The JBS processing business in South America says it will take legal action against the Greenpeace environmental group over what it says are false claims over its Brazilian cattle procurement activities.

In a strongly worded and detailed statement issued by JBS SA overnight, it picks-apart, issue by issue, a log of claims made in a report by Greenpeace suggesting that JBS had been ‘collaborating with deforestation’ and ‘not complying with previous agreements’ in Brazil.

JBS said it had been taken by surprise with the disclosures contained in the Greenpeace report.

US media has carried stories overnight suggesting that British grocery chain Tesco has already cancelled its meat contract with Brazil's JBS SA after Greenpeace published its report highlighting what it said was ‘18 months of field research showing JBS repeatedly disobeyed civil and legal agreements in Brazil not to buy animals from deforested areas, indigenous territories or properties blacklisted for using slave-like employment.’

Greenpeace said five other customers of JBS Brazil had indicated they wouldn't renew contracts with the meat processor after learning of the report's findings. They included UK supermarket chains Sainsbury's, Princes (Mitsubishi Group), Asda and Clarks, as well as furniture retailer Ikea (which buys JBS leather) and Dutch Sligro Food Group. Greenpeace campaigners in Europe shared their JBS research with these companies over the past three months.

A JBS SA statement issued overnight said the information regarding JBS in the report was false, misleading, incorrect and induced the public to draw erroneous conclusions regarding the reality of the facts.

Due to this, the company will challenge Greenpeace and will use all available legal channels to repair the material damage caused to the image of JBS through the disclosure of this incorrect information, the statement said.

“JBS receives the disclosure of this defamatory public report from the ONG with shock, since the company has demonstrated to its clients and to society at large that it has the most advanced and sophisticated systems in the area of sustainability in the beef sector in Brazil,” the statement said.

 “JBS currently has more than 500 employees directly involved in sustainability activities inside the Company in Brazil whose commitment reaches far beyond their daily obligations. Actions involve investments in the environment, incentives and development programs for a sustainable beef supply chain, a satellite monitoring system of rural properties within the Amazon biome, pioneering projects registered at the United Nations to generate carbon credits, ongoing projects to reduce the emission of GHG, programs to reduce water usage at production units, selective collection and recycling of residues, production of bio-diesel, the use of renewable energy sources, and maintenance of an educational institute to forward social development in the community,” the statement said.

JBS addressed each and every one of the claims made by Greenpeace in its report, refuting them all. Many of the accusations were based around claims that the company was buying cattle off Brazilian beef producers who are under embargo by the Brazilian Environmental Institute over inappropriate land clearing.

The general thrust of JBS’s evidence was that it had last traded with the embargoed cattle producers well before the embargoes were applied – typically up to 3-12 months before. In some cases the properties identified by Greenpeace had never been black-listed by the Government, or were confused with properties carrying similar or identical names. Other examples confused plants owned and operated by JBS with those owned by others.

Commenting on indirect livestock supply issues, JBS said it had a commercial relationship with ranchers that participated in the final phase of finishing cattle. These were the properties that are monitored by the company.

“The complete monitoring of indirect suppliers – ranchers that provide young cattle to finishers – by JBS or by another producer in the sector will only be possible when there is a complete traceability system in Brazil which would identify and monitor cattle from calving to their adult age,” the company said. “Here it is important to point out that the agreement between JBS and Greenpeace contemplates the re-evaluation of this point due to the complexity of the subject.”

“JBS will continue to cooperate with public entities, NGOs and research institutes to incentivise and develop a feasible traceability system, applicable to the whole cattle supply chain in Brazil.”

Much of Greenpeace's report focuses on nine points of agreement made in October 2009 by processors JBS, Marfrig and Minerva with Brazil's federal prosecutor's office over cattle sourcing practices. Greenpeace focused its study on Mato Grosso, the main cattle producing state in Brazil, and found at least five ‘irregularities’ in JBS's purchase of cattle from local suppliers.

The report says 687 cattle were bought by JBS abattoirs between June and December of 2011 that had been blacklisted for deforestation. Eleven other farms accused of illegal logging by the Brazilian government may have provided JBS more than 7300 cattle, the report said.

Greenpeace argued that the Brazilian government should be held equally accountable for JBS's alleged environmental violations, because Brazil's National Development Bank holds a 31 percent share of the company, via investments.

JBS has recently invested in training its buyers of meat and equipment in new methods of supply control. Each truck that arrives at a farm site in the Amazon has a GPS tracker, which is recorded for environmental records. JBS records of the movement of these trucks, via satellite, and if one is seen to be within 10km of an unapproved supplier, the truck is called with a delivery suspension notice until the situation is clarified.