JBS urged to improve ‘indirect’ supply chain monitoring

Monday, March 2nd, 2020

The meatpacking giant has long faced allegations that it is fuelling deforestation and now Brazil’s environment commission has called for an investigation into its traceability mechanisms.

Credit: Shutterstock.

The world’s largest meat company is facing renewed pressure to improve steps it takes to monitor “indirect suppliers” used in its cattle purchases in Brazil.

JBS has long faced allegations that its supply chain is linked to illegal deforestation and critics are now demanding the firm address the impact its indirect suppliers have on the environment.

In the wake of Greenpeace’s landmark Slaughtering the Amazon report in 2009, JBS and Brazil’s other major meatpackers agreed to not purchase from farms involved in illegal deforestation but over a decade later and major holes in its traceability mechanisms remain.

JBS has failed to disclose the extent to which it relies on indirect suppliers – farms that transport cattle to a second ranch before being sent to slaughter – and now critical voices in Brazil’s political sphere are calling for action.

Senator Fabiano Contarato, who presides over the environment commission, has called for Brazil’s environment and agriculture ministers to attend a Congress hearing. “These facts are serious and they should be investigated rigorously,” he said. “This is a form of cattle laundering.”

His quotes were featured in a recent Guardian article highlighting the ineffectiveness of JBS’s current policies including how the firm’s promotion of ‘independent audits’ it has received to show environmental compliance have been found wanting.

Audits commissioned by JBS since 2013 as part of agreements with various state prosecutors aimed at improving supply chain transparency (the 2009 Meat TAC agreement with the Amazon state of Pará where all major meat producers must monitor suppliers and agree to stamp out illegalities is a notable example) suggest the firm is a shining example of compliance.

The two audits for 2016 and 2017 indicate that over 99% of JBS’s cattle purchases comply with environmental and labour laws.

However, when the public prosecutor’s office in Pará commissioned its own audits of large meat producers, including JBS for 2016, a strikingly different picture emerged.

The audit said JBS was one of the worst performing meatpackers in the state during 2016.

It showed that the firm had bought over 118,000 heads of cattle – or 19% of its total purchases in Pará – presenting some form of irregularity, including purchases from farms which didn’t have the mandatory Rural Environmental Cadastre document needed to sell to slaughterhouses.

In the most recent JBS audit, conducted by Dutch company DNV.GL, no irregularities linked to deforestation were found in 7,140 Amazon cattle transactions in 2018.

However, the audit added that there is “no verification system” in place for indirect suppliers and the firm has refused to answer questions about how much of its meat is derived from indirect ranches.

“This is totally against ethical principles in relation to its consumers,” Marina Silva, a former environment minister, told the Guardian. “These audits end up as more of a smokescreen.”

The University of Wisconsin’s Holly Gibbs, who has studied Amazon cattle supply chains for a decade, also told the newspaper: “The cattle companies are monitoring direct suppliers but there are so many loopholes that the indirect suppliers can just come in and out.”

JBS has been embroiled in several cases that have linked its suppliers to environmental breaches over the years. In 2017, the firm was fined £6.5m for buying cattle reared on illegally deforested Amazon land, while other suppliers have faced allegations of labour abuses.

Last year Earthsight revealed how UK and European supermarkets were at risk of fuelling deforestation in Brazil by using JBS beef for various corned beef products they sold. This was followed by further research that detailed how rations packs used by the British army had for years been stocked with JBS beef from Brazil.

In a statement to the Guardian, JBS said: “JBS is committed to eradicating deforestation, ensuring sustainable livestock practices and improving the livelihoods of farmers in the Amazon region.

“We have worked for more than a decade on the frontlines, driving meaningful, responsible change in the region. We urge those who share the common goal of ending deforestation to seek solutions rather than criticism. We will only meet this collective challenge and preserve this important biome through collaboration and action.”