An American investment giant that manages multi-billion-dollar pension funds in the United States, Canada, and Sweden faces allegations that it has circumvented Brazilian laws on foreign acquisition of farmland, including land from a shady Brazilian business figure accused of two murders.
Acquisitions of Brazilian farmland by the US-based Teachers Insurance and Annuity Association–College Retirement Equities Fund, or TIAA-CREF — which promotes transparency, social responsibility, environmental sustainability, and respect for land rights — grew by over 145 percent between 2012 and 2014 to 256,324 hectares, as part of a $5.1 billion global portfolio of farmland in several countries, including the United States.
A three-year investigation by a coalition, including Barcelona-based Grain that monitors land purchases worldwide, concluded that the pension fund's farmland investment unit TIAA-CREF Global Agriculture (TCGA) — the largest in the world to focus on retirement savings investors, and into which Swedish AP2 and Canada's CDPQ and bcIMC pension funds have also invested — had created "complex company structures" that effectively skirt Brazilian law.
Farmland has been a big attraction for long-term investments, seen as more reliable than volatile financial markets in the wake of the 2008 global economic downturn and accounts for a growing proportion of the $23 trillion of global pension fund assets.
As a key global commodity exporter, Brazil has been particularly popular with farmland investors, given the availability of affordable land and existing infrastructure.
In 2008, TIAA-CREF and Brazilian sugar giant Cosan joined forces to form a company called Radar, 81 percent of which was owned by the US investment fund. In 2010 they hit a snag, though. Brazil's attorney general tightened legislation regulating land acquisition by foreign companies, amid soaring interest from overseas, to include Brazilian companies controlled by foreign players.
But far from paring back investments, the two companies increased them using Tellus — a new company managed and majority-owned by its Brazilian partner Cosan, who had a 51-percent stake.
"It's a clear case of evasion: Companies have been created with the sole purpose of channeling foreign investment into Brazilian farmland," Devlin Kuyek, a senior research at Grain, said.
"The companies have been getting in for cheap; interest in these long-term assets grows amid increasing demand for food and dwindling resources to produce it," Kuyek added. "Farmland will be increasingly at a premium and what we're seeing is a race to control and acquire it."
A key reason Brazil tightened the regulations was to prevent speculation on land prices. But the report says this is exactly what has happened, putting land out of reach for small farmers and landless people.
The location and circumstances in which farmlands are being acquired is perhaps of even greater concern. The investigation pinpoints four sites acquired in northeastern states of Maranhão and Piauí in the Cerrado — a threatened habitat of tropical savannas, plateaus, and valleys in central Brazil.
'Some of the land has been home to native communities for centuries.'
Local people depend on the land to grow their own crops and graze livestock, but the area is ideal for industrial-scale soybean plantations, so it has become the forefront for land-use conflicts. Activists say the area is being desecrated by encroaching large-scale agriculture, particularly from chemicals that companies use to prepare the soil for cultivation.
Grain's investigation found evidence that some of the farmland acquired by TCGA was linked to Brazilian businessman Euclides de Carli, who is accused of violent land grabs and, according to a former Maranhão legislator, ordering the assassination of two people, including a farmer who had refused to sell land to him.
De Clari is also accused of employing armed thugs to evict people to take ownership of some 13 farms and deforesting 110 square kilometers of native forest. Separate investigations also accused the tycoon and other land grabbers of routinely falsifying documents and land titles, acquired through local notaries and government officials, who investigators say benefit directly or indirectly by having large companies in the area.
The TCGA-linked companies do not get their hands dirty, says Fábio Pitta, a researcher at Brazil's Social Network for Justice and Human Rights, who explained the land grabs are typically outsourced.
"Just because the land is seized by someone else doesn't mean the companies don't know what's happening; after all they are dealing with the biggest land grabbers in the area," he said. "Some of the land has been home to native communities for centuries, although they often don't have any or sufficient documentation."
Pitta visited the region and says many uprooted communities have been forced either to move to shanty towns in nearby cities, or to work for a pittance for the very people who seized their land.
The investigators say tougher official oversight is required, and vow to keep monitoring after a second TCGA fund was signed in August, with TIAA-CREF, AP2, CDPQ, and four new US and UK pension funds. The group accuses the funds of "misleading" pension holders by claiming investments in farmland are responsible, and urges them to divest from the investments and return the land to local communities.
TIAA-CREF, AP2, and CDPQ did not respond to VICE News requests for comment. Canada's bcIMC declined to comment.
Brazil sugar giant Cosan said in a statement that it "strictly follows the legislation in effect … in all its acquisitions." TIAA-CREF said in a 2014 report that it "[does its] best to avoid investing in areas with ambiguous land rights laws and ... ensure that proper land title searches and ownership are confirmed prior to purchase."But Kuyek said the onus remains on the pension funds to vet their investments.
"There is no question the attention should be placed on them," he said. "TCGA has so much influence given the vast sums moved into farmland that it amplifies these crimes and the impact they cause locally."
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