Bertin loan cancelled
19/06/2009
Reports from Brazil suggest the International Finance Corporation (IFC)—the division of the World Bank that promotes sustainable private sector investment in developing countries—has cancelled a loan agreement with Brazilian packer and tanning group Bertin.
The company signed a deal with the IFC in 2007, under which it would receive a total of $90 million over a number of years to expand its business, specifically by setting up sustainable livestock operations in the state of Pará, which is close to Amazon rain forests that some environmental groups believe to be under threat of deforestation. The IFC has already released $60 million of this funding, which Bertin will now pay back.
The Brazilian company said in a statement that the difficult times the Brazilian agro-economic sector is going through at the moment make it difficult for Bertin to move ahead with its expansion plans. Instead, it said its priorities were to get through the downturn and then look to strengthen afterwards.
It said a pilot project for sustainable livestock rearing in Pará ended successfully last October. It involved 24 farms initially, but Bertin has said it will roll its ideas out to more farms in the state and in Mato Grosso during the second half of this year. A spokesperson for Bertin told Brazilian media that the IFC had hoped for faster progress and said some figures in the World Bank division had never been in favour of an expansion loan for Bertin. The initial decision in 2007 attracted considerable criticism from a number of NGOs.
Nevertheless, Bertin insisted that discussions on cancelling the loan had begun in January, long before the publication of a recent controversial Greenpeace report that was highly critical of Bertin, linking the company and many of its leather customers to the problem of deforestation. Bertin has already responded to the Greenpeace findings, insisting that none of its own operations are involved in illegal deforestation and that it would carry out an extra audit of the practices employed by its external suppliers, immediately cancelling the contracts of any companies found to be in breach of the law. The leatherbiz blog will publish a longer article about the Greenpeace report on June 20.
Meanwhile, the IFC has confirmed to Brazilian media that it will continue to fund sustainable livestock farming in Brazil.
Share this story:
