AGRÍCOLA XINGU S.A. (“XINGU”), enrolled with the National Register of Legal Entities under CNPJ No. 07.205.440/0001-24, with head office at Av. Paulista, 1842 – 9th floor – conj. 97 – Edifício Cetenco Plaza – Torre Norte, Bela Vista | 01310-923 | São Paulo/SP, hereby informs, through its representative, in reply to the letter received, as follows:
Firstly, a brief contextualisation of XINGU’s commitment and continuous improvement regarding socio-environmental issues must be presented, as well as full and complete compliance with the applicable environmental regulations.
XINGU, as a reputable company that firmly acts in the preservation of the environment, develops its activities within the parameters of the applicable regulations, as well as seeks to make available to all, nothing less than excellence, having, annually, received awards issued by the Federal Government (Ministry of Agriculture, Livestock and Supply – MAPA) that attest to its level of excellence and relevance with regard to ethics and integrity.
Also, with the intention of helping neighbouring communities, it frequently develops and puts into practice social actions. Some examples can be highlighted:
- Through donations, XINGU has encouraged the establishment of laying hens with a farm for egg production and marketing in a local community. It has also provided the start of food production and other basic items. Continuing to help with the purchase of products needed for the consumption of their staff and used in their kitchens, further strengthening cooperation by making them suppliers of eggs, vegetables, fruits and cassava flour to XINGU;
- Donation of IT equipment to some educational institutions in the municipalities where XINGU’s farms are located;
- Donation of hospital equipment to a hospital in a municipality where XINGU’s farms are located;
- XINGU, through financial sponsorship, provided the renovation of a dam to improve the flow of water from the irrigation canal to serve a neighbouring village
Notwithstanding the foregoing, XINGU will now clarify the “questions, statements and allegations” contained in the aforementioned email:
- Tabuleiro VII Farm is fully owned by XINGU, which has all the legal and relevant documents. With regard to the aforementioned community, what exists is a possible interest on their part in the area owned by XINGU, however, there is no document proving any right of the self-styled community of Fecho de Pasto do Capão do Modesto over Tabuleiro VII Farm;
- XINGU clarifies that it has all the corresponding licenses and certifications to meet the requirements imposed by the Institute for the Environment and Water Resources of the State of Bahia – INEMA;
- Regarding the agrochemical regularly produced and marketed by competent companies, XINGU on the same occasion clarified that it was regularly purchased and would be used within the specifications in force of the MAPA (Ministry of Agriculture, Livestock and Supply). Then, in November of the same year, the supervisory body ADAB (State Agency for Agricultural Defence of Bahia) released the use of the agrochemical, making the issue clear;
- As already reported in the media, XINGU entered into a Private Rural Lease Agreement for Agricultural Exploration with the company SLC Agrícola S.A., and as a result of that agreement, XINGU has closed its agricultural operating activities.
Regarding the negotiations carried out with Agrícola Xingu, Nutrade states that they involve areas with different registrations and therefore different from those referred to in the current questions by Repórter Brasil. We have guarantee documents (grain CPRs) that certify that the National Register of Legal Entities of the area that originated the soybean traded by Nutrade, as well as the registrations provided as guarantee, do not have any embargo.
As previously mentioned, we reinforce that throughout the commercialization of commodities such as soy, Nutrade adopts a verification process of all areas and guarantees connected to the signed negotiations, fully complying with all environmental and labour regulations.
With regard to Agropecuária Jan, we inform you that, given the new questions sent by Repórter Brasil, we conducted additional investigations to the previous ones (carried out with a focus on our direct sales), increasing the spectrum of our scans and thus reaching the negotiations formalized through our indirect sales channels. In this context, where said barter transactions are formalised on behalf of these third parties, we identified a deal formalised in June 2018, specifically — where the delivery of the grain took place in April 2019. We confirm that the registrations originating the referred negotiation are different from those for which Notices of Violations were issued on February 21, 2019 — reaffirming our commitment in the investigation and confirmation of the situation of our originators and business partners.
We should add that Syngenta understands and assumes its role in the evolution of sustainable agriculture, integrating and promoting environmental programs for the recovery of degraded areas with several partners.
Firstly, ALZ Grãos reaffirms the social and environmental regularity of the soybean acquisition in question, which met the Company’s criteria (listed below). In this case, no socio-environmental restrictions or possible land conflicts over the area of origin were verified at the time of purchase. ALZ Grãos did not establish a commercial relationship with the company Agrícola Xingu and did not acquire products originating from Tabuleiro VII Farm.
Regarding company policies, ALZ Grãos has Socio-Environmental and Sustainability Policies for grains applicable to direct and indirect suppliers of the company. The Policies are available on the official ALZ Grãos website – http://alzgraos.com.br/folder.pdf.
To ensure a responsible soybean chain, ALZ Grãos has principles of commercialization, which consolidate the implementation of its Sustainability Policy by prohibiting the sale of soybeans from areas that involve: Ibama embargoes; Indigenous Lands, Quilombolas and Full Protection Conservation Units; non-compliant areas and areas included in the Soy Moratorium list; areas of producers included in the Dirty List of Slave Labour. Besides this, ALZ Grãos requires, by means of a contractual clause, that supplying producers comply with environmental legislation.
In September 2021, ALZ Grãos implemented a specialized geoprocessing platform for traceability of its soybean supply chain, optimizing the monitoring of grains sold to rural producers by the company, directly or indirectly. With a database updated daily, the implemented technology has provided rapid advances to ALZ Grãos’ traceability, reinforcing the monitoring and application of the company’s marketing principles for direct and indirect purchases. From the total volume commercialized by ALZ Grãos regarding the 2020/2021 crop, the volume acquired directly from rural producers was 98.5%, so that the traceability challenge is concentrated on indirect purchases (1.5%), with less impact on ALZ Grãos’ business.
The company’s principle, according to its Policy, is to conserve biomes of proven high ecological value (such as the Amazon and Cerrado) with the intention of discouraging and eliminating the conversion of native vegetation for alternative land use in Brazil. The monitoring of deforestation and the conversion of native vegetation is done at the polygon level, with geoprocessing tools and geospatial bases of public consultation (using the PRODES layers and satellite images with different historical dates).
Bunge does not comment on commercial relationships with specific producers, but reinforces that it is committed to achieving deforestation-free supply chains by 2025. We were the first to announce the most ambitious commitment of our scale in our industry, and we will continue to use our market position to lead industry progress in this direction. This commitment extends to all regions where we operate, including direct and indirect supply.
Bunge does not purchase soybeans from illegally deforested areas and has advanced traceability and monitoring of its direct and indirect purchases. We maintain strict control over social and environmental criteria in our operations in high-risk regions of South America — more than 9,000 farms covering more than 12 million hectares. Our monitoring uses state-of-the-art satellite technology and is able to identify changes in land use and soybean planting on each farm where we originate.
Using our protocols, Bunge is a leader in providing deforestation-free products to the marketplace, going beyond current consumer demand. Our soy certification portfolio includes Round Table on Responsible Soy (RTRS), Biomass Biofuel Sustainability Voluntary Scheme (2BSvs), ProTerra, among others.
We also aim to be a leader in transparency in our industry, helping to raise the bar for industry performance by regularly monitoring and disclosing progress on our commitments and performance. Since 2016, we have published regular updates on traceability and our commitment to non-deforestation. We are the only company in our industry to produce such reports over that time period. Our 10th progress report for soy can be viewed here.
On top of that, we share our experience and technology with others. In 2021, the company launched the Bunge Sustainable Partnership, a first-of-its-kind program that helps grain retailers implement supply chain verification systems, including farm-scale satellite monitoring, in Brazil’s Cerrado region. Dealers can adopt independent imaging services or use Bunge’s geospatial monitoring framework at no cost. By engaging the dealers, Bunge, which already tracks and monitors approximately 50 per cent of its indirect purchases in the Cerrado, expects to reach 100% by 2025.
Bunge recognizes the important role it can play, but believes that any lasting and scalable solution will require participation and engagement with our partners along the supply chain, from farmers to customers, with compensation to the farmers who ultimately have to give up their right to produce on the land they own and preserve. This is why we work through associations, initiatives and direct partnerships with our peers in the value chain to ensure success across the industry. As an example, Bunge cofounded the Soft Commodities Forum (SCF), along with other industry leaders, as a way to address common sustainability challenges. Working together with these partners, Bunge is helping to increase industry transparency regarding the supply of soy in several priority municipalities, which are most vulnerable to deforestation. By 2021, the number of municipalities monitored increased from 25 to 61. While Bunge has regularly published information about its soy supply chain in South America since 2016, SCF is a platform where companies commit to publishing biannual reports to share additional data, such as traceability information in these 61 municipalities. Bunge’s most recent performance report, published in December 2021, is available here.
Bunge will continue working to promote advanced standards and develop practical and sustainable approaches. This is part of our strategy and we will remain committed to this endeavour.
In addition to our position already submitted, we would like to reinforce that we have 100% traceability and monitoring of our direct purchases and we are working hard to encourage the sector to strengthen the traceability and monitoring of indirect purchases, either through our unprecedented Sustainable Partnership Program or for active participation in industry initiatives such as the SCF — Soft Commodity Forum, of which Bunge is a co-founder.
ABIOVE (Cofco and Cargill)
Some companies associated with ABIOVE sent us their request. These companies (associated with ABIOVE) follow several protocols, commitments and have a series of policies related to their suppliers, so the answers are more in the sectoral scope.
1 – Repórter Brasil: Do the companies have mechanisms to guarantee the origin of the soy purchased from other trading companies, such as ALZ Grãos? Can it guarantee that it did not acquire soy from areas deforested by Agrícola Xingu in western Bahia?
ABIOVE and its associated companies have led discussions and efforts to eliminate deforestation and promote sustainable growth in the soy chain. They have also developed processes and tools to track and monitor the grain. It should be noted that the associates do not buy soy from illegally deforested areas.
2 – Repórter Brasil: Doesn’t the acquisition of soy from other trading companies expose companies to deforestation committed by indirect suppliers in the Cerrado? What strategies do the companies adopt to mitigate these risks?
The companies associated with ABIOVE support their indirect suppliers by constantly seeking operational solutions and assessing methodologies to engage these suppliers with their protocols. There are also clauses in traders’ contracts that oblige intermediaries to ensure soybean compliance with legal requirements in the Cerrado biome. Some intermediary companies also conduct audits to demonstrate they have responsible sourcing.
3 – Repórter Brasil: What are the companies’ policies related to soybean acquisition from Cerrado areas? Does it have any time frame established to achieve zero deforestation in its supply chain of grains originating from areas of the biome?
The companies associated with ABIOVE have their own policies that are public and with strict commitments to monitor their suppliers; compliance with the applicable legislation at the national and international level (importing countries); and commitments to track commodities. The policies also involve commitments regarding Human Rights and traditional communities, compliance with labour legislation and support to small and medium-sized rural producers with free training and technical assistance through Agro Plus and individual certification programmes.