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13 June 2009

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Brazil

World Bank revokes loan to Brazilian cattle giant accused of Amazon deforestation

The Work Bank's private lending arm has withdrawn a $90 million loan to Brazilian cattle giant Bertin, following Greenpeace's release of a report linking Bertin to illegal deforestation of the Amazon rainforest, report environmental groups, Friends of the Earth-Brazil and Greenpeace.

The loan, granted by the International Finance Corporation (IFC) in March 2007, was to expand Bertin's meat-processing in the Brazilian Amazon. At the time, the IFC promoted the loan as a way to promote environmentally responsible beef production in the Amazon, although environmental groups - including Friends of the Earth-Brazil and Greenpeace - criticized the move.

IFC's support of Bertin was put in the spotlight two weeks ago when Greenpeace issued its expos on the Brazilian cattle industry. The report, titled Slaughtering the Amazon, linked some of the world's most prominent brands to illegal deforestation in the Amazon for production of cattle products. Earlier this week Brazil's three largest supermarket chains, Wal-Mart, Carrefour and Pao de Acucar, said they will suspend contracts with suppliers found to be involved in Amazon deforestation.

William Laurance, a senior scientist with the Smithsonian Tropical Research Institute, said he was pleased the IFC recalled the loan.

"I am delighted to hear that the proposed IFC loan to Bertin, S.A. operation has been halted," he told mongabay.com. "Cattle ranching - often on illegally deforested lands - has emerged as one of the biggest killers of the Amazon rainforest, and a threat to the region's indigenous peoples. Bertin has been profiting from this destruction."

Greenpeace and Friends of the Earth-Brazil also welcomed the IFC's decision.

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

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

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

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

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