As one of the most powerful commodity traders in Brazil, Cargill Inc. has worked to expand its business while fending off criticism that it's enabling the destruction of Amazon forests and savanna for soy farms.
The clearing of Brazil's climate-moderating tropical forests and grasslands has escalated under nationalist President Jair Bolsonaro, and Cargill in 2019 announced it would fail to meet its pledge to halt deforestation in Brazil by the following year.
Now the Minnetonka-based agribusiness giant's Brazil operations are being challenged again, this time by human rights activists with the backing of environmentalists.
Cargill has plans to build a new $150 million river port in northern Brazil to help handle its soy shipments. The land it acquired, however, sits on an island that's long been home to a community of fishermen and acai gatherers who are descendants of former African slaves, and who hold special land rights in Brazil.
The residents have sued Cargill in federal court in Brazil, accusing the company of stealing their land, acquiring it through third parties bearing allegedly fake land titles. Others are named in the lawsuit, including public entities and the company that sold the land to Cargill.
The dispute centers on about 1.5 square miles of land in Abaetetuba, a city near the coast in the northern state of Pará.
Brazil's judicial system is notoriously slow. The lawsuit was filed earlier this year, but Cargill hasn't filed a legal response in court yet because it hasn't received the official court summons, said spokeswoman Eliane Uchoa. In an e-mail exchange, Uchoa denied wrongdoing. Cargill legally purchased the land, she said.
"We have not and will not build anything until we have the proper environmental permits to do so and after consultation has been completed with the Regulatory Authority and local community," Uchoa said.
Cargill will uphold the Amazon Soy Moratorium, which bans buying soy from illegally cleared land, Uchoa said, as well as the company's own four-page written policy on ending deforestation in its soy supply chain in South America.
The company's website states that "more than 95%" of the soy it bought in Brazil during 2018-2019 "was demonstrated to be deforestation- and conversion-free."
Cargill is seeing a rapid increase in demand for South American soybeans "to address rising global food security issues," Uchoa said.
A leading soy trader in Brazil, Cargill owns four ports in the country, and two more through joint ventures. The new one in Abaetetuba would handle up to 9 million tons of cargo each year of corn, soybeans and other grains barged down the Pará River from the states of Pará, Maranhão, Piauí, Tocantins, Rondônia and Mato Grosso, according to its 2018 environmental impact report.
Much of that area is in Brazil's Cerrado, the vast wooded savanna adjacent to the Amazon rainforest that is also a major carbon sink. Intense soy production has shifted to the Cerrado following international outcry over destruction of the rainforest. Much of the soy goes to animal feed.
Deforestation in the Cerrado has escalated to its highest rate since 2015. It has lost 3,293 square miles of trees and vegetation — an area greater than the state of Delaware — from August 2020 to July 2021, according to data from Brazil's National Institute of Space Research.
The deforestation has gone hand-in-hand with conflicts over land rights.
Lisa Rausch, a University of Wisconsin scientist working on deforestation-free supply chains in Brazil, said she is surprised Cargill is pursuing another port in Pará given the past controversy over its port in Santarém, built in the early 2000s.
That port was the focus of major protests and featured heavily in the influential 2006 Greenpeace report Eating Up the Amazon, a call to action that linked Brazilian soy to European supermarkets and fast food chains such as McDonald's. The controversy helped drive the signing of the Soy Moratorium in 2006.
Rausch said she's also surprised the company would pursue the land if there were questions about the land transfers.
"Creative solutions" around land titles are extremely common in Brazil, Rausch said.
"The whole region is sort of shrouded in a long history of what they call land title disputes," she said. "It's surprising to me that they are moving ahead with this knowing that somebody would dig into it."
In an interview, Tatiane Rodrigues de Vasconcelos, a legal advisor in the Public Prosecutor's Office of the state of Pará, said she researched the land titles in question during law school. She concluded they are fake, and that the community land was sold illegally.
The riverside community is a federally protected traditional settlement that has been in the area for more than 200 years, according to Paulo Weyl, a human rights lawyer rights at the Federal University of Pará who is representing the residents.
In an interview, Weyl said the government officially recognized the community's protected status in 2005 as what's called an Agro-extractive Settlement Project. It was made clear at that time that the federal government owns the land. Weyl called the sale of the land "absurd."
According to Weyl, city officials transferred land titles to individuals who sold it to a company called Brick Logística, which then sold it to Cargill in 2020 for about $1.2 million.
Brick Logística's LinkedIn profile says it "develops greenfield private ports in the Brazilian Amazon." In its filed response to the lawsuit, the company denied any fraud. The part of the island that Brick Logística acquired for the port had a long history of private ownership and did not belong to the protected community, it said. The crucial point, it said: "the absolute non-existence of any trace of occupation or use of the property currently owned by Cargill under the of tenure by communities residing on the Xingu island."
Chief executive Kleber Menezes, Pará's secretary of transport from 2015-2018, forwarded a request for comment to his legal team, which did not respond in time for this story. But he said he quit his duties at Brick while in statement government and there was no conflict of interest.
The plans for the new port are wreaking havoc on the community, which sees a threat to their entire way of life, Vasconcelos said. Some of the 188 families who are directly affected have already moved away. The dredging and construction, along with increased barge traffic up and down the river, will serious harm the fishing grounds, she said.
"It's like they're invading their houses, their territory," Vasconcelos said.
Environmental groups are holding up the land deal as a sign that Cargill isn't committed to ending deforestation or protecting the rights of Brazil's traditional communities.
Merel van der Mark, coordinator of the Forests & Finance Coalition, a group that includes Rainforest Action Network and Amazon Watch, said she thinks Cargill's buyers and the global banks doing business with Cargill should reconsider their ties with the trader. It's "bad business," she said.