Rainforest Action Network has filed a complaint with the SEC over pattern of illegal and corrupt actions by the Brazilian meat giant
*See RAN’s SEC Complaint Submission for details and references.
New York – JBS, the largest animal protein company in the world, is planning a U.S. IPO* to list shares on the New York Stock Exchange. This would open up new possibilities for investment and financing for a company which has wide ranging reports of unacceptable company conduct. Concerns about the company’s business practices and supply chain have been well documented and raised repeatedly over the last 15 years. These include: illegality; deforestation; invasion and land grabbing of Indigenous and traditional territories; land conflicts and violence against rights defenders, slavery and labor abuses in its supply chain; lack of traceability; corruption; and greenwashing.
Rainforest Action Network (RAN) has written to the SEC to request an investigation into allegations that JBS does not operate to acceptable business standards, has filed potentially misleading statements and has omitted material information for investors in its F-4 Registration Statement dated 12 July 2023. RAN asked for the SEC to engage with JBS in a fully transparent manner to enable much needed public scrutiny.
“JBS is a notorious company with a well documented history of destructive practices and massive impacts on the climate, including illegality, corruption, bribery and land conflict with Indigenous communities,” said Merel van der Mark, spokesperson for Rainforest Action Network and Coordinator of the Forest and Finance Coalition. “To fulfill its role of basic due diligence, we request that the SEC conduct a thorough investigation into the pattern of alarming and unacceptable corporate conduct by JBS before granting it an IPO on the NYSE.”
This IPO is also being called a “dual listing” as it aims to be listed on both the São Paulo exchange (since 2007) and the NYSE. JBS has made several attempts to list in the US. The 2017 attempt was thwarted by the larger corruption scandal which concluded with the USD 3.2 billion settlement and admission of bribing thousands of politicians. Since then, JBS has continued to be implicated in numerous illegalities, including multiple instances of corruption and price fixing in the U.S.
The billionaire Batista brothers, sons of JBS founder José Batista Sobrinho, will emerge as majority shareholders through the proposed restructuring to consolidate their share of voting rights from 48% to 85-90%. Major questions remain about transparency, corporate governance, shareholder influence and continued impacts on climate, biodiversity and human rights.
Concerns raised in the letter include:
- JBS has failed to eliminate illegal deforestation, slavery and labor abuses, and landgrabbing of Indigenous territories in its supply chain.
- JBS has made a high-profile net-zero pledge in 2021, but is estimated to have increased its Greenhouse Gas (GHG) emissions by 51% in five years. In 2021, JBS sold $3.2 billion worth of ‘green bonds’ which are linked to their net-zero pledge. However, independent researchers found they lack any credible decarbonisation plan.
- JBS has continued to be embroiled in corruption and bribery scandals in Brazil and the US. In 2017, the controlling shareholders J&F Investimentos (owned by the Batista brothers) agreed to pay a record-breaking fine of $3.2 billion with the Brazilian Government which settled five separate investigations into JBS’ extensive corrupt and fraudulent business practices. There have been a series of major settlements in the US in 2020, 2021 and 2022 as a result of JBS and the Batista brothers’ fraudulent and corrupt corporate practices including: foreign corrupt practices; bribery; price-fixing.
Rainforest Action Network provided JBS with an opportunity to comment on our allegations, however JBS did not respond.
* On September 1st, JBS filed Amendment No. 1 to Form F-4