Questions persist over giant Chinese soy trader’s track and trace plan

COFCO’s pledge to protect Brazil’s vast Cerrado watersheds from deforestation is welcome but looks less bold on closer inspection

 

Flávia Milhorance and Piero Locatelli, Dialogo Chino (UK)  

October 9, 2020

 

The Chinese agribusiness giant COFCO International released plans in July to achieve full traceability of its direct soy suppliers in Brazil by 2023, an effort that could help curb the devastation of the Cerrado biome. However, environmentalists say the plans falls short on transparency.

 

“Soy production can go hand in hand with the conservation of forests and native vegetation,” Wei Peng, head of sustainability at COFCO International, said on announcing the pledge, adding; “We make our traceability commitment public because we are prepared and we want to be held accountable for it."

 

In recent weeks, the plan, which was a response to a sustainability-linked U$2.3 billion loan, has won high praise in the financial sector. But, questioned by Diálogo Chino, COFCO did not say how big an increase in the volume of soy it currently traces would be required in order to meet its goal, and it has released very little information about how it plans to do so.

 

"We still need to understand what these instruments are that they have adopted for verification," says Lisandro Souza, coordinator for the Imaflora programme on climate and agricultural production chains. "Then, the degree of transparency of this policy."

 

In a statement, COFCO said it would release results of the policy on their annual sustainability reports and other "concrete indicators" regularly.

 

The most glaring omission in the plan is the issue of the company’s indirect suppliers and COFCO has not revealed how much Brazilian soy it sources from them. COFCO says 70% of the soy it buys from the state of Mato Grosso and the so-called Matopiba region that encompasses the states of Maranhāo, Tocantins, Piauí and Bahia, comes from direct suppliers, suggesting its 2023 pledge has significant room for improvement.

 

In a written response to questions from Diálogo Chino, COFCO said it was making an effort "to engage with indirect suppliers".

 

The whole of Matopiba and almost half of Mato Grosso fall within the Cerrado biome, from where COFCO sources almost a third of all its Brazilian soy. Less well known than the Amazon rainforests to its north, the Cerrado savannah covers over a fifth of Brazil’s land area, but enjoys far fewer environmental protections. At 2 million square kilometres, the Cerrado is equivalent in size to France, Germany, Spain, Italy and England combined.

 

Preservation of the Cerrado is essential for water stability in Brazil. Known as the “cradle of Brazilian waters”, the savannah highlands feed the headwaters of such major rivers as the Araguaia and São Francisco and supply eight of Brazil’s twelve major river systems. Only 8% of the vast partially tree-covered grassland is currently protected land.

 

As protection of the Amazon region has risen up the agenda in the last 20 years, agribusiness has moved into the neighbouring Cerrado biome. Soy production tripled in the Cerrado between 2001 and 2019, and 51% of the land area dedicated to soy in Brazil is found there.

 

Amazon overspill ...

 

Ambitious newcomer ...

 

Questions over indirect suppliers ...

 

Pressure from banks ...

 

Transparency essential ...

 

The human cost ...

 

Joint action or going it alone? ...

 

more, including links 

https://dialogochino.net/en/agriculture/37787-questions-persist-over-giant-chinese-soy-traders-track-and-trace-plan/