Study links European car manufacturers to Amazon deforestation

RIO DE JANEIRO, BRAZIL – Through the complex web of international trade that uses illegal products from the Amazon, the European automotive industry probably does not go unscathed. Leather seats of vehicles from car manufacturers such as Volkswagen, BMW, Daimler, PSA group (Peugeot, Citroen, Opel) and Renault possibly carry marks of illegal deforestation, difficult to be traced, denounces a report published this Friday, April 16th, by Rainforest Foundation Norway.

The largest exporter of cowhide in the world, Brazil supplies about 30% of this material to the global automotive industry. Until it becomes vehicle upholstery, the leather may have been removed from cattle raised in an illegally cleared area in the Amazon Rainforest, points out the Oslo-based foundation.

“The aim of the report is to expose the fact that there is an industry that needs to be studied and that needs transparency,” said Joana Faggin, lead author of the study about the auto industry’s indirect contribution to deforestation. “Currently, no car company can prove that it’s not involved,” she added.

With an accelerated pace of destruction, in 2020 the Amazon lost the largest area of the last 12 years, 11,088 km², according to data from the National Institute for Space Research (INPE). Cattle breeding continues to be the main driver of devastation: more than 90% of deforestation is illegal and gives way to pastures, according to studies by the Institute of Man and Environment of the Amazon (IMAZON).

Tracking the traces of animals in these illegally deforested areas is a major challenge: “If the European consumer wants to know where the leather comes from, he will encounter many difficulties. This industry has a complex supply chain, it’s very difficult to follow the product’s path after the slaughterhouse,” says Faggin.

An obscure route

To try to understand the origin of the leather components used by assemblers, the report delved into trade. The mapping was done based on documents from the companies, research already published, case studies that show environmental crimes committed by farms that sell cattle in Brazil, and information available on the Panjiva platform – a database on global trade.

The analysis identified three main export routes: Brazil – Asia (China, Indonesia and Thailand), Brazil – North America (Mexico and the United States), Brazil – Europe (Italy, Germany and Slovenia).

From the Brazilian tanneries to the European cars, the raw material reaches the continent in larger quantities through Italy, in the form of chromed leather, called wet blue.

After one more processing stage, the material is sold to the seat factories. It is mainly in the Czech Republic and Germany, which hold 22% and 13% of this global market, respectively, that the seats are finished and delivered to the carmakers.

According to the study, those who buy from large Brazilian suppliers cannot ensure that the material has not come from deforested areas. “On the contrary, the report shows a high probability that deforestation is a factor in this supply chain,” the document says.

Most of what is exported by Brazil comes from tanneries located in the Legal Amazon, which extract the hide from cattle raised and slaughtered in the region. JBS Couros, Minerva Couros, Vancouros, Fuga Couros, Durlicouros, Mastrotto Brasil and Viposa, the seven largest suppliers to the European industry, are listed as companies that have some connection with forest cutting, not necessarily illegal.

Skirting the rules

As in the meat chain, the starting point for tracing the origin of the leather is the cattle. In Brazil, which has about 214 million head of cattle and the largest cattle herd in the world, this route can hide traps.

Half of these animals are in the Amazon and advance over the forest, where many producers circumvent environmental laws to sell, seemingly legally, the cattle that occupy deforested areas and conservation units.

The best known practice is “cattle washing”, transferring animals from illegal farms to others that are authorized to make the final sale, a method that deceives the monitoring systems.

“Everyone knows, including the slaughterhouses, that it is in the indirect supplier that the problem lies. Although the big slaughterhouses have signed an agreement to stop this, none of them have made much progress in monitoring the indirect suppliers,” comments Faggin about the scheme.

Although the clandestine practice is well known, the companies that buy cattle from the Amazon have done little to escape the risk, assesses Paulo Barreto, from IMAZON. The institute developed a methodology that measures the degree of exposure to deforestation of each meat packing plant in the region based on information about the place where the cattle is acquired, distance from the ranch, existence of roads, among others.

What the leather exporters say

JBS, a giant in the sector, denied any connection with illegal deforestation and cited an online tool created to track the leather, JBS360.

About the problem of illegality hidden in indirect suppliers, the company said that the Transparent Livestock Platform, launched in 2020, extends the “reach of its monitoring to its suppliers’ suppliers” and that it will provide a “definitive solution” by 2025.

Minerva, for its part, says it has signed a commitment to eliminate illegal deforestation from its entire chain, and that it plans to integrate a new tool “into its geographic monitoring system for the Amazon, which provides an assessment of risks related to indirect supplier farms.” The deadlines, on the other hand, are unclear.

The company also admitted the challenge of ensuring the origin of the leather, but said it has a system of traceability of hides after they leave the slaughterhouse and processing in the tanneries that guarantees “100% of the hides processed in its units in Brazil.”

Vancouros simply stated that it has a “raw material purchase policy, as well as certifications related to this issue.”

Viposa sent a similar answer, claiming to have “a policy for the purchase of raw material (leather), as well as certifications and actions related to the themes of traceability, sustainability and environment.”

What the automakers say

Volkswagen criticized the report alleging inaccuracies. “For Volkswagen Group brands, we can state that Brazilian leather is usually chrome tanned. However, in Europe, the Volkswagen Group uses only chrome-tanned leather without chrome,” it reported.

The automaker says it has a “written commitment” from all suppliers that no material is related to illegal deforestation in the Amazon.

BMW said it has the same guarantee from its suppliers. According to the brand, leather from Brazil currently represents about 5% of its total used stock. “This will represent 1% at the end of next year, which will decrease to 0% in the medium term as we restructure our leather supply chains and no longer depend on leather from South America,” the note said.

Daimler, maker of Mercedes-Benz, claims to require in contracts with suppliers that the products delivered are free of illegal deforestation. “Specifically, the supplier must confirm that the hides processed for the products delivered to Mercedes-Benz come from cattle raised outside the Amazon, Cerrado, Pantanal, Gran Chaco, Atlantic Forest and Chocó-Darién areas,” it added.

PSA preferred not to comment until it has access to the full report from Rainforest Foundation Norway.

Renault did not comment.

Certification and international pressure

Cited by some exporters, the Leather Working Group (LWG), the most internationally accepted leather certification organization, would have some limitations to ensure the origin of the material, according to Rainforest Foundation Norway.

“The supplier gives a statement to the LWG saying it has no connection with deforestation. There is no rigorous verification,” says Faggin.

That is why, for the authors of the study, the automobile industry becomes complicit if it continues to buy from those who source the raw material from deforestation in the Amazon, as the report points out.

“All five major automakers in Europe [Volkswagen, BMW, Daimler, PSA Group and Renault] do not have a strong control policy on this,” concludes the study.

For Paulo Barreto, it is important that the debate generates great international repercussion.

“Monitoring the origin of leather is even more complicated than that of meat. We had changes because of international pressure, but they are very small in face of the size of the problem. There are many loopholes, there are several responsible parties, such as companies and the financial sector, which have a large international arm,” he says. “Much more effort is needed.”

Source: DW