with restricted contacts and relations with the press.

In January, Joint Normative Instruction 2/2020 created conciliation hearings to be held after notices of violation are issued. Although Ibama has not confirmed the number of hearings held since then – which were affected and aggravated by failures in the integration of electronic systems – they are estimated to be quite low. As for disclosure of interdicted areas, files available on Ibama’s Open Data Portal point to 400 new entries from early January to July 15, 2020 (including some that appear on internal lists but are no longer in the consultation system). Between 2012 and 2018, 16,000 fines were imposed per year on average. Even though they dropped to 9.700 in 2019, with a lower number of operations as well, the number of new entries raises red flags.

“It’s important to note that the current government promotes the idea that deforestation has always been out of control. And that’s a lie,” researcher José Augusto Pádua says.

“Delays in updating information on interdictions have practical consequences. Banks all over Brazil look at Ibama’s list to provide rural credit. They may be providing loans to those who should not be receiving it,” says Suely Araújo, who is now a member of Observatório do Clima’s Board. From mid-May to mid-July, military personnel working in Operation Green Brazil 2 claim to have carried out more than 14,000 inspections with over 1,200 notices of violation, resulting in BRL 407 million in fines. Depending on the pace of conciliation hearings and updates on the interdiction list (Ibama would not comment on it), it will take a long time before these notices of violation can be specified and publicized.

In March, Ibama set new restrictions to contacts between the agency’s staff and journalists. “The relationship with the press has changed completely. Ibama used to disclosure environmental crimes to the press, which helped to prevent other crimes,” Araújo says. “Today, the press does not follow inspections or receive details of reports on these operations”. Under the protection of anonymity, Ibama´s agents reported to El País that illegal mining activities, considered priorities by environmental agencies’ experts, were excluded from the operations of Green Brazil 2 by the military command.

‘Total freedom’

“Throughout history, [farmers involved in environmental violations] have been pardoned by political decisions, showing that ignoring or failing to comply with past environmental regulations ‘pays off,’” says Alex Marega, deputy secretary of the Mato Grosso State Environment Department, on the pardon of environmental violations committed until 2008 by the 2012 flexibilization of Brazil’s Forest Code. “People think: ‘I’ve got to do it now because if there’s pardon in the future, I’ll have already guaranteed my share.’”

According to him, the sense of impunity is the main explanation for the recent increase in Amazon deforestation. “Many producers think they will not be caught or even if they are [caught by environmental inspections], it will be worth it,” he points out. “With the increase in the BRL-USD exchange rate [in addition to very high prices of commodities like soybeans], they realize that since their products are exported, they will be able to cover all these costs even if they have to pay fines and legal costs.”

Federal University of Rio de Janeiro (UFRJ) Professor José Augusto Pádua, who researches environmental history, points out that these agents of Amazon deforestation do not keep fixed roles in society. A logger opens roads and later he may decide to use the logging areas for cattle ‘farms,’ or he may invest in mining. That is, they are not land grabbers with roles that are fixed all the time. “They move according to the context. They are always there, but the rhythm and boldness of their actions depend on the political messages they get.”

“GLO is often presented as an environmental protection action, but it means even more humiliation to the Ministry of the Environment/Ibama, which, despite their experience, now have to follow orders from the military,” says ISA researcher Antonio Oviedo.

When deforestation dropped substantially in 2005-2015, they remained there but invested in businesses such as gas stations and other enterprises and services. “When they see an opening, they jump at it. It’s important to note that the current government promotes the idea that deforestation has always been out of control. And that’s a lie,” Pádua adds. He considers the federal administration of President Bolsonaro as “directly responsible for the setback”; it has brought back Brazil’s “image as the environmental bad guy” due to uncontrolled deforestation and burnings in the Amazon last year and this year.

That is why the messages are essential. “And the messages sent in the beginning of the Bolsonaro government were terrible: the President said he would no longer demarcate any indigenous land and he criticized Conservation Units. There was this backwards discourse on ‘total freedom,’ a return to that view that conservation is development’s enemy,” he says. According to him, Bolsonaro’s mindset is similar to that of illegal miners who see the forest as “worthless, as an obstacle to what really matters, which is economic gain.”

Suely Araújo had already noticed the changes in the second half of 2018, when she was still Ibama’s head: increasing number of deforestation alerts issued in the Amazon and growing hostility against field inspectors. The reason, she said, was the presidential race. “The Bolsonaro’s campaign spoke against environmental control. Environmental sanctions were presented as part of an ‘industry of fines,’ as if inspectors were doing something wrong. More serious than that: violators were told that ‘anything goes,’ increasing the number of illegal acts.”

Oviedo, from ISA, recalls that in 2019, the previous GLO decree together with a 60-day fire moratorium contributed to the fight against forest fires but had virtually no impact on deforestation rates. “Along with all the forest cut down in 2020, there is an enormous amount of dry biomass ready to be burned during the fire season in the Amazon this year,” he says. Considering the aggravating factor of Covid-19, which also affects respiratory health, the researcher points out that two critical peaks may coincide – fires and viral infections – which may culminate in new collapses in the health system, with fewer hospital beds and health professionals available and increased mortality during the annual fire season in the Amazon Forest (August-October). A technical note published in June by the Amazon Environmental Research Institute (IPAM) estimates that, if the current drivers of deforestation persist, about 9,000 km² of deforested areas may turn to ash. IPAM calculations made in the towns most affected by burning in the Amazon showed that the air pollution increased by 53% on average.

O post Concentration of power on the military undermines policies for the Amazon, opens way for more deforestation and fires apareceu primeiro em Repórter Brasil.

No one has been arrested or even indicted a year after ‘Fire Day,’ an attack organized by ranchers and businessmen from Novo Progresso, which tripled fires in southwest Pará state on August 10-11, 2019. Civil (State) Police and the Federal Police investigations have yet to point out who is responsible for the incident, which was organized on a WhatsApp group and included a ‘kitty’ to buy fuel and hire bikers to spread the flames, as detailed by Repórter Brasil in October last year.

Amazon devastation, which in 2019 reached record levels for the last decade, aroused worldwide commotion and mobilized heads of state to defend the forest. This year, burning season is just beginning in the world’s largest tropical forest, but satellite data already show that fires have increased over last year.

According to the Science Director of the Amazon Environmental Research Institute (IPAM), Ane Alencar, one of the drivers for successive increases in forest destruction is the lack of punishment. “Impunity is the cancer that spreads deforestation and fire in the Amazon.”

The first hypothesis investigated by both Civil and Federal Police is that the ‘Fire Day’ was organized by businessmen and ranchers from Novo Progresso, who were questioned and had their documents, cell phones, and computers seized during Federal Police’s ‘Pact of Fire’ operation.

Among those investigated is the president of the Union of Rural Producers, Agamenon Menezes. Cattle ranchers’ pressure target reserve areas such as the Jamanxim National Forest, which they want for pastures. There are 618,000 cattle heads in Novo Progresso alone – with a population of 25,000.

However, the investigation conducted by Civil Police in Novo Progresso states that the fire on that August weekend was spread by dry weather. In addition, the Police understood that such fires happen every year. Despite being under confidential procedures, Repórter Brasil learned from police officers that the investigation does not point to any suspects or authors.

Federal Police, in turn, did not finish the forensic analysis of the equipment seized in operation ‘Pact of Fire.’ The investigation was not finished either. “We depend on the analysis of the media’s content. Unfortunately, the pandemic has delayed everything,” explains Sérgio Pimenta, the sheriff in charge of the investigation.

Since last year, information regarding the Federal Police investigation has not been given to the Federal Prosecution Service. The standard procedure is for information to be shared with the prosecutors every three months. They feel discouraged, Repórter Brasil found out. “If no steps are taken in this investigation for so long, it will be clear that it was not a priority,” says one of the sources interviewed by Repórter Brasil, who requested anonymity.

The Civil Police investigation, in turn, was sent to the Judiciary and the Public Prosecution Service – without pointing out any authors. The Prosecution stated in a note that it requested that the records be returned to the police to take “further and necessary action for a better analysis of the facts,” but without detailing what that action was and claiming that the procedures are confidential.

One fact that hindered the investigations, according to police officers heard privately by Repórter Brasil, is that local ranchers and businessmen are well connected with deputies and senators from Pará, especially those who are part of the so-called ruralist caucus. They also have communication channels to the top federal government officials. Another fact that also contributed to delay investigations was a conflict between civil and federal police in Pará.

Dispute between police forces and the interests at stake

The conflict started when three federal police officers were arrested by civil and military police (two distinct state police forces) in Novo Progresso. They spent a night at the police precinct until they were properly identified – in November 2018. The arrest caused the dismissal of a local Civil Police sheriff.

The dispute became fiercer when sheriff Vicente Gomes, head of the Civil Police Superintendence of Tapajós, determined that the Novo Progresso police should not pass the statements taken under the ‘Fire Day’ investigation on to the Federal Police.

Gomes and other local authorities are members of one of the WhatsApp groups where the ‘Fire Day’ would have been organized, called ‘Jornal A Voz da Verdade’ (The Voice of the Truth Newspaper) with 256 members. The details of the arson, however, were organized in a smaller group called ‘Sertão,’ with 70 members and without police officers, as revealed by Repórter Brasil. When the report was published, Gomes said he would not comment.

Investigations regarding ‘Fire day’ also revealed that the Civil Police precincts in Novo Progresso and Castelo dos Sonhos (an Altamira district near Novo Progresso) are not working in synch. While Novo Progresso investigators took testimonies from influential ranchers and businessmen in the region, officers in Castelo dos Sonhos arrested three landless rural workers on the grounds that they were suspected of being responsible for the coordinated arson attacks in the forest.

The three landless rural workers were in jail for 50 days, and a court order released them after Repórter Brasil questioned the reasons for their arrest. One of the prisoners denounced the presence of illegal loggers in the settlement where they lived. “When the police arrived at my house, I thought they’d come to arrest the loggers, but they arrested me instead,” she told Repórter Brasil, in an interview published in October 2019.

Pro-destruction discourse

The region affected by ‘Fire Day’ involved areas in the towns of Novo Progresso, Altamira, São Félix do Xingu, and Itaituba. That weekend, the satellites of the National Institute for Space Research (Inpe) detected 431 fire spots in the areas of the four towns, which represented 39% of the 3,026 fire spots recorded across Brazil over the weekend. The most affected areas were the Jamanxim National Forest and the Nascentes Serra do Cachimbo Biological Reserve.

The agreement between ranchers and loggers that resulted in ‘Fire Day’ was revealed on August 5, 2019 by journalist Adécio Piran, from Pará-based news website Folha do Progresso. After publication, Piran left town for two months because of the death threats he received. He has been Novo Progresso’s Environment Secretary since May.

In recent decades, Brazil had managed to reduce the area deforested in the Amazon during dry season to around 5,000 square kilometers. In the last cycle (August 2018-July 2019), 10,000 square kilometers were destroyed. According to Ipam, 15,000 square kilometers are expected to be destroyed between August 2019 and July this year, says Ipam’s science director Ane Alencar. “That is a reflection of the feeling of impunity that we are experiencing in this government,” he says.

For her, in addition to impunity, another factor behind the steady increase in Amazon destruction is that the criminals who burn it and deforest it began to feel encouraged by discourses and actions stressed since President Jair Bolsonaro’s election.

O post One year after ‘Fire Day,’ no one has been arrested or charged; impunity encourages destruction of the Amazon apareceu primeiro em Repórter Brasil.

Two multinationals bought cocoa beans from a supplier employing slave-like labour in the state of Bahia. In investigations conducted by the Labour Prosecution Service (MPT), Repórter Brasil found a series of labour violations in the supply chains of Olam International and Barry Callebaut. A third agribusiness giant also benefited from ‘dirty cocoa’: Cargill.

The three foreign companies account for 97 percent of the grinding and roasting of cocoa beans in Brazil and supply major chocolate brands such as Nestlé and Lacta (Mondelez) – manufacturers of the popular Brazilian chocolate brands ‘chokito’ and ‘sonho de valsa.’ But before becoming a treat in the hands of consumers, Brazilian cocoa experiences a sad reality in rural areas.

At least 148 people have been rescued from slave labour on cocoa farms in the past 15 years. Many operations took place in the states of Pará and Bahia, the largest cocoa hubs in Brazil. Human rights violations also include threats from employers, degrading housing and hygiene conditions, debt bondage, and even child labour.

According to the Labour Prosecution Service, the two central figures in this chain of crimes are farm owners and the so-called ‘middlemen’ – intermediaries who serve as links between owners and large mills.

One of the farms caught with slave labour belongs to Chaves Agrícola e Pastoril, a company that owns several cocoa estates in southern Bahia. In September 2017, labour inspectors from the Ministry of Economy rescued nine people in a slave-like situation at the Diana Farm in Uruçuca (BA).

According to inspectors, the farm kept workers in poor accommodation, without access to bathroom facilities or drinking water. They used to bathe in a pond of still, murky water. In order to drink and cook, they had to strain the water collected from wells to remove tadpoles and fish.

According to prosecutors’ findings at the time of the inspection, the cocoa harvested by the Chaves Group was traded with different middlemen in the towns where the company had farms. Repórter Brasil had access to invoices from their businesses. The documents confirm that, at the time of the rescue, at least two large mills – Barry Callebaut and Olam Agrícola – were buying cocoa from a middleman supplied by farms belonging to the Chaves group.

Barry Callebaut said that its relationship with Chaves Agrícola e Pastoril was interrupted in June 2019, after it found violations to its supplier code of conduct.

Olam Agrícola, in turn, did not comment on the use of slave labour in its supply chain nor did it say whether it had taken action regarding the Chaves group. However, it stated that it has monitoring systems in place to protect human rights.

Mondelez, owner of Lacta, acknowledged the challenges it faces to establish good working conditions in plantations. Nestlé said it buys cocoa directly from mills. The two chocolate makers say they reject bad labour practices.

In 2018, just a few months after the crime was found, the Diana Farm and other estates belonging to the Chaves Group received the seal of good practice from UTZ, the main international certifier of labour and environmental sustainability in the segment. The certificate, however, is no longer valid. Asked about the date and reasons for its cancellation, UTZ did not respond (see the companies’ full statements).

In April 2020, as a result of the operation, Chaves Agrícola e Pastoril was included in the ‘dirty list’ of slave labour, an official register of the Ministry of Economy that exposes employers caught using slave-like labour. Before entering the list, employers defend themselves in two administrative jurisdictions at the Ministry’s Special Social Security and Labour Secretariat.

This was not the first time that the company faced charges of labour irregularities. In 2016, the Prosecution Service obtained a court order freezing the Chaves Group’s bank accounts after 120 workers were found in degrading housing conditions on the company’s farms. Representatives of the group were contacted by phone and e-mail but did not respond.

Payment below the minimum wage

In December 2018, another inspection in southern Bahia found labour violations that once again involved the major players in the cocoa industry. Federal labour inspectors and prosecutors found workers living on the Boa União and Sete Voltas farms without bathrooms or treated water. They said they earned less than half the minimum wage.

According to the prosecutors, the cocoa harvested at the two properties used to be traded with the same middleman. In a statement to the agency, he said he sold the product to Barry Callebaut, Cargill and Olam.

Repórter Brasil was unable to locate the owners of the Boa União and Sete Voltas farms. Cargill said that it stopped purchasing cocoa from the middleman in question in 2019. The multinational informed that it intends to increase direct purchases from farms, which today account for only 20 percent of the volume purchased. “In the past two years, Cargill opened four more warehouses across Brazil to expand direct purchases,” says the company (see full answer).

Barry Callebaut declined to comment on the case, claiming that it does not disclose information about its suppliers. Olam did not respond either.

Partners?

As in the case of the Diana Farm, the workers of these two properties were also under so-called ‘partnership contracts.’ These are legal arrangements in which the farm owner provides a plot of land to the farm worker – called a ‘partner’ – to manage cocoa trees throughout the year. Workers are not entitled to salaries, but at the end of the harvest they keep a share of the cocoa harvested under their care – usually 50 percent or less.

However, according to the law, farm owners must guarantee minimum housing and infrastructure conditions to their ‘partners,’ in addition to autonomy to sell their cocoa. But that is often not what happens. In some cases, owners impose cocoa buyers on farmers. With little margin for negotiation, profits from the arrangement do not provide decent and proper livelihood.

Virtually all cocoa in Bahia is produced under these contracts, leading to labour violations, explains Labour Prosecutor Ilan Fonseca de Souza. “Partnerships hide employment relationships. Farm owners gets their production without having to hire anyone,” he says. That is why inspectors say that many of those contracts are frauds, i.e. designed to mask a relationship that is actually one of employer and employee.

To stop violations in cocoa plantations, Souza advocates that the industry’s giants should be held accountable, since the acquisition of the product supplies an extremely concentrated market. This possibility, however, comes up against the difficulty to trace the origin of the cocoa beans. Through informal contracts, middlemen gather bags from several farms in order to resell the product to processing companies in larger volumes.

Of the three multinationals that negotiated with the middlemen involved in labour violations, only Barry Callebaut commented on the difficulties of tracking the origin of cocoa. The company promises to certify its middleman, but the system is not ready and no date has been set for operations to start.

O post Slave labour and inhuman wages: labour violations in Brazil’s cocoa industry apareceu primeiro em Repórter Brasil.

The official crests of the towns of Marcelândia and Feliz Natal, in northern Mato Grosso, display three fallen logs and an ox, respectively. Deforestation, logging, and livestock are also ubiquitous in daily life and are related to the recent high rates of devastation in the two municipalities, both in terms of hot spots and deforested area. Located near the boundaries of the Xingu Indigenous Park, in a region known for ‘new areas’ of deforestation, these cities epitomize the escalation of Amazon environmental degradation in the state and help prevent Mato Grosso from reaching zero illegal deforestation by 2020 – a target the state set in 2015.

Inpe (Brazil’s National Institute for Space Research) recorded 162 fires in Feliz Natal between June and July this year – the highest figure among municipalities of the Amazon biome in Mato Grosso – while Marcelândia had the largest deforested area (83 km²) among registered rural properties, according to Prodes data from 2018-2019. And these are just two pieces of information showing how the situation in those towns illustrates the state’s failure to end illegal deforestation – a promise made during the Climate Summit in Paris that is becoming increasingly unreachable.

Between August 2019 and July this year, Inpe detected 1,800 square kilometres of deforested area in Mato Grosso’s Amazon biome – an increase of 31 percent over a year earlier and 60 percent compared to two cycles ago (August 2017 to July 2018). Monthly escalation of degradation was also dramatic and was more intense precisely last July, with the rate of deforestation increasing by 136 percent over the previous month.

One of the Mato Grosso government’s main measures to curb forest destruction within that period was investing in modern monitoring satellite systems. At the cost of R$ 6 million, the Planet alert system was hired in 2019 with funds received by the state from the UK and Germany. Another initiative to meet the target – in partnership with the Public Prosecution Service – was to cross Planet data with information on areas listed on Brazil’s Rural Environmental Register (CAR) to improve environmental violation reports.

However, these measures were neutralized by three mistakes, according to experts. Projections and promises were not realistic; there was a lack of political work against the actions of the federal government that make it difficult to control deforestation; and, finally, practical actions were shy since remote monitoring of fire and deforestation is not enough, even when it uses cutting-edge satellites.

Asked by Repórter Brasil about the situation, the Mato Grosso government recognized that “the deficit in investments necessary to leverage sustainable development in the state is still very high.” But it stated that, for this to happen, there must also be “collective action that includes other spheres of public administration and involves the private sector and civil society” (read the answer in full here).

Fernando Sampaio, executive director of the government’s strategy towards zero deforestation – called Producing, Conserving and Including – admits that the state target “is very far” from being met. “Ruralists say that Brazil can produce a lot more without deforestation. But the fact is that, even if we improve environmental inspections to try to halt [devastation], this game ca only be turned by ascribing real value to the standing forest”.

The town of Feliz Natal once again illustrates Sampaio’s statement about how intact forest is worth much less than devastated areas. For tax collection purposes, the municipal government set the value of each hectare of preserved area at R$ 1,480, while farming land is worth three times more: R$ 4,433. Even for areas considered ordinary for farming, the amount is set at R$ 3,614. “To this day, standing forest is still worthless. For anyone who owns a forest area, land is worth much more without a forest than with it,” Sampaio stresses.

‘Dramatic’ deforestation and record livestock production

“The numbers are terrible. The amount of deforestation is dramatic due to the loss of biodiversity that Brazil is undergoing,” says prosecutor Marcelo Vacchiano, head of the Technical Centre for Support to Environmental Execution of the Mato Grosso State Prosecution Service (MPMT).

Alice Thuault, deputy director of Centro de Vida Institute (ICV), also sees the figures on escalating deforestation as ‘scary’ and she criticizes the ‘anti-environmental show’ put on by the federal government that dominated the sector’s agenda. In the same survey that shows that 85 percent of deforestation in Mato Grosso in 2018/2019 was illegal, the fall in the number of Ibama’s fines for damages to the state’s flora was also stressed: from 1,093 in 2015 to just 411 in 2019 – less than half in a year of more environmental devastation.

Ibama is under ‘military intervention,’ especially since the executive order on Guarantee of Law and Order (GLO) and the creation of Operation Verde Brasil 2 in May, which has been dismantling state policies by replacing experienced technical staff with military officers.

According to Prosecutor Vacchiano, this government agenda that does not address the country’s socio-environmental problems also includes pardon for environmental crimes, inertia before forest invasions and land grabbing, and instructions from Minister of the Environment Ricardo Salles to ‘pass the cattle through the gate’ on legal deregulation (meaning to approve it in batches).

At state level, civil society organizations also criticize the approval by the Mato Grosso State Parliament of a bill that allows clearing native forest in Permanent Protection Areas (PPA) for self-declared ‘low impact’ projects without properly checking properties’ environmental registration and opening the way for ‘express’ licensing based only on documentation submitted by interested parties. In its original version, the project even authorized registering properties that overlap Indigenous Lands still in process of approval – an item that ended up being removed from the text approved in July, in the middle of the pandemic, after pressure from Indigenous Peoples and environmentalists.

This scenario of environmental weakness takes place in a context of extremely high agribusiness production. The Gross Value of Agricultural Production (VBP) in Mato Grosso is expected to reach R$ 125 billion in 2020, according to the Ministry of Agriculture. It is the highest in the country (17.5%), followed by the states of Paraná (12.8%), with R$ 91 billion, and São Paulo (12.7%), with R$ 90.7 billion. This year, the national gross value is expected to reach R$ 716 billion – an 8.8 percent increase over 2019. Driven by record grain harvests and higher prices for agricultural products, it will be the largest production in 31 years – even amid the Covid-19 pandemic and with several industries undergoing retraction.

The municipal level

Both the figures and the government measures in its actions aimed at environmental dismantling are part of Marcelândia’s recent history. Located 210 km from Sinop, the hub of Mato Grosso’s so-called ‘Big North’ region between the BR-163 Highway and the Xingu Indigenous Park, Marcelândia was the target of Ibama and the National Force operations – such as Curupira (2005) and to Arco de Fogo (2008) – which found irregularities and shook the local timber industry.

After remaining on the list of priority towns for the Ministry of the Environment’s actions for prevention, monitoring and control between 2008 and 2013, Marcelândia spent five years in the group of municipalities where deforestation was monitored and under control – only to return to the list of places demanding high attention in 2018. Only one person linked to an agribusiness company is being charged in the package of investigations conducted by the Public Prosecution Service for the illegal deforestation of 2,900 hectares in that town (corresponding to almost 3,000 football fields) in 2008-2019. Another landowner, a businessman who lives far away in a southern Brazilian town where he used to be the mayor, is charged by the Prosecution Service for illegally clearing another 1,000 hectares in the same period.

Large properties prevail in the municipality – areas under 400 hectares are only 5% while farms with more than 2,000 hectares cover 71 percent – which indicates that, in general, those who deforest and burn in Marcelândia are not family farmers, settlers or community members. They are big farmers.

According to head of the Municipal Environmental Department Suzana Barbosa, “Marcelândia is undergoing a process of transition from livestock to agriculture, with turnover in landowners, something that did not use to happen often. We observe that some of them arrive here, do their ‘cleaning up’, ‘clear their land’ and then go on to ‘burn.’ Sometimes they ignore inspections altogether.”

According to her, the frequency of environmental inspections was reduced: “Between 2013 and 2018, Ibama inspectors used to arrive here as soon as the rainy season ended (between February and April) and stayed until November or December.” In 2019 and 2020, operations were scarce, according to Barbosa, with only occasional remote monitoring interventions, and they did not last more than 20 days.

Last year, forest fires recorded by the Fire Department in Marcelândia scared the population, who remembered the inferno of the 2010 fire season – when flames advanced over the town area, leaving families homeless, destroying 80% of companies, and creating the need for an emergency decree.

Even so, Marcelândia still comes third in the Amazon biome in Mato Grosso in number of hot spots (148) detected by Inpe between June and July 2020, just behind neighbouring Feliz Natal (162) and Gaúcha do Norte (152).

O post Degradation advances in Mato Grosso and causes zero illegal deforestation target to fail apareceu primeiro em Repórter Brasil.

Banco do Brasil and BNDES are the Brazilian financial institutions with the highest investments in forest-risk companies, according to a study launched this Tuesday (Sept. 1^st) by the international coalition Forests & Finance, of which Repórter Brasil is a member.

Banco do Brasil is by far the largest provider of credit to commodity companies – the main drivers of deforestation in the country. It loaned US$ 30 billion between 2016 and 2020, mostly through rural credit.

In the same period, BNDES was the largest provider of investments to forest-risk companies, with US$ 3.8 billion in April 2020. More than half of that amount went to the beef sector, followed closely by the pulp and paper industry.

Taking an international approach to the issue, the study reveals that the largest global banks have given US$ 154 billion in loans to companies that produce and trade commodities in the three areas with large tropical forests in the world – Brazil, Southeast Asia and Central and West Africa.

In addition to the study, the Forests & Finance Coalition also provides a new free database that monitors credit flow in the world and can be searched. Its goal is to increase transparency and put pressure on financial institutions to be more rigorous about their clients at a time when the forest fire season seems more devastating than that of 2019.

“Global banks and investors are knowingly financing the agribusiness giants that are fueling the fires,” Merel van der Mark, Coordinator of the Forests and Finance Coalition. In addition to Repórter Brasil, the Rainforest Action Network, TuK Indonesia, Profundo, Amazon Watch and BankTrack are part of the group.

Deforestation has almost doubled in the world in the past ten years, despite several industry-based and multilateral commitments to zero deforestation. In 2019, it reached 11.9 million hectares. Forests are destroyed mainly to produce commodities such as meat, oil palm, pulp, rubber, soy, and timber.

According to the data available, credit to commodity industries has generally increased by 40% since the Paris Agreement was signed in December 2015 to contain global warming. In April this year, just before the ‘fire season’ began in the Brazilian Amazon, investors held US$ 37 billion in bonds and shares of commodity companies.

“Despite the financial sector’s commitments to the Sustainable Development Goals and the Paris Agreement, their pursuit of profits are driving us toward a climate and public health disaster,” Merel criticizes. According to the United Nations Environment Program, deforestation and related loss of wildlife habitat are critical, even when diseases such as Covid-19 emerge.

The study shows that only 15 banks account for about 60 percent of the US$ 154 billion in credit granted to companies at risk of causing deforestation since the Paris Climate Agreement was signed. Eight of those banks are signatories to the UN Principles for Responsible Banking, which include a commitment to align banking operations with the Paris Agreement and the Sustainable Development Goals, including SDG 15 to “halt deforestation [and] restore degraded forests” by 2020.

In terms of origin of the loans, banks in Brazil, China, Indonesia, Malaysia, the United States and Japan accounted for the largest financing flows. These findings illustrate the lack of regulations and corporate policies needed to align the financial sector with global environmental and social priorities.

Repórter Brasil asked Banco do Brasil and BNDES to comment on their respective risks of causing deforestation. Banco do Brasil sent the following note:

“Banco do Brasil is the world’s most sustainable financial corporation according to Corporate Knights’ Global 100 Ranking published at the World Economic Forum in Davos in 2019 and 2020. BB is also the best Brazilian financial institution in the New York Stock Exchange’s Dow Jones Sustainability Index (DJSI) and it is listed in the main global sustainability indexes.

Such recognition reflects BB’s strict enforcement of its socio-environmental responsibility policy as well as its sustainability guidelines for providing credit, which can be found here.

Banco do Brasil is a reference in sustainable credit, including for agribusiness, and plays its role in fostering productive sectors, fully complying with environmental legislation, monitoring social impacts of business, and using the best corporate governance practices.”

Repórter Brasil is still waiting for a statement from the BNDES, which will be published as soon as it is received.

O post BB and BNDES face the highest exposure to deforestation, according to international study apareceu primeiro em Repórter Brasil.

Increasing deforestation in the Amazon in 2020 has prompted banks and funds to promise changes in investments that affect the region. Nordea, the largest asset management company in the Nordic countries, announced the withdrawal of all its investments from JBS, the world’s largest meat exporter. A month earlier, another group of 29 financial institutions that control more than $3.7 trillion had already expressed concern about the problem in a letter addressed to the Brazilian government.

But some investors with strong influence in the Amazon have resisted the calls for reform. That is the case of Morgan Stanley, a shareholder in two of the three largest beef producers in Brazil. The company owns 3.4% of Marfrig, the second-largest meatpacker in the country, and 4.94% of Minerva, the third-largest meatpacker.

William Lock, head of the bank’s International Equity Team, said in a recent sustainability report: “We include companies on the basis of their ability to sustain or improve their returns, rather than on the basis of rating their environmental or social credentials.

“We don’t exclude companies or industries solely for ESG reasons, unless we anticipate the risk of a material impact to long-term returns,” he wrote.

Cases of illegal deforestation were found in suppliers of the two companies in which Morgan Stanley holds stakes. Documents obtained by Repórter Brasil show that Marfrig bought cattle from the family of one of the largest deforesters in the Amazon. The two meatpacking companies in which Morgan Stanley holds shares are also linked to farms that have been fined for illegal deforestation in their supply chains.

The cases were presented to Morgan Stanley, but the company declined to comment on the issue, arguing that “these shares are not held as a strategic or proprietary investment on behalf of Morgan Stanley.”

The bank’s response contradicts documents it published in Brazil. In a form delivered to Brazil’s Securities and Exchange Commission (CVM), it says that MSAC, Morgan Stanley’s Brazilian subsidiary, does not “engage in third-party asset management” and adds that “funds managed by MSAC include four qualified investors, all from the Morgan Stanley Group.”

In addition, according to a company policy posted on its Brazilian website, “the funds and portfolios managed by MSAC come from resources exclusively owned by companies of the Morgan Stanley conglomerate. The management of third-party resources is not part of its scope, nor the distribution of securities.”

The Marfrig connection

Marfrig bought cattle from the family of one of the biggest deforesters in the Amazon. Hundreds of animals slaughtered by the company originated from farms linked to José Carlos Ramos Rodrigues, who has been fined at least 13 times for environmental violations between 2007 and 2016, amounting to almost $20 million in sanctions.

In a report published by The Intercept Brasil, he was listed as the 11^th largest deforester in the Amazon since 1995. About 15,000 hectares of his agricultural land in São José do Xingu, Mato Grosso, have been blacklisted by Ibama, an arm of the environment ministry.

In addition to environmental crimes, Rodrigues was also charged with employing labor in slave-like conditions. The case took place in the same fields where federal labor inspectors rescued 16 workers in 2007.

The huge area where slave labour and deforestation occurred is divided into four different farms. The properties are registered to Rodrigues, his family members and two companies belonging to him – Agropecuária São José and Agropecuária Jatoba Empreendimentos e Participações. About 1,000 animals raised on one of these properties were sold to Marfrig’s meatpacking plant in Nova Xavantina, Mato Grosso, between July 2018 and November 2019.

Repórter Brasil tried to contact Rodrigues by the e-mail address and telephone number of his company, but he did not reply. The meatpacking company stated that “the Brasília Farm does not face any kind of socio-environmental restrictions under the criteria set by Marfrig.”

Indeed, the Brasília Farm has no record of recent deforestation. But, before selling cattle for slaughter, it received animals from another neighbouring property belonging to the family. Hundreds of hectares of that other property – the Moinho/Califórina Farm – have been blacklisted for illegal deforestation.

About this, Marfrig states that “as of today, there are no effective tools to systematically control animal triangulation between farms.”

Deforestation at indirect suppliers

Minerva and Marfrig also bought cattle from a farm belonging to Sidney Gasques Bordone, a cattle rancher who has been fined twice for illegal deforestation. In 2005, he was fined 1.6 million Brazilian reais (about $300,000) for clearing Amazon rainforest in Aripuanã, Mato Grosso. In 2013, he was fined again, this time 200,000 Brazilian reais (about $38,000).

The Amor do Aripuanã Farm, where the deforested area is located, did not sell directly to meatpackers, but transferred animals to another property without a history of environmental breaches – which, in turn, sold cattle to both companies.

In August 2019, Sidney Gasques Bordone transferred the animals from the farm where deforestation occurred to the Rio Azul Farm in Vila Bela da Santíssima Trindade, Mato Grosso. After that, Rio Azul sold hundreds of cattle to the Marfrig plant in Várzea Grande and to the Minerva plant in Mirassol D’Oeste, both in the same state.

Once again, Marfrig stated that controlling so-called ‘cattle triangulation’ between farms is not possible. “As of today, there are no tools that allow systematic control of this situation, but as previously mentioned, we have participated since the beginning in the development of the new monitoring protocol for livestock suppliers and we understand its importance and the transparency and evolution it provides to procedures,” the company said.

Minerva stated that “data legally available for official use do not allow the Company to find irregularities in the process of supplying livestock to our Mirassol D’Oeste/MT unit.” The company said it will investigate “the facts using data legally available for that analysis” and will act if irregularities are found.”

Repórter Brasil was unable to contact rancher Sidney Gasques Bordone or the farms involved.

Morgan Stanley silent on deforestation

The two cases above are not the first reports linking Marfrig and Minerva suppliers to illegal deforestation. Even in the face of recurring problems, the bank’s policy on socio-environmental issues does not include specific measures for the livestock supply chain or for deforestation in general.

“The firm falls short in its policy regarding deforestation and the commodities that drive it,” according to the Rainforest Alliance, an organization that evaluated the company’s sustainability policies released last year. They recommend that “Morgan Stanley should align with the No Deforestation, No Peatland, No Exploitation (NDPE) model that is becoming standard among global agribusiness companies and increasingly banks.”

Amazon Watch climate and finance director Moira Birss says Morgan Stanley policies provides no clear indication that there is a set process for excluding financing for certain projects or companies if they don’t meet established criteria.

“There is no mention in the policy of monitoring of secondary and tertiary supply chains, which as I’m sure you know is crucial for combatting beef-linked deforestation in the Amazon.”

“Morgan Stanley’ policy specifically allows for controlled burning as a practice in agribusiness, which is unacceptable given that controlled burning is the primary cause of Amazon fires.” She also says that Morgan Stanley should follow the example of European investors that have been putting pressure on the Brazilian government to act in this regard and even withdrawing their investments.

In addition to being a shareholder in the companies, Morgan Stanley also provided financial services to Marfrig. According to a Global Witness survey published in 2019, Morgan Stanley underwrote a series of bond issuances worth an estimated $947 million for Brazilian beef trader Marfrig between 2014 and 2017. A spokeswoman said the bank had financed Marfrig, but noted it had not done so in 2018 or 2019. She insisted deforestation risks are analysed carefully.

“In that case, it has the ability to communicate directly and clearly with the companies that it will not extend new lines of credit nor underwrite loan facilities or bond issuances unless Marfrig and Minerva cease engaging in activities that contribute to deforestation,” Birss said.

O post How Morgan Stanley is linked to deforestation in the Amazon apareceu primeiro em Repórter Brasil.

In July, a major policy to combat global warming was announced by BlackRock, the world’s largest investment fund manager. The company said it would take concrete action against at least 53 companies for their inaction regarding global warming and place 191 others under observation.

Upon launching the project, the company’s CEO, Larry Flink, announced that the climate crisis will completely change finance, and “companies, investors, and governments must prepare for a significant reallocation of capital.”

But the announcement left out one of the major drivers of global warming: the meat industry, which is the main cause of deforestation in the Brazilian Amazon. The words cattle and deforestation are missing from the 30 pages of the report in which BlackRock describes the actions it is taking to combat climate change. The company omitted its stake in JBS, the world’s largest meat exporter.

Part of the investments in the Brazilian multinational are made through a BlackRock fund that “favours companies with less production of greenhouse gases.” The fund in question has 53 million Brazilian reais ($9.8 million) in equity and invests in companies listed on the Carbon Efficient Index (ICO2) created by the Brazilian Stock Exchange and the state development bank BNDES. The index is supposed to include companies with “transparent practices regarding their greenhouse gas emissions.”

In May this year, Blackrock became JBS’s third-largest shareholder – behind J&F Investimentos, controlled by the company’s founders, and BNDES. A series of reports and studies published this year showed cases of illegal deforestation among JBS suppliers, even though it pledged not to buy cattle from deforesters more than ten years ago. JBS has repeatedly denied the problems found in its supply chain.

“BlackRock has not by any means done everything they should on energy issues – they are still the world’s largest investor in coal for starters – but they have been much more vocal about energy than they have about agribusiness,” says Jeff Conant, director of the forest programs at Friends of the Earth. “In general, investors have been slow to address the crucial role that forests and land use play in driving the climate crisis, and have faced much less pressure on these issues.”

Focus on energy over agribusiness

BlackRock is a major investor in three out of the 25 largest companies at risk of deforesting in the world, according to a study published by Friends of the Earth US and Amazon Watch. In addition to livestock, the study also looks into investments in industries such as palm oil, rubber, and grains. Despite the importance of agribusiness in climate change considerations, the company’s recent announcement that it will combat global warming was entirely focused on companies linked to the energy and infrastructure industries.

Before announcing measures on global warming, BlackRock released a new sustainability policy for agribusiness. Even in its policy for the segment, livestock is not addressed, and deforestation is mentioned only twice. In reference, the firm asks “companies to disclose any initiatives and externally developed codes of conduct, e.g. committing to deforestation-free supply chains, to which they adhere and to report on outcomes, ideally with some level of independent review.”

Repórter Brasil asked BlackRock if any measures had already been taken regarding its investment in JBS. A spokeswoman said the company engaged “with JBS and others to discuss their policies and practices on issues specific to operating in the Amazon Basin, such as land use and supply chain management, and to hear their views on the long-term climate-related risks for the agricultural industry associated with accelerated deforestation.

“Since those engagements last year, we have continued to closely monitor these companies to assess their operational standards and progress, including implementing their sustainable land use policies,” she said.

BlackRock also stated that it has taken measures related to JBS’s supply chain where there are cases of deforestation. “We discussed JBS’s efforts to eradicate deforestation throughout its supply chain after the company provided an update on these efforts and progress of its advanced monitoring capabilities of supplier farms in the Amazon. We are closely monitoring progress and disclosures.”

JBS investment sold as ‘environmentally responsible’

Part of BlackRock’s investments in JBS is offered to its customers as a “sustainable” option. JBS’s shares are part of a BlackRock fund that manages investments linked to the Carbon Efficient Index (ICO2). It is advertised on the company’s website as a fund that “favours companies with less greenhouse gas generation” and that brings a “low-cost, socially responsible investment solution.”

ICO2 is a stock index. Known in the financial markets by the acronym ETF (Exchange Traded Fund), these indices combine, into a single product, shares of many companies – in this case, companies claiming to have a low carbon footprint.

The main criterion companies have to meet in order to enter ICO2 is an annual inventory on greenhouse gas emissions. The inventory, however, focuses only on companies’ direct operations. Emissions associated with their suppliers are not considered.

BlackRock manages a fund that replicates this index, with shares of all the companies included in it. So through BlackRock an investor in search of sustainable options may come to invest in a company whose suppliers are involved in cases of illegal deforestation.

BlackRock says that as an asset manager it cannot replace a company’s stock with other index chosen by its customers. “BlackRock’s ETFs track the investment results of third-party indices to which our clients themselves choose to allocate their assets,” BlackRock said.

But BlackRock could enforce sustainability policies even in the case of ETFs, argues Moira Birss, director of climate and finance at Amazon Watch. “BlackRock likes to hide behind the excuse of the ‘passive’ index fund model, under which ETFs fall. However, it’s more a question of ‘will not’ rather than ‘cannot’, because BlackRock ignores the many ways that index fund purveyors have multiple choice points at which to apply sustainability policies.”

According to Birss, asset managers can exclude certain companies from indexes. “Even if a certain company, like JBS, remains in a particular index fund, asset managers like BlackRock maintain power to pressure companies to improve their policies – though to date BlackRock has not demonstrated that it is effectively using this power,” Birss added.

BlackRock says it is engaging with stock index creators “to expand sustainable options for investors” and has pledged to double the number of sustainable funds for its clients at a global level in the years to come.

BlackRock under pressure for change

BlackRock has been under pressure to change its investments in agriculture. Last year, US congress members issued a letter in which they questioned the company’s actions regarding deforestation in the Amazon.

“It is incumbent upon US financial institutions to take a firm stance by ceasing all of their financing of that destruction and set a strong example for other institutions to follow,” Democratic Representative Rashida Tlaib said in the letter.

Last year, indigenous lawyer Luiz Eloy Terena, from the Coordination of Indigenous Peoples of Brazil (APIB), attended the company’s assembly in New York where he spoke about the impacts of the its investments in the Amazon. Representing a shareholder, he addressed BlackRock’s CEO.

“Pressure to open new areas to agricultural expansion and illegal logging caused approximately 150 million trees to be cut in [the Amazon] region alone,” said the lawyer, citing BlackRock’s investments in JBS and Bunge, the largest soy buyer in the country. “Due to this type of destruction in our territories and ways of life, we came here to warn you about the risks entailed by this type of investment.”

APIB wants BlackRock to demand JBS and other companies in which it holds shares to provide more supervision of their supply chains and restrict purchases of commodities produced on properties located in indigenous lands or operating in conflict areas. “We understand that as the least a company that considers itself sustainable has to observe [their suppliers] at this moment,” says Terena.

For Shona Hawkes, a senior consultant at Global Witness, banks and investors should demand that governments pass laws compelling them to do due diligence before making investments. “As long as the status quo allows banks and investors to profit from activities linked to deforestation, it’s hard to take their promises for change seriously.”

O post BlackRock silent on livestock in latest global warming policy apareceu primeiro em Repórter Brasil.

In mid-August, Kayapó indigenous people took yellow posters not only to the middle of the federal road known as BR-163 but also to the world’s headlines. Taking extra risks because of Covid-19, they left their villages and occupied the road that connects Cuiabá, in Mato  Grosso, to Santarém, in Pará, in the middle of the Amazon. They were there to claim the renewal of the Basic Environmental Plan – Indigenous Component (PBA-CI), which is part of the road’s licensing.

The demonstration took place in the town of Novo Progresso, state of Pará – the epicenter of the August 2019 “Fire Day.” And it has borne fruit: this month, a court ordered the Federal Government to renew the plan, which helps minimize the impacts of the road’s construction works. The plan is a set of actions ranging from protection and monitoring of the Indigenous Lands Menkragnoti, Baú and Panará by the communities themselves to implementing sustainable economic alternatives. It became effective in 2008 as a condition for granting the environmental license to resume paving works on BR-163 in the same year.

The Plan sets the Executive’s commitments to safeguarding basic rights for Indigenous Peoples: from funds to maintain programs enabling surveillance of the territory against encroachers that deforest and burn to the operation of the Kabu Institute, which enables service management – including health care, in the middle of the new coronavirus pandemic.

Throughout the debates about renewing the program, Brazil’s indigenous affairs agency Funai (the National Indigenous Foundation) argued that ‘caution’ was needed in dealing with the issue – a stance similar to that adopted by the National Department of Transport Infrastructure (DNIT) since December last year , when the 4^th addendum to the Plan expired.

However, on September 1, a federal court granted an injunction reaffirming the need to keep the Plan, following a public civil lawsuit filed by the Federal Prosecution Service (MPF). It ordered DNIT to send work plans for the renewal of the Plan to Funai by September 29.

In her decision, Judge Maria Carolina Valente do Carmo of the Federal Court of Altamira emphasized what had been established by the plan itself regarding its “permanent character, since the impacts resulting from the project tend to increase over the years.” She also ordered DNIT and Funai to present proof of the renewal of the Indigenous Component of the Plan regarding the Menkragnoti, Baú and Panará Indigenous Lands by mid-October.

DNIT asked the court for an extension of the deadline and the Federal Government argued that, since it intends to grant the concession of the road to the private sector (it was sent to the Federal Court of Accounts in May), it would no longer be responsible for its socio-environmental impacts, in addition to  questioning the urgency of meeting indigenous peoples’ demands.

Judge Do Carmo, however, did not grant these requests and reinforced that “there is higher risk of irreversibility of indigenous people’s losses if renewal of the Plan is postponed indefinitely.” In a complementary decision, she set a 5,000-real fine for each day of non-compliance with the full decision.

“Actions essential to physical and cultural reproduction”

“They always say that it is under analysis, that they are looking into it, that they are already solving it. Then they set a date. But that’s crap! Nothing gets solved. Everyone knows that Funai should be there to accommodate our demands, but they don’t care about indigenous people anymore,” says Mydjere Kayapó, vice president of the Kabu Institute. The indigenous organization gathers villages from the Menkragnoti and Baú Indigenous Lands and has managed resources transferred by the federal government under the Plan since 2010. According to Funai, the transfers, which also include funds directed to the Panará association, amounted to R$ 39 million since the program began in 2008.

In the public civil lawsuit that resulted in the injunction to renew the plan, prosecutors argued that mitigation actions are “essential to the physical and cultural reproduction of the Kayapó Mekrãgnoti and Panará peoples, and that they must persist as long as the growing impacts of the road on their territories persist.”

The same Court decision also prohibited the Brazilian Institute of the Environment and Renewable Natural Resources (Ibama) from granting a definitive operating license for paving the BR-163 road until proof of renewal is produced.

“When we had the Plan, we did our monitoring, our own surveillance. That’s why the federal government may not want to renew the Plan, so we can’t monitor it,” adds Mydjere. “Miners and loggers are entering indigenous lands with full strength. There are even some indigenous people who favor this, who are involved, [who are] deceived by the miners and the loggers. They like to call the indigenous people to protect themselves, saying that the timber belongs to the indigenous people. They always use that.”

Asked by Repórter Brasil about the irregular condition of the BR-163 construction project regarding environmental licensing, Funai did not comment. The Ministry of Infrastructure, in turn, vaguely informed that the “government has maintained constant dialogue about the topic with the communities” and that “DNIT and Funai are negotiating, with the assistance of the Ministry of Infrastructure and the Investment Partnership Program (PPI), to renew the Basic Environmental Plan – Indigenous Component.”

In mid-August, on the eve of the announced indigenous road blockade, an emergency transfer of R$ 2.3 million was made under an addendum referring to the first half of 2020, but the proposal to renew the Plan for 2020-2024 still lacks any official answer – now required by the Courts.

Proper health care in communities is also part of the demands of indigenous people, who also released an open letter and a statement addressed to Funai. “Then Covid-19 arrived as an invisible enemy of indigenous people. It has already killed four of our elders on our land,” reports the vice president of Kabu. “And fires are major around here. If you come, you’ll see that everything is huge here.”

A new chapter: Ferrogrão

Mydjere Kayapó describes what the records of the National Institute for Space Research (Inpe) have also been pointing out. The outbreaks detected in these territories on August 1-15 have largely surpassed the average of the last decade. According to a survey based on data obtained using the Aqua satellite and taking into account the ​​100 km of the boundaries of the Baú and Menkragnoti Indigenous Lands, there were 3,079 fire outbreaks – 90.7 percent of the average of the last ten years (3,389) for the whole of August (see heatmap below). A large part of those fires occurred right by the BR-163 road.

The relationship between safeguarding rights and deforestation is the focus of a study recently published in the United States and conducted by the University of California at San Diego and the University of Columbia. The investigation pointed out that safeguarding indigenous territorial rights could have reduced deforestation by 1.5 million hectares in the Brazilian Amazon.

According to political scientists and authors Kathryn Baragwanath and Ella Bayi, the standstill in homologation of indigenous lands, together with the increase in violence toward indigenous peoples and Bolsonaro’s claims that he will “open” these lands to mining and agricultural interests highlight “the importance of an institutional system which will recognize these property rights”, which had calculated effects of reducing deforestation by up to 66%. In addition to the demarcations, the work published by the National Academy of Sciences also highlights the necessary “strengthening [of] existing mechanisms that protect indigenous territories from extractive activities.”

Along this line, Mydjere Kayapó stressed that another important point in the indigenous peoples’ demands is the consultation regarding the construction of Ferrogrão, supposed to be the most important grain transportation railroad – parallel to the BR-163. “When the analysis takes place, or a hearing on Ferrogrão, then federal and the state governments and those who want to do it should call us, the Indigenous Peoples, to listen to us too,” he stresses.

Part of the Federal Government’s Investment Partnerships Program (PPI), the 1,000-kilometer-plus Ferrogrão project is the result of a proposal supported by the Pirarara consortium. The group includes trading companies that control the soy market – ADM, Amaggi , Bunge, Cargill and Louis Dreyfus – and put together by Estação da Luz Participações (EDLP), a company specializing in logistics projects. In a round of meetings with potential operators, funders and investors of the construction – whose cost for a 69-year concession is estimated at R$ 8.4 billion for implementation only – government officials reported that socio-environmental issues were among the most often cited concerns.

A survey by the Climate Policy Initiative – a center for evaluation of climate policies affiliated with the Pontifical Catholic University of Rio de Janeiro (PUC-RJ) – estimated that, if no mitigation measures are taken, the project may increase the demand for land and induce deforestation of 2,043 km² of native vegetation in Mato Grosso.

The Ministry of Infrastructure’s press office informed that licensing for the construction work is still in its early stages, but the lands of the Kayapó People are located beyond the limits established as areas of influence of the projected railway. The Xingu+ Network, which includes indigenous peoples’ organizations, traditional communities’ associations and civil society institutions operating in the Xingu River basin, disputes the ministry’s view and continues to demand free, prior and informed consultation with the indigenous peoples regarding the construction work.

The Panará People: “Our situation is very complicated”

The Panará indigenous people – arguably the most historically affected by the paving of the Cuiabá-Santarém Road, since their population was reduced by more than 80 percent – were also benefited by the decision of the Federal Court of Altamira to renew the Plan under the Prosecution Service’s action.

“We won. Yes, it has to continue. Because it’s our right. These funds [of the PBA-CI of BR-163] have to be kept so we can do our inspection work and protect our area, the forest can remain standing, the river can remain clean, we can be fed,” says Kunity Panará from the Iakiô Association, mentioned in the decision as the recipient of funds related to the mitigation of the road’s impacts. The Panará people, he continues, “suffer the impacts of the asphalt” to this day.

“Big farmers are deforesting near our area. Deforestation for cattle, soy, logging, burnings is already very close,” says Kunity. “When the government started opening BR-163, the Cuiabá-Santarém road, it passed over our villages, our cemetery. Because of that, we lost many of our relatives, our family, in the hands of the government. The road ‘cleaned up’ our villages, our cemetery,” he said with sadness. When the most recent stage of the works started, “they were”, according to him, “deceiving a lot,” “making many promises,” without fulfilling “what’s written.”

One of the promises most often remembered by the indigenous peoples is a road branch to facilitate access to their villages, also included in the decision of the Altamira judge “We are losing some of our relatives, who were taken to doctor appointments or treatment. We have lost relatives in the middle of the road because there is a lot of mud, fallen trees, bridges collapsing because of the rain,” he says, describing deaths resulting from lack of structure and neglect in community health care.

“This year we are suffering even more. Our situation is very complicated. We are here in the village and the whole of Brazil is at war with Covid-19, we have no support, no resources to help our communities.” There are six Panará villages with about 600 people.” We need the Plan’s resources to continue because the road will never end.”

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Part of the fire devastating the Pantanal in Mato Grosso started in farms whose owners sell cattle to former minister and former senator Blairo Maggi’s Amaggi group and to the Bom Futuro group, which belongs to Eraí Maggi, considered the world’s largest soy producer. These two business groups, in turn, supply multinational giants JBS, Marfrig and Minerva.

Repórter Brasil’s survey was based on a study conducted by the NGO Instituto Centro de Vida (ICV), which found that the fires in Mato Grosso started in five properties. It was based on data on outbreaks pointed out by INPE (Brazil’s National Institute for Space Research), images from Sentinel-2 and Planet satellites, and NASA’s mapping of fire-affected areas. The ICV study analyzed outbreaks in Mato Grosso between July 1 and August 17 but points out that the first fire in the region started on July 11. Based on the farms’ geolocation, Repórter Brasil used data from the Rural Environmental Register (CAR) and the State Finance Department to identify their owners as well as buyers supplied by two of them.

The fires that started in these five cattle ranches – all located in Poconé, 100 km from the state capital Cuiabá – destroyed 116,783 hectares, an area the size of Rio de Janeiro. Such massive destruction corresponded to 36% of the total area affected by fires in Mato Grosso’s Pantanal in the period examined (July and the first half of August).

Brazil’s Federal Police is investigating Pantanal fires by looking into ranches in the rural area of ​​Corumbá, state of Mato Grosso do Sul. The ICV study, however, focused on the neighboring state of Mato Grosso, around the town of Poconé.

These five rural properties in Mato Grosso include Raimundo Cardoso Costa’s Comitiva Farm, where the fire started on July 20 and at least 171 outbreaks were found. A 25,188-hectare area was destroyed by the fire that started on that farm.

According to data from the Mato Grosso State Finance Department, Raimundo Cardoso Costa owns another farm, close to the Committee Farm, called Recanto das Onças. Repórter Brasil found that it has sold cattle to the Bom Futuro group, known for its soy production but which has 130,000 cattle of the Nellore breed. Bom Futuro supplies cattle to the Brazil’s largest meatpacking companies – JBS, Marfrig and Minerva – as shown by documents to which Repórter Brasil had access.

Another ranch located in Poconé and one of the five properties examined by Repórter Brasil is José Sebastião Gomes da Silva’s Espírito Santo Farm, where the fire started on August 4. Inpe informed that at least 73 outbreaks destroyed 14,292 hectares, according to NASA.

Gomes da Silva also owns the Formosa Farm. The property sells cattle to Elza Junqueira de Carvalho Dias’s Rio Bonito farm, which resells cattle to JBS and Marfrig. The Formosa Farm is also a supplier of Amaggi Pecuária. The company is part of the Amaggi group, which belongs to the family of politician Blairo Maggi, owner of ten farms in Mato Grosso and operating in several sectors besides soy and livestock – such as energy and logistics. Amaggi Pecuária, in turn, is a JBS, Marfrig and Minerva supplier.

Last week (14), a Federal Police team from Corumbá, Mato Grosso do Sul – a state that also includes the Pantanal biome – searched and seized four farms, suspecting that the fire was intentionally caused to create pastures. The police investigate if something happened to the Pantanal that was similar to the ‘Fire Day’– when farmers and businessmen from Novo Progresso, Pará, organized fires in the Amazon on August 10-11, 2019.

“We want to find out who the perpetrators [of burnings in the Pantanal] were,” police chief Daniel Rocha told Repórter Brasil, referring to the fact that the fires that are destroying the biome would have been caused by human action rather than natural drought. The properties investigated by the Federal Police under the Matáá operation are close to the Pantanal National Park, on the border of the two states – and, according to Rocha, are large cattle states.

Fire is the cheapest way to expand pastures, as explained by the executive director of Friends of the Earth – Brazilian Amazon, Mauro Armelin. He says that meatpacking companies should also look into their indirect suppliers as a way to curb deforestation and fires caused by human action. “If meatpackers do not carry out full analyses and monitor their indirect [suppliers], they will never be able to say that their supply chains are free from deforestation,” he explains.

More than a hundred meatpackers have signed an agreement with the Federal Prosecution Service (MPF), known as ‘the Meat Plea Deal,’ in 2009, pledging not to buy cattle from areas deforested or sanctioned for using slave labor in the Amazon. More than 10 years later, the companies have managed to circumvent the agreement with a series of tricks that often involve indirect suppliers with socio-environmental issues, as Repórter Brasil showed in an article published in June.

‘Fire started with a car explosion,’ says cattle rancher

Raimundo Cardoso Costa told Repórter Brasil that the fire on his property started after a vehicle exploded. “Firefighters put it out, but it remained on the roots of plants and then it spread,” he says. He also said that it destroyed 40% of his property’s 15,000 hectares and spread to other farms.

Costa complains about environmental legislation and says that burnings should be allowed off the dry season. “You have to let Pantanal people clean what they have to clean,” he says. He also says that he would never set fire to his own farm because native forest works as a natural fence, and without it, he would have to spend R$ 10,000 to build each kilometer of fence – his farm, according to him, would need 50 kilometers.

He lives in São Paulo but has owned farms in the Pantanal for 10 years, with 1,200 heads of the Nellore breed. He is a typical indirect supplier, selling cattle mainly to other ranchers who fatten them up before reselling them to meatpackers for slaughter. He claims to have sold the Recanto das Onças farm, but he is still listed as its owner in a document from the State Finance Department. However, he confirmed that he negotiated, on several occasions, with the Bom Futuro group – supplier of JBS, Marfrig and Minerva.

Costa complains about ranchers being blamed by fires. “They are berating us. People from Pantanal have always taken care of it,” he says. He is also a supporter of President Jair Bolsonaro. “Bolsonaro is blamed for everything that happens in Brazil. The media thinks that the worse the better. We have to help the president improve Brazil.”

Repórter Brasil contacted a lawyer working for another farmer, José Sebastião Gomes da Silva, but received no reply until this article was finished.

Amaggi, which buys cattle from José Sebastião Gomes, informed Repórter Brasil that it will suspend purchases pending investigation of his responsibility for the fire outbreaks in other of his properties.

Minerva Foods pointed out that “agricultural producers are also affected by major fires, which can affect their properties.” The company said that its direct suppliers (Amaggi and Bom Futuro) are fully regular, but it did not comment on indirect suppliers (Costa and Gomes).

Marfrig owns the Montana and Bassi brands. It stated that it uses a satellite platform to monitor suppliers with fire outbreaks and that it has issued an alert suspending cattle purchases until the situation is clarified, but that it cannot fully control indirect suppliers. The company recognizes the issue as ‘critical’ and launched, in July, a program to try to solve it.

JBS, owner of brands Friboi, Seara, Swift and Doriana, said that it can only monitor suppliers that sell directly to the company since it does not have access to Animal Transit Guides (GTAs) of previous links in the chain. Without the information on those documents, the company understands that “any conclusion from JBS on the origin of the cattle acquired from these suppliers would be ill-judged” (Read all statements in full).

The Bom Futuro group did not answer Repórter Brasil’s request for a statement.

Overwhelming destruction

This year’s Pantanal fires are the largest since INPE started recording them 1998. Until last Wednesday, there had been almost 16,000 outbreaks – 56 percent higher than 2005, the worst year in the time series. The fire destroyed 15 percent of the region, with 2.3 million hectares of the world’s largest wetland.

Pantanal’s native fauna suffers the most. There are 1,200 different species of animals, 36 of which are threatened with extinction. The victims include snakes, alligators, monkeys, and jaguars. The fires have already decimated a blue macaw haven and are advancing over a jaguar protection area.

“When I arrived in Poconé, around midnight, the town was shrouded in darkness. The smoke was so heavy that I thought it was the morning mist. It was not. It was the effect of over 2 million hectares burning in the Pantanal,” photographer João Paulo Guimarães told Repórter Brasil.

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