Brazil report asks tough questions of Better Cotton
Major clothing companies have questioned sustainability initiative Better Cotton following a critical report from non-profit group Earthsight.
Campaign group Earthsight has published a report on Brazil’s Cerrado region in which it accuses large cotton producers of illegal deforestation, land-grabbing and violence against communities there.
London-based Earthsight says it worked on the report for a year analysing satellite images, court rulings, shipment records and other documents, and talking to people on the ground. From this, it has alleged that cotton grown in the western region of the Brazilian state of Bahia by two of the country’s largest producers, SLC Agrícola and Grupo Horita, “is linked to a number of illegalities”. Earthsight also alleges that Horita and SLC Agrícola are “emblematic of a broader reality of export-oriented agribusinesses inflicting harm on the Cerrado, its traditional communities and the climate”. The Cerrado is a vast tropical savannah biome that spreads across ten states in Brazil, as well as into parts of Paraguay and Bolivia. It covers 2 million square-kilometres in total, with around 75% of the land in private ownership.
In its report the campaign group says that cotton from the farms in question has come onto the global market with certification under the Responsible Brazilian Cotton (ABR) programme. This programme is run by Brazilian cotton producers’ association Abrapa and operates under a benchmarking agreement with global cotton sustainability initiative Better Cotton. “In effect, this means Better Cotton and Abrapa’s ABR are granted as a single certification to Brazilian cotton farmers,” Earthsight says.
SLC Agrícola and Grupo Horita have threatened to take legal action against Earthsight if they consider its report harmful to their reputations. Abrapa has told Earthsight that if the two Brazilian companies decide to press ahead with legal action, it will support the cotton producers.
Response from Abrapa
At the end of April, two weeks after the Earthsight report appeared, Abrapa said a sustainability working group that it runs had already met to discuss ABR and its links to Better Cotton.
The working group discussed Abrapa’s relationship with Better Cotton, resulting in an acceptance that for the single certification concept to work, the criteria for both programmes may need to line up better. Abrapa said the industry in Brazil would be in a position to use the latest version of Better Cotton’s principles and criteria, version 3.0, in its certification programme for the 2024-2025 cotton-growing season. This is in keeping with the timeline Better Cotton has set out for growers around the world.
This relatively proactive and constructive response from Abrapa shares space on its corporate website with much more negative sentiments. Abrapa has shared an article that weekly news magazine Oeste published about the practices Earthsight claims to have unearthed in Brazil. The article talks of “a so-called investigation”, and says the London-based organisation has no reliable source for what it alleges.
The magazine goes on to quote the owner of one of the companies, Walter Horita, who says he was shocked to see the report because he thought all the questions Earthsight raised had already been resolved. Grupo Horita sent documents, photos and videos, but according to the company owner, Earthsight did not respond and ignored the information. “We have nothing to hide,” Mr Horita tells Oeste. “We have strict laws in Brazil for agricultural products. If we did anything wrong, it would be impossible for us to prevent the supervisory bodies from finding out.” The magazine says SLC Agrícola has also insisted the allegations are without foundation.
Scrutiny welcome
In the wake of the Earthsight report, Better Cotton formulated a detailed response of its own. It commissioned an independent audit to investigate the allegations.
Chief executive, Alan McClay, said on announcing this: “We welcome the scrutiny of organisations such as Earthsight as they help to shine a spotlight on areas where oversight needs to improve. Better Cotton’s mission is to promote more sustainable agricultural practices globally, helping cotton communities survive and thrive, while protecting and restoring the environment.”
Advisory firm Peterson conducted the audit and concluded that three of the farms mentioned in the Earthsight report were licensed to sell Better Cotton, but that these three particular farms were not in breach of Better Cotton’s standards. The Peterson audit found no relation between the accusations that Earthsight has made relating to community impact and these three farms. In relation to deforestation, the Earthsight report refers to fines at the farms in Bahia, but the auditors’ conclusion was that these fines related to breaches that occurred years before the farms started working with Better Cotton. Satellite imagery has confirmed that no new land has been converted at these farms since 2008 and there are no areas currently under embargo, the audit states. There was, therefore, no breach of standards, Mr McClay’s organisation insisted.
However, the auditor’s report found that the ABR standard “should evolve to become more focused on issues such as community needs and the cultural values of land, and to ensure that land conversion does not occur in areas of high conservation value”. In addition, the report said that the ABR criteria should be strengthened to ensure that producers are not engaged in acts of corruption.
When WSA asked Earthsight for its reaction to Better Cotton’s response, it questioned the audit report’s assertions. Deputy director at the campaign group, Rubens Carvalho, says Better Cotton’s claims regarding farms’ certification status fail to line up with information that Abrapa has made public about cotton production facilities in Brazil in an online database. A simple search of the database shows the name of the farm, the nearest town, the group that owns it and the status of its ABR and Better Cotton certifications. In this case, a comparison of what Abrapa says is certified, with what the companies themselves say is certified and what Better Cotton says is certified throws up “an inexplicable discrepancy,” Mr Carvalho says.
He goes further, calling the audit that Peterson has carried out “so flawed as to be almost worthless”. According to Earthsight, the audit that Better Cotton commissioned examined only “a tiny proportion” of farms named in the original report’s allegations.
Another shortcoming in the audit that the campaign group points to is that it makes no mention of ongoing disputes over land between cotton growers and traditional communities. Mr Carvalho explains that these disputes often involve land that is remote from the existing farms, but which the same cotton-growing companies are trying to take control of. Earthsight also says it has been unable to verify from its contacts on the ground claims that the auditors engaged with local people.
Finally, it notes that Better Cotton has accepted that SLC and Horita have faced fines for environmental infractions in the past, before becoming certified. Earthsight’s view is that allowing companies that have broken the law to become certified afterwards shows the certification programme’s “inadequate approach”.
Where the cotton went
Amid the claims and counter-claims that Earthsight, Better Cotton, Abrapa and the cotton growers have exchanged, the most important reaction to this controversy has come from the apparel industry. Two of the biggest clothing groups in the world have become involved. There was nothing accidental about this. Earthsight has admitted that it intended from the outset to weave these major players into the narrative and it makes no apology for doing so.
From its analysis, Earthsight concluded that many of the bales of cotton from the farms in question were first shipped to mills in Asia. It has named PT Kahatex in Indonesia and the Jamuna Group in Bangladesh among the recipients. The first of these is a supplier to H&M, the second is a supplier to Inditex. Both apparel groups have issued statements in response to the original report. H&M and Inditex do not buy cotton directly, but mills and garment manufacturers that supply fabric and clothing to the two fashion groups have sourced cotton from the farms in the frame.
PT Kahatex, the largest buyer of the cotton at the centre of the allegations, has H&M as its second-biggest customer. Earthsight says the Swedish group has sourced socks, shorts and trousers containing this cotton from the Indonesian supplier. In parallel, it says stores run in Europe by Inditex’s main brand, Zara, have sold jeans and other denim clothes worth €235 million manufactured by Jamuna. Earthsight says this equates to approximately 21,500 pairs of jeans a day across the vast network of Zara stores.
When Earthsight published its report, H&M said it requires all of its suppliers to source sustainable cotton. Its requirements also include the stipulation that the standards and certifications under which the cotton is presented as sustainable must be “credible and robust”. It added: “We rigorously monitor that our requirements are met.”
H&M said the findings from Earthsight’s report were “highly concerning” and that it was taking the allegations very seriously. It said it had entered into close dialogue with Better Cotton about the report’s claims and about the third-party investigation Better Cotton commissioned. It concluded: “The report clearly highlights the need for all actors to continue the work to further improve standards and traceability systems, which we fully support.”
The details of Inditex’s reaction have been less public, but Better Cotton has confirmed to WSA that its chief executive, Alan McClay, received a formal letter from the Spanish group asking the cotton sustainability organisation to put in place a plan for offering the apparel industry maximum visibility into its certification practices, and for taking forward “in a decisive manner” its work on traceability.
Pressure points
In its conclusions, Earthsight makes no excuse for making these major players in the global apparel industry part of its efforts to “put pressure on” Better Cotton. It says Better Cotton must make sure crops produced on deforested land do not carry positive environmental certification and that audits and the award of certification are the work of independent actors.
It has also called on legislators in the European Union, the US, UK and elsewhere to “ramp up their ambition” and put in place laws that will make it more difficult for harmful practices to continue and for organisations to benefit from those practices. It points out that, for example, new rules that will come into force in the EU at the end of this year under the EU Deforestation Regulation (EUDR) will have no effect on the examples of bad practice it says it has uncovered in this report. The new rules seek to guarantee that products from a list of commodities coming into the EU have no links to deforestation; they are stringent. There are seven commodities on the list. Cotton is not one of them.
Cotton harvesting near São Desidério. Brazil is projecting a crop for 2023-2024 of 14.6 million bales, which would make it the third-largest producer of cotton in the world, behind China and India.
All Credits: Thomas Bauer/ Earthsight
