Trade with IFC funded farm in Amazon is embargoed

The Brazilian federal environmental body IBAMA declared this week an embargo on any commercial relationships with a farm directly owned by the Amaggi trader, belonging to the governor of Mato Grosso and soy baron Blairo Maggi.  The embargo is a new instrument recently created by Brazilian legislation: based on it, any company acquiring products from an embargoed farm can become liable for environmental crime.  A list of embargoed farms is updated on the internet.  IBAMA has not yet determined the exact size of the area.

The farm is located in the municipality of Feliz Natal, in Mato Grosso (Brazilian Amazon).  It was also fined by IBAMA on February 19, 2008, after it had been verified that it was operating without a license by the state environmental agency.  AMAGGI has received two loans by the International Finance Corporation, private sector arm of the World Bank, without performing an environmental assessment of its activities.  Such procedure was considered irregular by an audit of IFCs own ombudsman office in 2006, but the bank neglected to take any remedial action in response to it.  Brazilian NGOs have repeatedly alerted the World Bank about the risks of this loan and other loans to expand cattle ranching in various Amazon states.

Amaggi itself recognised, in its most recent report on environmental and social issues, published in 2006, that more than 70% of its third-party suppliers were in an illegal situation as far as deforestation of their farms.  However, it never released a list a list of those suppliers, many of which are believed also being subject to embargo.  But the situation of Feliz Natal now affects the company itself, which is both a producer and trader of grains.

Other politicians, as the governor of Rondônia Ivo Cassol and several mayors, are also among the owners of farms embargoed by IBAMA in different states of the Amazon.