BANKS DODGY DEALS CAMPAIGNS
Sections
Banks Dodgy Deals Campaigns
Our campaigns
Banks and Climate
Banks and Human Rights
Banks and Nature
Our projects
Tracking the NZBA
Banks and Russia
Banks and Steel
Tracking the Equator Principles
Tracking the PRBs
Find a Better Bank
Banks and the OECD Guidelines
Media
News Publications
Raiffeisen Out! Bank.Green End Coal Finance Plastic Banks Tracker Defund TotalEnergies Financial Exclusions Tracker Equator-Complaints.Org Don't Buy into Occupation Banks & Biodiversity Forests & Finance Drop JBS StopEACOP Fossil-Free Finance
BankTrack
About BankTrack Organisation Our team Our board Our annual reports Funding and finances Guiding principles Our history BankTrack in the media Team up with us Our privacy policy Donate Visit us
Successes Contact BankTrack
Donate Mailing list Facebook Twitter Linkedin Login
Home › Dodgy Deals ›
Dodgy Deal
Eldorado BrasilBrazil

Company – On record

This profile is no longer actively maintained, with the information now possibly out of date
Contact:

nature@banktrack.org

Last update: 2020-02-04 00:00:00
An Eldorado Brasil processing facility located at Centro Limeira. Photo: Roberto Ortuzar via Wikimedia Commons (CC BY SA 3.0)

Company – On record

This profile is no longer actively maintained, with the information now possibly out of date
Contact:

nature@banktrack.org

Last update: 2020-02-04 00:00:00
Why this profile?

Why this profile?

Eldorado Brasil plans to expand its 1.7 million tonnes per year pulp mill in Três Lagoas with a new 2.5 million tonnes per year line. This large expansion would cause a significant increase in the impacts caused by the plantations that feed the mill, as well as by the mill itself, in a region that is already home to three large pulp mills.

About
Sectors Pulp, Paper and Paperboard Mills
Headquarters
Ownership

Eldorado Brasil's two main shareholders are: J&F Investimentos (50.59%) and CA Investments (49.40%). J&F Investimentos is owned by Brasil's Batista family.

Subsidiaries
Website http://www.eldoradobrasil.com.br

Eldorado Brasil was founded in 2010 by J&F Investmentos, the holding company that also controls the world's largest meatpacker, JBS. Eldorado Brasil was established to build a pulp mill in Três Lagoas, which started its operations in 2012. In 2015, Eldorado Brasil launched the plan for a second mill - Vanguard II. This was delayed due to legal conflicts over the company's ownership. In 2017, the owners of J&F Investmentos signed a contract with Paper Excellence (PE) to sell Eldorado Brasil in order to raise money to pay the fines that they agreed to pay as part of the plea bargain J&F Investmentos signed with the Federal Public Prosecutor's office concerning corruption allegations. But in 2018 J&F Investiments canceled the deal, alleging that Paper Excellence had not complied with the contract. The issue is being settled in an arbitration court.

The company owns an industrial complex in Três Lagoas, which includes a pulp mill, chemical plants, a biomass based power plant and a land bank of more than 350,000 hectares, in Mato Grosso do Sul, of which 220,000 hectares are eucalyptus plantations and 106,000 hectares are protected areas. The company mainly exports its pulp, with 40% going to Asia.

Impacts

Social and human rights impacts

Labour issues The construction of the mill attracted many migrant labourers to the region, causing impacts on the local economy. Several of them stayed in the region and found work in the plantations. However the management of plantations is not very labour intensive, and the industry generates fewer jobs than the cattle ranches which made way for the plantations. The working conditions in the field are often also precarious. In 2012, a group of 8,000 contract workers at the Três Lagoas mill went on strike for the fourth time. Their  demands included better working conditions, health insurance and more free days.

Outsourcing land ownership Eldorado Brasil rents 96% of the land on which its plantations are located, owning only 4% itself. With this model, the company exercises great control over what happens on the land, but it does not take responsibility for the long term care of it.

Aerial spraying In its 2014 Sustainable Forest Management Plan, the company states that it applies pesticides by airplane. The lack of precision of such applications can lead to the contamination of water ways and the spraying of non target areas such as community gardens and urban areas.


Environmental and climate impacts

Fibre Sourcing The establishment of large monocultures is very detrimental to biodiversity and the conservation of valuable biomes. Eldorado Brasil has a landbank of 350,000 hectares in Mato Grosso do Sul, of which 220,000 hectares are eucalyptus plantations.

Eldorado claims it has an area of 106,000 hectares of preserved forests. However, the company does not provide geo-referenced maps of the areas it owns, leases or sources from. And though over 90% of its landbank is FSC-certified, FSC also does not disclose geo-referenced maps of the plantations it certifies. This makes social control on compliance with both the law and the certification criteria impossible.

Impacts on water availability and quality Fast growing pulpwood plantations use vast amounts of water and often impact the availability of water for other uses, such as subsistence farming, agriculture or even drinking water. Though the industry stresses that eucalyptus tree uses water efficiently and that its water use is similar to that of other plants on the basis of biomass produced (282 grams of water per gram of dry biomass according to one study), since these trees grow very fast they actually use much more water per hectare per year than slow-growing native vegetation.

Long term research in South Africa has shown that the fast growing and exotic eucalyptus trees require, on average, 30 liters of water per day. When planted at a density of 400 trees per hectare, this means 12,000 liters per hectare per day. This may cause water levels in nearby streams and wells, as well as the groundwater levels, to drop.

Apart from the direct use of water by the trees themselves, there is also the impact from water being taken from rivers for irrigation purposes, the reduced uptake of water by soils due to erosion and the destruction of rivers and streams when the land is being prepared for plantations. Complaints of water scarcity by communities that live near plantations are numerous, whether in the Baixo Parnaíba, in Espírito Santo or in Três Lagoas.

On top of the high water usage of the pulp industry, it also pollutes waterways, both due to the excessive use of agrochemicals and due to the discharge of polluted effluent in waterways. The effluent of Eldorado’s pulp mills contains, among other things, carcinogenic dioxins, as it uses chlorine in the bleaching process.


Other impacts

Energy production The Vanguard complex also has a power plant which produces up to 220 megawatts (MW) per hour. The plant runs on biomass, burning timber that isn't used in the pulp process. Of this amount, 95MW is used by the mill, and another 50MW by the companies that produced inputs. The rest, which is enough to supply a city with one million inhabitants, is sold to the national grid. The project for the Vanguard II mill includes another 310MW biomass energy plant, which will produce energy excess of 92MW. NGO's have warned that the large scale burning of woody biomass to generate energy is bad for the climate, for the people, for the forests and for the energy transition.

Corruption The Batista brothers, who control J&F Investments, are engulfed in corruption scandals. On 13 May 2017, J&F Investimentos SA agreed to pay BRL 10.3 billion (USD 3.16 billion) over 25 years as part of a leniency settlement over bribery allegations which are investigated under Operation Car Wash. Its the world’s biggest leniency fine ever levied, Brazilian prosecutors said.

Another investigation, Operation Greenfield, investigates a billionaire corruption scheme that was set up between 2009 and 2015, in which ex-executives of pension funds Petros and Funcef, knowingly invested millions in an over-rated Eldorado Brasil, in exchange for kickbacks, but in detriment of the pension funds.

Paper Excellence, the company that was previously in line to purchase Eldorado Brasil, is controlled by the Widjaja family, which also controls APP. This company was dissacociated from FSC in 2007 for its involvement in destructive forestry practices, and in 2001 defaulted on USD 14 billion of debt.

Financiers

Eldorado Brasil was set up with large investments from Brazilian development bank, BNDES, and two pension funds, Petros and Funcef, which, until 2017, jointly owned 17% of the company, through FIP Florestal. They have sold their shares to CA Investments.

Export Credit Agencies have financed Eldorado Brasil with loans totalling BRL 805 million (Eldorado Brasil Financial Statements March 2019).

 

Institution type
Finance type
Year
Governance
Bank policies
Norms & standards
The following bank investment policies apply to Eldorado Brasil:
BNDES
2014-06-03 00:00:00

Socio-environmental Guidelines

Bank policy
2014-06-03 00:00:00 | BNDES
2016-05-04 00:00:00

Socio-environmental Policy

Bank policy
2016-05-04 00:00:00 | BNDES

Applicable norms and standards

Forest Stewardship Council- 10 Principles of Forest Stewardship
FSC Principles and Criteria
Land Use, Land-Use Change, and Forestry (LULUCF) Guidance for GHG Project Accounting
Principles for Responsible Banking (PRB)
Principles for Responsible Investment (PRI)
Protocolo Verde Brasil (Brazil Green Protocol)
Social & Environmental Responsibility Policy of Brazilian financial institutions (CMN Resolution No. 4327)
WWF Guidelines for Investment in Operations that Impact Forests
News
BankTrack
Partners
Blog
External
BankTrack news BankTrack blog Partner news Partner blog

Pulp & paper industry expansion in Cerrado risks fires, water shortage and climate damage, says new EPN report

2022-12-14 | Environmental Paper Network
BankTrack news BankTrack blog Partner news Partner blog

Brazil's unprecedented biomass power plant

2021-04-20 | Bnamericas
BankTrack news BankTrack blog Partner news Partner blog

Two sides of the same coin: How the pulp and paper industry is profiting from deforestation in the Amazon rainforest

Agriculture and cattle ranching are the notorious drivers of deforestation in the Brazilian Amazon. But the cattle and soy industry are only one side of the coin, with pulp & paper companies refusing to carry the blame because they do not directly burn the land – other industries do that for them. In Brazil, pulp & paper companies Suzano, Eldorado Brasil and Klabin own the largest pulp mills and should face their responsibilities for the destruction of the Amazon forest.
2020-09-22 | Environmental Paper Network
Blog
BankTrack news BankTrack blog Partner news Partner blog

Two sides of the same coin: How the pulp and paper industry is profiting from deforestation in the Amazon rainforest

2020-09-22 | Environmental Paper Network
BankTrack news BankTrack blog Partner news Partner blog

TRT ratifica decisão liminar que obriga Eldorado a adequar jornada de trabalho de seus motoristas

2020-01-24 | Ministerio Publico do Trabalho
BankTrack news BankTrack blog Partner news Partner blog

Com delacao de Joesly, MPF denuncia 14 por fraudes em Petros e Funcef

2019-10-25 | Brasil | Valor
BankTrack news BankTrack blog Partner news Partner blog

Controle da Eldorado Celulose poderia custar R$ 6 a mais para a PE

2018-09-16 | Brazil | Valor
BankTrack news BankTrack blog Partner news Partner blog

Eldorado se reúne com credores

2018-09-09 | Chile | Estadao
BankTrack news BankTrack blog Partner news Partner blog

J&F cancels Eldorado deal with Paper Excellence

2018-09-04 | Brazil | Valor
BankTrack news BankTrack blog Partner news Partner blog

Paper Excellence entra na Justiça contra a família Batista por Eldorado

2018-08-30 | Brazil | Folha de Sao Paulo
BankTrack news BankTrack blog Partner news Partner blog

Justiça condena indústria Eldorado a indenizar sociedade em R$ 2 milhões por infrações trabalhistas

2018-08-28 | Ministerio Publico do Trabalho
BankTrack news BankTrack blog Partner news Partner blog

Indonesia's APP close to buying Eldorado Brasil, sources say

2017-08-27 | Reuters
BankTrack news BankTrack blog Partner news Partner blog

J&F negocia Eldorado com asiática APP

J&F negotiates Eldorado with Asian APP
2017-08-14 | Brazil | Valor
BankTrack news BankTrack blog Partner news Partner blog

Brazil's J&F agrees to pay record $3.2 billion fine in leniency deal

2017-05-31 | Brazil | Reuters
BankTrack news BankTrack blog Partner news Partner blog

Eldorado Brasil adia para 2020 início de operação da 2a linha de celulose

Eldorado Brasil postpones the start of its second pulp line till 2020
2017-02-25 | Brazil | JP Newx
BankTrack news BankTrack blog Partner news Partner blog

Proposta da Eldorado é rejeitada e greve de 8 mil trabalhadores continua

2012-02-02 | Brazil | Campo Grande News
Resources
Documents
Links
2022-12-14 00:00:00

Scorching The Earth

Pulp and paper expansion in Três Lagoas, Brazil
NGO document
2022-12-14 00:00:00 | Environmental Paper Network
2019-03-31 00:00:00

Annual report 2018

Annual report
2019-03-31 00:00:00 | Eldorado Brasil
2019-01-31 00:00:00

Forestry Management Plan 2018

Company document
2019-01-31 00:00:00 | Eldorado Brasil
2019-11-11 00:00:00

Code of conduct

Date listed represents date as accessed on website
Bank policy
2019-11-11 00:00:00 | Eldorado Brasil
2018-07-31 00:00:00

CSR report 2017

Annual report
2018-07-31 00:00:00 | Eldorado Brasil
2019-11-11 00:00:00

Sustainability policy

Date listed represents date as accessed on website
Bank policy
2019-11-11 00:00:00 | Eldorado Brasil
2019-07-31 00:00:00

CSR report 2018

Annual report
2019-07-31 00:00:00 | Eldorado Brasil
2014-01-01 00:00:00

RIMA Vanguarda II

Company document
2014-01-01 00:00:00 | Eldorado Brasil
2014-08-31 00:00:00

Plano de Manejo Florestal Sustentavel 2014

Sustainable Forest Management Plan 2014
Company document
2014-08-31 00:00:00 | Eldorado Brasil
2019-04-09 00:00:00

Decision by the US District Court of Minnesota

regarding application of CA Investment
Other document
2019-04-09 00:00:00 | US District Court of Minnesota

FSC FM Certification

Eldorado Brasil's webpage on corporate social responsibility

J&F Investimentos' webpage on corporate social responsibility

Eldorado's Vanguard II - project webpage

FSC Watch

Send feedback on this profile
Sections
Banks Dodgy Deals Campaigns
Our campaigns
Banks and Climate Banks and Human Rights Banks and Nature
Our projects
Tracking the NZBA Banks and Russia Banks and Steel Tracking the Equator Principles Tracking the PRBs Find a Better Bank Banks and the OECD Guidelines
Media
News Publications
Raiffeisen Out! Bank.Green End Coal Finance Plastic Banks Tracker Defund TotalEnergies Financial Exclusions Tracker Equator-Complaints.Org Don't Buy into Occupation Banks & Biodiversity Forests & Finance Drop JBS StopEACOP Fossil-Free Finance
BankTrack
About BankTrack Organisation Our team Our board Our annual reports Funding and finances Guiding principles Our history BankTrack in the media Team up with us Our privacy policy Donate Visit us
Successes Contact BankTrack
Vismarkt 15
6511 VJ Nijmegen
The Netherlands
Contact@banktrack.org
Donate Mailing list Facebook Twitter Linkedin
©2023 BankTrack
BankTrack is a registered charity in the Netherlands (ANBI) - RSIN 813874658
Find our privacy policy here

Stay up to date

Sign up now for all BankTrack's news


Make a comment

Your comment will be reviewed, before being posted