April 2, 2011
BRASILIA (AFP) - Federal prosecutors in Brazil said Friday they have filed suit against the state-run Banco do Brasil for approving loans to companies that illegally deforested the Amazon jungle and used slave-like labor practices.
Prosecutors in the Amazon jungle state of Para filed the suit against both the bank and the Banco da Amazonia for providing public funds to large farms that broke environmental and labor law, the Public Ministry said in a statement.
Prosecutors said they uncovered 55 loans totalling nearly five million dollars that the Banco do Brasil, the country's main bank, approved for law-breaking farms.
They also uncovered some 37 loans worth 11 million dollars to farms with similar problems from the Banco da Amazonia.
"The discovery of this irregular financing shows that this is a generalized problem," read the statement.
The information backs up studies showing a direct relationship between public loans and the growth in Amazon deforestation, the statement read.
Brazil's judicial branch must now decide if it will accept the cases.
In Brazil, the Public Ministry is an autonomous agency of prosecutors who work independently from the executive, the legislative and the judiciary branches of government.
A 2008 law prohibits extending public credit to companies that violate environmental law.
Since the law was passed, Brazil has significantly reduced the pace of Amazon jungle deforestation, which had reached alarming levels with the growth of agro-industry, mining, cattle ranching and illegal logging.
The Banco do Brasil denied the accusations in a statement, insisting that it complies with Brazilian law. However, it said it would look at the charges on a "case by case basis."
The Banco da Amazonia said it could not comment because it had not yet seen the legal case.
Prosecutors also accused the government-run Institute of Agrarian Reform for "inefficiency" in failing to maintain accurate figures on rural Amazonian property.
