Reports continue to surface in the Para region of Brazil around the issue of deforestation in the Amazon and its link to illegal sourcing of dry wood charcoal, a resource commonly used by the global steel industry.
Charcoal tends to be more popular than the use of coal in pig iron production due to its low sulfur content, increased reactivity, and purity during processing. As a result, there’s a higher demand for dry wood charcoal by the steel industry, which organizations like the Instituto Observatori Social (Social Observatory Institute - SOI) in their February 2011 SOI issue would argue, are contributing to collective corruption and deforestation facing the Amazon region. Business people, politicians, public servants, and in some cases environmental protection agencies have reportedly worked together to circumvent environmental and local laws making charcoal laundering an on-going environmental challenge for the Amazon.
REDD-Monitor (a group that facilitates discussion about the concept of reducing deforestation and forest degradation) reports that currently, Brazil’s forest code limits the percentage of land that farmers and ranchers can clear. In the Amazon rainforest, 80% of the forest must be left intact, 35% in tropical savannah zones and 20% in the rest of the country. However, despite a reported reduction in deforestation by the National Institute of Space Research between August 2010 and July 2011, environmental codes/laws are not strictly enforced and ranchers and agribusiness corporations ignore them resulting in a huge amount of illegal deforestation. Nevertheless, the government continues to take a firm stance on illegal logging certificates and un-authorized clearings.
A recent piece from The Economist, “Fiddling while the Amazon burns”, from December 3, 2011 discussed the controversial and political bill currently being reviewed by the Brazilian Senate surrounding the suggested implementation of legislative safeguards and a revision of the country’s Forest Code, a debate that’s been running for over 15 years. The proposed revisions would allow farmers in the Amazon to cut down a larger percentage of trees on their property and re-define the type of land that can be legally cleared.
However, environmentalists argue that the changes and loopholes in the proposed legislation pose a big threat to the Amazon rainforest. As it stands, the bill remains to be re-approved by Brazil’s congress and President. Until then, those beneficiaries in the global steel industry (ex: manufacturers of steel car parts or home appliances, to name a few) caught sourcing illegal coal run the risk of environmental violations found in their supply and value chain, negative press, and a possible consumer backlash, in turn impacting their company or brand’s reputation.
