The article was produced in partnership with the Pulitzer Center.
One morning this summer, a rancher who raises cattle on illegally deforested land in the Amazon met with a trader and signed over 72 fattened animals. Mr. Felipe gave his cattle a clean record by selling them, so that they wouldn't be seen as responsible for the destruction of the world's largest rainforest.
Mr. Felipe talked about the business that has made him rich over lunch. He acknowledged cutting down the forest and not paying for it. He said he hid the true origins of his cattle by selling them to a middleman and then creating a paper trail to show his animals were from a legal ranch. He said that other ranchers in the area do the same.
Whether his farm is legal or not, he said.
An investigation by the New York Times into Brazil's rapidly expanding slaughterhouse industry has identified loopholes in its monitoring systems that allow hides from cattle kept on illegally deforested Amazon to be sold to major companies in the United States and elsewhere.
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The area of the Amazon known as Jaci-Paran is a special protected environment where there is a restriction on the destruction of trees. The transactions that he made are the linchpins of a complex global trade that links Amazon deforestation to a growing appetite in the United States for luxurious leather seats in pickup trucks, SUVs and other vehicles sold by some of the world's largest automakers.
Suppliers in the United States increasingly buy their leather from Brazil, as a luxury vehicle can require a dozen or more hides. The hides of millions of cattle in the Amazon region are used to make leather that is worth hundreds of billions of dollars annually.
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The rancher admitted that he had deforested land in the protected area.
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The cattle were rounded up for slaughter.
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The capital of Rondnia is Porto Velho.
The leather trade shows how the wealthy world's shopping habits are tied to environmental degradation in developing nations, in this case by helping to fund destruction of the Amazon despite its valuable biodiversity and the scientific consensus that protecting it would help to slow climate change.
To track the global trade in leather from illegal ranches in the Brazilian rainforest to the seats in American vehicles, The Times interviewed ranchers, traders, prosecutors and regulators in Brazil. The Jaci-Paran Extractive Reserve is home to communities of people who have lived off the land for generations and has been granted special protections because of it.
These communities are being forced out by ranchers. Over the past decade, ranchers have significantly expanded their presence in the reserve, and today some 56 percent of it has been cleared according to data compiled by the state environmental agency.
The report is based on analysis of corporate and international trade data in several countries and thousands of cattle-transport certificates issued by the Brazilian government. The Environmental Investigation Agency obtained the certificates. The certificates were independently verified by the Times.
This enabled the tracking of leather from illegal farms in the Amazon to the three biggest meatpackers in Brazil. The world's largest leather processor is called JBS.
The practice of selling animals reared in the Jaci-Paran reserve to middleman traders suggests an intent to conceal their origin, according to Aidee Maria Moser, a retired prosecutor in Rondnia State. She said that it was a way to give a veneer of legality to the cattle.
The problem is not limited to Rondnia. The second-largest cattle herd in the Amazon was found to have bought 301,000 animals from farms that did not meet animal welfare standards.
In response to the audit, the company agreed to improve its monitoring system, block suppliers flagged by the research and donate $900,000 to the state.
To get a sense of the scale of the ranches operating in vulnerable areas across the Brazilian Amazon, The Times put government maps of protected Amazon land, deforested areas and farm boundaries with the locations of ranches that the company publicly listed as supplying its slaughters in 2020. An analysis shows that ranches covering an estimated 2,500 square miles overlap Indigenous land, a conserve zone or an area that was deforested after 2008 when laws regulating deforestation were put in place in Brazil.
The methodology and results were verified by a team of independent researchers who study land use in the Brazilian Amazon.
The leather was shipped to Mexico by companies that own tanneries, which were then used by a major seat maker in the United States. In the year of 2018, it was said that 70 percent of its hides were from Brazil. Brazil's hides are also used in other countries, including Italy, Vietnam and China, according to the trade data.
Almost three-quarters of the ranches identified in The Times analysis did overlap with land that the government categorizes as illegally deforested, or as Indigenous land. The ranches were in compliance with the rules when they were bought by JBS.
In instances where there were overlaps, the farms were allowed to operate in protected or deforested areas, or their boundaries had changed, or they had followed rules to fix their environmental violations. If sustainable practices are followed, ranching is allowed in some protected areas.
In a statement, the company said it has a system in place that checks supplier compliance with its environmental policy. More than 14,000 suppliers have been blocked because they failed to comply with the policy. The company said that the challenge for the beef cattle supply chain is to monitor the suppliers of its suppliers since the company has no information about them.
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There is a farm on the edge of a burned area.
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Cattle were herded onto trucks and transported to slaughter.
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The Marfrig slaughterhouse in Ji Paran is in Rondnia.
In recent years, ranchers have been racing to supply growing demand for beef in China. Leather industry representatives say that if there is demand for beef, they will use hides that would otherwise be thrown away.
Raoni Rajo, who studies Amazon supply chains at the Federal University of Minas Gerais, said that because the leather industry makes ranching more profitable, it shares responsibility for any deforestation. He said that leather has high added value.
The Amazon is losing its ability to absorb carbon dioxide because of forest loss. The main driver of climate change is the burning of fossil fuels. At the recent United Nations climate summit in Glasgow, Brazil was one of more than 100 nations to pledge to end deforestation.
The findings show how illegal leather is entering the global supply chain, circumventing a system that was created in recent years to try to show that their cattle come from legitimate ranches.
The cattle from the Jaci-Paran reserve were entering the supply chains of Marfrig and Minerva, but they weren't aware of it.
All three said they had systems to monitor farms that supply their slaughters directly, and that they exclude farms that don't comply with environmental laws. They can't trace indirect suppliers like Mr. Felipe, who sell cattle through middleman.
The company said it used a robust process that ensured it worked with the most capable and advanced suppliers that are committed to purchasing hides from cattle reared on compliant farms. The company said it would take legal action against suppliers if they violated its policies.
G.M. expects suppliers to act in a way consistent with the principles and values of the company. Ford said it wanted to source only raw materials that are produced in a responsible manner. Suppliers of Volkswagen already adhere to a high level of sustainable practices.
The global demand for leather is helping to sustain a growing herd of 120,000 cattle. The government would have enough money to reforest the whole reserve if all the cattle were sold.
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Loureno Dures lived on the banks of the Jaci-Paran River.
The men docked at Loureno Dures home in the pouring rain. Mr. Dures, a rubber tapper, invited the men in and gave them coffee. One of the visitors got right to the point after talking about the weather for a few minutes.
Mr. Dures and one of his friends described the meeting recently. I came to kill you.
They wanted to get rid of Mr. Dures because his land was valuable to ranchers.
In 1996 a community of rubber- tree tappers were granted the right to pursue their careers. Mr. Dures is one of the last tappers. The community is being pushed out.
Mr. Dures said that he hoped for justice and that he was spared that day because he is an old man.
Mr. Dures and his friend said that the would-be hit man identified the person who had sent him, but only by a nickname. According to the police report, the police didn't investigate because Mr. Dures and his friend couldn't give a full name of the person.
The regional police division was waiting for the men to give more information so it could investigate, according to the director of the division.
The appetite for land in the area was analyzed by The Times. Between January and June of this year, ranches operating in Jaci-Paran sold at least 17,700 cattle to intermediate ranches. According to both government and corporate data, the buyers were suppliers to the big meatpackers.
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The forested area where Mr. Dures lives.
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A logging truck is in the reserve.
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Mr. Dures arrived at his home.
A local trader named Armando Castanheira Filho has been one of the largest buyers of cattle in Jaci-Paran for many years. The sales created a paper trail that showed the origin of the cattle.
A Times reporter witnessed a transaction when Mr. Felipe sold his 72 cattle. Mr. Castanheira bought that day.
The animals were tracked by the Times. They ended up at a Marfrig slaughter.
Marfrig runs a website listing where its cattle come from in an effort to show that it sources cattle in a responsible manner. The Times tracked a shipment on July 14 that didn't include Mr. Felipe's ranch. Mr. Castanheira's farm is on the list of farms that supplied cattle for the next day's slaughter.
A truck marked with the name of a tannery left the Marfrig slaughter house carrying hides. A tannery that supplies a seat maker.
Mr. Castanheira said that some of the cattle he buys from the reserve go directly to slaughter, although the paperwork shows they went through his own farm first. He denied that he did it to hide the origin of the cattle.
He wrote in a text message that he didn't do this to "launder" anything. He wanted to profit from the difference between what he pays for each animal and what he can get at the slaughter.
Marfrig, Minerva and JBS said they did not dispatch trucks to pick up cattle outside of their direct suppliers. Lawyers for Marfrig have filed a report with the police that describes the events described by The Times.
Mr. Castanheira claims that the Times reporter witnessed the only instance of this kind of transaction. Mr. Castanheira was excluded from the supplier pool by the three meatpacking companies.
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There is a statue by the road in Ariquemes.
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The animals were weighed for the middleman by the owner.
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Santo Angelo is outside the protected reserve.
Two companies named Vancouros and Viposa are the owners of Bluamerica and they acknowledged the challenges of tracing indirect suppliers. Both companies said they were working with the World Wide Fund for Nature to improve their systems.
The analysis of government data on cattle movement in Jaci-Paran and nearby areas identified over 100 transactions that show signs of cattle laundered money. The transactions show that at least 5,600 cattle were transferred from farms in the reserve to middlemen who sold them to the major slaughters.
The fact that transactions aren't closely tracked is a huge loophole, and Holly is a University of Wisconsin-Madison geographer who has been researching agribusiness in the Amazon for a decade.
She said that animals raised in a protected area are being brought into national and international supply chains.
The supply chain from the ranch to the auto showroom is complex. Marfrig's hides are mostly processed by Vancouros and Viposa, according to corporate data and interviews. According to trade data compiled by Panjiva, the largest American buyer of hides is the seat manufacturer, which is based in Michigan.
In May, illegal ranchers in Jaci-Paran won a big victory. The governor of Rondnia signed a measure that shrunk the reserve by 90 percent.
The law that prosecutors are fighting in court allows ranchers on illegally deforested land to open businesses. Critics said the law could set a precedent for further destruction in other protected reserves.
Mr. Dures, the rubber tapper, said he would not leave his forest even if the legal fight went against him. The cattle pasture is close to his home.
He only knows that he lives among the mighty trees. Staying is the only way to keep the forest standing.
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There are hides in the Vancouros tannery in Londrina, Brazil.
Every few seconds at the Vancouros tannery in southern Brazil, the sound of leather hides tumbling in dozens of 11-foot wooden drums is interrupted by the clicks of a pneumatic marker as each individual hide is pierced with a seven-digit code that traces its origin.
The commercial director of the tannery plucked a damp blue hide from a pile and typed his code into a website that his company created for its clients. The supplier's details were popped up.
He said that all of the leather was traced. No one asked for it, but we felt the market needed more transparency.
Mr. Marques was told that one of his most important suppliers, Marfrig, was buying cattle from suppliers whose transactions showed signs of cattle laundering. He said he was surprised. The main product is expected to be legal.
He said that his company's monitoring wasn't to blame. The audit is based on their system, so we have to trust the documents that are provided to us.
The last farm where the cattle are slaughtered is tracked by all three major meatpackers. They don't account for the fact that cattle don't spend their whole lives on a single farm. They don't consider that a direct supplier might be selling cattle that were actually raised by someone else.
The tracking systems were created after a report that linked Brazilian beef and leather suppliers to illegal deforestation. The major firms state that they have zero tolerance for rainforest destruction.
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The hides were destined for a tannery in Porto Velho.
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The Vancouros tannery is one of the suppliers.
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A butchery in Porto Velho. China buys a lot of beef from Brazil.
All of the major slaughters post their data online. The other companies don't include ranches' precise locations. An analysis of the data from the most recent year available indicated that ranches that may have violated government rules may have been supplied by the company.
At the time of purchasing, all of the suppliers were in compliance. The data privacy law in Brazil allows Marfrig and Minerva to give as much information as they want about their direct suppliers.
The Leather Working Group is an organization that tanneries rely on to certify their compliance. The group has assigned a gold rating to all the Amazon tanneries that supply Lear with leather, signifying that they adhere to sustainable practices.
The group said in a statement that due to the complexity of the farming systems in Brazil and lack of publicly available databases, there is still no easy solution for this situation.
Marfrig, JBS and Minerva have all pledged to improve the tracking of ranches that sell cattle to their direct suppliers. The indirect suppliers will be traced by the year 2025. Marfrig said it would trace all of its suppliers in the Amazon by 2025.
Rick Jacobsen of the Environmental Investigation Agency said that only a birth-to-slaughter traceability for individual animals is going to be enough to ensure that there is no destruction in the high-risk supply chains in the Amazon.
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There are stacks of leather at a Vancouros operation.
The leather seats in Cadillac's Escalade SUV can push the price of the top-of-the-line model to more than $100,000.
One of the many vehicles sold in the United States that uses leather seats is the Escalade, which is made by a company that commands a fifth of the world's market in car seats.
Neither G.M. or Lear labels where the leather comes from. According to data from Panjiva, the supply-chain data company, the imports of Brazilian leather have increased over the past decade. According to Panjiva data, last year, the largest importer of leather and hides in the US was Lear, which imported about 6,000 tons.
The demand for leather in the auto industry is being driven by full-size trucks and large SUVs. Drew Winter, a senior analyst at Wards Intelligence, said that leather adds significant resale value to many buyers.
Raymond E. Scott, the chief executive of Lear, spoke to investors about the importance of luxury vehicles. He said that the company has 45 percent of the luxury market. The strength of G.M.'s full-size trucks and SUVs, which also includes the Suburban, was the reason for the growth of the seating business.
In Brazil, 100 percent of our suppliers use a technology called "geo-fencing" to make sure they don't buy animals from farms that are involved in rainforest destruction.
According to The Times findings in Brazil, suppliers of Lear didn't have the ability to track all cattle in this way.
All suppliers were required to comply with a no-deforestation policy, which banned the use of materials from illegal deforested areas or Indigenous lands. Ford, Daimler, Volkswagen and Stellantis are the biggest customers of Lear, according to corporate filings.
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Rondnia State has pastures near Buritis.
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The Vancouros tannery is in Londrina.
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A car at a movie premiere.
General GM's supply chain was built on strong, transparent and trusted relationships. Ford said that it did well in many areas and can improve in others. Volkswagen said it was working on better tracking the supply chain back to the farm.
Daimler said that a small percentage of its leather came from Brazil. The company said it was working to confirm the locations of tanneries and farms in its supply chain.
Brazil overtook Italy to become the biggest exporter of leather and hides to the US last year, accounting for one-third of the 15,000 tons imported. The increase can be attributed to the auto industry.
According to trade data from Panjiva, the majority of the leather shipments from So Paulo to Houston go to the United States. Much of it is trucked across the Mexican border to one of two dozen car-seat factories in Mexico, where workers cut the hides and sew them into seat covers.
The leather is trucked back over the border. According to data from Material Research, at least 1,800 tons of leather was shipped from Mexico to the United States from January to June of this year.
Its final destination is nationwide. It is easier for the company to match color and other variations to the models coming down the vehicle assembly lines if they are located closer to the final automobile-assembly plants.
The plant in Arlington, Texas, is where the company makes some of the most luxurious trucks, including the Escalade. About 1,300 SUVs are assembled a day for sale in the United States.
The factory that makes leather seats is a 10-minute drive away.
The Jaci-Paran reserve is in Brazil. Hiroko Tabuchi and Albert Sun were in New York.
