To ensure that farms involved in deforestation are not part of its supply chain, JBS has been actively working alongside other stakeholders to develop sectorial strategies that can be applied throughout the entire beef industry in the Amazon.
One of these strategies is the “Boi na Linha” program jointly developed by JBS, the Federal Prosecution Office and the Brazilian NGO, Imaflora and which aims to define criteria and technical rules for monitoring cattle suppliers. Since July 1, 2020, all meat packers who have signed consent decrees (Brazilian acronym, TAC) – a legal undertaking with the Federal Prosecution Office – and operate in the states of the Legal Amazon have to adhere to the initiative.
One of the criteria of the monitoring program is a “theoretical index” of cattle productivity per hectare, per year. Meat packers must use this index to evaluate their suppliers to detect suspicious cases of “cattle laundering ” – a relatively recent phenomenon that occurs when a cattle supplier whose farm is affected by an environmental embargo from IBAMA for illegal deforestation uses a third-party farm to provide his cattle to meat packers.
Cattle laundering has been happening because suppliers previously linked to deforestation on their farms are now encountering more and more obstacles to selling their cattle on account of the sectorial actions implemented by the Federal Prosecution Office with the support of JBS and other meat packers. Although still a challenge to be overcome, this is the result of the positive structural changes that are coming into play in the socioenvironmental governance of beef supply chains in the Amazon.
The theoretical index and the new monitoring rules
The theoretical index is a tool used by the program to calculate whether the productivity of a farm that supplies cattle exceeds the maximum stipulated quantity of three head of cattle per hectare, per annum. If a farm exceeds this, checking is necessary to see if it is using a high productivity system such as confinement, semi-confinement or feed supplement capacity that could justify the productivity achieved. Otherwise, JBS and other meat packers must cease all negotiations with the supplier farm until it can present evidence of a production system that justifies its high productivity.
Besides the theoretical index of livestock farming productivity, meat packers have to follow the new rules for monitoring suppliers, which require the use of geo-monitoring tools to analyze the areas embargoed by IBAMA on account of illegal deforestation. Based on geo-spatial analysis, if the property invades embargoed areas, it must be blocked, and no cattle can be purchased. JBS has already adopted this approach using its robust direct supplier monitoring system considered the most advanced within the sector.
JBS prides itself on the role it has played in developing the new Supplier Monitoring Protocol whose implementation it believes will have a significant positive impact, since it aims to bolster the socioenvironmental commitments of the Brazilian beef production industry.
Other measures
JBS takes an unquestionable approach to zero deforestation along its entire supply chain. It was one of the first companies in the sector to invest in policies and new technologies for countering, discouraging and eliminating deforestation in the Amazon jungle.
JBS has been working for more than a decade on the front lines to bring about significant and responsible change in the Amazon region, and it has made a considerable investment in managing, monitoring and regularization to boost standards within the sector. Many of the tools used today by the sector as a whole in Brazil to monitor the supply chain, as well as the advances made towards a shared target for a productive and sustainable cattle farming system, were started by JBS.
Since 2009, the Company has applied a strict Responsible Procurement Policy for raw materials. Every JBS supplier farm in the Amazon is monitored using satellite imagery and geo-referenced data, providing the best and most recent information to support the Company’s efforts.
JBS’s monitoring system is considered one of the world’s best and most sophisticated, evaluating over 50,000 farms that are potential cattle suppliers every day, covering more than 450,000 km² – larger than the territory of Germany (357,000 km²).
If the farms are considered non-compliant with the Company’s Sustainable Supply Policy, for whatever reason, they are blocked from its supply chain. This includes automatic blocking of any farm involved in deforestation of native forests, invasion of protected areas such as indigenous lands or environmental conservation units, or properties containing areas embargoed by IBAMA (the Brazilian Institute for The Environment and Renewable Natural Resources). JBS also does not purchase cattle from producers involved in rural violence or land conflicts, or those that engage in hard or child labor.
To date, JBS has blocked more than 9,000 farms that supply cattle, because of non-compliance with its sustainability criteria.
Independent audits by the leading global auditors DNV-GL and BDO, based on samples of direct cattle purchases by JBS over the last six years, show that over 99.9% of the purchases from farms located in the Amazon region comply with the Company’s socioenvironmental criteria. This rose to 100% during the Company’s latest audit undertaken in 2019. The results of these audits are available on the Company’s website and by August 31 JBS will publish the new results for cattle purchases in 2019.
JBS is also investing in four innovative projects to proactively evaluate the best solutions for dealing with the issue of tracking its indirect suppliers. Some of the projects could be applied across the entire sector, inspired in the blockchain system, and will be tested by the Company.