How leather seats in luxury SUVs fuel deforestation of the Amazon
By Manuela Andreoni, Hiroko Tabuchi and Albert Sun
© The New York Times Co.
BURITIS, BRAZIL » One morning this summer, Odilon Caetano Felipe, a rancher who raises cattle on illegally deforested land in the Amazon, met with a trader and signed over 72 newly fattened animals. With that stroke of the pen, Felipe gave his cattle a clean record: By selling them, he obscured their role in the destruction of the world’s largest rainforest.
Over lunch shortly after the July 14 sale, Felipe spoke about the business that has made him wealthy. He acknowledged cutting down the thick Amazon forest and that he had not paid for the land. He also said he structured his sales to hide the true origins of his cattle by selling to a middleman, creating a paper trail falsely showing his animals as coming from a legal ranch. Other ranchers in the area do the same, he said.
“It makes no difference,” he said, whether his farm is legal or not.
A New York Times investigation into Brazil’s rapidly expanding slaughterhouse industry — a business that sells not only beef to the world but tons of leather annually to major companies in the United States and elsewhere — has identified loopholes in its monitoring systems that allow hides from cattle kept on illegally deforested Amazon land to flow undetected through Brazil’s tanneries and on to buyers worldwide.
Felipe’s ranch is one of more than 600 that operate in an area of the Amazon known as Jaci-Paraná, a specially protected environmental reserve where deforestation is restricted. And transactions such as his are the linchpins of a complex global trade that links Amazon deforestation to a growing appetite in the United States for luxurious leather seats in pickups, SUVs and other vehicles sold by some of the world’s largest automakers, among them General Motors, Ford and Volkswagen.
A luxury vehicle can require a dozen or more hides, and suppliers in the United States increasingly buy their leather from Brazil. While the Amazon region is one of the world’s major providers of beef, increasingly to Asian nations, the global appetite for affordable leather also means the hides of these millions of cattle supply a lucrative international leather market valued in the hundreds of billions of dollars annually.
This leather trade shows how the wealthy world’s shopping habits are tied to environmental degradation in developing nations, in this case by helping to fund destruction of the Amazon despite its valuable biodiversity and the scientific consensus that protecting it would help to slow climate change.
To track the global trade in leather from illegal ranches in the Brazilian rainforest to the seats in American vehicles, the Times interviewed ranchers, traders, prosecutors and regulators in Brazil, and visited tanneries, ranches and other facilities. The Times spoke to participants at all levels of the illicit trade in the Jaci-Paraná Extractive Reserve, an area in Rondônia state that has been granted special protections because it is home to communities of people who, for generations, have lived off the land by tapping rubber trees.
These communities are now being forced out by ranchers who want the land for cattle. Over the past decade, ranchers have expanded their presence significantly in the reserve, and today about 56% of it has been cleared, according to data compiled by the state environmental agency.
The reporting is based on analysis of corporate and international trade data in several countries and thousands of cattle-transport certificates issued by the Brazilian government. The certificates were obtained by the Environmental Investigation Agency, an advocacy group in Washington. The Times independently verified the certificates and separately obtained thousands of additional ones. This enabled the tracking of leather from illegal farms in the Amazon to slaughterhouses operated by Brazil’s three biggest meatpackers, JBS, Marfrig and Minerva and to the tanneries they supply. JBS describes itself as the world’s largest leather processor.
According to Aidee Maria Moser, a retired prosecutor in Rondônia state who spent almost two decades fighting illegal ranching in the Jaci-Paraná reserve, the practice of selling animals reared in the reserve to mid- traders suggests an intent to conceal their origin.
“It’s a way to give a veneer of legality to the cattle,” she said, “so slaughterhouses can deny there was anything illegal.”
The problem is not limited to Rondônia. Last month, an audit led by prosecutors in the neighboring state of Pará, home to the second-largest cattle herd in the Amazon, found that JBS had bought 301,000 animals, amounting to 32% of its purchases in the state, from January 2018 to June 2019 from farms that violated commitments to prevent illegal deforestation.
JBS disagreed with the criteria used by the prosecutors and agreed to improve its monitoring system, block suppliers flagged by the research and donate $900,000 to the state in response to the audit.
To get a sense of scale of the ranches operating in vulnerable areas across the Brazilian Amazon, the Times overlaid government maps of protected Amazon land, deforested areas and farm boundaries with the locations of ranches that JBS publicly listed as supplying its slaughterhouses in 2020. An analysis showed that, among the JBS suppliers, ranches covering an estimated 2,500 square miles significantly overlapped Indigenous land, a conservation zone or an area that was deforested after 2008, when laws regulating deforestation were put in place in Brazil.
The methodology and results were examined and verified by a team of independent researchers and academics who study land use in the Brazilian Amazon.
International trade data showed companies that own tanneries supplied with the hides had then shipped leather to factories in Mexico run by Lear, a major seatmaker that supplies auto assembly plants across the United States. Lear said in 2018 that it was sourcing about 70% of its raw hides from Brazil. Brazil’s hides also go to other countries, including Italy, Vietnam and China for use in the automotive, fashion and furniture industries, the trade data showed.
JBS acknowledged that almost three-quarters of the ranches identified in the Times’ analysis did overlap with land that the government categorizes as illegally deforested, or as Indigenous land or a conservation zone. But it said all the ranches had been in compliance with rules to prevent dedleman forestation when JBS bought from them.
JBS said that, in those instances where there were overlaps, the farms were allowed to operate in protected or deforested areas, or their boundaries had changed, or they had followed rules to fix their environmental violations. Ranching is allowed in some protected areas in Brazil if it follows sustainable practices.
In a statement, JBS said it has maintained a monitoring system for more than a decade that verifies supplier compliance with its environmental policy. “More than 14,000 suppliers have been blocked for failure to comply with this policy,” it said. However, the company said, “the great challenge for JBS, and for the beef cattle supply chain in general, is to monitor the suppliers of its suppliers, since the company has no information about them.”
Amazon deforestation has surged in recent years as ranchers race to supply growing demand for beef, particularly in China. Leather industry representatives make the point that as long as there is demand for beef, they are simply using hides that otherwise would be sent to landfills.
Raoni Rajão, who studies Amazon supply chains at the Federal University of Minas Gerais, said that because the leather industry makes ranching more profitable, it shares responsibility for any deforestation. “Leather can have high added value,” he said.
In response to detailed questions, JBS, Marfrig and Minerva said they were not aware that cattle from the Jaci-Paraná reserve were entering their supply chains.
All three said they had systems to monitor farms that supply their slaughterhouses directly, and that they exclude farms that do not comply with environmental laws. But all three acknowledged that they cannot trace indirect suppliers, such as Felipe, who sell cattle through middlemen, masking their origins.
“Transparency” with a loophole
Every few seconds at the Vancouros tannery in southern Brazil, the sound of leather hides tumbling in dozens of 11-foot wooden drums is interrupted by the clicks of a pneumatic marker as each individual hide is pierced with a seven-digit code that traces its origin.
Clébio Marques, the tannery’s commercial director, plucked a damp blue hide from a pile, pulled out his phone and typed its code into a website that his company created for its clients, such as Lear. Up popped the details of the supplier of that specific hide.
“All of our leather is traceable,” he said. “This is not required, no one asked for it, but we felt the market needed more transparency.”
But then Marques was presented with the finding that one of his most important suppliers, Marfrig, was buying cattle from suppliers whose transactions showed signs of cattle laundering. “I’m surprised,” he said. “We expect the main product to be legal.”
He stressed, though, that his own company’s monitoring was not at fault.
All three major meatpackers have systems designed to track the last farm where the cattle they slaughter came from. However, all three have the same flaw: They do not account for the fact that cattle do not typically spend their whole lives on a single farm. Therefore, they do not consider that a direct supplier might be selling cattle that actually were raised by someone else, on illegally deforested land.
The tracking systems were created after a 2009 Greenpeace report that linked Brazilian beef and leather suppliers to illegal deforestation.
Today, the three major firms state that they have zero-tolerance deforestation policies for all direct suppliers.