American Financial Services Giant Attacked for Role in Brazilian Land Grab

Its long acronym, TIAA-CREF, stands for what sounds like a lofty purpose: Teachers Insurance and Annuity Association – College Retirement Equities Fund. Based in New York with origins dating back to the time of Andrew Carnegie, the 97-year-old company boasts that it is the United States’ largest retirement fund manager for professionals who work in the education, research, medical and cultural fields. And this is a “different” organization, according to TIAA-CREF, as it has worked on corporate social responsibility issues for over 40 years, has been named as one of the world’s most ethical companies and takes a “client-conscious approach” towards building revenue.

But this financial services firm, which manages over half a trillion dollars in pension funds, is known far differently in South America as for what some say has amounted to a massive “land grab” in Brazil. According to Grain, a small NGO that supports small farmers and social equality movements, TIAA-CREF has had a central role in a scheme that has acquired vast amounts of farmland across Brazil—even though the country has strict laws covering foreign investments in farmland.

According to an investigation led by Grain and a coalition of several other NGOs, TIAA-CREF has used a complex investment vehicle to ramp up its land holdings in Brazil. This separate fund, which TIAA-CREF operates in tandem with pension fund managers from Sweden and Canada, has purchased farmland throughout the Brazilian cerrado, a massive savannah-like region of 770,000 square miles. Over the past 30 years, the cerrado has largely evolved into industry-scale farms that now grow coveted crops such as soy, corn and cotton. Investment in the cerrado is one reason why Brazil, a net food importer in 1980, has become one of the world’s largest food exporters.

The rise in Brazilian agriculture, however, has also resulted in what critics call a massive “land grab,” during which many small farmers have been subjected to shady business practices and in turn lost their title and access to their land. Labor conflicts, environmental degradation and social ills have festered across the cerrado as political connections, falsified documents claiming title over land and forest and in the worst cases, death threats and even murder, have forced many families to leave land they had held for generations. The report issued by Grain accuses TIAA-CREF and one of its partners, the Brazilian sugar producer Cosan, of benefiting from this trend, and says their allegations are backed up by public documents and interviews with farmers who had been forced off their land.

TIAA-CREF and its investment partners have refused to disclose any information related these land purchases, but figures disclosed in its sustainability reports are aligned with the company’s growing interest in Brazilian agriculture. From just over 250,000 acres of farmland in 2012, its holdings have surged to over 630,000 acres by the beginning of this year. Meanwhile both Cosan and TIAA-CREF have declined to discuss the circumstances surrounding these transactions, and also refused to cooperate with a New York Times investigation. The researchers at Grain do not implicate TIAA-CREF or Cosan in the actual coercion of land titles. Instead, much of the land purchased was already cleared, some of it by Euclides de Carli, a businessman who has the reputation of being one of the most notorious land grabbers in all of Brazil.

The report issued by Grain shows how the lack of transparency is threatening TIAA-CREF’s reputation. Claims of being a responsible company have been undermined by business dealings that may have violated the spirit of the law in Brazil while causing many people to leave their homes and lose their only source of income. “Small farmers and indigenous people in Brazil,” Grain’s report concludes, “are paying much too high a price to support the pension funds of workers in the US, Canada and Sweden.”

Image credit: Grain