Investigative Review of Inditex

SECTION 1 of 14: Earthsight’s ‘Fashion Crimes’: Exposing Inditex’s Link to Illegal Deforestation In April 2024, the United Kingdom-based non-profit Earthsight released a landmark investigation titled “Fashion Crimes.” This report exposed a direct supply chain link between Inditex, the parent company of Zara, and illegal deforestation in Brazil’s Cerrado region. The investigation utilized satellite imagery, court rulings, shipment records, and undercover operations to trace “tainted cotton” from western Bahia to the retail shelves of the world’s largest fashion retailer. Earthsight’s findings shatter the illusion of sustainable sourcing that Inditex projects to its consumers and investors. The investigation focused on two major Brazilian agribusiness entities: SLC Agrícola and the Horita Group. These companies dominate the cotton industry in the Cerrado, a biodiversity hotspot that has lost half its native vegetation to industrial agriculture. Earthsight analysts tracked 816, 000 tonnes of cotton exported by these two firms between 2014 and 2023. The data revealed that this cotton flowed directly to eight specific clothing manufacturers in Asia. These manufacturers, including Interloop Limited and Nishat Mills, produce millions of finished garments for Inditex brands. The supply chain is not unclear. It is a documented route from environmental crime scenes in Bahia to high-street fashion stores in Europe and the United States. SLC Agrícola stands as Brazil’s largest cotton producer. It manages 44, 000 hectares of cotton plantations in western Bahia alone. even with its size and market dominance, the company has a documented history of environmental violations. Brazil’s environmental protection agency, Ibama, has fined SLC Agrícola more than $250, 000 since 2008 for infractions in Bahia. Earthsight’s analysis of satellite data showed that three of SLC’s farms lost at least 40, 000 hectares of native Cerrado vegetation over the last 12 years. In 2022, the company cleared 1, 365 hectares of native vegetation at its Palmares farm. This action directly contradicted its own zero-deforestation policy adopted just one year prior. The Horita Group presents an even darker profile. The investigation linked this entity to violent land disputes and corruption. Ibama fined the Horita Group over 20 times between 2010 and 2019 for environmental violations totaling $4. 5 million. In 2014, Bahia’s environmental agency identified 25, 153 hectares of illegal deforestation on Horita farms within the Estrondo estate. This estate is a massive agribusiness complex frequently in reports of land grabbing. Federal investigations in 2019 also targeted Walter Horita, one of the group’s owners, for alleged bribery of court officials to secure favorable rulings in land disputes. A serious component of this scandal is the failure of the “Better Cotton” certification system. Inditex relies heavily on this label to assure customers of its ethical sourcing standards. Earthsight found that all the tainted cotton traced in their investigation carried the Better Cotton certification. The report describes the certification scheme as fundamentally flawed. It notes that Better Cotton does not perform its own compliance checks in Brazil. Instead, it relies on the Brazilian Cotton Producers’ Association (Abrapa) to verify standards. This arrangement creates a conflict of interest where the industry polices itself. The certification failed to flag the illegal deforestation, land grabbing, and environmental fines associated with SLC Agrícola and the Horita Group. Inditex responded to these with a public demand for answers. The company sent a letter to Better Cotton CEO Alan McClay and criticized the absence of clarity in the certification process. Inditex claimed it had waited six months for the results of an internal investigation by Better Cotton. This response attempts to shift the load of due diligence solely onto the certifier. Yet the Earthsight report that major buyers like Inditex possess the resources to monitor their own supply chains. Their reliance on a third-party label allowed illegalities to unchecked for years. The “Fashion Crimes” report provides irrefutable evidence that the cotton in Zara’s clothing drives the destruction of the Cerrado. It connects the consumer purchase directly to the bulldozing of distinct ecosystems and the displacement of traditional communities. The of the trade is massive. The environmental cost is verified. Inditex faces the reality that its supply chain is deeply entangled with criminal activity in Brazil. The company can no longer claim ignorance when the data shows a clear line from the deforested savannahs of Bahia to the checkout counters of its global empire.

The Cerrado is not a savanna; it is an inverted forest. While the Amazon captures the world’s attention with its towering canopy, the Cerrado hides its might underground. Roughly 70% of its biomass exists in complex, deep root systems that anchor the soil and sequester carbon at a rivaling the rainforests to the north. These roots act as a colossal sponge, absorbing rainwater during the wet season and slowly releasing it into aquifers that feed eight of Brazil’s twelve major river basins. This biome is the “water tank” of South America, a hydrological engine that sustains the continent’s agriculture, energy production, and human population. Industrial cotton monocultures are this engine. The expansion of cotton fields in the Cerrado, driven by the insatiable demand of fast fashion conglomerates like Inditex, represents a violent terraforming project. To make way for the white gold that feeds Zara’s supply chain, agribusiness giants strip the land of its native vegetation. When the twisted trees and shrubs of the Cerrado are uprooted, the soil loses its structure. The deep roots die, releasing gigatons of stored carbon into the atmosphere—an invisible that accelerates planetary heating. The ecological violence extends beyond deforestation. Cotton is chemically dependent. In the Cerrado, it consumes more pesticides per hectare than almost any other crop. The Earthsight investigation highlights that the region absorbs approximately 600 million liters of pesticides annually, with cotton accounting for a disproportionate share. These chemicals do not stay on the leaves. They drift into the air, poisoning local communities, and leach into the sandy soil, contaminating the very aquifers the biome is supposed to protect. The “water tank” is becoming a toxic reservoir. SLC Agrícola and the Horita Group, the suppliers identified in the Earthsight report as feeding Inditex’s supply chain, operate on an industrial that obliterates biodiversity. The Cerrado is home to five percent of the planet’s animals and plants, of which are widespread. The conversion of this habitat into endless rows of cotton pushes species like the giant anteater, the maned wolf, and the giant armadillo toward extinction. These animals require vast, interconnected territories to survive. The fragmented left behind by agribusiness—islands of native vegetation drowning in a sea of monoculture—cannot support them. Water consumption by these cotton plantations further destabilizes the region. While the Cerrado is adapted to seasonal droughts, the water-intensive nature of industrial cotton farming drains surface water and depletes groundwater reserves. Large- irrigation systems suck rivers dry, altering flow patterns and leaving downstream communities with trickles of mud. This hydrological theft disrupts the delicate balance of the wet and dry seasons, fire risks. In 2024, the region saw a disturbing rise in fires, linked to land clearing and the desiccation of the. The soil itself falls victim to this relentless extraction. Without the protective cover of native vegetation, the Cerrado’s ancient, nutrient-poor soils are exposed to torrential rains and scorching sun. accelerates, washing topsoil into rivers and silting up waterways. To compensate for the degrading land, producers dump more synthetic fertilizers, creating a feedback loop of chemical dependency and environmental degradation. This is not farming in the traditional sense; it is mining the soil for short-term yield, leaving behind a sterile wasteland. Inditex’s reliance on “Better Cotton” certification does nothing to mitigate this physical reality. The certification focuses on procedural checks rather than the structural integrity of the ecosystem. A label on a t-shirt cannot restore a severed aquifer or resurrect a species lost to habitat destruction. The demand for cheap, abundant cotton incentivizes producers to push the agricultural frontier further into the wild, treating the Cerrado not as a important organ of the Earth, as an expendable resource for textile production. The destruction of the Cerrado is a direct consequence of the speed and volume at which brands like Zara operate. The “fast” in fast fashion requires a raw material supply chain that prioritizes output over ecology. Every hectare of Cerrado cleared for cotton is a permanent loss of evolutionary history and ecological function. The biome, once destroyed, does not simply grow back. Its complex interactions between soil, roots, and water took millennia to evolve. The cotton fields that replace them are biological deserts, silent and toxic, producing fiber for garments that likely end up in a landfill within months. This ecological catastrophe is the hidden cost of the Inditex business model. The company’s financial success is built on the conversion of a carbon-sequestering, water-generating biodiversity hotspot into a chemical-laden factory floor. The 2024 data on deforestation rates, even with minor fluctuations, confirms that the pressure on the Cerrado remains immense. As long as the global market demands unlimited cotton at rock-bottom prices, the “underground forest” continue to, taking with it the water security and climate resilience of an entire continent.

SLC Agrícola: The Industrial Engine of Destruction

At the center of the Cerrado’s ecological collapse stands SLC Agrícola, an agribusiness behemoth that dominates the Brazilian cotton sector. Founded in 1977 and publicly traded on the Brazilian stock exchange (B3: SLCE3), this company operates an industrial empire spanning over 460, 000 hectares across six states. It is not a farming operation; it is a land-conversion machine. The Earthsight investigation explicitly identifies SLC Agrícola as a primary source of the “tainted cotton” entering Inditex’s supply chain. While Zara markets its sustainability credentials to Western consumers, its raw materials originate from a supplier with a documented history of large- native vegetation clearance, land disputes, and environmental fines.

The Earthsight Indictment

The “Fashion Crimes” report provides a forensic accounting of SLC Agrícola’s connection to Inditex. Investigators traced 816, 000 tons of cotton exported by SLC Agrícola and the Horita Group between 2014 and 2023. This fiber did not flow directly to Spanish warehouses moved through a complex web of eight Asian clothing manufacturers. These intermediaries produce millions of finished garments for H&M and Zara. The supply chain opacity frequently shields brands from accountability, yet the Earthsight data pierces this veil, linking specific bales of cotton from deforested Brazilian estates directly to the retail giant’s inventory. Inditex cannot claim ignorance when its primary raw material supplier is Brazil’s largest publicly traded farmer, a company repeatedly flagged by environmental watchdogs.

Deforestation by the Numbers

SLC Agrícola’s environmental record contradicts the polished sustainability reports it presents to investors. Data from Chain Reaction Research estimates that the company cleared approximately 30, 000 hectares of Cerrado vegetation between 2011 and 2017 alone, an area roughly the size of Belo Horizonte. While the company frequently asserts that its operations comply with Brazilian law, the legal framework in the Cerrado is far weaker than in the Amazon. Landowners in this biome are required to preserve only 20% to 35% of native vegetation, compared to 80% in the Amazon. SLC Agrícola exploits this regulatory gap to strip vast tracts of savanna legally. Yet, even these lax standards have not prevented the company from running afoul of environmental agencies. Between 2007 and 2010, IBAMA, Brazil’s environmental enforcement agency, fined the company over 12. 5 million reais ($2. 3 million) for environmental violations.

The Hollow “Zero Deforestation” Pledge

In 2021, facing mounting international pressure, SLC Agrícola announced a “Zero Deforestation Policy,” promising to halt the conversion of native vegetation. Satellite monitoring exposes this commitment as a failure. AidEnvironment detected the clearing of approximately 50 hectares of native vegetation within SLC’s **Fazenda Palmares** in Bahia between January and February 2024. This recent destruction occurred in an area previously damaged by fire, which the company claimed was a natural event. Rather than allowing the land to regenerate, SLC converted it for production. This incident demonstrates a pattern where corporate policy serves as a shield for investors while chainsaws continue to operate on the ground.

Land Grabbing and Corruption: The Case of Fazenda Parceiro

The allegations against SLC Agrícola extend beyond environmental destruction to the theft of public lands, a practice known in Brazil as *grilagem*. The company’s **Fazenda Parceiro** in Formosa do Rio Preto, Bahia, sits at the heart of one of Brazil’s most notorious land-grabbing scandals. Investigations by Brazilian authorities linked the estate to a massive corruption scheme involving the bribery of judges to secure fraudulent land titles. This “Operation Faroeste” revealed a criminal enterprise designed to legalize the theft of over 300, 000 hectares of land. While SLC Agrícola leases part of this land and denies direct involvement in the fraud, it profits from the production on disputed territory. The cotton grown here, on land stolen from the state and local communities, flows into the global market with the Better Cotton seal of approval.

Conflict with Traditional Communities

In Piauí, SLC Agrícola’s operations at **Fazenda Cosmos** have sparked conflict with the Melancias traditional community. Residents report that the sprawling estate encroaches on their ancestral territory, restricting their access to the Uruçuí-Preto river and subjecting them to pesticide drift. These communities, who have lived in harmony with the Cerrado for generations, face an industrial neighbor that fences off land and depletes local water tables. The “Fashion Crimes” report highlights these human rights violations as an integral part of the cost of cheap cotton. Inditex’s sourcing, which ostensibly prohibit suppliers involved in land rights abuses, have failed to exclude SLC Agrícola even with these well-publicized conflicts.

The Failure of Certification

SLC Agrícola maintains its position in the global supply chain through the Better Cotton (BC) certification system. This label acts as a passport for its products, assuring brands like Zara that the cotton is “ethical.” Yet, Better Cotton admitted to Earthsight investigators that it was aware SLC farms had been fined for environmental infractions before certifying them. The certification body’s audit method focus on farming practices frequently ignore the legality of land acquisition or historical deforestation. By relying on this flawed standard, Inditex outsources its due diligence to an organization that prioritizes volume over verification. The result is a system where cotton from a farm linked to judicial corruption and deforestation enters the European market as a sustainable product.

Inditex’s Complicity

Inditex’s continued partnership with SLC Agrícola exposes a serious flaw in its corporate responsibility strategy. The retailer relies on the sheer volume SLC provides to meet the demands of its fast-fashion model. Severing ties with Brazil’s largest producer would require a fundamental restructuring of its supply chain and a likely increase in costs. Instead, Inditex accepts the “Better Cotton” assurances, bankrolling the destruction of the Cerrado. The profits from Zara’s sales in London and New York filter back to Bahia, incentivizing SLC Agrícola to expand its footprint further into the savanna. Until Inditex enforces a strict zero-tolerance policy for suppliers linked to deforestation and land grabbing, its sustainability claims remain little more than marketing noise masking the roar of bulldozers.

SECTION 4 of 14: Horita Group: Documenting Land Grabbing and Corruption in Western Bahia

The Estrondo Estate: A Monument to Land Theft

Inditex’s supply chain relies heavily on cotton sourced from Western Bahia. This region is dominated by the Horita Group. Walter Yukio Horita and his brother Wilson Hideki Horita control this agribusiness empire. They operate roughly 140, 000 hectares of farmland in the area. of this land lies within the Agronegócio Condomínio Cachoeira do Estrondo. This massive estate covers over 444, 000 hectares. It is larger than the state of Rhode Island. Brazilian authorities identify Estrondo as one of the largest land-grabbing cases in the nation’s history. The mechanics of this land theft are brutal and systematic. The estate occupies public lands that belong to the state of Bahia. These lands are the ancestral home of the Geraizeiros. These traditional communities have lived in the Cerrado for nearly two centuries. They practice sustainable agriculture and coexist with the biome. The Horita Group and other tenants of Estrondo have enclosed these commons. They use armed security to enforce boundaries that courts have repeatedly declared illegal. Bahia’s Attorney General launched a lawsuit in 2018 against the estate’s owners. The state seeks to recover over 400, 000 hectares of illegally appropriated public land. The Horita Group occupies approximately one-third of this disputed territory. They use it to grow cotton and soy for export. The Earthsight investigation revealed that Horita’s operations are not passive. They are active participants in the dispossession of local people.

Operation Faroeste: Justice for Sale

Land grabbing in Bahia requires political cover. The Horita Group’s expansion is linked to a massive corruption scandal known as Operation Faroeste. Federal Police launched this investigation to a criminal organization within the Bahia Court of Justice. The scheme involved the sale of judicial rulings to legitimize land grabs. Judges and court officials received bribes in exchange for decisions that favored agribusiness interests over legitimate landholders. Walter Horita was a central figure in this inquiry. Investigators allege he paid millions of reais to lawyers and court officials. These payments secured favorable rulings that allowed the Horita Group to maintain control over disputed lands. Federal agents raided Horita’s home and offices during the operation. They seized documents and digital evidence. The Superior Court of Justice (STJ) described Horita as a primary beneficiary of this criminal network. The of the financial flows is massive. Authorities discovered that Walter Horita moved over 22 billion reais between 2013 and 2019. of this money had no clear origin. Reports indicate that Horita negotiated a plea bargain with authorities. He agreed to pay a fine of nearly 30 million reais to avoid prosecution. The Horita Group denies the existence of this plea deal. The evidence of corruption remains a matter of public record. Inditex continues to profit from cotton grown on land secured through these illicit means.

Violence Against Traditional Communities

The theft of land in Western Bahia is a violent process. The Geraizeiros face constant intimidation from private security forces employed by Estrondo. These guards patrol the estate’s perimeter. They restrict the movement of local residents. They confiscate cattle. They destroy fences built by the community. The violence frequently escalates into armed conflict. Security guards working for Estrondo shot two members of the local community in 2019. Jossone Lopes was shot in the leg while attempting to recover his cattle. Another resident was wounded in a separate incident. The Horita Group’s operations are directly linked to this violence. Their farms benefit from the security apparatus that terrorizes the local population. The cotton that enters Inditex’s supply chain is harvested in a zone of low-intensity conflict. The Horita Group also the Capão do Modesto community. This traditional territory is located in the municipality of Correntina. Horita acquired the “Alegre” farm in this area. The company uses this property as a “legal reserve” for its Sagarana farm. This arrangement allows Horita to clear more land for production elsewhere. The acquisition of the Alegre farm is fraudulent. A court ruling in 2023 suspended all land titles overlapping the Capão do Modesto territory. The judge evidence of land grabbing. The Horita Group ignores these legal setbacks. They continue to list the property as a valid environmental asset.

Environmental Crimes and Impunity

The Horita Group’s record of environmental violations is extensive. IBAMA is Brazil’s federal environmental enforcement agency. Agents from IBAMA fined Horita owners more than 20 times between 2010 and 2019. The total value of these fines exceeds 4. 5 million dollars. The violations include illegal deforestation and the use of embargoed land. Satellite imagery analysis by Earthsight exposed a brazen breach of environmental law. IBAMA placed an embargo on a specific Horita farm in 2008. This measure prohibits any commercial activity on the land to allow for regeneration. The Horita Group ignored this order. They have grown cotton on this embargoed land repeatedly since 2017. This cotton enters the global market carrying the taint of environmental crime. State agencies in Bahia also documented illegal clearing. Inema is the state environmental body. Inema found 25, 153 hectares of illegal deforestation on Horita farms within Estrondo in 2014. The agency later admitted it could find no permits for another 11, 700 hectares cleared between 2010 and 2018. The destruction of the Cerrado is not an accident. It is a business model. The fines are treated as a cost of doing business. The profits from cotton exports far outweigh the penalties.

The Supply Chain of Complicity

Inditex cannot claim ignorance of these facts. The Horita Group is a major supplier to global trading giants. Cargill and Bunge purchase vast quantities of soy and cotton from Horita farms. These traders then supply the textile manufacturers that produce garments for Zara and other Inditex brands. The supply chain is documented. Shipment records link Horita directly to the Asian factories that clothe the world. The “Better Cotton” certification scheme this trade. Horita farms carry the Better Cotton seal. This label supposedly guarantees ethical and sustainable production. The certification bodies failed to detect the land grabbing. They ignored the corruption allegations. They overlooked the environmental fines. The Better Cotton initiative validates the destruction of the Cerrado. It provides a shield for Inditex. The retailer can point to the logo and claim compliance. The reality on the ground tells a different story. Inditex’s reliance on Horita cotton supports a criminal enterprise. Every dollar paid for this cotton funds the legal defense of corrupt land grabbers. It pays the salaries of the guards who shoot traditional farmers. It finances the bulldozers that clear the native savanna. The connection is direct. The liability is undeniable. The Horita Group exemplifies the rot at the base of the fast fashion industry. Inditex’s sourcing practices prioritize volume and price over legality and human rights. The result is a supply chain built on stolen land and corruption.

The Better Cotton Loophole: Certifying ‘Tainted’ Cotton as Sustainable

The method allowing illegal deforestation to infiltrate the supply chains of global fashion giants is not a failure of oversight, a feature of the certification model itself. Inditex relies heavily on the Better Cotton (BC) initiative to validate its sustainability claims, yet in Brazil, this system functions less as a rigorous auditor and more as a laundering operation for agribusinesses engaged in environmental crimes. The core of this failure lies in a “benchmarking” agreement that outsources verification to the very industry it purports to regulate.

The Benchmarking Trojan Horse

Better Cotton does not directly certify farms in Brazil. Instead, it operates through a partnership with the Brazilian Association of Cotton Producers (ABRAPA). Under a 2014 agreement, ABRAPA’s own “Responsible Brazilian Cotton” (ABR) program was deemed equivalent to the Better Cotton Standard. This reciprocity means that any cotton certified by ABRAPA automatically receives the Better Cotton seal of approval. Consequently, the entity responsible for policing environmental standards is the trade association representing the producers themselves.

This structure creates a fundamental conflict of interest. ABRAPA’s primary mandate is to maximize the commercial success of Brazilian cotton growers, including the industrial- agribusinesses driving the destruction of the Cerrado. By delegating certification authority to a lobbying group, Better Cotton has allowed the fox to guard the henhouse. The Earthsight investigation revealed that this arrangement permitted farms owned by SLC Agrícola and the Horita Group to retain their “sustainable” status even while being fined for illegal clearance and embroiled in land-grabbing disputes.

The Mass Balance Mirage

The obfuscation is further entrenched by Better Cotton’s “mass balance” chain of custody model. Unlike segregation models that keep certified raw materials separate from non-certified ones, mass balance allows for the mixing of cotton from various sources as it moves through the supply chain. A brand like Zara does not necessarily buy physical cotton grown on a specific sustainable farm. Instead, it purchases “Better Cotton Claim Units” (BCCUs), credits that correspond to a volume of certified cotton produced somewhere in the system.

This decoupling of physical material from sustainability claims renders traceability nearly impossible for the end consumer. “Dirty” cotton grown on illegally deforested land in Western Bahia can be mixed with legitimate cotton at the ginning stage. Once processed, the tainted fiber becomes indistinguishable from the rest. For Inditex, this system offers a convenient shield: the company can claim it sources vast quantities of “Better Cotton” without ever having to verify the actual origin of the fiber in its garments. The certification creates a paper trail of sustainability that bears little resemblance to the physical reality of the supply chain.

Certifying Environmental Crimes

The practical consequences of this loophole are devastating. Earthsight’s “Fashion Crimes” report documented that between 2014 and 2023, approximately 816, 000 tonnes of cotton from SLC Agrícola and the Horita Group were exported to manufacturers supplying Inditex and H&M. even with the Horita Group’s involvement in the Estrondo estate scandal, one of the largest alleged land grabs in Brazilian history, and SLC Agrícola’s clearance of thousands of hectares of native vegetation, their cotton continued to flow into global markets with the Better Cotton stamp of approval.

Better Cotton’s standards in Brazil failed to flag these violations because they focus narrowly on farm-level operations rather than the broader corporate conduct of the landowners. A farm can be certified “sustainable” even if its owners are simultaneously clearing adjacent land illegally or are involved in corruption scandals to secure land titles. When confronted with evidence of these crimes, Better Cotton’s response was to commission an audit that Earthsight later dismissed as “flawed to the point of being almost worthless,” as it examined only a fraction of the relevant farms and ignored the widespread nature of the agribusinesses’ operations.

Inditex’s Plausible Deniability

For Inditex, the Better Cotton loophole provides a of plausible deniability. When the Earthsight findings broke, Inditex sent a letter to Better Cotton demanding “transparency” and expressing “serious breach of trust.” Yet, this response deflects accountability. By outsourcing its due diligence to a third-party certifier known to partner with industry lobbyists, Inditex constructed a supply chain willfully blind to the environmental costs of its raw materials.

The retailer’s reliance on this flawed system allows it to project an image of responsibility while profiting from the cheap, high-volume cotton production that demands the erasure of the Cerrado. As long as the “Better Cotton” label remains a tradable commodity divorced from the land, the destruction of Brazil’s savanna continue to be certified, packaged, and sold as sustainable fashion.

The forensic of Inditex’s supply chain begins with a single, metric: 816, 000 tonnes. This figure represents the volume of cotton traced by Earthsight investigators from the deforested estates of SLC Agrícola and the Horita Group in western Bahia to eight specific clothing manufacturers in Asia between 2014 and 2023. This mass of fiber, grown on land seized from traditional communities and cleared in violation of environmental embargoes, did not into the unclear global market. Instead, it flowed through a precise, documentable channel directly into the factories that stitch garments for Zara, Bershka, and Pull&Bear.

The Asian Nexus: Jamuna Group

Among the eight manufacturers identified, the Jamuna Group in Bangladesh stands out as a serious node in Inditex’s procurement network. Earthsight’s analysis of thousands of shipment records reveals that Jamuna is a primary recipient of this tainted cotton. The of this relationship is industrial. In the twelve months leading up to August 2023 alone, Zara stores in Europe sold denim and other clothing manufactured by Jamuna worth approximately €235 million. This to roughly 21, 500 pairs of jeans produced every single day, stitched from fiber that carries the forensic signature of the Cerrado’s destruction.

Jamuna Group is not a minor player; it is one of Bangladesh’s largest industrial conglomerates, and its textile division exports nearly two-thirds of its total production to Inditex. This high degree of dependency creates a direct, undeniable pipeline. When SLC Agrícola or Horita Group bulldozes native vegetation in Bahia to expand production, the resulting cotton bales are loaded onto trucks, shipped to ports, and sold to intermediaries. From there, they travel to Chittagong, enter Jamuna’s spinning mills, and emerge as the “Join Life” sustainable collections hanging in Inditex storefronts across Madrid, London, and New York.

Forensic Methodology: Connecting the Dots

The link between a bulldozer in Bahia and a price tag in Berlin was established through rigorous supply chain forensics. Earthsight investigators did not rely on corporate sustainability reports or voluntary disclosures. They built their case using primary data: satellite imagery, court rulings, and export records. By cross-referencing the specific harvest periods of the embargoed farms with the export dates of cotton shipments, they tracked the physical movement of the commodity.

To the gap between the Brazilian exporters and the Asian mills, the investigative team went undercover. Posing as investors and industry insiders at global trade shows, they obtained sensitive supplier lists and production data that are shielded from public view. This subterfuge confirmed what the shipping records suggested: the “dirty” cotton was not being segregated. It was being mixed, spun, and certified as “Better Cotton” (BC), laundering its environmental crimes before it even reached the sewing floor. The certification provided a veneer of legitimacy, allowing Inditex to classify the resulting garments as ethical while the raw material itself was the product of illegal land clearance.

The Indonesia Connection: PT Kahatex

While Jamuna Group anchors the Bangladesh supply route, the investigation also identified PT Kahatex in Indonesia as another major recipient of the tainted fiber. Kahatex is among the largest consumers of Brazilian cotton globally. Although H&M is identified as Kahatex’s second-largest customer, the mill is part of the broader manufacturing ecosystem that feeds the fast fashion duopoly. The sheer volume of cotton ingested by these mega-mills, hundreds of thousands of tonnes, makes it statistically impossible for major clients to avoid contamination without rigorous, farm-level traceability, which Inditex’s current systems fail to provide.

The forensic evidence presents a binary reality. Either Inditex knew its primary suppliers were sourcing from high-risk Brazilian agribusinesses and chose to look away, or its oversight method are so fundamentally broken that it cannot identify the origin of the raw material for a quarter-billion euros worth of inventory. The 816, 000-tonne figure is not an estimate; it is a documented quantity of evidence that indicts the company’s procurement model. The supply chain is not a mysterious “black box.” It is a series of contracts and bills of lading that, when read together, tell a clear story of complicity.

Traceability Data: The route of Tainted Cotton

Origin (Brazil)	Intermediary Stage	Manufacturer (Asia)	Retail Destination	Volume/Value
SLC Agrícola / Horita Group (Bahia)	Global Trading Houses (Export)	Jamuna Group (Bangladesh)	Inditex (Zara, Bershka, Pull&Bear)	€235m (Europe sales, 1 yr)
SLC Agrícola / Horita Group (Bahia)	Global Trading Houses (Export)	PT Kahatex (Indonesia)	Global Fast Fashion Retailers	Part of 816, 000 tonnes traced

Satellite Analysis: Visualizing Illegal Vegetation Clearance on Certified Farms

The modern era of supply chain accountability is defined by a simple, unyielding truth: there is nowhere to hide from the eye in the sky. While corporate sustainability reports rely on self-assessments and static audits, satellite technology provides an objective, time-stamped record of environmental destruction. In the case of Inditex’s supply chain, the between certified “sustainable” cotton and the ground reality in Brazil’s Cerrado is not a matter of interpretation of visible, quantifiable geography. Earthsight’s investigation, Fashion Crimes, uses this technology to strip away the veneer of compliance, revealing a pattern of industrial- clearance that directly contradicts the ethical claims of the world’s largest fashion retailer.

Methodology: The Digital Smoking Gun

The forensic backbone of this exposure lies in the cross-referencing of high-resolution satellite imagery with government authorization records. Earthsight, in collaboration with AidEnvironment, used imagery from providers like Planet and Sentinel-2 to monitor specific coordinates within the Western Bahia region. This “Real-time Deforestation Monitoring” (RDM) system allows investigators to detect changes in vegetation cover on a week-by-week basis. By overlaying these visual changes with data from Brazil’s National Institute for Space Research (INPE) and the specific deforestation permits issued by Bahia’s environmental agency (Inema), the analysis distinguishes between legal suppression and illegal clearance. The results present a damning timeline of destruction on farms certified by Better Cotton and linked to Inditex suppliers.

Case Study: SLC Agrícola’s Fazenda Palmares

SLC Agrícola, a giant in the Brazilian agribusiness sector and a key supplier in the Inditex network, presents a case study in the limitations of corporate denial. Satellite analysis focused on Fazenda Palmares, a sprawling estate in the municipality of Barreiras. In November 2022, monitoring systems detected a fire event that razed native vegetation in the southern portion of the farm. SLC Agrícola dismissed the event as a “natural fire,” a common defense used to evade responsibility for land conversion. yet, satellite imagery from January and February 2024 tells a different story.

Images from this period show heavy clearing the very same area that had supposedly burned naturally two years prior. Approximately 50 hectares of vegetation were mechanically removed, preparing the land for cultivation. This sequence, fire followed by clearance, is a known method for bypassing deforestation regulations, yet the cotton produced here continues to flow into global markets. Broader analysis of SLC’s properties, including Fazenda Piratini and Fazenda Parceiro, reveals a cumulative loss of at least 40, 000 hectares of native Cerrado vegetation over the last 12 years. The persistence of this clearance, visible from orbit, stands in clear contrast to the “zero-deforestation” pledges frequently found in the company’s public relations materials.

Case Study: Horita Group’s Estrondo and Barra Velha

The Horita Group, another primary supplier identified in the supply chain tracing, operates the Estrondo estate, a mega-farm covering over 200, 000 hectares. Historical satellite data paints a picture of widespread non-compliance. In 2014, analysis by Bahia’s environmental agency identified 25, 153 hectares of illegal deforestation within the estate. More, the focus has shifted to Fazenda Barra Velha. Between March 2022 and May 2023, satellite sensors detected the clearance of 5, 778 hectares of native vegetation. When investigators checked these coordinates against public permit databases, they found authorization for only 2, 995 hectares. This gap suggests that nearly 2, 800 hectares, an area roughly the size of 3, 900 football fields, were cleared without valid permits.

Similar patterns emerge at Fazenda Santa Paula, also linked to the Horita/Mizote complex. From January 2022 to May 2023, approximately 5, 500 hectares were stripped of vegetation. Permits could only be located for 2, 869 hectares. The visual evidence is unambiguous: vast geometric scars appearing in the, turning complex savanna ecosystems into monoculture grids. These are not minor boundary adjustments industrial operations requiring fleets of bulldozers and weeks of labor, all occurring in plain sight of satellite monitors yet apparently invisible to the certification bodies approving the cotton.

Case Study: Franciosi Agro’s Santa Isabel

The investigation also utilized satellite data to audit Franciosi Agro, a producer supplying the same Asian textile mills that manufacture for Zara and H&M. At the Santa Isabel farm complex in Luís Eduardo Magalhães, imagery from 2021 to 2023 shows the clearance of 5, 000 hectares of native vegetation. A review of the environmental licenses for this property revealed that the company had authorization to clear less than half that amount. The satellite record provides irrefutable proof that the farm expanded its production area far beyond its legal limits, laundering the harvest from illegal lands into the legitimate supply chain.

The Certification Blind Spot

The most disturbing aspect of this satellite analysis is not the deforestation itself, the fact that it occurred on farms holding the Better Cotton (BC) certification. BC relies heavily on retrospective audits and document checks, a method that has proven woefully insufficient against the speed of modern deforestation. Satellites capture the destruction as it happens; auditors frequently arrive months or years later, by which time the land has been plowed, planted, and harvested. The “loophole” allows cotton from these deforested zones to be certified because the system does not require farm-level traceability for the end consumer, nor does it penalize “legal” deforestation in the Cerrado, even with the biome’s ecological fragility.

Farm / Group	Period Monitored	Total Clearance Detected	Permit Status / gap
SLC Agrícola (Fazenda Palmares)	Jan, Feb 2024	50 hectares	Cleared in “burned” area; claimed natural fire.
Horita Group (Fazenda Barra Velha)	Mar 2022, May 2023	5, 778 hectares	~2, 783 ha unpermitted (Illegal).
Horita Group (Fazenda Santa Paula)	Jan 2022, May 2023	5, 500 hectares	Only ~2, 869 ha permitted.
Franciosi Agro (Santa Isabel)	2021, 2023	5, 000 hectares	Cleared double the authorized area.

The data is clear. 816, 000 tonnes of cotton tracked from these specific producers did not simply; it entered the global market, moving from the deforested plains of Bahia to the spinning mills of Asia, and to the retail racks of Inditex brands. The satellite images serve as a permanent indictment, freezing the moment of destruction in time and linking it directly to the garments sold in high streets worldwide. In the face of such granular, visual evidence, the industry’s reliance on paper certificates and self-regulation appears not just negligent, complicit.

The traditional community of Capão do Modesto, located in the municipality of Correntina in Western Bahia, stands as a harrowing testament to the human cost of the global fashion supply chain. Inhabited by approximately 80 families who identify as Fundo e Fecho de Pasto, this territory has become the epicenter of a violent struggle between sustainable communal living and the voracious appetite of industrial agribusiness. Unlike the vast monocultures that surround them, these families have occupied the Cerrado for generations, practicing low-impact agriculture and communal grazing that preserves the biome’s biodiversity. Their existence, yet, faces an existential threat from the very entities supplying cotton to Inditex.

The Mechanics of “Green Land Grabbing”

The conflict at Capão do Modesto exposes a sophisticated legal maneuver known as “green land grabbing.” Under Brazil’s Forest Code, landowners in the Cerrado must preserve 20 percent of their property as a “legal reserve.” Agribusinesses, seeking to maximize the productive area of their high-value cotton and soy plantations, frequently bypass this requirement by purchasing cheap land in distant areas to serve as their reserve. This allows them to clear 100 percent of their prime agricultural real estate while claiming compliance with environmental laws.

Investigations reveal that the Horita Group and SLC Agrícola have used the territory of Capão do Modesto for this exact purpose. By acquiring land titles overlapping with the traditional community’s territory, these corporations designate the community’s forests as their own legal reserves. This bureaucratic sleight of hand privatizes the community’s ancestral land, turning their home into a “paper forest” that justifies the deforestation of thousands of hectares elsewhere. The families of Capão do Modesto find themselves living on land that, on paper, belongs to agribusiness giants, stripping them of their rights and subjecting them to a campaign of terror designed to drive them out.

Horita Group: The Alegre Farm Connection

The Horita Group, a key supplier identified in Inditex’s supply chain, sits at the heart of the allegations in Correntina. Legal documents and investigative reports link the company to the acquisition of the “Alegre” farm, a 2, 169-hectare property that overlaps directly with the Capão do Modesto territory. This land serves as the legal reserve for Horita’s Sagarana farm, a massive soy and cotton operation located nearly 150 kilometers away.

The Bahia State Attorney General’s office has flagged this transaction as fraudulent. In a move that validates the community’s long-standing grievances, the Attorney General requested the suspension and eventual cancellation of land titles overlapping the community, citing the acquisition as “one of the most serious land grabbing cases in Bahia.” In 2023, a court ruling suspended these titles, acknowledging the illegality of the claims. Even with this judicial intervention, the Horita Group continues to list these disputed lands as environmental assets, laundering the reputation of their cotton production while the local population lives under siege.

SLC Agrícola and Tabuleiro VII

SLC Agrícola, another giant in the Inditex supply network, is similarly implicated in the dispossession of Capão do Modesto. The company’s Paysandu farm, a major cotton-producing estate, is legally tethered to a reserve within the community known as “Tabuleiro VII.” This linkage allows SLC to maintain intensive cultivation on its Paysandu estate by outsourcing its conservation obligations to land occupied by traditional inhabitants.

This arrangement creates a perverse incentive structure where the preservation of the Cerrado on paper directly correlates with the violation of human rights on the ground. The community’s presence becomes a liability for the “owners” of the reserve, leading to systematic efforts to restrict their movement and activities. The cotton harvested from Paysandu, tainted by this association, flows into the global market, carrying the Better Cotton certification that supposedly guarantees social responsibility.

Tactics of Intimidation and Violence

The “green land grabbing” scheme is enforced through brute force. Residents of Capão do Modesto report a systematic campaign of harassment, surveillance, and violence carried out by private security forces and gunmen linked to the agribusiness interests. The objective is clear: make life in the territory unbearable.

Community members describe being confined to shrinking pockets of land, unable to access the grazing grounds their livelihoods depend on. Gunmen patrol the perimeter, intimidating families and restricting their freedom of movement. Reports document incidents of cattle theft, where livestock, the primary economic asset for these families, are seized or killed by security agents. In more extreme cases, residents have faced direct physical threats and armed attacks. The isolation of the community, which absence connection to the electrical grid and relies on spotty satellite internet, exacerbates their vulnerability, allowing these abuses to occur with relative impunity.

The psychological toll is immense. Families who have lived in harmony with the Cerrado for over a century live in constant fear of eviction and violence. The restriction on their traditional activities not only threatens their economic survival also their cultural identity. The “legal reserves” that Inditex’s suppliers claim to protect are, in reality, zones of conflict where environmental compliance is weaponized against human rights.

Judicial Intervention and Corporate Inaction

The severity of the situation at Capão do Modesto has forced the state to act, albeit slowly. The Bahia Attorney General’s intervention highlights the widespread nature of the land grabbing, noting that 19 private properties illegally overlap with the community’s 11, 200-hectare territory. The suspension of titles represents a significant legal victory, yet the situation on the ground remains volatile. Agribusinesses continue to exert pressure, and the complex web of shell companies and bureaucratic obfuscation makes enforcement difficult.

For Inditex, the are direct and damning. The cotton sourcing that rely on certifications like Better Cotton have failed to detect or prevent this exploitation. The traceability data linking Horita and SLC to Asian garment manufacturers, and subsequently to Zara and H&M, establishes a clear chain of custody. The cotton fibers woven into fast fashion garments sold in European and American outlets are physically derived from a system that dispossesses the families of Capão do Modesto. The corporate narrative of sustainability collapses when confronted with the reality that their “eco-friendly” suppliers are maintaining their environmental credentials by stealing land from of Brazil’s most populations.

Capão do Modesto Conflict: Key Entities and Allegations

Entity	Property Name	Role in Conflict	Connection to Inditex
Horita Group	Alegre Farm (2, 169 ha)	Land overlaps traditional territory; used as “legal reserve” for Sagarana farm.	Direct supplier of cotton to Inditex manufacturers.
SLC Agrícola	Tabuleiro VII	“Legal reserve” linked to Paysandu cotton farm; overlaps community land.	Direct supplier of cotton to Inditex manufacturers.
Bahia Attorney General	N/A	Called it “one of the most serious land grabbing cases”; suspended titles.	Legal authority challenging the suppliers.
Capão do Modesto Community	Traditional Territory (11, 200 ha)	Victims of displacement, violence, cattle theft, and surveillance.	Displaced population at the source of the supply chain.

The “sustainable” cotton label stitched into millions of Inditex garments relies on a certification system so fundamentally compromised that it functions less as a safeguard and more as a laundering method for environmental crimes. At the center of this deception lies the Brazilian Association of Cotton Producers (Abrapa), a trade entity that Inditex and Better Cotton (BC) treat as an independent arbiter of sustainability. In reality, Abrapa is an industry lobby group run by the very agribusinesses driving the destruction of the Cerrado. ### The Benchmarking Loophole The structural failure begins with a bureaucratic method known as “benchmarking.” Better Cotton, the Geneva-based organization that Inditex relies on for its sustainability claims, does not directly certify farms in Brazil. Instead, it outsources this serious function to Abrapa through a strategic partnership. Under this agreement, Abrapa’s own certification scheme, *Algodão Brasileiro Responsável* (ABR), is deemed equivalent to Better Cotton standards. This equivalence creates an automatic pipeline: if a Brazilian farm receives ABR certification, it is instantly licensed to sell its harvest as Better Cotton. This system allows Inditex to procure vast quantities of “sustainable” fiber without ever conducting its own due diligence on the ground. The flaw is absolute. Abrapa’s primary mandate is not environmental protection; it is to maximize the profitability and market share of Brazilian cotton producers. By designating a lobby group as the gatekeeper of sustainability, Better Cotton has put the fox in charge of the henhouse. ### Institutionalized Conflict of Interest Abrapa is not a neutral NGO or a government watchdog. It is an association owned, funded, and governed by cotton farmers. Its leadership consists of the same industrial- producers accused of land grabbing and deforestation. In 2024, the presidency of Abrapa was held by Alexandre Schenkel, a major cotton grower from Mato Grosso. He was succeeded in the 2025-2026 term by Gustavo Viganó Piccoli, another prominent producer and former president of the Mato Grosso Cotton Producers Association (Ampa). These individuals represent the interests of the agribusiness elite. Their role is to defend the sector against regulation and criticism, yet they are simultaneously tasked with policing that same sector for environmental violations. The conflict extends deep into the association’s councils. The Horita Group, identified by Earthsight as a key actor in the violent dispossession of traditional communities in Bahia, maintains deep ties to this structure. Walter Horita, the group’s owner who was implicated in a “cash-for-court-rulings” corruption scandal, is a celebrated figure within the sector. Abrapa does not shun these actors; it champions them. The association has frequently used SLC Agrícola’s farms as showpieces for international delegations, presenting the very entities linked to Cerrado clearance as models of responsibility. ### The Audit Charade The verification process overseen by Abrapa is financially compromised. The third-party auditors responsible for inspecting farms are paid directly by the farmers they audit. This client-vendor relationship creates an immediate incentive for leniency. An auditor who rigorously documents violations—such as the illegal clearance of native vegetation or the encroachment on traditional lands—risks losing future contracts with the agribusinesses that pay their fees. Earthsight’s 2024 investigation, *Fashion Crimes*, exposed the consequences of this corrupt feedback loop. The report detailed how auditors repeatedly certified farms owned by SLC Agrícola and the Horita Group as compliant with sustainability standards, even as satellite imagery showed thousands of hectares of deforestation. In one egregious case, auditors certified a farm even with the existence of government fines for environmental infractions. The ABR protocol, which supposedly aligns with international standards, failed to detect or report the violent land disputes at the Estrondo estate, where the Horita Group operates. ### Inditex’s Willful Blindness Inditex is not a passive victim of this fraud; it is a primary beneficiary. The Spanish retail giant consumes massive volumes of Brazilian cotton—tracing 816, 000 tonnes to these specific suppliers—and relies on the ABR-Better Cotton equivalency to market its products as “Join Life” or sustainable. When confronted with evidence of these failures, Inditex’s response has been one of bureaucratic deflection. Following the release of the *Fashion Crimes* report, Inditex sent a letter to Better Cotton demanding “transparency” and clarification. Yet, the company continues to source from Brazil through this tainted pipeline. By accepting Abrapa’s certification at face value, Inditex abdicates its responsibility to verify its supply chain. The company’s sustainability claims rest on the word of a trade association that exists to protect the profits of deforesters. ### The 2025 Whitewash In March 2025, Better Cotton released an updated “action plan” to address the scandals in Brazil. Far from the conflict of interest, the plan reinforced it. Better Cotton announced it would work *with* Abrapa to “strengthen” due diligence and “promote communication” with local communities. This decision ignores the fundamental reality of the Cerrado: Abrapa’s members are the antagonists in the struggle for land and preservation. Asking the cotton lobby to lead the effort in protecting traditional communities from land grabbing is an act of cynicism. It ensures that the certification system remains a tool for corporate reputation management rather than a method for genuine environmental accountability. For Inditex, this arrangement is convenient. It allows the flow of cheap, “certified” cotton to continue uninterrupted, while the Cerrado behind a veil of paperwork.

Table 9. 1: The Certification Conflict Matrix

Entity	Role in Supply Chain	Conflict of Interest
Abrapa	Certifying Body & Trade Lobby	Represents the commercial interests of the farmers it certifies. Leadership consists of cotton producers.
Better Cotton (BC)	Global Standard Setter	Outsources verification to Abrapa via “benchmarking,” removing independent oversight.
Auditors	Field Inspectors	Paid directly by the farms (auditees), creating financial dependency and pressure to ignore violations.
Inditex	Buyer / Retailer	Uses ABR/BC certification to validate “sustainability” claims without independent verification of illegal deforestation.

The Aggressive Pivot: Inditex’s Letter to Geneva

On April 8, 2024, days before the public release of Earthsight’s Fashion Crimes report, Inditex executives dispatched a blistering letter to Better Cotton CEO Alan McClay. The correspondence did not contain an apology to the communities in Western Bahia. It did not outline an immediate plan to compensate victims of land grabbing. Instead, the Spanish retail conglomerate launched a preemptive strike against its own sustainability partner. Inditex framed itself as a victim of bureaucratic incompetence rather than a beneficiary of environmental plunder. The letter demanded urgent explanations and accused the certifier of failing to protect the retailer’s reputation.

Inditex’s strategy relied on a calculated deflection. The company claimed the represented a “serious breach of trust” in the certification process. By focusing on the certifier’s inability to police the supply chain, Inditex attempted to distance its executive leadership from the crimes committed on the ground. The narrative was clear. The system had failed Inditex. Inditex had not failed the Cerrado. This rhetorical maneuver allowed the company to express outrage at the findings without admitting negligence in its procurement strategies. The letter treated the illegal deforestation and violence as a service failure delivered by a vendor rather than a human rights emergency funded by its orders.

The “Breach of Trust” Narrative

The specific language used by Inditex reveals a corporate priority to insulate the brand from liability. In the letter to McClay, Inditex officials stated that they had relied on Better Cotton to ensure good practices. They argued that the presence of tainted cotton in their supply chain was a violation of the agreement between the retailer and the certifier. This argument ignores the immense power Inditex holds over the global textile market. As one of the world’s largest buyers of cotton, Inditex possesses the resources to conduct independent forensic audits. Relying solely on a third-party logo provided a convenient shield against direct accountability.

Inditex also complained about a absence of communication. The company noted it had been waiting more than six months for the results of an internal investigation Better Cotton supposedly launched in August 2023. This detail is damning. It suggests Inditex was aware of chance irregularities in its Brazilian supply chain long before the Earthsight report went public. Yet the retailer continued to source garments linked to these supply chains while waiting for a report. The demand for “transparency” in April 2024 came only after the threat of public exposure became unavoidable. The timeline indicates that Inditex prioritized damage control over immediate supply chain intervention.

Contrast in Corporate Responses

The between Inditex and its main competitor, H&M, highlights the aggressive nature of the Spanish giant’s defense. Confronted with the same evidence, H&M admitted to a failure of responsibility. The Swedish retailer acknowledged that its reliance on the certification scheme had been insufficient. Inditex refused to make such a concession. The company maintained a stance of injured innocence. They directed all inquiries regarding the scandal to Better Cotton. This refusal to accept blame serves a legal and financial purpose. Admitting fault could open the door to litigation from affected communities or sanctions under emerging European supply chain laws. Blaming the certifier keeps the liability one step removed from the parent company.

The Transparency Trap

Inditex demanded that Better Cotton produce a “plan” to clarify traceability. This request sounds proactive in a press release. In practice, it functions as a delaying tactic. By asking the certifier to fix the system, Inditex avoids the immediate need of severing ties with the problematic suppliers. The demand for a new plan implies that the current system can be repaired with better paperwork. It sidesteps the fundamental problem that the cotton was grown on stolen land. No amount of improved transparency can retroactively legalize deforestation or erase the violence used to clear the Capão do Modesto territory. The call for better oversight shifts the load of proof back to the organization that failed in the place.

Scapegoating the Certifier

Earthsight and other environmental watchdogs identified this response as a classic scapegoating tactic. Better Cotton has long been criticized for its weak standards and conflict of interest in Brazil. Inditex knew or should have known about these flaws. The retailer’s sustainability reports frequently tout its rigorous standards and control over its supply chain. Claiming ignorance when those standards fail contradicts the image of a hyper- logistics machine. If Inditex can track a Zara blazer from a distribution center to a retail shelf in forty-eight hours, its inability to trace the raw material for that blazer suggests a willful blindness. The reliance on a flawed certification scheme provided a method to wash the cotton of its crimes before it entered the Inditex inventory.

Financial of the Denial

The refusal to admit fault protects Inditex’s stock value and consumer perception. A direct admission of sourcing illegal cotton would contradict the company’s heavy investment in “Join Life” and other sustainability marketing efforts. It would validate the claims that fast fashion is inherently destructive. By shifting the blame to Better Cotton, Inditex attempts to preserve the validity of the sustainability label itself. If the label is broken, it can be fixed. If the business model is broken, it must be dismantled. The April 2024 response was designed to ensure that the conversation remained focused on the mechanics of certification rather than the ethics of production.

Comparison of Responses to Earthsight Report (April 2024)

Entity	Primary Stance	Key Action Taken	Admission of Fault
Inditex	Accusatory / Deflective	Sent demand letter to Better Cotton CEO	None (“Breach of trust” by certifier)
H&M	Apologetic / Reflective	Acknowledged failure in responsibility	Yes (“We have failed”)
Better Cotton	Defensive / Bureaucratic	Launched third-party audit of specific farms	Partial (Admitted need for better due diligence)

The aggressive posture taken by Inditex succeeded in muddying the waters. Media coverage split between the crimes in the Cerrado and the bureaucratic infighting between the retailer and the certifier. This distraction served Inditex well. It allowed the company to continue operations without an immediate boycott or regulatory crackdown. The cotton continued to flow. The garments continued to sell. The blame remained firmly attached to the paperwork, not the purchaser.

The journey of 816, 000 tonnes of tainted cotton does not end in the spinning mills of Dhaka or Jakarta. It terminates in the pristine, well-lit of Zara and Bershka stores across Europe and the Americas. For the consumer, the transaction is simple: a pair of denim jeans for €29. 95, perhaps tagged with a comforting “Join Life” or “Better Cotton” label. For the Cerrado, the transaction is existential. The Earthsight investigation, *Fashion Crimes*, provides the forensic evidence linking Inditex’s most popular brands directly to the environmental carnage in Western Bahia, shattering the plausible deniability the conglomerate has long maintained regarding its raw material sources. The investigation identified a specific, high-volume pipeline connecting the deforestation-scarred estates of SLC Agrícola and the Horita Group to Inditex’s retail empire. The primary conduit for this flow is the Jamuna Group, a colossal industrial conglomerate based in Bangladesh. While Inditex contracts with over 1, 700 suppliers, Jamuna represents a serious node in their denim supply chain. Customs data and supply chain mapping revealed that Jamuna is a major recipient of cotton from the specific Brazilian farms identified as illegal deforesters. The of this commerce is not trivial; it is industrial. In the twelve months leading up to August 2023, Zara stores in Europe alone sold approximately €235 million worth of jeans and other denim apparel manufactured by Jamuna. This equates to roughly 21, 500 pairs of jeans sold every single day—nearly 900 pairs per hour. Each pair serves as a physical archive of the supply chain’s toxicity, embodying fibers grown on land seized from traditional communities and cleared of native vegetation in violation of Brazilian environmental law. These items were not hidden in the back of the catalog. The investigation found that the tainted cotton was used to produce of Zara’s best-selling items, the very products that appear at the top of online search results and occupy prime real estate in brick-and-mortar storefronts. The ubiquitous nature of these garments suggests that the contamination is not an anomaly a widespread feature of Inditex’s sourcing strategy in Brazil. By relying on high-volume, low-cost producers like SLC Agrícola, Inditex’s supply chain incentivizes the aggressive expansion of cotton monocultures at the expense of the Cerrado biome. The branding of these garments adds a of hypocrisy to the ecological damage. of the clothing linked to these crimes was marketed under sustainability credentials. Inditex is the world’s largest user of Better Cotton (BC), a certification scheme that claims to ensure cotton is produced in a way that protects the environment and communities. The *Fashion Crimes* report exposes this seal as functionally worthless in the context of the Cerrado. The cotton from Horita and SLC Agrícola, even with being grown on illegally deforested land and linked to corruption and violence, carried the Better Cotton certification. When a customer in Berlin, London, or New York purchases a pair of Zara jeans, they are frequently reassured by tags promising “sustainably sourced” materials. The reality documented by Earthsight is that these tags served to launder the reputation of “dirty” cotton. The certification decoupled the physical reality of the fiber—the scorched earth, the displaced *Geraizeiros*, the pesticide runoff—from the product’s commercial identity. Inditex’s reliance on this flawed certification allowed the company to outsource its due diligence, insulating its brand image while maintaining access to cheap, high-quality Brazilian cotton. The connection extends beyond Zara. Bershka, Inditex’s youth-focused brand, was also implicated in the supply chain mapping. Targeting a younger, more climate-conscious demographic, Bershka’s marketing heavily leans into “eco-friendly” aesthetics. Yet, the supply chain forensics show no distinction in the sourcing between the brands. The same manufacturers, processing the same tainted fiber, feed the inventory of multiple Inditex subsidiaries. The “fast fashion” model, predicated on speed and volume, a raw material stream that is consistent and massive—requirements that the industrial farms of Western Bahia are uniquely positioned to meet, provided one ignores the environmental laws they flout. Inditex’s defense has been to point fingers at the certifier. In response to the, the company stated it had “commercial relationships” with the manufacturers claimed Brazilian cotton represented only a fraction of their total intake. They emphasized their reliance on Better Cotton to monitor farm-level compliance. This defense, yet, ignores the structural reality of the trade. Inditex is not a passive buyer; it is a market-maker. Its demand signals shape the behavior of suppliers like Jamuna and, by extension, producers like SLC Agrícola. By failing to implement its own rigorous traceability systems—even with generating billions in annual profit—Inditex chose to remain willfully blind to the origins of its raw materials. The retail endpoint is where the crime is monetized. The €235 million in revenue generated from Jamuna-manufactured denim is not just profit; it is the financial fuel that powers the bulldozers in Bahia. Every euro spent on these products validates the business model of land grabbing and deforestation. The consumer, denied accurate information and misled by greenwashed labeling, becomes an unwitting financier of ecological destruction. The “Fashion Crimes” report does not just indict a farm or a factory; it indicts the entire value chain that ends at the checkout counter.

Table 11. 1: The Retail Nexus , Tracing the Tainted Cotton

Supply Chain Node	Entity Name	Role in Deforestation Economy	Key Metric / Volume
Source	SLC Agrícola / Horita Group	Illegal deforestation, land grabbing, violence against communities.	816, 000 tonnes exported (2014-2023)
Manufacturer	Jamuna Group (Bangladesh)	Primary denim supplier to Inditex; processes tainted cotton.	Exports 2/3 of production to Inditex
Retailer	Zara / Bershka (Inditex)	Global distribution and sale of finished goods.	€235m sales (Jamuna denim, EU only, 2023)
Product	Denim Jeans / Apparel	Consumer endpoint; frequently labeled “sustainable”.	~21, 500 pairs sold daily in Europe
Certification	Better Cotton (BC)	Greenwashing method; certified illegal farms as compliant.	100% of tainted cotton was BC certified

The between the polished sustainability reports found in Inditex’s annual filings and the criminal dockets of the Brazilian judiciary is absolute. While Zara’s parent company promotes its “Join Life” and “Better Cotton” initiatives as guarantors of ethical sourcing, the suppliers feeding its supply chain, specifically SLC Agrícola and the Horita Group, appear repeatedly as defendants in federal and state courts. These are not minor administrative oversights or bureaucratic clerical errors. The judicial records, spanning over a decade, detail a pattern of environmental crimes, corruption, and land theft that Inditex’s due diligence method failed to detect or chose to ignore.

The Horita Group and Operation West

The most damning evidence against Inditex’s supply chain integrity lies in the criminal files of Operação Faroeste (Operation West). Launched by the Brazilian Federal Police and the Prosecutor General’s Office (PGR), this investigation exposed one of the most sophisticated judicial corruption schemes in Brazil’s history. Investigators uncovered a criminal enterprise where judges and court officials sold rulings to legitimize land grabbing in western Bahia. The scheme allowed agribusiness interests to fabricate land titles, stealing vast tracts of public land and dispossessing traditional communities.

Walter Yukio Horita, a co-owner of the Horita Group, was named as a central figure in this inquiry. Federal prosecutors alleged that Horita was involved in laundering money and bribing court officials to secure favorable decisions regarding land ownership. The investigation revealed that between 2013 and 2019, the scheme involved the movement of approximately R$ 5. 7 billion (over $1 billion USD), with Horita implicated in transactions designed to obscure the origins of illicit funds. In 2019, the Superior Court of Justice (STJ) authorized search and seizure warrants against Horita, signaling the severity of the allegations. The probe indicated that the “legal certainty” Inditex relies on for its sourcing was purchased through illicit payments to the very magistrates sworn to uphold the law.

The for Inditex are severe. The company’s sourcing rely on the assumption that a supplier holding a land title is the legitimate owner. Operação Faroeste shattered this assumption. It demonstrated that in the Cerrado, a legal title can be a product of bribery rather than legitimate acquisition. By continuing to source from the Horita Group during the height of these public investigations, Inditex’s supply chain absorbed cotton grown on land whose ownership was being contested by federal prosecutors as the fruit of a criminal enterprise.

Ibama Infraction Notices and Environmental Fines

Beyond corruption charges, the administrative records of Ibama (Brazilian Institute of the Environment and Renewable Natural Resources) provide a quantitative history of environmental destruction. These records are public, searchable, and definitive. They show that the suppliers in question treated environmental fines not as deterrents, as the cost of doing business.

The Horita Group’s environmental record is particularly egregious. Between 2010 and 2019, the group’s owners received more than 20 infraction notices from Ibama, totaling approximately $4. 5 million in fines. The infractions included clearing native vegetation without permits, impeding the regeneration of natural forests, and using fire illegally to clear land. In 2014 alone, Bahia’s state environmental agency identified 25, 153 hectares of illegal deforestation on Horita farms within the Estrondo estate. Later, in 2020, the same agency could not locate permits for an additional 11, 700 hectares cleared between 2010 and 2018. These dates overlap directly with the period Inditex suppliers were shipping cotton to Asian manufacturers producing garments for Zara and Bershka.

SLC Agrícola, while publicly championing its “zero deforestation” commitment, also carries a heavy ledger of environmental sanctions. Since 2008, the company has been fined more than $250, 000 by Ibama for various infractions in Bahia. These fines contradict the company’s narrative of strict compliance. In 2019, Ibama placed an embargo on 250 hectares of SLC’s operation for cultivating transgenic cotton in the buffer zone of a conservation area. Although the embargo was later lifted, the infraction reveals a disregard for the biological boundaries established to protect the Cerrado’s dwindling biodiversity. The recurrence of these fines suggests a widespread operational strategy where expansion takes precedence over compliance, and where “sustainability” is a marketing applied retroactively to illegally cleared land.

The 2023 Injunctions: Blocking the Land Grab

The judicial pressure on Inditex’s suppliers intensified in May 2023, when a court in Correntina, Bahia, issued a landmark ruling against the “grilagem” (land grabbing) affecting the Capão do Modesto traditional community. The judge ordered the blocking of land registry records for 19 farms linked to the Horita Group and other agribusinesses. This injunction was a direct response to evidence presented by the Bahia State Prosecutor’s Office (PGE), which argued that these titles were fraudulent and overlapped with the shared territory of the fecho de pasto communities.

This ruling froze the assets, acknowledging that the land on which the cotton was being grown might legally belong to the traditional inhabitants, not the agribusiness giants. The court’s decision highlighted “strong indications of land grabbing” and validated the community’s long-standing claims of dispossession. For a global retailer, this is a serious compliance failure. Inditex’s supply chain was extracting resources from land that a court of law determined was likely stolen. The cotton harvested from these blocked farms enters the global market carrying the weight of this judicial dispute, rendering any “Better Cotton” certification legally and morally void.

The Estrondo Estate: A History of adjudicated Violence

The legal battles surrounding the Condomínio Cachoeira do Estrondo, a mega-estate where the Horita Group is a major landowner, further illustrate the criminality in the supply chain. In 2018, the Bahia Attorney General’s Office filed a lawsuit describing Estrondo as “one of the largest areas of land grabbed in Brazilian history.” The state sought the annulment of titles covering over 300, 000 hectares, arguing they were derived from fraudulent registries dating back to the 1970s.

This legal contest is not academic; it involves documented violence. Court records include accounts of private security forces employed by the estate acting as a paramilitary militia. In 2019, Jossone Lopes Leite, a member of the local community, was shot by guards while attempting to retrieve cattle. The incident is part of a broader pattern of intimidation detailed in police reports and civil lawsuits. The judiciary has intervened multiple times to grant possessory rights to the communities, yet the agribusiness operations continue. By sourcing from this region, Inditex is financially supporting entities that are active defendants in lawsuits alleging the violent usurpation of human rights.

The Failure of Corporate Due Diligence

The existence of these records, federal investigations, millions in fines, court-ordered land blocks, and corruption probes, the defense of ignorance. These are not hidden documents. Ibama’s embargo list is public. The Operação Faroeste indictments made national headlines in Brazil. The court injunctions in Correntina are matters of public record. Inditex’s failure to identify these risks indicates a due diligence process that is either woefully incompetent or willfully blind.

The reliance on Better Cotton certification provided a convenient shield, allowing Inditex to outsource its verification responsibilities. Yet, the judicial evidence proves that certification does not equal legality. A farm can hold a Better Cotton license while simultaneously fighting federal charges for bribery and environmental destruction. The legal reality of the Cerrado is defined by these court cases, not by the voluntary standards of a Swiss non-profit. The cotton entering Inditex’s supply chain is physically and legally tethered to these crimes, making the retailer a beneficiary of the very illegalities the Brazilian courts are attempting to prosecute.

The release of Better Cotton’s internal audit in April 2024 was intended to quell the firestorm ignited by Earthsight’s *Fashion Crimes* report. Instead, it poured gasoline on the embers. Commissioned by the certifier and conducted by the third-party auditor Peterson, the investigation sought to verify whether the specific farms supplying Inditex and H&M had breached sustainability standards. The verdict was swift and absolute: the auditors found “no breach of standards” on the three farms examined. Better Cotton (BC) declared the matter settled, stating that the accusations of community displacement and illegal deforestation held no weight against their certified producers. Critics immediately branded the investigation a “whitewash.” Earthsight’s rebuttal was blistering, describing the audit as a “blinkered effort at greenwash” that was “so flawed as to be almost worthless.” The primary failure lay in the audit’s deliberately narrowed scope. While Earthsight’s investigation had implicated the sprawling agribusiness empires of SLC Agrícola and the Horita Group—entities controlling hundreds of thousands of hectares—the Peterson audit restricted its view to just three specific farm units. This microscopic focus allowed the auditors to ignore the broader context of the landholdings. By isolating these three plots, the audit sanitized the supply chain, disregarding the fact that these “clean” farms were part of larger estates with documented histories of environmental fines and land disputes. The audit’s methodology regarding land ownership drew particular ire. Better Cotton admitted that its standards apply only at the farm level, not the company level. This loophole meant that an agribusiness could be found guilty of illegal deforestation on 90% of its land, yet still receive Better Cotton certification for the remaining 10% where the cotton was currently growing. The audit confirmed that the three farms were registered with Brazil’s Rural Environmental Registry (CAR), a self-declaratory database, and used this administrative technicality to dismiss allegations of land grabbing. It ignored the reality that CAR registrations are frequently used by land grabbers to overlay claims onto traditional communal lands, a tactic central to the conflict in the Cerrado. Most damaging was the audit’s handling of community consultation. Better Cotton claimed the auditors had engaged with local officials to verify the absence of social conflict. yet, representatives from the Capão do Modesto community—the very people Earthsight identified as victims of violence and intimidation by security forces linked to the cotton estates—stated they were never contacted. Local civil society organizations confirmed that the auditors had not reached out to the specific traditional communities engaged in the land struggle. By failing to interview the accusers, the audit created an echo chamber where the only voices heard were those of the accused agribusinesses and their paperwork. The “whitewash” extended to the problem of deforestation. The audit noted that while fines for environmental infractions existed, they predated the farms’ certification or occurred on different parts of the property. This bureaucratic separation of “past” and “present,” or “farm” and “estate,” allowed Better Cotton to certify cotton from producers that had been fined millions of reais by IBAMA. The audit’s refusal to look beyond the fence line of the specific certified plots meant that the widespread deforestation driving the expansion of these mega-farms was rendered invisible. Inditex’s role in this process was one of passive complicity. having demanded the investigation, the Spanish retail giant accepted the findings without public challenge. The “clean” audit provided Inditex with the plausible deniability needed to continue sourcing from the region. By relying on a certification scheme that polices its own failures, Inditex outsourced its moral responsibility. The retailer could point to the Peterson report as proof of due diligence, even as satellite imagery and court records continued to show a different reality on the ground. The audit did not exonerate the supply chain; it exposed the method used to launder dirty cotton into the global market.

Table 13. 1: The ‘Whitewash’ Audit , Discrepancies Between Earthsight Allegations and Better Cotton Findings (April 2024)

Investigative Metric	Earthsight Allegation (Fashion Crimes)	Better Cotton / Peterson Audit Finding	serious Flaw Identified
Scope of Investigation	Implicated entire agribusiness groups (SLC Agrícola, Horita Group) and their cumulative landholdings.	Restricted to 3 specific farm units currently certified.	Ignored non-certified parts of the same estates where deforestation occurred.
Community Consultation	Alleged violence and harassment against Capão do Modesto traditional community.	Claimed “no relation” to community impact; communities reportedly not contacted.	Failed to interview the victims; relied on agribusiness testimony.
Land Legality	Cites “grilagem” (land grabbing) and overlapping claims on traditional lands.	Verified CAR registration (self-declared) and absence of current embargoes.	Accepted self-declared paperwork as proof of ownership; ignored ongoing court battles.
Deforestation Link	Documented 100, 000 hectares of clearance linked to the companies.	Found no illegal clearance within the certified plot boundaries during the audit window.	“Farm-level” standard blinds the auditor to company-wide environmental destruction.

The from the audit forced Better Cotton to concede that its standards needed “strengthening,” a tacit admission that the current framework was insufficient to detect the crimes alleged. Yet, for the 2024 harvest, the “whitewash” served its purpose: the cotton flowed, the contracts remained signed, and the labels on Zara’s racks remained unchanged. The audit proved that in the world of industrial agriculture, the right answer depends entirely on where you choose not to look.

The European Union Deforestation Regulation (EUDR), formally Regulation (EU) 2023/1115, is frequently as the world’s most aggressive legislative attempt to purge supply chains of environmental destruction. Yet, for the fashion industry, the law contains a fatal flaw: it does not classify cotton as a “relevant commodity.” This legislative omission grants Inditex and its competitors a temporary amnesty, allowing the importation of fiber linked to the destruction of the Brazilian Cerrado to continue without triggering the regulation’s strict liability method.

The Annex I Exclusion

The scope of the EUDR is defined by **Annex I**, which lists the seven commodities subject to mandatory due diligence: cattle, cocoa, coffee, oil palm, rubber, soya, and wood. Cotton is absent from this list. Consequently, while a leather belt sold by Zara (Inditex) must be traceable to a deforestation-free plot of land, the cotton shirt hanging to it requires no such proof under this specific statute. This exclusion even with evidence from Earthsight’s “Fashion Crimes” report, which demonstrated that cotton cultivation is a primary driver of native vegetation loss in Western Bahia. By leaving cotton out of the initial scope, EU legislators created a regulatory bifurcated reality where the agricultural drivers of deforestation in the Cerrado, soy and cattle, are penalized, while cotton, frequently grown in rotation on the same cleared lands by the same agribusiness giants (SLC Agrícola and Horita Group), escapes direct sanction.

The “Other Wooded Land” Loophole

Beyond the commodity list, the EUDR’s geographical definitions offer a secondary of protection for Inditex’s supply chain. The regulation initially restricts “deforestation” and “forest degradation” based on the **FAO definition of forest**, which generally requires a canopy cover of more than 10% and trees higher than 5 meters. The Cerrado, a tropical savanna, is a mosaic of forest, shrubland, and grassland. Large swathes of this biome fall under the category of **”Other Wooded Land” (OWL)** rather than “forest.” Although the destruction of the Cerrado is ecologically catastrophic, clearing shrubland for cotton does not always meet the strict legal definition of “deforestation” under the current EUDR text. This technicality allows agribusinesses to clear thousands of hectares of native savanna vegetation legally under Brazilian law, and without violating EU market access rules, provided the land is not classified as “forest.”

Inditex’s Compliance Shield

If cotton were included in the EUDR today, Inditex’s current sourcing model would face immediate paralysis. The regulation mandates **geolocation coordinates** for every plot of land where the raw material is produced, along with a “due diligence statement” proving the land was not deforested after December 31, 2020. Inditex relies on **Better Cotton (BC)** for the majority of its supply. As detailed in previous sections, the BC system operates on a “mass balance” chain of custody, where certified cotton is mixed with uncertified cotton during ginning and spinning. This mixing breaks the physical link between the final product and the farm of origin. Under a strict EUDR regime, mass balance is generally insufficient for proving that a specific shipment is deforestation-free. The exclusion of cotton spares Inditex the immediate expense of its mass-balance supply chain and building a segregated, trace-to-plot system, a logistical undertaking that would cost millions and disrupt the speed of its “fast fashion” model.

The French Duty of Vigilance Alternative

In the absence of EUDR coverage, the primary legal instrument applicable to Inditex regarding its Brazilian supply chain is the **French Corporate Duty of Vigilance Law** (*Loi sur le devoir de vigilance*). Enacted in 2017, this law applies to large companies operating in France (which includes Inditex subsidiaries) and requires them to establish a “vigilance plan” to identify and prevent serious violations of human rights and environmental damage. yet, the load of proof under the French law is significantly higher than under the EUDR. * **EUDR:** The company must prove the product is clean (reverse load of proof). If they cannot produce the coordinates, the product is banned. * **Duty of Vigilance:** The plaintiff (e. g., an NGO) must prove that the company’s vigilance plan was insufficient and that this negligence directly caused the harm. While NGOs have successfully used the French law to sue retailers like Casino Group over beef linked to Amazon deforestation, the legal threshold allows companies like Inditex to that they exercised “reasonable vigilance” by hiring third-party certifiers like Better Cotton. The failure of the certifier (Better Cotton) to detect the illegalities at SLC Agrícola and Horita Group becomes a convenient defense for Inditex, shielding them from direct liability for negligence.

Article 34: The Review Timeline

The EUDR contains a review clause, **Article 34**, which mandates the European Commission to assess the feasibility of extending the regulation’s scope. * **By June 30, 2024:** The Commission was required to assess the inclusion of “Other Wooded Land.” * **By June 30, 2025:** The Commission must review the inclusion of other commodities, specifically naming maize and biofuels, chance extending to cotton. even with these deadlines, the political climate in Europe has shifted toward deregulation and delay. In late 2024 and early 2025, industry pressure led to a provisional agreement to **postpone the full application of the EUDR by one year**, pushing the compliance deadline for large operators to December 2026. This delay signals that any expansion of the scope to include cotton is likely years away.

Conclusion: A Regulatory Free Pass

The exclusion of cotton from the EUDR represents a serious regulatory failure that directly benefits the fast fashion industry. It allows Inditex to publicly condemn deforestation while continuing to profit from a supply chain where the raw material is grown on cleared savanna. Until the regulation is amended to include cotton and recognize the ecological value of “Other Wooded Land,” the load of policing these supply chains falls entirely on investigative journalists and NGOs, while the legal of the European Union remains idle.

Regulatory Instrument	Status for Cotton (2024-2026)	Impact on Inditex Liability
EU Deforestation Regulation (EUDR)	Excluded (Not in Annex I)	None. No requirement to trace cotton to plot or prove deforestation-free status.
French Duty of Vigilance	Included (General Scope)	Moderate. Requires proof of negligence. Reliance on “Better Cotton” certification is a primary defense.
EU Corporate Sustainability Due Diligence Directive (CSDDD)	Pending Implementation	Future Risk. require broader due diligence absence the strict “market ban” method of EUDR for specific commodities.
US Uyghur Forced Labor Prevention Act (UFLPA)	Included	High (for Xinjiang). Forces traceability for Chinese cotton, does not apply to Brazilian deforestation.