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IFC board vote on 2nd loan for Amazon soy expansion in June

(Sunday, May 9, 2004 -- CropChoice news) -- Below are two letters regarding the approval by the International Finance Corporation for a $30 million loan to Amaggi, the world's largest soybean producer.

IFC board vote on 2nd loan for Amazon soy expansion in June
Please Support Brazilian NGO Letter

Dear Colleagues,

In 2002, the IFC approved a $30 million loan to Amaggi, a soy producer, processor and exporter belonging to Blário Maggi, the world's largest soy magnate and current governor of Mato Grosso state. The loan is for working capital, allowing Amaggi to finance 900 soy planters in Mato Grosso and Rondonia states. The IFC classified this loan as a category "B" loan, so environmental conditions apply only to the immediate project area. At the same time, Blário Maggi is among the principal beneficiaries of the paving of 1,700 km of the 163 highway through neighboring Pará state to the deepwater Amazon river port of Santarém. He further organized a consortium of soy exporters and transporters to finance the paving in partnership with the government. The road paving will substantially cut transport costs for exporting soybeans, but has already unleashed a land war in western Pará and an environmental firestorm in Mato Grosso and Pará.

The expansion of soy for export, the imminent certification of all Amazon states as free of hoof-and-mouth disease, and increased demand for range-fed beef globally in the wake of mad cow scares, has changed the terms of agriculture in the Amazon. For the first time, activities that require large-scale forest clearance have become highly competitive in international markets. From 2001 to 2003 and from 2003 to 2004, nearly three-quarters of the deforestation in the Amazon (at the highest levels since 94/95) occurred in Mato Grosso and Pará states, the two states where soy and cattle ranching are expanding most rapidly. Rural violence in Pará has reached levels not seen since the 1980s as land speculators and illegal loggers seek control of the lands in the 163 corridor ? there are reports of some 30 rural workers murdered in the corridor since early 2003. In this context, to imagine that financing the expansion of soy production has no effects beyond the farm gate is to make a mockery of environmental impact assessment.

Last February, a group of Brazilian NGOs met with Amaggi in the IFC's São Paulo offices, ostensibly to share information and investigate possibilities for further dialogue. The IFC positioned itself as merely a neutral broker of the discussion. Now, the meeting is being used as evidence of NGO collaboration with the company to justify a second loan to Amaggi, said to be scheduled for a vote in June. The NGOs have called for a meeting with the IFC and World Bank country directors on May 12th, and express serious concerns with the second loan.

Please sign on to the statement of support for the Brazilian NGOs letter by COB Tuesday, May 11. (Please indicate name, position, organization.)

Steve Schwartzman
Co-Director, International Program, EDf

James D. Wolfensohn
The World Bank Group
1818 H Street, N.W.
Washington, D.C. 20433
Fax: 202 522 3031

Peter Woicke
Executive Vice President
International Finance Corporation
2121 Pennsylvania Avenue, NW
Washington, DC 20433 USA
Fax 202 974 4359

Dear Sirs,

Our organizations share the concerns of Brazilian NGOs with the IFC's proposed second loan to the Amaggi company, and support their request for a meeting with your Country Directors prior to any further action on the proposed project.


Stephan Schwartzman
Co-Director, International Program
Environmental Defense

Brasília, May 5th, 2004

Wolfgang Bertelsmeyer
Country Manager ? Brazil

Vinod Thomas
Brazil Country Director
World Bank

Dear Sirs,

We have noted inconsistencies in information about the relations among the organizations we represent, the IFC, and its client, the Amaggi group, and would like to invite you to a meeting to clarify our positions and expectations in this respect.

In February of this year, we participated in a meeting at the headquarters of the IFC in São Paulo, with the objective of presenting our organizations' initiatives in Mato Grosso state, and hearing a presentation on the Amaggi group's activities and environmental management plans. In spite of our interest in discussing the terms of the IFC's loan to Amaggi, we were informed from the moment the agenda for the meeting was set that this was not relevant, since the loan was already done. There was at no point any mention of a possible new loan. The IFC presented itself as solely the facilitator of dialogue amongst the organizations.

Among the subjects discussed in the meeting was the possibility of identifying potential areas of collaboration among the institutions, which point was to have been discussed in a future meeting, yet to take place. Since the February meeting is being cited as evidencing positive relations between the Amaggi group and the our organizations in the context of negotiations of a second loan, we are inviting you to the Brasília office of the Instituto Socioambiental (ISA), on May 12 in order to clarify this issue.

The prospect of a new loan concerns us, in light of the socio-environmental situation of the state of Mato Grosso and the relations between the private company, Amaggi and the state government. In addition to record-breaking deforestation rates in the state, the government has sent the Legislative Assembly a proposal for the reduction of state Conservation areas, which demonstrates questionable socio-environmental policies.

Being certain of your interest in establishing improved information flow, transparency and participation in the context of actions for effective socio-environmental management, we sign,


Oriana Almeida
Ana Cristina Barros
Instituto de Pesquisa Ambiental da The Nature Conservancy - TNC
Amazônia - IPAM
Adriana Ramos
Rosa Lemos Sá
Instituto Socioambiental ? ISA WWF-Brasil