Responses to News Report about Sugar Mill Partner Fined for Illegal Planting in Indigenous Area.

November 27, 2025

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(Reporter Brazil (Google translation)) Position statement from BNDES, Miguel Vaz Ribeiro and Marino Franz, Funai and the Ministry of the Environment. -- BNDES informs that FS Indústria de Biocombustíveis underwent a thorough registration analysis and no final and unappealable proceedings resulting from environmental and/or labor infractions were found that would prevent the Bank from granting financing to this company. In addition, all projects are subject to social and environmental risk assessments, in accordance with the Regulations for Socio-environmental and Climate Management of Operations. The BNDES Social, Environmental and Climate Responsibility Policy (PRSAC) also applies to the biofuels sector.

Therefore, the financing for FS Indústria de Biocombustíveis was approved in accordance with current regulations, including those related to socio-environmental aspects, labor, and CO2 emission reduction. Regarding project execution, it should be clarified that the contract requires the company to notify the BNDES System at any time about judicial and administrative proceedings related to sensitive issues, including crimes against the environment, whether against the company or its suppliers.

Finally, it is important to highlight that the Bank monitors the projects and, when irregularities are identified in ongoing financing, BNDES adopts appropriate measures, such as suspending the release of funds and, in more serious situations, the early termination of the contract. Therefore, the Bank has already formally notified the company and awaits clarification of the facts described in order to define its actions regarding the contracts signed with FS Indústria de Biocombustíveis.

Miguel Vaz Ribeiro and Marino Franz

1) Would Miguel Vaz Ribeiro and Marino Franz like to comment on the Ibama fine?

The sole reason for IBAMA's action was an alleged overlapping indigenous land with the property of Miguel, Marino, and Dankang Fiagril.

As will be seen below, it is FUNAI that acts illegally when it disseminates false information to other public bodies regarding indigenous land overlapping with private properties, whose demarcation procedure has not been completed.

2) What are the planting practices at Fazenda São Jorge? Is the area overlapping the indigenous land used for planting cotton and corn?

There is a misunderstanding in the assertion of the existence of indigenous land by this respectable media outlet.

The intended Batelão indigenous land demarcation process has not been completed, as it was suspended by order of the Superior Court of Justice.

Furthermore, on September 17, 2025, the Federal Regional Court of the 1st Region in Brasília ordered FUNAI to immediately remove restrictive information regarding the use and enjoyment of the properties of Miguel, Marino, and Dakang from FUNAI's database, including information related to SIGEF, which can only take effect after the eventual homologation of the Batelão Indigenous Territory, by decree of the head of the federal Executive Branch (process no. 1025105-54.2024.4.01.0000).

FUNAI has been disobeying this order from the Federal Regional Court of the 1st Region.

IBAMA once claimed that the property of Miguel, Marino, and Dankang Fiagril overlapped with a non-existent indigenous land, based on erroneous data provided by FUNAI, which the Federal Regional Court of the 1st Region has already ordered to be removed from that Foundation's databases.

Therefore, there is no irregular planting on the part of Miguel, Marino and Dankang Fiagril, nor any disregard for the "SOCIAL AND ENVIRONMENTAL RESPONSIBILITY POLICY IN THE SUPPLY AND SALES CHAIN", since there is no demarcated indigenous land overlapping with the property of Miguel, Marino and Dankang Fiagril.

The decision of the Federal Regional Court of the 1st Region ensures the full use and enjoyment of the properties of Miguel, Marino, and Dankang Fiagril.

3) As partners and suppliers of FS Indústria de Biocombustíveis, is the action taken against Miguel and Marino contrary to the company's socio-environmental policies?

As explained above, Miguel has not violated any of FS Indústria de Biocombustíveis' socio-environmental policies.

4) Did Miguel and Marino inform FS Indústria de Biocombustíveis about the fine? How is this matter being handled by the company?

Yes, the company is aware of and continues to observe current environmental regulations and procedures. Since there is no officially approved land use plan, the planting is currently in compliance and authorized by SEMA (State Secretariat for the Environment).

FUNAI

The National Foundation for Indigenous Peoples (Funai) clarifies that the Batelão Indigenous Land (TI) is properly demarcated and the Judiciary has already recognized the traditional nature of the indigenous occupation and the nullity of property titles affecting the area, such as, for example, the rural properties called "Fazenda São Jorge".

The overlap was identified in a technical analysis conducted in October 2025 by the Cartography Coordination (Cocart) of Funai, through official cartographic studies. However, it should be noted that the original indigenous right, already recognized by the Brazilian State, takes precedence over the claims of private individuals over the declared territory, and any economic exploitation activity (such as monoculture planting) carried out by non-indigenous people in the area is considered irregular and subject to environmental penalties.

Funai maintains its composure regarding the regularity of its actions, supported by the technical and legal certainty that indigenous original rights prevail over private claims. Since the end of October 2025, the Specialized Federal Attorney's Office at Funai (PFE/Funai) has been working to reverse the preliminary injunction that ordered the removal of information from the records of the São Jorge Farm, given the unequivocal cartographic evidence of overlapping land.

The agency reaffirms that provisional decisions based on cadastral information do not invalidate the nature of Indigenous Lands, whose protection is the duty of the State. The legitimacy of Funai's actions in defending this heritage is undisputed and undeniable, which is why all appeals are proceeding through their regular course.

Ministry of the Environment

According to Decree 9.578/2018, the Ministry of Environment and Climate Change (MMA) chairs the Management Committee of the National Fund on Climate Change (FNMC), which establishes the guidelines and priorities for the application of its resources. Also according to the decree, the National Bank for Economic and Social Development (BNDES) manages the FNMC's finances, which involves evaluating financing requests from companies.

BNDES informs that FS Indústria de Biocombustíveis underwent a thorough registration analysis and no final and unappealable proceedings resulting from environmental and/or labor infractions were found that would prevent the Bank from granting financing to this company. In addition, all projects are subject to social and environmental risk assessments, in accordance with the Regulations for Socio-environmental and Climate Management of Operations. The BNDES Social, Environmental and Climate Responsibility Policy (PRSAC) also applies to the biofuels sector.

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BNDES notifies ethanol plant with partner fined for planting in indigenous area. (Reporter Brazil (Google translation))

Excerpt from Reporter Brazil: Miguel Vaz Ribeiro, mayor of Lucas do Rio Verde, was fined R$ 2.9 million by Ibama for illegally planting corn on the Batelão Indigenous Land in Mato Grosso; He is a supplier and one of the partners of FS, a plant financed by the Climate Fund and one of the main corn ethanol producers in the country.

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Brazilian law prohibits the cultivation of genetically modified organisms on indigenous lands and in conservation units. The environmental agency also classified the infraction as biopiracy – the illegal exploitation of biological resources and traditional knowledge – and ordered the destruction of the crops.

FS received R$ 500 million for investments in corn ethanol.

In September 2024, BNDES announced financing of R$ 500 million for FS to build a new corn ethanol plant in Querência (MT) , with a capacity of up to 400,000 tons. The funds were disbursed through the Climate Fund.

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In addition to Miguel Vaz Ribeiro, Fazenda São Jorge is registered in the name of Marino José Franz and Dankang Fiagril Administração de Bens, a company in which Franz serves as a board member. Marino Franz and Dankang Fiagril are listed in the corporate structure of Fiagril, a producer of agricultural inputs and grains based in Mato Grosso.

Franz is also a partner in FS Indústria de Biocombustíveis and has a history of supplying the biofuel producer, according to documents obtained by the news report.

Ribeiro, Franz, and Dankang Fiagril are jointly appealing the fine in a lawsuit against Ibama. In May of this year, the producers obtained a favorable court ruling that suspended the destruction of the crops until a further judicial decision regarding the fine.

The Batelão Indigenous Territory, traditionally occupied by the Kayabi people , had its declaration decree published in 2007. Since then, farmers – including Ribeiro and Franz – have been claiming areas in court, in lawsuits that are still ongoing. In 2008, the Ministry of Justice suspended the previous year's decree, complying with a ruling from the Superior Court of Justice (STJ) . In 2016, the Federal Court confirmed that the Indigenous Territory is traditionally occupied by the indigenous people. Currently, the territory is registered as "declared" on the Funai website . The next steps are the physical demarcation of the territory and its homologation.

In September 2025, a decision by the TRF1 (Federal Regional Court of the 1st Region) determined that Funai (National Indian Foundation) must remove restrictive information regarding the use of farms in the territory until the Indigenous Territory is officially recognized. READ MORE