Royal Dutch Shell Plc  .com Rotating Header Image

The bitter taste of Brazil’s sugarcane

In a 2009 report on Brazil, the UN Special Rapporteur on the situation of human rights and fundamental freedoms of indigenous people, mister James Anaya, wrote that Mato Grosso do Sul “has the highest rate of indigenous children’s death due to precarious conditions of health and access to water and food, related to lack of lands.”

From pages 22, 23 & 24 of “Royal Dutch Shell and its sustainability troubles” – Background report to the Erratum of Shell’s Annual Report 2010

The report is made on behalf of Milieudefensie (Friends of the Earth Netherlands)
Author: Albert ten Kate: May 2011.

Joint venture with Brazil’s largest sugar and ethanol producer

On 25 August 2010, Royal Dutch Shell and the Brazilian sugar and ethanol producer Cosan S.A. have signed binding agreements to form a joint venture in Brazil. The definite formation of the joint venture is expected to occur in the first half of 2011. The name of the joint venture will be Rai?zen. “Due to the size of its operations, Rai?zen will help sugarcane ethanol, a sustainable, clean and renewable source of energy, to consolidate itself worldwide and strengthen Brazil‘s position in the international biofuels trading business,” stated its appointed Chief Executive Officer, Vasco Dias.

Cosan is Brazil’s largest sugar and ethanol producer, accounting for about 10 percent of Brazilian production. Ethanol made from sugarcane has become the most popular fuel for cars in Brazil, surpassing gasoline. Cosan is the world’s fourth largest ethanol producer and probably the world’s largest ethanol producer from sugarcane.

The deal calls for Cosan to transfer its units for sugar and ethanol production, fuel distribution and energy generation to the venture. Shell will contribute its retail fuel and aviation fuel distribution business, and its participation in the biomass technology companies Iogen Energy and Codexis.

After state oil giant Petrobras, the proposed joint venture competes with Ipiranga, a unit of Brazil’s Grupo Ultra, to become the second-largest fuel retailer in Brazil. In the fuel area, the joint venture will sell approximately 20 billion litres of fuels to the transportation and industry markets and to its network of over 4,500 retail sites.

All Cosan’s 24 sugarcane producing mills are located in the South-Central region of Brazil: 22 mills are located in Sa?o Paulo state, one in Jatai? city (Goia?s state) and one in Caarapo? city (Mato Grosso do Sul state).

Brazil’s sugarcane plantations are located in the South-Central and North-eastern regions. These regions account for 89% and 11% of Brazilian production, respectively. Within the South-central region most is grown within Sa?o Paulo state.

Some of Cosan’s assets will not be included into the joint venture: the lubricant businesses; the sugar logistics business called Rumo Logistica; the land prospecting and development business called Radar Propriedades Agricolas, the food retail brands Da Barra, Uniao and other minor brands.

Sourcing sugarcane from occupiers of indigenous land

Since June 2009, Cosan owns a newly-built sugarcane plant in Caarapo?, Mato Grosso do Sul state. Presently, the plant has a capacity to crush 2.5 million tonnes of sugarcane a year.120 The former owner has expected that the capacity will be over 6 million tonnes in 2017/2018. The plant is included into the Shell-Cosan joint venture plans, so soon it will be half owned by Shell.

To supply the Caarapo? plant, Cosan sources mostly from new sugarcane plantations in the neighbourhood. One of its known sourcing areas are the farmlands of the Santa Claudina farm. This farm is located within the indigenous territory Guyraroka? of the Guarani-Kaiowa? Indians. The federal public prosecutor in Mato Grosso do Sul stated in May 2010 that Cosan’s purchase of raw materials from indigenous areas demonstrates its lack of social and environmental criteria for selecting suppliers, and disrespect for the second largest indigenous population of the country. The Santa Claudina farm is owned by a state representative of Mato Grosso do Sul, Ze? Teixeira. Cosan has confirmed that one of its suppliers operates in the region.

According to satellite images of the Brazilian Institute for Space Research (INPE), sugarcane plantations occupy already half of the indigenous territory Guyraroka?. Since there are 26 “owners” of farmland within Guyraroka?, there could be more suppliers to Cosan.

The indigenous territory Guyraroka?, comprising over 11.000 hectares, was traditionally occupied by Guarani-Kaiowa? Indians. According to the Brazilian constitution and United Nations conventions the land is theirs.

In October 2009, the Brazilian Ministry of Justice produced a directive as a step forward to final demarcation. The next steps for the Ministry are the administrative demarcation of the area and the withdrawal of the current occupants of the area. A signature by the Brazilian President, Ms Dilma Rousseff, is needed to make the demarcation definite. Generally, however, the demarcation process moves at a very slow pace. Moreover, the current occupants of the land are not likely to leave without resistance, be it in court or in the area itself. Violence by land occupiers and discrimination against the Guarani-Kaiowa? Indians are frequently performed in Mato Grosso do Sul state.

Guyraroka? is just one of the indigenous territories within the Central-South region of Mato Grosso do Sul, that has experienced serious delays in being demarcated. Dozens of Guarani-Kaiowa? groups are waiting for their right to plots of land. Some 30,000 Guarani-Kaiowa? live in Mato Grosso do Sul state. In the past they were pushed off their land and into reservations. Today, these reservations are severely overcrowded. The communities subsist mainly on government food aid. According to the federal public prosecutor of Mato Grosso do Sul, Dr Marco Antonio Delfino de Almeida, “the demography is comparable to being imprisoned in spaces so small that social, economic and cultural life are impossible to sustain.” In a 2009 report on Brazil, the UN Special Rapporteur on the situation of human rights and fundamental freedoms of indigenous people, mister James Anaya, wrote that Mato Grosso do Sul “has the highest rate of indigenous children’s death due to precarious conditions of health and access to water and food, related to lack of lands.”

Sugarcane plantations are arising rapidly in Mato Grosso do Sul. The state area cultivated for sugarcane harvest amounted to 502,000 hectares during the 2010/11 season. For the 2005/06 season the figure stood at 160,000 hectares. Both Cosan and the Brazilian government havosane identified the Central-South region of Mato Grosso do Sul as one of the main areas for future growth. This is the same area as where dozens of different Guarani-Kaiowa? groups are claiming plots of land.

A further extract from this section of the report will be published in the coming days:

“Cosan’s short-lived inclusion into the “dirty list” of slave labour”

THE COMPLETE 73 PAGE REPORT (with reference sources)

Comments are closed.

%d bloggers like this: