MercoPress. South Atlantic News Agency

Canada's new PM's past in Brazil comes to light

Carney played a senior role at Brookfield, a company linked to deforestation and slave-like labor scandals in the South American country

Canada's new Prime Minister, Mark Carney, may be a novice in politics but not to scandals, given his past at the investment firm Brookfield Asset Management, where he was vice chair and head of transition investing, later becoming chair of the asset management arm. During his tenure, Brookfield's name was linked to deforestation and slave-like labor practices, which seem to clash with Carney’s public stance on sustainability and climate action.

Brookfield owned significant agricultural assets in the South American country, including around 267,000 hectares of land used for soybean, sugar, corn, and cattle production.

Between 2012 and 2021, reports estimate that Brookfield subsidiaries deforested approximately 9,000 hectares in the Cerrado, a biodiverse savanna region bordering the Amazon. This deforestation, largely to clear land for soybean farming, is said to have released about 600,000 tons of CO2. Brazilian authorities reportedly found that Brookfield had legal permits for deforestation on only one of the eight farms involved, raising questions about compliance with environmental regulations.

Beyond environmental concerns, there have been allegations of labor abuses tied to Brookfield’s operations. A regional labor court in December 2021 upheld a fine of US$ 800,000 against a Brookfield-controlled firm for what was described as “slave labor-like” conditions on one of its farms. Workers were allegedly subjected to degrading conditions, long hours, and violations of basic rights, falling under Brazil’s legal definition of modern slavery.

Additionally, Brookfield’s farming operations have been linked to attempts to evict indigenous communities from their lands in the Amazon.

As the UN Special Envoy on Climate Action and Finance and co-founder of the Glasgow Financial Alliance for Net Zero (GFANZ), Carney has pushed for financial institutions to stop funding deforestation and to take responsibility for transitioning away from environmentally damaging assets rather than simply selling them off.

Yet, Brookfield sold the Brazilian farms in question in 2021, a move critics argue allowed the firm to sidestep accountability for the environmental and social damage. Carney himself has said companies should not “divest their way out of the problem” but should manage a responsible phase-out.

On the other hand, Brookfield claimed the deforestation was legal and that the decision to sell was made years earlier due to the fund reaching the end of its life, obligating them to return capital to investors. The company also highlighted efforts to adopt policies aimed at reducing deforestation, though these came after the sales. While much of the deforestation occurred before Carney joined the firm, he was in a senior role during the sale of the assets.

In the end, Carney's these contradiction are already casting doubts on the future of the unelected head of Government should he call for elections, even if his influence at Brookfield has been more about steering future strategy than rectifying past missteps.