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Grain trader Cargill faces legal challenge in US over Brazilian soya supply chain

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4 weeks ago

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Cargill says it has put in place a sophisticated monitoring operation at ports, warehouses and other points in its supply chain.

World’s biggest grain trader accused of ‘shoddy due diligence’ on deforestation and alleged rights violations.

The world’s largest grain trader, Cargill, is facing a first-ever legal challenge in the United States over its failure to remove deforestation and human rights abuses from its soya supply chain in Brazil.

ClientEarth, an environmental law organisation, filed the formal complaint on Thursday, accusing Cargill of inadequate monitoring and a laggard response to the decline of the Amazon rainforest and other globally important biomes, such as the Cerrado savannah and the Atlantic Forest.

The case, which was submitted under the guidelines of the Organisation for Economic Co-operation and Development, argues that Cargill’s “shoddy due diligence raises the risk that the meat sold in supermarkets across the world is raised on so-called ‘dirty’ soy”. ClientEarth says this breaches the international code on responsible business conduct.

The lawyers behind the complaint have stressed the urgency of the issue because Amazon degradation is approaching a tipping point, after which scientists say the rainforest will turn into dry grassland, emitting vast amounts of carbon dioxide. The Amazon’s sister biome, the Cerrado, has already lost half of its tree cover.

The lawyers say they hope the legal challenge will raise standards at Cargill – which is the biggest privately owned company in the US, with revenues last year of $165bn (£131bn) – and set an example across the industry.

Laura Dowley, a lawyer at ClientEarth, said: “Cargill has vast resources at its disposal to implement due diligence. The technology is already there. We aren’t asking it to do anything it doesn’t have the resources to do. We hope it will show leadership.”

Cargill has promised to be “deforestation-free” in the Amazon and Cerrado by 2025 and completely eradicate deforestation from all its supply chains by 2030. The company says it has put in place a sophisticated monitoring operation at ports, warehouses and other points in its supply chain. ClientEarth said it identified several shortcomings in this system, including a lack of environmental due diligence on:

  • Soya beans bought from third-party traders, which make up 42% of all Brazilian soya Cargill purchases.
  • Soya beans owned by other companies that passes through Cargill ports.
  • Indirect land use change.
  • Soya sourced from the Cerrado savannah.
  • Soya sourced from the Brazilian Atlantic Forest.

ClientEarth also cites reports alleging Cargill suppliers have been involved in rights violations of Indigenous, Afro-Brazilian and other forest-dependent communities.

Cargill told the Guardian it had not seen the full complaint but it had an “unwavering commitment” to eliminate deforestation and conversion in South America. In line with this, it added: “We do not source soy from farmers who clear land in protected areas and have controls in place to prevent non-compliant product from entering our supply chains. If we find any violations of our policies, we take immediate action in accordance with our grievance process.”

The company’s website notes: “Cargill is committed to transforming our agricultural supply chains to be free of deforestation by 2030. Our policy on forests lays out our overarching approach to achieving this target globally across our priority supply chains. It is founded on our belief that farming and forests can and must coexist.” A spokesperson added that Cargill was also “strongly committed” to protecting human rights in its operations, supply chains and communities.

However, journalists revealed last year that one of Cargill’s soya suppliers grows crops on land deforested and burned in the Brazilian biome. In 2020, the Guardian and partners uncovered evidence that Cargill supplied Tesco, Asda, McDonald’s, Nando’s and others with chicken fed on imported soya linked to thousands of forest fires and at least 300 sq miles (800 sq km) of tree clearance in the Cerrado savannah. Similar reports were broadcast this year by Sky News.

Source: The Guardian

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A corporate cartel fertilises food inflation

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2 weeks ago

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May 24, 2023

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Last year’s financial results from the world’s largest fertiliser companies are now in — and it’s a shocker. Given the sky high fertiliser prices of 2022, it was anticipatedthat their revenues would break records, but no one could have predicted this scale of profiteering. As the world grappled with a severe food crisis and farmers saw costs rise, the world’s largest fertiliser firms ramped up their margins and more than tripled their profits from two years ago.

Graph 1

Graph 1 shows the total profits of the big nine fertiliser companies over the past five years. They exponentially grew from an average of around US$14 billion before the Covid-19 pandemic to US$28 billion in 2021 and then to an astounding US$49 billion last year. International agencies like the World Bank blamed the spike in fertiliser prices on the Russian war in Ukraine, resulting in high natural gas prices (used to produce nitrogen fertiliser) from shortages and trade disruptions. But as can be seen in Graph 2, a major part of the story is the monopoly power of the fertiliser companies. These companies increased prices far beyond the increases in production costs and boosted their profit margins to a massive 36% in 2022.
Graph 2
There are signs that fertiliser prices are coming down from their stratospheric heights earlier this year, but the effects of the price spike are still being felt. The high prices and lack of supply in some countries caused farmers to cut fertiliser use, thereby reducing production levels and contributing to an alarming rise in global food insecurity. The high prices also pushed many farmers deeper into debt. Farmers from Cameroon to the U.S. say they are still spending three times as much on fertilisers as they were a few years ago. And in countries where fertilisers are heavily subsidised, the price spike has saddled governments with huge debts. In India alone, the central government’s expenditure on fertiliser subsidies last year surged from US$9.8 billion to US$17.1 billion. People are paying the price for the fertiliser industry’s price gouging.
The costs are also rising for the planet. Chemical fertilisers are a major source of environmental pollution and greenhouse gas emissions, with nitrogen fertilisers alone accounting for one out of every 40 tonnes of annual emissions. New reports from the UN’s Food and Agriculture Organisation and Earth4All, a global collective of leading scientists and economists, make it clear that steep and immediate reductions in global fertiliser use are required to avert catastrophic climate change. Both recommend a near phase-out of nitrogen fertiliser consumption by 2050 (see Graph 3). The idea is not to recklessly crash production levels, but a planned transition toward more sustainable, agroecological farming systems that require less or no fertiliser.
Graph 3
It is increasingly clear that today’s food inflation is a product of both corporate greed and ecological breakdown. Obscene levels of profit-taking by corporations are happening across the food system, from fertilisers to processing to retail, and this is pushing up prices. But the way these corporations organise our food production and distribution is also driving climate change and, undermining the capacity for the global food system to deliver affordable and accessible food, now and over the long term.
Bold new approaches are urgently needed to reign in corporate power in the food system and turn the food crisis around. When it comes to fertilisers, policy actions like windfall taxes and price controls can help. But to deal with both profiteering and environmental catastrophe we need to transition food production to rely far less on chemical fertilisers. The fertiliser industry will be pushing for the opposite when it gathers for its annual meeting in Prague this week, yet around the world there are farmers and rural movements already leading a transition away from chemical fertilisers, with plenty of successful examples to learn from. What’s holding us back is the structural political change needed at all levels to address the excess profiteering from the fertiliser industry, and chart a new path toward more resilient food systems.
Source: grain.org

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The Black Sea Grain Initiative: When the United Nations Brokers Profits for Corporations, Bankers, and Oligarchs

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2 weeks ago

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May 23, 2023

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“I am so moved watching the wheat fill up the hold of the ship. It was the loading of hope for so many around the world,” said United Nations Secretary-General, Antonio Guterres, as a cargo ship was loaded up with Ukrainian grain in August 2022. Mr. Guterres was launching the Black Sea Grain Initiative, purportedly to prevent famines and a global food crisis by enabling food exports from Ukraine, amidst the Russian military blockade. USAID claimed that the “lifesaving deal”, which was renewed on May 18, 2023, “helps people in need across the globe by delivering desperately needed grains to lower income countries and bringing down food prices.” The European Commission celebrated the initiative as a “a critical step forward in efforts to overcome the global food insecurity caused by Russia’s aggression against Ukraine.”

Mr. Guterres’ hope, loaded on the cargo ship, has however since gone missing at sea.

Despite the hype in political circles and the Western media that the Initiative was essential to secure food supply for those in need — particularly in Africa — data released by the United Nations offers a starkly different reality. As of May 2023, only 3 percent of the food commodities exported from Ukraine under the initiative has gone to low-income countries. Out of the 30.3 million tons exported, a mere 2 percent — 625,000 tons — went to the World Food Programme for food aid operations around the globe.
Charts showing grain exports from Ukraine by income group and country.

The top destination for Ukraine’s agricultural exports is the European Union, with China being second. Spain is the largest recipient in Europe. Instead of offering relief, Ukrainian exports are threatening the livelihoods of millions of European farmers — to the extent that Hungary and Poland banned imports from Ukraine in April 2023 to protect their farmers. As Ukraine and the European Commission pressured for the ban to be lifted, Hungarian and Polish farmers pushed back, asking the critical question: Who actually benefits from these exports?

The Oakland Institute’s report, War and Theft: The Takeover of Ukraine’s Agricultural Land, answers the question. It exposed that the producers exporting commodities from Ukraine are mostly large-agribusinesses and oligarchs, associated with European and North American financial interests. Furthermore, the report detailed how these producers are heavily indebted to Western financial institutions, in particular the European Bank for Reconstruction and Development (EBRD), the European Investment Bank (EIB), and the International Finance Corporation (IFC) — the private sector arm of the World Bank. Together, these institutions are major lenders to Ukrainian agribusinesses, with close to US$1.7 billion lent to just six of Ukraine’s largest landholding firms in recent years. Other key lenders are a mix of mainly European and North American financial institutions — both public and private.

Renewing the Black Sea Initiative and maintaining the flow of exports from Ukraine has nothing to do with supporting the struggling Ukrainian farmers or the trumpeted goal to prevent a global food crisis — which has been largely triggered by speculation on global food markets. Food prices skyrocketed when global stocks of cereals were at historically high levels according to the World Bank.

Pretending their goal is to fight world hunger is appallingly deceitful, when, with the Black Sea Grain Initiative, the United Nations has become a business broker for agribusiness corporations. In violation of its values and the principles of the United Nations Charter, together with the Western banks and financial institutions, the United Nations is supporting large food trading companies, oligarchs, and their lenders and shareholders, to sustain export business and grow profits despite the carnage of war.

Source: oaklandinstitute.org

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NGO WORK

EU vote on corporate sustainability due diligence fails to fully recognise key role of human rights defenders

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1 month ago

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May 4, 2023

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JOINT STATEMENT

Last week the European Parliament’s legal affairs (JURI) committee adopted its position on the proposed EU Corporate Sustainability Due Diligence Directive. Amid strong pressure, the text is a significant step towards ensuring mandatory human rights and environmental due diligence across the full value chain. It includes several important improvements and goes a long way towards aligning with the UN Guiding Principles on Business & Human Rights and OECD Guidelines for Multinational Enterprises.

However, as organizations working closely with Human Rights Defenders (HRDs) across the globe, we are concerned that the text, compared to the European Parliament (EP) Rapporteur’s draft, the human rights, development and environment committees’ opinions and other positions, constitutes a missed opportunity to explicitly recognise and protect defenders as affected and legitimate stakeholders.

Defenders play a critical role in protecting human rights and the environment, but their work exposes them to enormous risks, too often resulting in reprisals and tragically the loss of life.

In 2022, Front Line Defenders and its HRD Memorial partners documented the death of 401 defenders worldwide – 48% of whom were HRDs defending land, environmental and indigenous peoples’ rights.

Business & Human Rights Resource Centre (BHRRC) documented over 4,700 attacks on defenders related to business activities since 2015, which highlights this is a salient human rights issue in many business sectors. In a report released on Wednesday, BHRRC shows that 555 attacks took place in 2022 alone, revealing that on average more than 10 defenders were attacked every single week for raising legitimate concerns about irresponsible business activity. Indigenous defenders and communities continue to face disproportionate risks. Additionally, BHRRC data shows that approximately 1/3 of all attacks in 2020 stem from a lack of consultation or the failure to secure the free, prior and informed consent (FPIC) of affected indigenous peoples and affected local communities with customary tenure rights. In many cases, attacks can be traced directly back to business actors: for example, strategic lawsuits against public participation (SLAPPs) are one well-documented tactic used by businesses to stop people raising concerns.

At the same time, while there is growing business acknowledgement of HRDs as affected stakeholders, the particular risks and impacts they face are still not sufficiently recognised by many EU companies. The 2021 UN Working Group on Business & Human Rights’ authoritative guidance clearly states that lead firms may cause, contribute to or be linked to such impacts across their value chains.

In light of the above, the final JURI text, despite promising elements regarding stakeholder engagement, reference to the Aarhus Convention and FPIC, as well as removal of some obstacles to access to justice, misses out on covering human rights defenders more comprehensively and explicitly beyond ‘other stakeholders’ to be consulted. There must be no ambiguity regarding the urgency of engaging with HRDs and ensuring their protection from retaliation and other adverse impacts as affected stakeholders.

A recent Front Line Defenders report documented three case studies – from Colombia, India and Uganda – demonstrating how HRDs and their communities would be better protected by a strong EU Directive that explicitly places defenders at its core.

For ILC, the protection of land and environmental defenders remains a top priority. The draft EU law is a huge step forward for communities across the globe. But to be effective it must be explicit in protecting Human Rights Defenders and how one can enforce those rights in case of violations
Eva Maria Anyango Okoth, HRD from Kenya, and the Senior Program Officer for Africa at the International Land Coalition (ILC)

As the negotiations move to the next step, the plenary vote in the European Parliament and then the trilogue negotiations, we reaffirm that to fully protect and recognise HRDs, it is critical that the legislation avoids ambiguities in protections and retains strong language that had been included in earlier drafts, including the EP Rapporteur’s proposal and the opinions from the human rights, development and environment committees. At a minimum we recommend that the final text of the Directive as agreed by co-legislators:

  • explicitly includes Human Rights Defenders as affected stakeholders in the corresponding stakeholder definition and covers them as such in provisions on mandatory stakeholder engagement, grievance mechanisms and non-retaliation;
  • similarly recognises organizations protecting human rights and the environment in the same definition and provisions; and
  • includes the UN Declaration on Human Rights Defenders, which breaks down key human rights for the specific context of defenders, in the Annex, along with important additional references e.g. to the Escazú Agreement.

We also point to concerns outlined by civil society organizations about the text’s remaining shortcomings regarding access to justice and other areas, both for defenders and all other rightsholders.

Source: Business & Human Rights Resource Centre

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