KANSAS CITY, MO. – The Inter-American Development Bank (IDB) Group shelved plans to lead a syndicated loan to Marfrig Global Foods SA. The bank’s board of directors was scheduled to vote on the loan in December 2021, but the vote later was pushed to May 4, 2022. Currently, the loan is no longer up for approval, according to the bank’s website.
IDB Invest, the private sector unit of the Inter-American Development Bank, extended a $43 million loan to Marfrig with an additional $157 million leveraged from other financial institutions. Environmental, animal welfare, human rights and other groups lauded the bank’s decision.
“Public development finance should not be channeled to large-scale industrial livestock operations like Marfrig that fuel deforestation and the climate crisis” said Kari Hamerschlag, deputy director of Food and Agriculture at Friends of the Earth US. “We hope the IDB Invest’s decision to drop the Marfrig loan sends a loud signal to other banks: animal agribusiness investments are incompatible with commitments to reduce emissions and align their lending with the Paris Climate Agreement.”
A letter to the board of directors, signed by more than 200 organizations, argued that extending the loan to Marfrig contradicted the bank’s sustainability goals. Marfrig and JBS SA both have been accused of fueling deforestation in the Amazon and displacement of Indigenous communities through the purchase of cattle grazed on deforested lands.
The letter said, “In fact, the IDB’s own assessment says that investment in this company carries many environmental and social risks “mainly related to Marfrig’s supply chain, including deforestation, impacts on landscapes, ecosystems and biodiversity, child/forced labor, and inadequate environmental, health and sustainability (EHS) practices by the Company’s primary suppliers.””
Both companies have denied the allegations.