Retailers, investors urge Brazil to scrap bill seen boosting deforestation

* Marks & Spencer, John Lewis among those to sign

* Call for government to reconsider land law change

* Say would have to reconsider local agri supply chain

By Simon Jessop and Jake Spring

LONDON/BRASILIA, May 5 (Reuters) - A group of European
companies including Tesco and Marks & Spencer
have threatened to stop using Brazilian agricultural commodities
if the country's Congress passes a law expanding property rights
for squatters on public land.

Environmental advocates warn that the proposal would
encourage deforestation by rewarding land grabbers in the Amazon
rainforest who occupy properties illegally, often clear-cutting
areas for agricultural use in the process.

Proponents of the bill say that only by bringing properties
into the legal system can they be forced to comply with Brazil's
strict laws that limit deforestation in the Amazon to 20% of
private property.

The retailers, also including Metro and John Lewis,
as well as investors such as Norway's biggest pension company
KLP, said that Brazil's environmental protections were
increasingly inadequate, while the land bill potentially risked
even greater threats to the Amazon.

"If this or other measures that undermine these existing
protections become law, we will have no choice but to reconsider
our support and use of the Brazilian agricultural commodity
supply chain," the European companies wrote in an open letter to
Brazilian lawmakers released on Wednesday.

Brazil is the world's largest exporter of soy and beef.

The bill was scheduled for a vote in Brazil's Senate last
week but was shelved amid criticisms from environmentalists.
Congressional leaders said the issue needed more discussion and
indicated it could be put up for a vote again this week.

That proposal was the second push by the government and
congressional allies to win approval for such a plan. Similar
legislation was withdrawn in May 2020 after a boycott threat
from many of the same companies.

The current Senate bill would allow for much larger and more
recently settled properties to receive deeds.

The move comes at a testing time for the government of
President Jair Bolsonaro, as deforestation in Brazil's Amazon
surged to a 12-year high in 2020.

Under international pressure led by the United States,
Bolsonaro promised at a leaders summit in April to strengthen
environmental enforcement and reaffirmed a commitment to end
illegal deforestation by 2030.
(Reporting by Simon Jessop and Jake Spring; Editing by
Catherine Evans)