Foreign company engaged in illicit activities intends to move to the EU

A Brazilian company that has recently announced its intention to move a significant portion of its operations within the European Union, has come under scrutiny in recent months over allegations about illicit activities worldwide. Those activities allegedly include contributing to global deforestation, exporting contaminated meat to the EU, human rights violations and accusations of actively corrupting governments.

The company, named JBS, is the world’s largest processor of fresh beef and pork, with more than $50 billion in annual sales as of 2017. JBS has recently come under fire over its non-compliance with EU standards, and therefore, putting European consumers at risk.

A recent report by rights group Amnesty International linked JBS to the destruction of the Amazon. While the group did not find any evidence that the meat giant is directly involved with human rights abuses, the report found that cattle illegally grazed in protected areas have entered the supply chain, of JBS, which previously pledged to monitor its indirect suppliers.

In July, JBS was excluded from assets sold by Nordea Asset Management, northern Europe’s largest financial services group, which controls a €230 billion fund. The decision was taken over the meat giant’s links to farms involved in Amazon deforestation, but also over past corruption scandals.

“The exclusion of JBS is quite dramatic for us because it is from all of our funds, not just the ones labelled ESG”, said Eric Pedersen, Nordea Asset Management’s head of responsible investments. A third of the group’s investments are classified as ESG, which stands for the “environmental, social and governmental” standards of a company.

JBS in 2009 committed to stop buying from any direct suppliers involved in deforestation. “JBS is committed to a sustainable livestock supply chain and has a zero deforestation policy within its supply chain,” the company said in a statement and added that they do not purchase cattle from farms involved in the deforestation of native forests or that encroach on indigenous land or conservation areas.

In 2017, however, the giant was fined $7.7 million by a government environment agency, for buying over 49,000 heads of cattle from illegally deforested areas in the Amazon state of Pará, some from indirect suppliers.

Last year, media reported that JBS slaughterhouses in the same state had bought cattle from farms owned by the ranching company AgroSB Agropecuaria SA, which had been supplied with cattle from another ranch that has a history of fines for deforestation and is owned by the same company.

“Full traceability of our supply chain including workable solutions to monitor indirect supply remains a top priority. New initiatives have been proposed and are being examined with stakeholders on top of the substantial policies that have already been implemented”, JBS told the media.

In June, JBS was accused again for buying cattle from a farm that sourced cattle from another farm inside a protected reserve in Mato Grosso state co-owned by the same owner – who had been charged with environmental crimes.

Earlier, media revealed that JBS and its subsidiaries were the suppliers of a large portion of salmonella-contaminated chicken exported from Brazil to the United Kingdom. Salmonella bacteria, which is found in the guts of poultry and livestock, can create a poisoning that can be life-threatening.

The European Union has been running a major salmonella reduction programme for more than a decade. Yet, Brazil supplies about $1 billion worth of poultry meat to Europe each year. It exports more than 4.3m tonnes of chicken a year all over the world.

Alexandre Campos da Silva, who coordinates meat inspections for the Brazilian government, said in defense that this “is not a risk” for human health because the bacterium is killed in the cooking process. However, salmonella can be contracted from contact with raw chicken.

A recent report published earlier this year by the European Centre for Disease Control and Prevention and the European Food Safety Authority warned that foodborne bacteria, such as Salmonella, Campylobacter and E. Coli, are getting harder to treat as they are becoming increasingly resistant to antibiotics used to beat them.

In 2019, JBS claimed it operates 37 meat-packing plants in Brazil with a total slaughter capacity of 33,550 cattle per day. In the same year, JBS recorded a net revenue of $6 billion from the sale of beef and related products, which are sold under different brands.

Even though the EU embargoed meat from some Brazilian sources, tests have discovered salmonella in more than 370 consignments of Brazilian chicken and other poultry meat shipped to the EU since April 2017. Contaminated meat has been shipped to many EU countries, including the Netherlands, France, Germany, Spain, Italy, Belgium, Ireland and the UK.

At least 1,359 tonnes of contaminated poultry was exported to the UK in that period, although the true figure is likely to be higher as not every shipment has been the subject of microbiological testing. Much of the contaminated meat was detained by port inspection staff before being sent back to Brazil, where it was sold to Brazilian consumers, but records show that in some cases the contaminated meat had already been allowed into the UK.

In November, JBS reported a near nine-times increase in Q3 net profit, beating market expectations, driven by strong demand at home as well as from the United States and China, where almost a third of JBS’ meat exports went.

In Europe, JBS said it continued to see improvement in its poultry business, with consumer demand gradually recovering from the impact of the COVID-19 pandemic. The meat giant’s July-September profit reached $581.2 million.