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FAQs: Brazil Bertin Project

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What is the Bertin project?

Bertin Ltda is the leading integrated beef and hide processor in Brazil, with slaughtering capacity of about 5,400 heads per day. Bertin's lines of business include: beef processing, tanning and production of semi-finished and finished hides, hygiene and cleaning products, personal protective equipment, and dog toys (chewable bones).

The project consists of a $90 million corporate investment that will allow Bertin to expand and modernize its existing facilities, including one acquired in 2005 in Marabá in Brazil's Amazon region. The company will also be able to build a new facility in Mato Grosso. The upgrades will increase Bertin's capacity by 5,000 heads per day, as well as improve its environmental performance.


Why is IFC considering an investment in Bertin?

IFC believes that through its involvement in this project, it can raise the standards in the production and supply chain of beef processing in Brazil in general, and in Pará's southeast region in particular.

Given the economic significance of cattle ranching in Pará, IFC and Bertin intend to set a standard based on good international practice that can be replicated in other beef processing operations and their respective supply chain.

IFC's intention is to help establish initiatives and practices in Brazil's meat industry to combat such critical issues as illegal deforestation, rural violence, illegal landholding (grilagem), slave labor, and invasion of indigenous people's land. Through this project Bertin will develop systems and procedures to buy cattle only from farms and farmers that conform to its requirements. Although an efficient state policy would detect and take action when these phenomena occur, IFC's believes the private sector has an important role to play.

The decision to finance Bertin will be considered by IFC's Board of Directors on the basis of the project's merits and its potential to model to other meat packers and suppliers a method for sustainable cattle grazing in the Amazon.


How can IFC ensure that the project will not encourage illegal practices such as deforestation and rural violence?

IFC is classifying the Bertin project as a Category A investment, which implies a full Environmental and Social Impact Assessment (ESIA) for the slaughterhouse in Marabá and its supply chain. In addition, given that this would be a corporate investment, it also involves a thorough appraisal of all other operations owned by Bertin in Brazil.

During the appraisal period, IFC identified a set of procedures for the purchase of cattle from Bertin's suppliers that will require them to comply with Brazilian legislation and World Bank Group policy in relation to:

  • Environmental licensing, including illegal deforestation
  • Defense of human rights (related to agrarian conflict)
  • Illegality in land acquisition
  • Infringement on indigenous people's land
  • Labor conditions, including slave labor
These elements as well as other policies and procedures, will be assembled in an Environmental and Social Management System and the corresponding Environmental and Social Action Plan, which will consist on a series of programs and actions that Bertin will commit to undertake within an agreed timetable.

IFC will monitor the implementation of this project to ensure that the above requirements are being complied with.


Is traceability important for Bertin's suppliers?

Traceability provides a record of each animal from the farm where it was born, through possible intermediaries where it may have been raised, to its arrival at the slaughterhouse. It was originally designed for food safety reasons but it can also be used to trace the cattle to the farms and check for environmental and social performance.

Most of Bertin's suppliers trace their cattle according to the national traceability system SISBOV. However, in the state of Pará, where Bertin's Marabá slaughterhouse is located, cattle ranchers do not have this system in place. This is because the state government does not require it and there is no financial incentive for them to do so until Pará opens for export to the European Union.

Bertin undertook a pilot project with 25 suppliers in Pará to test the use of good agricultural practices, including SISBOV traceability. Following this experience, Bertin is currently developing a registration system that requires suppliers to complete SISBOV forms with additional information pertaining to environmental performance and corporate social responsibility. In addition, and as part of Bertin's commitments to IFC, the company will be training its own cattle buyers and producers in relation to good agricultural practices and SISBOV traceability. These actions will prepare Bertin and its suppliers for the opening of the EU market, providing a comparative advantage to them and an example to others


How will the monitoring of the project be done, to ensure Bertin will fulfill its commitment to IFC?

As with any project that IFC finances, monitoring and evaluation is mandatory throughout the life of the project to ensure compliance. Bertin will be required to submit annual monitoring reports of its activities to IFC. For its part, IFC will undertake annual visits (or more frequent as appropriate) to all relevant operations with the aim of ensuring compliance with IFC requirements and Bertin's commitment for ongoing improvement of its operations, as per the company's Environmental and Social Management System.


What are the developmental impacts and the specific benefits that this project would bring to the people of the Marabá region, particularly for those in Pará?

The practice of sustainable cattle grazing in the Marabá region is a positive development impact, since cattle ranching in southeast Pará is a reality. With IFC's social and environmental standards being applied to cattle grazing in the region, ranchers on the supply chain will be discouraged from resorting to slave labor, illegal deforestation, illegal landholding, and agrarian conflict. This is a benchmarking exercise for the sector, with important potential benefits elsewhere.

In addition, more job opportunities will be created, particularly for the Marabá area. Dog toy factories, for instance, are labor-intensive enterprises, and most of the jobs in the dog toy factories tend to go to women (because of their handcraft abilities). Hence there will also be a positive gender impact.

IFC's mandate is to create jobs that are sustainable within the perspective of a globalized economy, and the jobs created by Bertin are of that character. Although cattle grazing is not traditionally a labor-intensive activity, the Bertin loan would take into consideration that in areas with high social vulnerability and where extreme poverty is present, any private sector initiative should support alternative efforts at generating income.

Based on the results of the local consultation process, Bertin and IFC have designed a social investment program aimed at strengthening family agriculture practices through technical training. Drawing on IFC's technical assistance funds, the effort will also use Bertin's purchasing power in the region to help the businesses of small producers. We estimate that around 2 million reais will be invested in those activities over the next three years.


How does this project fit with the World Bank Group's strategy in Brazil?

IFC and the World Bank's offices in Brazil closely coordinate their respective activities in the Amazon region. This project and, particularly, the supply chain of Bertin and other meat packers in the area, could improve their chances to attain greater sustainability with the implementation of World Bank programs such as Pará Rural and the Amazon Strategy, which will soon be submitted to the World Bank's Board for consideration.

IFC's overall agribusiness strategy reflects the World Bank Group rural development strategy, which emphasizes the following strategic priorities:
  • Enabling broad-based and sustainable rural growth
  • Enhancing agricultural productivity and competitiveness
  • Fostering nonfarm economic growth
  • Improving social well-being, managing risk, and reducing vulnerability
  • Enhancing sustainable management of natural resources
  • Combating rural poverty
Specific World Bank projects in the region, including Pará Rural and the Amazon Strategy, also address the larger rural development strategy and contain elements that would help in develop sustainable cattle ranching.


Was there a consultation processes and a period for stakeholders to offer feedback?

Throughout the first phase of the draft study, IFC staff and Arcadis Tetraplan held private meetings with a series of stakeholders in the state of Pará and in the city of Marabá. These included meetings with grassroots organizations, NGOs, farmers, trade associations and representatives of civil society. In addition, the company held two public consultations in Marabá, one at the beginning of the process and one toward the end of the study, so that local population could participate and offer their views. These were taken into consideration in the production of the Environmental and Social Impact Assessment and the related action plan.

In accordance with IFC's disclosure policy, once the ESIA is completed it will be made available to the public for a period of 60 days for comments. Stakeholders will be able to offer their comments through a series of mechanisms, including an online based form. IFC will also organize a consultation meeting in Brasilia on December 1, 2006, where the ESIA will be presented. This meeting will be open to the public.