Why The Amazon Tri-Border Area Impacts Businesses Worldwide

The area deep in the Amazon that includes border towns in Brazil, Colombia, and Peru has been experiencing a deepening security crisis even before the COVID-19 pandemic. Despite recent scrutiny after the murder of international correspondent Dom Phillips and his local guide Bruno Pereira, this vast area has seen little change despite upticks in media coverage of crime and related deforestation in the area. On 17 July 2024, the International Crisis Group (ICG) released a report entitled “A Three Border Problem: Holding Back the Amazon’s Criminal Frontiers.”

Here are five key takeaways from the ICG report and why it matters for businesses worldwide, followed by an analysis of how these issues affect operations and ways to take action.

Five Important Takeaways from ICG’s Tri-Border Report

1. Organized criminal groups in this area work together far more effectively than governments.?

Brazilian crime syndicates Primeiro Comando da Capital (PCC) and Comando Veremelho (CV) are the most active criminal groups in the area, all but replacing local organizations such as Familia do Norte and Os Crías. The one exception has been the Carolina Ramírez front of the ex-FARC mafia, active in the Colombian state of Amazonas. The PCC and CV essentially used local criminal organizations for their unique knowledge of the region and relationships with local communities, further sinking their teeth into the areas comprising this often-overlooked geography. Normal methods of creating illicit income sources, such as drug production and trafficking as well as illegal mining, fishing, and timber operations, have paved the way to diversify local criminal economies even further. Furthermore, the PCC reportedly has set up a localized base of operations in prisons in Leticia, Colombia and Tabatinga, Brazil.

2. Illegal land grabbing has become common.?

Locals are threatened for attempting to defend their homes as criminal groups seize property, and the government is nowhere to be found. This expanding and unabated growth of criminal groups in the area is destroying the local flora and fauna, further threatening not only local livelihoods in the short term but the planet’s long-term health. Environmental damage beyond deforestation is also present. Coca plantations use harmful pesticides, and unregulated coca paste production facilities use even more damaging chemicals. More recently, alarm bells have sounded over a recent sighting of an uncontacted Indigenous group in Peru. While these groups are living in protected areas, licit logging concessions as well as a vast expansion of illicit activities threaten their lives and overall way of life.

3. Government responses have been insufficient despite key international climate-focused events planned in the region, which will draw further attention and scrutiny.?

The ability for local populations to flourish in the tri-border area is further threatened by those moving there out of necessity to work for new verticals in the local criminal economy. Strict respect for jurisdictional boundaries inhibits security forces from being able to effectively carry out operations — a common barrier to enforcing the tri-border area between Argentina, Brazil, and Paraguay. Local security authorities are focused on monitoring their borders and curbing cocaine trafficking. Meanwhile, criminal groups involved in illegal mining, logging, and timber operations have been able to expand even more easily because authorities are largely focused on illicit drug trafficking and cannot police such a vast territory. The state’s lack of presence has also led CV and PCC to provide so-called criminal social responsibility (CSR) in the area, which includes provisioning food, medication, and other necessities that the state (in theory) should provide to its most vulnerable citizens.?

4. With limited licit business ventures and a lack of state presence, the region needs international attention and investment.?

The Amazon is rich in natural resources, a fact that cannot and should not be ignored. Criminal groups and average citizens alike must be redirected to other methods of income generation, or they will not stop destroying nature. Criminal ventures have found recruitment efforts to be extremely easy given the lack of alternative income sources and jobs within the licit economic vertical. However, the relationship can be fraught at times because local workers on coca plantations are often paid in coca paste as opposed to cash, rendering them furthermore reliant on criminal organizations to buy up the paste. Viable alternatives like cacao or a?aí require startup funding, training, and access to supply chains to sell these products. REDD+ projects and other green investment initiatives can drive further resources into the area, while events including the COP16 in Cali, Colombia; the G20 Summit in Rio de Janeiro, Brazil; and the COP 30 in Belém do Pará, Brazil also present an excellent opportunity to host roundtables about how to drive further investment.

5. Groups who have called the region home for centuries should be included at the table to discuss preserving the area.?

In most cases, Indigenous groups are key to defending the environment. Previous instances of mutual respect between local criminal organizations and Indigenous leaders indicate that the current level of environmental destruction in the region could be further reduced. However, this situation has become more complicated as non-local groups take hold. Resources from capitals and from abroad will be required. Collaboration between Indigenous groups and local authorities so far has led to little success, even when Indigenous groups share information about the presence of trafficking routes of criminal organizations. Some Indigenous leaders have been threatened, forcing them to leave the Amazon. Ribeirinhos should be included with caution. These individuals, many of whom are descendants of families who moved to the Amazon during the rubber boom during World War II, have differing relationships with Indigenous groups and crime.

Four Impacts for Businesses Everywhere

1. Carbon credits and green bonds?

Most multinationals have purchased carbon credits as part of their net-zero strategies. Additionally, more are becoming further invested in the green bond market. Both of these investment strategies rely on places such as the Amazon remaining untouched. EU regulations, specifically the Sustainable Finance Disclosures Regulation (SFDR), require reporting on the potential risks or negative externalities of these investments. Beyond questions about the true impact of carbon credit projects, there are significant risks to investing in the Amazon when it is not being sufficiently protected.?

2. Water sources

Significant freshwater contamination is occurring as criminal enterprises expand in this tri-border area and throughout the Amazon. Beyond the cascading effects that issues like mercury poisoning have on the flora and fauna comprising these biospheres, many of these water sources flow across towns, departments, and in some cases multiple countries. Damage to these freshwater sources could affect businesses in various ways, such as affecting employees’ drinking water at an office building or requiring a massive agro-fishery operation to cull a fish population. These situations affect not only the bottom line of the business directly involved, but those of any company that sources directly or indirectly from its operations.

3. Supply chain management

Gold and timber resources from this area contaminate licit supply chains and allow these criminal enterprises to further expand by generating more licit income. Companies must stop using the excuse that it is simply “too hard” to trace their supply chain to the rural enclaves they rely on, or saying they will leave this task to third-party compliance teams. This tracing can be done, but tracking products from source to shelf is time-consuming and requires analytical prowess and knowledge of how companies can hide the less-pretty parts of their supply chains. Every company can trace their supply chain if they want to, but it takes time and money. For example, Southern Pulse worked with Evidencity to trace a supply chain to properties that had been accused of engaging in modern slavery practices. It was challenging and required analyzing large amounts of shipping data and corporate records, as well as working with boots on the ground. A “technology” solution for supply chain tracing cannot work in the Amazon — period.

4. Criminal group expansion

Allowing criminal groups to expand without any challenge to their hegemony or control will simply allow them to continue expanding outside this area. At this point, the greatest control is exercised by the PCC and CV Brazilian criminal syndicates. Allowing them to further expand outside of operating centers in Brazil, Argentina, and Paraguay is a mistake when the region has barely even begun to wrap its head around the challenge presented by factions of Tren de Aragua. Allowing CV and the PCC to expand in the Amazon will allow these groups to eventually touch the streets of major city centers, where their presence has not been noted before.

Three Actions You Can Take

1. Support sanctions tied to environmental crime.

Environmental crime legislation should be more cohesive and strengthen the powers of local public prosecutor’s offices, in addition to providing those individuals with security protection. OFAC should consider sanctioning those involved in environmental crime. Changing over local authorities every few months could help inhibit collusion in some cases.

2. Push for increased corporate transparency.?

Licit products obtained illegally make their way into traditional markets. More must be done abroad in regard to corporate transparency to disallow these products from entering the licit market. Legislation has been created in an attempt to combat forced labor based on geography, and the same can be done to force additional scrutiny on goods produced in this tri-border area. Most of the illicit product is making its way to Manaus, and efforts to cut off this key destination within the supply chain will reverberate downriver.

3. Invest in education and alternative livelihoods.

Most families in the area survive in what’s known as a subsistence economy. Taking away the illicit economies that put food on the table without replacing income-generating activities will lead to a population even more vulnerable to recruitment.

Wherever you operate in Latin America, Southern Pulse has the experience, network, and relationships to simplify this challenging region with honest, direct answers to your most complicated questions.

Want to learn more? Let’s chat.

CC BY-ND