H&M and Zara’s overreliance on certification schemes allows illegalities to thrive in their supply chains, a new report by Earthsight finds.
Cotton used by H&M and Zara is causing land grabs, illegal deforestation, and human rights violations in Brazil, which is on track to become the world’s leading cotton exporter, according to a new report by environmental nonprofit Earthsight.
Almost all Brazil’s cotton is grown in the Cerrado, the country’s second largest major habitat after the Amazon rainforest, Earth’s most biodiverse savanna, and home to 5% of the world’s species and 30% of Brazil’s biodiversity. But the biome is under attack from the expansion of agribusiness, with over 46% of its original land cover cleared for crops or pastures. “There’s been a lot of research and campaigning on the impacts of soy and beef in the Brazilian Cerrado, but a lot less has been said about the impacts of cotton production,” says Rubens Carvalho, deputy director at Earthsight.
For the report, which focuses on the state of Bahia and two of the country’s largest cotton producers, SLC Agrícola (SLC) and Grupo Horita (Horita Group), Earthsight tracked over 816,000 tonnes of cotton directly exported by the two companies from Bahia to foreign markets between 2014 and 2023. The cotton was tracked onwards to eight Asian clothing manufacturing companies, each of whom were regular suppliers of finished cotton goods including jeans and sweatshirts to H&M, Zara, or both during the nine-year window.
SLC and Horita Group stand accused of deforestation on a grand scale.
In 2014, Bahia’s environmental agency Ibama found 25,153 hectares of illegal deforestation on Horita farms at Agronegócio Condomínio Cachoeira do Estrondo, a vast agribusiness estate, the report outlines. In 2020, the same agency stated it could find no permits for 11,700 hectares of deforestation carried out by the company between 2010 and 2018. Between 2002 and 2019, Horita Group’s owners were fined over 20 times for environmental violations, totalling $4.5 million.
Meanwhile, three of SLC’s cotton farms lost at least 40,000 hectares of native Cerrado wilderness in the last 12 years, per Earthsight’s reporting. SLC has also been fined around $250,000 by Ibama since 2008 for environmental infractions in Bahia. Both companies are further alleged to have cleared land which has been legally earmarked for regeneration or preservation.
“There’s been a lot of research and campaigning on the impacts of soy and beef in the Brazilian Cerrado, but a lot less has been said about the impacts of cotton production.”
Rubens Carvalho
deputy director at Earthsight
SLC maintains it has appealed all Ibama fines, insisting that “all conversions with native vegetation followed the legal boundaries established by law,” and that since 2021, it has “formalized the commitment to refrain from converting areas with native vegetation,” according to its response to the report which it shared with Atmos. In its response, Horita says “all of its rural properties have preserved environmental protection areas… and all their agricultural enterprises have regular environmental licensing.”
But to access and farm such enormous swathes of land—60,000 football pitches worth in SLC’s case—the report shows both producers have engaged in or benefitted from substantial land grabs to the detriment of traditional communities. In 2018 Bahia’s attorney general found the Estrondo estate was “one of the largest areas of land grabbed in Brazilian history” with over 400,000 hectares of public lands having been illegally appropriated by the estate’s group of owners. So far, over half of this land has been deforested.
Geraizeiro communities have lived in harmony with nature in western Bahia since the 19th century. But Earthsight reports that, for more than 10 years, Geraizeiros have been intimidated, harassed, and even shot by armed men employed by Estrondo’s owners and tenants. They have also been confined to small areas with their traditional, low-impact activities restricted.
Violence spreads across the state of Bahia, to the traditional Fundo e Fecho de Pasto community of Capão do Modesto where records show land has been bought for what Earthsight calls suspiciously low prices. Land at Capão is often used as legal reserves (areas in which a fixed amount of native vegetation must be maintained) to allow deforestation elsewhere, yet the community is still subjected to “episodes of intimidation, surveillance, restriction, and cattle theft by gunmen,” according to the report.
“When you talk to these communities, they are struggling every day,” says Rafael Pieroni, Earthsight team lead for Latin America. “Not only are they protecting their families and their communities, but the Cerrado. They are very aware of the importance of the biome not only for the region, but for the entire world. It’s urgent.”
Deforestation and land grabbing in the Cerrado has been bolstered by state corruption, according to the report.
Walter Horita, one of the Horita Group owners, was the subject of a federal investigation in 2019, in which he was alleged to have paid millions of dollars in bribes to court officials. (Horita Group told Earthsight that “audits confirm Walter Horita has never moved money in ways that breach transparency rules.”) In 2003, three Ibama agents were accused of issuing Estrondo with fraudulent permits to clear land. Court documents show they were subsequently suspended and sued for corruption but most of the land they issued permits for has been cleared regardless.
“When you talk to these communities, they are struggling every day. Not only are they protecting their families and their communities, but the Cerrado.”
Rafael Pieroni
Earthsight team lead for Latin America
And yet—despite the many ethical and legal issues plaguing the cotton tracked by Earthsight, it was, in fact, certified by Better Cotton, which describes itself as “the world’s leading sustainability initiative for cotton”. Brands use the certification as proof they are making environmentally and ethically sound sourcing decisions. On the sustainability hub on its website, H&M boasts that all its cotton is “either organic, recycled or sourced through the Better Cotton Initiative.”
But Earthsight’s investigation indicates that Better Cotton offers no guarantee of, well, better cotton.
Of Better Cotton’s six required principles only one is related to biome conservation or local communities. Even so, there is no requirement for a producer to demonstrate that it holds legal rights over the cultivated land, and there is no ban on growing cotton on land that was illegally deforested before 2020 (previously there was no ban at all but the guidelines were updated in March this year). In addition, auditors are recommended to ask whether a company has followed the standard’s requirements to protect so-called High Conservation Values, the expectation being a producer will simply confess if they haven’t.
In responses provided to Atmos, H&M says “the findings from Earthsight’s report are highly concerning” and that it remains “in close dialogue” with Better Cotton, while Zara says it is “committed to upholding best practice in the textile industry” and “takes the allegations against Better Cotton extremely seriously.” Zara followed up by sending a letter to Better Cotton CEO Alan McClay asking for clarity on the certification process and progress on traceability practices.
“[These brands] are failing to monitor their cotton supply chains,” says Carvalho. “They are letting Better Cotton do their job for them in terms of checking for the legality and sustainability of the cotton.”
Since being notified of the investigation, a Better Cotton spokesperson says it has initiated and now concluded an “enhanced third-party verification audit of the three implicated farms” which will be shared upon review. But Earthsight believes it is not compliance that is the problem, but the standard itself. The only meaningful guarantees for the Cerrado, they say, will come in the form of robust regulation—in both consumer countries and in Brazil—that directly tackles cotton sourcing and all of the opaque, complex links within the supply chain.
“The time has passed for pledges from the private sector. We continue to lose forests, biodiversity is collapsing, and the climate crisis is more and more urgent,” says Carvalho. “Governments need to step in. We cannot waste any more time.”
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