Europe carmakers linked to Amazon destruction: report

Car seats from manufacturers like Volkswagen, BMW, Daimler, the PSA group (Peugeot, Citroen, Opel) and Renault could be linked to deforestation, the Rainforest Foundation Norway reported on Friday.

As the leading exporter of bovine leather, Brazil provides about 30% of this material to the global automotive industry. But before turned into car upholstery, the leather may have been removed from cattle raised on land in the Amazon rainforest that was deforested, possibly illegally. 

"The purpose of the report is to give an overview of a sector that needs to be studied and that needs transparency," Joana Faggin, the study’s lead author, told DW. "At the moment, no manufacturer can prove that it is not involved in this."

The pace of deforestation is picking up. Last year, the Amazon rainforest lost 11,088 square kilometers (4,280 square miles) of land, the largest area cleared over a yearlong period within the last 12 years, according to Brazil’s National Institute for Space Research, INPE.

Cattle farming continues to be the motor driving the logging. More than 90% of deforestation is illegal, and a majority of that land is used for grazing, according to the Brazilian conservation NGO Imazon. Following the path of the animals that are raised on this land is a massive challenge.

"If European consumers want to know where the leather comes from, they will face many difficulties," said Faggin. "This industry has a complex supply chain. It’s very difficult to follow the path of the product after the slaughterhouse." 

Leather follows an obscure route 

To understand the origins of the leather the manufacturers use, the study delved into complex network of international commerce between Brazil and major importers around the world. It mapped these relations using company documents, studies detailing environmental crimes committed by Brazilian cattle farms, and information on Panjiva, a global trade database.
 
The analysis identified three primary export routes: Brazil to Asia (China, Indonesia and Thailand); Brazil to North America (Mexico and the United States); and Brazil to Europe (Italy, Germany and Slovenia). 

To get from the Brazilian tanneries to the European car manufacturers, the raw material mostly passes through Italy. At this point, it is still chrome-tanned leather, known as wet blue. 

After another round of processing, the material is sold on to car seat factories. The Czech Republic and Germany make up 22% and 13% of this global market, respectively. Here, the seats are finalized and then delivered to the car manufacturers. 

According to the study, buyers can't be sure that material from major Brazilian suppliers didn't come from deforested areas. 

"On the contrary, this report shows a high probability that deforestation is a factor in the leather supply chain," the document said.

Most of the material exported from Brazil comes from tanneries in the nine states in the Amazon basin, which use leather from cattle raised and slaughtered in the region.

The biggest suppliers to the European industries — JBS Couros, Minerva Couros, Vancouros, Fuga Couros, Durlicouros, Mastrotto Brasil and Viposa — all have some sort of link to deforestation, though it may not necessarily be illegal, according to the study.

Suppliers cheating the system?

The starting point in tracing the origins of the leather is the cattle. In Brazil, which has the world's biggest cattle herd with about 214 million cows, this path could prove difficult.

Half of these animals are raised in the Amazon, on land that encroaches on the forest. Many suppliers here cheat environmental laws to hide that they are selling cattle raised in deforested spaces and protected areas. 

The most common practice translates to "cattle washing," which means transferring the animals from illegal farms to legal farms before making the final sale, which evades the monitoring systems. The cows are then sent on to meat companies.

"Everybody, including these companies, knows that the problem lies with the indirect suppliers. Even though the big companies have signed an agreement to stop this, none of them have made much progress in monitoring indirect suppliers," said Faggin.

Although the clandestine practice is well-known, companies that buy cattle from the Amazon have done little to minimize the risk, according to Paulo Barreto, a researcher with NGO Imazon.

The institute has developed a methodology that measures the degree of deforestation for each meat company in the region. It bases the measurement on the place where the cattle is bought, the distance of the meat company from the farm, and if there are highways nearby, among other information.

What leather exporters say

Of the seven exporters cited in the report, four replied to DW at the time of writing. 

JBS, a giant in the meat and byproduct industry, denied any connection to deforestation, citing an online tool with which one can trace the source of its leather, JBS 360. 

The company said it is dealing with the problem of illegal products from indirect suppliers with a platform called Transparent Livestock. Launched in 2020, it extends the "reach to monitor the suppliers of its suppliers," and will bring a "definitive solution" by 2025.

Minerva said it signed a commitment to eliminate illegal deforestation from its supply chain, and that it plans on integrating a new tool "to its geographic monitoring system of the Amazon that assesses the risks related to farms that are indirect suppliers." The timeline is not clear. 

The company, however, said it remains a challenge to accurately trace the origin of the leather. But it maintained that it has a tracking system for the material once it leaves the meat companies and tanneries to guarantee the source of "100% of the leather processed in its facilities in Brazil."

Vancouros and Viposa said they have policies and certifications in place to track their raw material.

What manufacturers say

Responding to the report, Volkswagen criticized its alleged inaccuracies.

"For the brands in the Volkswagen Group, we can state: Leather from Brazil is usually chrome-tanned. However, the Volkswagen Group only uses chrome-free tanned leather in Europe," it said.

The manufacturer said it has "written agreements" from all its suppliers that none of their material can be linked to illegal deforestation in the Amazon.

BMW said it had the same guarantee from its suppliers. Brazilian leather currently represents 5% of its total stock, according to the company.

"It will account for 1% at the end of next year. This will decrease to 0% in the medium term as we restructure our leather supply chains and no longer rely on leather from South America," it said in a statement. 

Daimler, which produces Mercedes-Benz, said it demands in its contracts with suppliers that the products not be connected to illegal deforestation. 

PSA preferred not to give a statement until it had access to the full report, while Renault did not respond to a request for comment.

More certification, international pressure needed

Some exporters said they used the Leather Working Group (LWG), which provides internationally accepted environmental certification for ethical leather manufacturers. But the organization may have some limitations in guaranteeing the origins of its material, according to the Rainforest Foundation Norway.

"The supplier provides a declaration to the LWG saying it has no connection to deforestation. There is no rigorous verification," Faggin said about the certification process.

The authors of the report said the automotive industry is complicit if it continues to buy raw materials coming from deforested areas in the Amazon.

"It is highly likely that all of the big five car manufacturers in Europe are sourcing leather from Brazilian companies linked to deforestation," the study said.

Paulo Barreto of NGO Imazon said it's important that the issue be in the international spotlight. 

"Monitoring where leather comes from is even more complicated than for meat. We had some changes because of international pressure, but they are too small given the magnitude of the problem," he said. "Much more effort is needed."