In a clear sign to financial institutions that nature destruction is no longer considered business as usual, the Brazilian Federal Public Prosecutor's Office (MPF) said that financing agricultural activities in public forests, Indigenous lands and conservation units in the Amazon can constitute the crime of invading public lands and advised1 that eight institutions - including Spanish and Dutch banks Santander and Rabobank - immediately terminate any such contracts granted via subsidized credit2. The landmark decision follows Greenpeace Brazil's report3 and complaint, which found that national and international banks had been using Brazil's rural credit system to finance thousands of rural properties that are driving illegal deforestation, invasion of Indigenous territories, and other destructive activities.
"Our investigation highlighted the scandalous failings of due diligence by banks in Brazil. The Prosecutor's Office has now made it clear that banks must take responsibility for their actions and stop financing properties that do not comply with environmental rules. This is a positive step and we hope the banks in question take the necessary action in this specific instance, but also that the banking system in general stops funding the thousands of other cases where businesses are being funded to destroy the Amazon rainforest. " said Thaís Bannwart, a campaigner with Greenpeace Brazil.
The list of financial institutions subject to the MPF's recommendations highlights the international reach of banks financing nature destruction. In addition to public and private banks based in Brazil - Banco da Amazonia, Banco Sicredi, Bradesco, Caixa Economica Federal and Itaú - the list of impacted financial institutions includes Santander, which is headquartered in Spain, and Banco De Lage Landen Brasil, which is a fully owned subsidiary of Netherlands-headquartered Rabobank. Once informed of these recommendations, the banks are legally obliged to respond within 30 days to confirm whether they will terminate the contracts together with a timeline of the proposed actions. After this, the MPF will make a decision on next steps – that could be criminal or civil legal action.
"Banks with headquarters in Europe that continue to operate rural credit in Brazil should also follow the MPF's recommendation and cancel their operations with properties that have socio and environmental irregularities, including violations of Brazilian constitutional environmental rights. This situation also shows why it is vitally important the European Commission reviews the role of finance in deforestation and forest degradation under the scope of the EU deforestation regulation," continued Bannwart.
