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Latino Daily News

Monday April 4, 2011

Banks in Brazil Being Sued for Approving Loans for Deforestation

Banks in Brazil Being Sued for Approving Loans for Deforestation

Photo: Brazilian deforestation

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Two banks in Brazil are being accused of funding deforestation in Amazon, one of the banks being the country’s largest.

State-run Banco do Brasil and Banco da Amazonia are being sued by the state of Para.

Prosecutors say they have discovered Banco do Brasil approved 55 loans to farms that had both employment and environmental laws. The loans were worth almost $5 million. The bank denies the allegations, and said it would look into the charges on a case-by-case basis.

It was also uncovered that Banco da Amazonia approved $11 million among 37 loans to farms having similar violations. Amazonia declined to make any comments until all their documents had been reviewed.

Brazil’s judicial branch will have to decide if they wish to pursue the case, but if the lawsuits are successful, the banks could be facing substantial fines.

Prosecutors are also asking for a change in regulations and of how loans are approved.

Officials in Brazil say that deforestation in the country is at its lowest point in 22 years, and they hope to cut the destructive practice by 80% (from the beginning) by 2020 as part of an international effort to address global warming.