Brazil Scandal: Auditor Absolves Better Cotton of Allegations, Says There's No 'Non-Compliance'

The auditor looked into seven counts of violations. The focus of the “examination” was on the Paysandu (SLC) and Sagarana and Timbaúba (Horita Group) farms. Other farms in question were not licensed to produce Better Cotton at the time.

The Peterson conclusions:

1. Violation of land rights: The three farms hold active registration status by the Rural Environmental Registry (CAR), the national electronic public registry on rural properties. They are also under no embargo from Ibama, the Brazilian Institute of the Environment and Renewable Natural Resources, which oversees the use and conversion of land for cotton farming.
2. Green land grabbing: The indicators of the ABR standard are deemed sufficient to ensure that the certified properties have a legal reserve and that it is lawful for them to be located outside the property.
3. Illegal deforestation: The farms have a ‘negative embargo’ certificate from Ibama, a form of an attestation that they have no areas under embargo. This means that the use and conversion of land for cotton farming comply with the national legislation related to the use of agricultural land. Additionally, the indicators of the ABR standard are deemed sufficient to ensure that the conversion of land for cotton farming occurs following the national legislation related to the use of agricultural land.
4. Irregular aerial spraying of pesticides (Horita only): The complaint made does not provide objective evidence that the applied pesticides (aerial or terrestrial) in violation of legal distancing, as they were under no embargo by Ibama.
5. Coercion and intimidation of traditional communities: The three farms are far removed from the "Capão Modesto" community or the Conservation Unit (UC) - "Recanto das Araras de Terra Ronca", the two community groups at the heart of the allegations. Additionally, channels are available for communication and dialogue with the local community.
6. Negative impacts on biodiversity: The Paysandu, Timbaúba, and Sagarana Farms are far removed from the UC "Recanto das Araras de Terra Ronca".
7. Intentional arson: As evidenced through the examined documents and interviews, the SLC group does not practice the burning of residues.

The Earthsight report had very clearly said that the rampant environmental violations as also abuses of communities could continue because of the Better Cotton certification system which, it contended, was deeply flawed.

The report had pointed out: "While Better Cotton is putting new standards and procedures in place, the scheme will continue to suffer from several weaknesses. Requirements for a producer to comply with local laws are excessively vague and say nothing about land ownership or land disputes. A new ban on conversion of natural ecosystems after December 2019 fails to address illegal deforestation that took place prior to that date. 

“A new traceability system being rolled out in the coming years is woefully inadequate as it only traces cotton back to the country of origin, not to individual farms. Rules on mitigating harm to indigenous and traditional peoples only apply to communities outside farm boundaries, ignoring violations against those whose lands have been stolen. On the other hand, criteria meant to protect local communities within farm boundaries fail to demand that agribusinesses seek their full consent for projects that affect their livelihoods.”

All this, however, did not work for H&M and Zara, the two European fashion behemoths that were linked to the Brazilian cotton scandal by virtue of their sourcing practices. The report had pointed out: “All of H&M’s cotton is already Better Cotton-certified (or, to a much lesser extent, organic certified). More than 90% of Inditex’s cotton was already BC (81%), recycled (6%) or organic (4%) by 2022. The firm expected to reach 100% BC or organic cotton in 2023. H&M is one of Better Cotton’s founding members, and until recently was represented on its governing council. The two firms are by far the largest users of BC-certified cotton on the planet; Inditex alone consumed 205,000 tonnes of it in 2022."

But then, the Earthsight report argued, this [the set of allegations] should have been surprising given the backdrop to the investigation. “Indeed, the certification scheme has been plagued by accusations of greenwashing and criticised for not allowing for full traceability of supply chains and not addressing human rights violations. Past analyses indicate the label cannot be seen as a guarantee of environmental or social responsibility.” The precedents had already been there.

There were problems with the standard itself. “There is no ban on growing BC cotton on land illegally cleared of forest before it was certified, and therefore no checks as to whether that might be the case. In fact, the standard includes no requirements at all for individual certified farms to comply with relevant laws on land rights or environmental protection… One result of these flaws is that it is easy for firms with many farms to simply certify the good ones alone – or to drop them from the scheme while conversion takes place, then re-certify them afterwards.”

Skirting the issue

The auditor’s report was all about looking into the issues of compliance, or non-compliance actually. A closer look at the findings shows that the auditor was assigned to look more into the symptoms than the diseases itself, which was the pivotal point of the Earthsight report.

Remarking about the ABRAPA’s own study, the report had said: “One reason ABRAPA’s initial investigation may have drawn a blank could be a simple one: it wasn’t compliance that was the problem, but the standard itself.” 

In not addressing the loopholes with the standard itself, Better Cotton has only exposed itself to further investigation of the way it conducts itself. And that’s notwithstanding the sugar-coated admissions that “we will take action to expand our due diligence process to encompass not only the standards we have recognition agreements with, but also the large commercial farms that want to sell their cotton as Better Cotton.”