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Justice Bell's Verdict
19th June 1997
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Chief Justice Bell's 800 page judgement was handed down on Thursday 19th June 1997 after his presentation of the Summary - the whole judgement is presented here for your enjoyment.
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4. Starvation in the Third World and destruction of rainforest.
The first two sections of the main text of the leaflet complained of appear under the bold headlines "What's the connection between McDonald's and starvation in the 'Third World'?" and "Why is it wrong for McDonald's to destroy rainforest?" They cover the two topics signalled by the headlines. I will take these sections of the leaflet together, because the theme of the defence case in relation to both is that McDonald's needs large quantities of beet for its hamburgers which consist of beef patties with some garnish, sandwiched in buns; that large numbers of cattle must be reared to satisfy McDonald's appetite for beef patties; that large numbers of cattle need large areas of land for grazing or for growing their feed, and that this land might be used for growing other food products or left in its natural state, some of it forest, were it not for the need for cattle. The Defendants' attempts to justify what is alleged in both sections of the leaflet depended upon their contention that cattle ranching to provide McDonald's restaurants with beef patties has caused deforestation and displacement of small farmers in Costa Rica and Guatemala, and that both cattle ranching and soya farming to produce cattle feed to provide McDonald's restaurants with beef patties has caused deforestation and displacement of small farmers and indigenous peoples in Brazil. The text under the headline "What's the connection between McDonald's and starvation in the 'Third World'?" reads as follows: "There's no point in feeling guilty about eating while watching starving African children on TV. If you do send money to Band Aid, or shop at Oxfam, etc., that's morally good but politically useless. It shifts the blame from governments and does nothing to challenge the power of multinational corporations. HUNGRY FOR DOLLARS McDonald's is one of several giant corporations
with investments in vast tracts of land in poor countries, sold to them by the dollar-hungry rulers (often military) and privileged elites, evicting the small farmers that live there growing food for their own people. The power of the US dollar means that in order to buy technology and manufactured goods, poor countries are trapped into producing more and more food for export to the States. Out of 40 of the world's poorest countries, 36 export food to the USA - the wealthiest. ECONOMIC IMPERIALISM Some 'Third World' countries, where most children are undernourished, are actually exporting their staple crops as animal feed - i.e. to fatten cattle for turning into burgers in the 'First World'. Millions of acres of the best farmland in poor countries are being used for our benefit - for tea, coffee, tobacco, etc. - while people there are starving. McDonald's is directly involved in this economic imperialism, which keeps most black people poor and hungry while many whites grow fat". There is then a picture of a woman holding a food bowl and a small child, with the legend: "A typical image of 'Third World' poverty - the kind often used by charities to get 'compassion money'. This diverts attention from one cause: exploitation by multinationals like McDonald' s. "This is followed by a box with the heading "GROSS MISUSE OF RESOURCES". McDonald's do not complain of this or the text in the box, but I will set it out for completeness. It reads: "Grain is fed to cattle in South American countries to produce the meat in McDonald's hamburgers. Cattle consume 10 times the amount of grain and soy that humans do: one calorie of beef demands ten calories of grain. Of the 145 million tons of grain and soy fed to livestock, only 21
million tons of meat and by-products are used. The waste is 124 million tons per year at a value of 20 billion dollars. It has been calculated that this sum would feed, clothe and house the world's entire population for one year. "The leaflet then turns to rainforest with a box headed "FIFTY ACRES EVERY Minute", which contains the text: "Every year an area of rainforest the size of Britain is cut down or deforested, and burnt. Globally, one billion people depend on water flowing from these forests, which soak up rain and release it gradually. The disaster in Ethiopia and Sudan is at least partly due to uncontrolled deforestation. In Amazonia - where there are now about 100,000 beef ranches - torrential rains sweep down through the treeless valleys, eroding the land and washing away the soil. The bare earth, baked by the tropical sun, becomes useless for agriculture. It has been estimated that this destruction causes at least one species of animal, plant or insect to become extinct every few hours." This box is followed by the headline "Why is it wrong for McDonald's to destroy rainforests?" and the text: "Around the Equator there is a lush green belt of incredibly beautiful tropical forest, untouched by human development for one hundred million years, supporting about half of all Earth's life-forms, including some 30,000 plant species, and producing a major part of the planet's crucial supply of oxygen. PET FOOD & LITTER McDonald's and Burger King are two of the many US corporations using lethal poisons to destroy vast areas of Central American rainforest to create grazing pastures for cattle to be sent back to the States as burgers and pet food, and to provide fast-food packaging materials. (Don't be fooled by McDonald's saying they use recycled paper: only a tiny per cent of it is. The truth is it takes 800 square miles of
forest just to keep them supplied with paper for one year. Tons of this end up littering the cities of 'developed' countries.) COLONIAL INVASION Not only are McDonald's and many other corporations contributing to a major ecological catastrophe, they are forcing the tribal peoples in the rainforest off their ancestral territories where they have lived peacefully, without damaging their environment, for thousands of years. This is a typical example of the arrogance and viciousness of multinational companies in their endless search for more and more profit. It's no exaggeration to say that when you bite into a Big Mac, you're helping the McDonald's empire to wreck this planet." The first section of headings and text plainly bears the meaning that McDonald's is to blame for starvation in the Third World; firstly because it has bought vast tracts of land in poor countries (for cattle ranching, presumably) and evicted the small farmers who lived there growing food for their own people; secondly because the power of its money has forced poor countries to export food (beef, most obviously) to it in the United States, and thirdly because it has drawn some Third World countries to export staple crops as cattle feed. - The headline starts the section with a suggestive question about the connection between McDonald's and starvation in the Third World. The words of which the Plaintiffs complain end with the assertion that McDonald's are a cause of Third World poverty. The text in between makes it clear that the connection between McDonald's and starvation in the Third World is causal and sets out three reasons why this is so. The Defendants argued that "investments in vast tracts of land" meant that McDonald's had an interest in the land by virtue of its commercial interest in cattle reared on the land, but I cannot accept that. The words "sold to them" clearly refer back to the Vast tracts of lands themselves, and they must mean that McDonald's have actually bought the land. In my judgment the Defendants, argument was no more than a
ruse to try to get round the fact that McDonald's does not own farming land in Third World or poor countries. As a matter of passing interest, one form of the single sheet AS leaflet which was based on the leaflet complained of said that "McDonald's owns vast tracts of land in poor countries....' The third paragraph of the first section of text speaks simply of producing food for export to the States rather than exporting food (beef most obviously) to McDonald's in the United States, but it is part of an attack on McDonald's which is best known for its burgers made from beef. The paragraph before refers to the eviction of small farmers, obviously from farmland, and the section which follows speaks of the destruction of rainforest for cattle pasture. In my judgment the ordinary reader would conclude that so far as McDonald's is concerned the vice attacked in the third paragraph is the export of beef from poor countries to McDonald's in the U.S. The leaflet does not specifically name the First Plaintiff U.S. company or the Second Plaintiff U.K. company, but I have no doubt that the references to "McDonald's" in a leaflet published in this country would be taken by the ordinary reader to refer to whoever is responsible for running McDonald's restaurants around the world (the First Plaintiff in fact) and in this country where publication of the leaflet is complained of (the Second Plaintiff in fact), despite the specific reference to the US dollar. National subsidiaries are inextricably linked with their holding companies in most people's minds. The sting of the words complained of is a general charge that the Plaintiffs are to blame for starvation in the Third World. This is clearly defamatory and damaging to the trading reputations of both Plaintiffs, tending to lower them in the estimation of right thinking members of society generally and making people reluctant to deal with them. So, in my judgment is the specific allegation of causing the eviction of small farmers from the land where they were growing food for their own people. The words complained of, bearing the meaning which they clearly do, are straightforward statements of alleged fact. I can see no comment or expression of opinion. This means that if they are to be successfully defended they must be justified as
true in substance and in fact. The meaning pleaded by the Plaintiffs is that "the Plaintiffs and each of them have, by purchasing large tracts of land in poor countries, caused the eviction of small farmers that lived there growing food for their own people and as a result are to blame for starvation in the Third World". This is tantamount to the first, defamatory parts of the meaning which I have just set out, including the general sting. It does not include the second and third means by which it is alleged that the Plaintiffs are responsible for starvation in the Third World. This is because those advising the Plaintiffs doubted whether those two reasons in themselves contained any defamatory matter. However, if the Defendants could prove that either Plaintiff was to blame for starvation in the Third World by either of those two means, or by any other means, the general sting would be substantially justified in respect of that Plaintiff, in my view. Turning to the second, rainforest section of the leaflet, the Plaintiffs pleaded that the headings and text mean that The Plaintiffs and each of them are guilty of the destruction of rainforest, thereby causing wanton damage to the environment"; that The Plaintiffs and each of them use and have used lethal poisons to destroy vast areas of Central American rainforest to create grazing pastures for cattle to be sent to the United States as burgers and pet foods and to provide fast-food packaging materials"; and, finally, that "the Plaintiffs and each of them are through their said conduct contributing to a major ecological catastrophe, forcing the tribal people in the rainforest off their ancestral territories where they have lived peacefully for thousands of years, without damaging their environment." Again I consider that the ordinary reader in this country would take this part of the leaflet to refer to both Plaintiffs. It refers to McDonald's as a US corporation and to cattle being sent back to the States rather than to the U.K. as burgers, but it also refers to multinational companies, and in lay terms the Second Plaintiff is the U.K. limb of the First Plaintiff. In my view the leaflet does carry the meanings which the Plaintiffs' claim, save that the contribution to a major ecological catastrophe refers to the destruction of the rainforest by the Plaintiffs, and the allegation of viciously driving tribal peoples off their ancestral territories is
another, albeit related, allegation. The ordinary reader would not associate the Plaintiffs with pet food. By posing the suggestive question "Why is it wrong for McDonald's to destroy rainforests?", and by giving an answer which involves the allegation that McDonald's among others have used lethal poisons to destroy vast areas of Central American rainforest with its abundant life-forms and crucial supply of oxygen to create grazing pastures for cattle to be sent to the United States as burgers and to provide fast-food packaging materials in a vicious and endless search for more and more profit, the leaflet clearly means that "McDonald's" have themselves destroyed rainforests. The clear imputation is of damage to the environment by the destruction of the life forms, including animal, plant and insect species, and the supply of oxygen which the rainforest supports and produces, contributing to a major ecological catastrophe. The alleged motive of a vicious and endless search for more and more profit makes the alleged, extensive, ecological damage '"wanton", in my view. I would re-express the Plaintiffs' pleading to say that this part of the leaflet bears the meaning that the Plaintiffs are guilty of the destruction of rainforest; that they use and have used lethal poisons to destroy vast areas of Central American rainforest to create grazing pastures for cattle to be sent to the United States as burgers and to provide fast-food packaging materials; that the Plaintiffs are through this conduct causing wanton damage to the environment and contributing to a major ecological Catastrophe, and that they are forcing the tribal people in the rainforest off their ancestral territories where they have lived peacefully for thousands of years, without damaging their environment. The meaning expressed in this way is within the meaning pleaded by the Plaintiffs. It is plainly defamatory of both Plaintiffs and damaging to their trading reputations. Again, it is an allegation which would make people reluctant to deal with them. The main, general sting is of wanton damage to the environment and contribution to a major ecological catastrophe by destruction of rainforest, but there is also a specific but related allegation of driving tribal peoples off their ancestral territories. The words complained of are a straightforward statement of alleged facts, not comment or opinion, so they must be defended
as true in substance and in fact; but on balance, I judge the statement at the end of this section of text, saying that "It's no exaggeration to say that when you bite into a Big Mac, you're helping the McDonald's empire to wreck this planet'', to be comment, largely because of its figurative language. This is the one defamatory statement in the leaflet, which I judge to be comment. The validity of the comment is clearly based upon McDonald's alleged destruction of rainforest. There was an issue as to what "rainforest" meant to the ordinary reader of this leaflet. The Defendants, through Mr Morris particularly, argued that it comprised all tropical forest including dry forest. Apparently there is no scientific definition of "rainforest", although it is used by geographers and other researchers and academics. Different witnesses, including expert witnesses, used it in different ways. Two of them, Mr Monbiot and Mr Secrett, would have given evidence of what they thought ''rainforest" meant to the ordinary reader, but I did not allow them to do so in this case where the Plaintiffs rely on the natural and ordinary meaning of the word and where an understanding of the word by an ordinary reader does not need specialised knowledge or specialised evidence which would only differ anyway. Mr Monbiot and Mr Secrett had to tell me what "rainforest" meant to them, so that I could understand their evidence, and Or Monbiot in doing this did tell me what he thought its popular meaning was, but that was as far as their evidence could go. To Mr Monbiot "rainforest" meant "the green belt around the tropics". It was a generally moist, generally dense forest. Mr Secrett distinguished tropical moist, wet and rain forest and tropical dry forest. Others certainly excluded dry forest from "rainforest". I believe that some campaigners have used the word "rainforest" widely because "tropical forest" which would really be a more all- encompassing and therefore accurate description of what they are trying to protect, i.e. all forest in the tropics, does not have the same evocative pull to the public ear. Mr Secrett, the director of a large and effective campaign group, really accepted as much, but said that his organisation made what it meant by "rainforest" clear in its literature. The Defendants pointed to the reference to Ethiopia and
Sudan where the reader would expect tropical forest to be dry, but in my view this point, if taken by the reader, would be swamped by references to rainforest in the headline and, later, in the text. In my judgment "rainforest" in the context of this leaflet, not otherwise defined, must mean more than tropical forest of any kind. After all, the leaflet could have said simply Tropical forest" throughout, but did not. In my view "rainforest" would mean something special to the ordinary reader. In my view it would mean luxuriant, broad-leaved, evergreen, very wet, canopy forest - very wet because of very heavy rainfall - to the ordinary reader of this leaflet. That is what it means to me. That is what it means for the purpose of judging justification of what the leaflet complained of says. Both the general, factual sting and the comment to which I have referred clearly relate to damage to the environment by destruction of rainforest. They do not, in my view, relate to possible damage to the environment by any other means such as the use of CFC or HCFC or pentane gases to make polystyrene foam packaging or the simple use of non-biodegradable polystyrene foam packaging, as the Defendants alleged, or by the cutting down of forests generally, or by the processing of pulp to make paper or paperboard packaging, or by incineration of waste, or by methane emissions from cattle. Those topics are not mentioned in the leaflet, nor are they fairly referable to any defamatory statement about which the Plaintiffs complain in the leaflet. - The text does, in parentheses, allege that the Plaintiffs are lying when they claim to use re-cycled paper and that the Plaintiffs are to blame for tons of the Plaintiffs' paper packaging ending up littering the cities of developed countries and I will return to those matters when I come to the use of recycled paper; but however unattractive litter is, I do not consider that the ordinary reader would see it as part of the allegation of damage to the environment or major ecological catastrophe or wrecking the planet by destruction of the rainforest. The text in the same parentheses says that it takes 800 square miles of "forest" just to keep McDonald's supplied with paper for one year, and the Defendants contended that this statement referred to forest generally as distinct from "rainforest"; but in my view the ordinary reader would take this
reference to "forest" to mean "rainforest''. Although the statement is in parentheses, the parentheses are placed deep in the section which attacks McDonald's for destruction of rainforest and they come immediately after the reference to destruction of rainforest to provide fast-food packaging materials. There was no evidence that any rainforest timber has ever been used to make McDonald's paper or paperboard packaging. In fact there was no evidence that McDonald's packaging required anything like 800 square miles of any kind of forest, whether cut down each year, which is what I take the leaflet to mean ("just to keep them supplied with paper for one year"), or as an area of sustained forest from which McDonald's requirements could be met indefinitely. In his final submissions, Mr Morris presented some calculations which were designed to justify the figure of 800 square miles on the latter basis, but they did not in my view hold water, quite apart from the fact that they had never been put to any witness, let alone been proposed by one. To return to relevant issues, the Plaintiffs contended that these first two sections of the leaflet are false in the meanings which they bear. The Defendants claimed that they are justified and that the comment about wrecking the planet is fair comment. In my view the essential issues in this part of the case covering the questions of economic imperialism and destruction of the rainforest are as follows. First, so as far economic imperialism is concerned, has either of the Plaintiffs bought vast tracts of land in poor countries and evicted the small farmers who lived there growing food for their own people? Second, has either of the Plaintiffs drawn any Third World country to export beef to it in the United States? Third, has either of the Plaintiffs drawn any Third World country to export staple crops as cattle feed? Fourth, have either of the Plaintiffs been to blame for starvation in the Third World by reason of the purchase of land or the eviction of small farmers or by drawing any Third World country to export beef to it in the United States or to export staple crops as cattle feed, or by any other means?
Fifth, so far as destruction of rainforest is concerned, have either of the Plaintiffs used lethal poisons to destroy vast areas of Central American rainforest to create grazing pastures for cattle to be sent to the United States as burgers or to provide fast food packaging materials? Sixth, have either of the Plaintiffs caused wanton damage to the environment or contributed to a major ecological catastrophe, or can it be fairly said that they are wrecking the planet, by destruction of rainforest? Finally, have either of the Plaintiffs forced tribal people in the rainforest off their ancestral territories? The Defendants did not produce any evidence that the First Plaintiff or any of its subsidiary companies, including the Second Plaintiff, or any concern in which it has a share, has ever bought land occupied by small farmers in poor countries, let alone vast tracts of it. Nor did they produce any evidence that they have ever themselves evicted small farmers from their land. Nor did they produce any evidence that the First Plaintiff or any of its subsidiary companies including the Second Plaintiff, or any concern in which it has a share, has ever actually and directly destroyed any rainforest or other forest in the tropics or anywhere else, let alone that it has used lethal poisons to do so, or on a vast scale. They have not challenged the Plaintiff's case that the only land owned by the First Plaintiff, or by its subsidiaries including the Second Plaintiff, or by concerns in which it has a share, is land upon which restaurants or offices or immediately related facilities stand. The Plaintiffs do not need to buy land for cattle ranching, because they have never owned cattle themselves, save for one occasion in the late 1960s or early 1970s when the First Plaintiff bought some cattle in the U.S.A. to protect its supply of beef during a time of extreme shortage. I have not heard any suggestion, let alone any evidence, that the First Plaintiff, or any company in which it has a share, or any joint venture partner or franchisee, has ever owned a single head of cattle in Costa Rica, Guatemala or Brazil or in any other rainforest country or poor country. The normal chain of supply to a McDonald's restaurant is that slaughterhouses buy cattle from farmers, large or small, who have reared them. The carcasses are deboned and the deboned meat is processed into beef patties by the company which has slaughtered the cattle or by a separate meat processor to whom
the deboned beef is sold. The patty processor which is a designated supplier but not a subsidiary or partner of the First Plaintiff or any of its subsidiaries, then sells the beef patties to the First Plaintiff's subsidiary, joint venture or franchisee operating "McDonald's" restaurants. Nevertheless the Defendants claimed that they had justified the allegations of responsibility for starvation in the Third World and destruction of rainforest by calling evidence that the Plaintiffs have a responsibility for dispossession of small farmers and for destruction of rainforest and other tropical forest and for driving tribal peoples off their ancestral territories, by the indirect effect of their sub-suppliers, cattle ranching on land which was previously cultivated by small farmers or which was forest cleared for ranching or cleared for other economic reasons and then kept clear by ranching. Where the ranches are on land which was not actually rainforest or ex-rainforest but land previously occupied by indigenous people, peasants and small scale farmers, the Defendants alleged a further indirect effect that such people are driven from their land so that it can be used for cattle ranching, and that once they are driven from their land they are forced to clear, settle and farm rainforest or ex-rainforest land to continue growing their own crops. Behind these allegations was a more general allegation that McDonald's contribution to the increase in beef-eating and particularly the consumption of burgers around the world, the "worldwide hamburger connection" according to some writers, leads eventually to destruction of the rainforest and eviction of small farmers from their land in poorer countries. In addition, the Defendants alleged that the Plaintiffs' use of beef inevitably results in the need for a massive consumption of animal feed including soya, in particular from Brazil where it is a staple crop and where there has been deforestation for soya production. The Defendants claimed that beef had been exported from poor countries to McDonald's suppliers in the United States and that soya, a staple crop, had been exported from Brazil as animal feed for cattle and chickens to provide McDonald's products and the beef industry generally. In fact the Defendants' evidence was restricted to the
effects of cattle farming on Costa Rica, Guatemala and Brazil, and of exporting beef from those countries, and to the effects of taking soya or soya meal from Brazil, so the Plaintiffs' evidence was similarly restricted. I will deal with the evidence in relation to each country in turn: Costa Rica, Guatemala and Brazil in that order, since it is the order in which McDonald's restaurants opened in the three countries. The position in relation to Costa Rica raises questions which also relate to Guatemala and Brazil. Where there was common ground or the evidence on one side was substantially uncontradicted and I have no good reason to doubt it, I will not always identify the source of the information which I relate. I will only relate the matters which have most exercised me in reaching a decision. The evidence was too extensive to deal here with all the relevant points taken on either side, although I hope to have taken due account of them. I have to be selective in this judgment. This comment applies to all the issues considered in this judgment and I will not repeat it. The unchallenged history of McDonald's in Costa Rica is that the first restaurant was opened in 1970. According to the First Plaintiff's Annual Report to 31st December, 1995, there were six McDonald's restaurants in Costa Rica in 1990 and fourteen in 1995. The best information that I have - from Mr Ray Cesca, the First Plaintiff's Director of Global Purchasing and Worldwide Trade, and from various Civil Evidence Act statements and letters - is that the restaurants were originally run by Costa Ricans trading as "McDonald's de Costa Rica" under licence from the First Plaintiff or a subsidiary, but that since about late 1995 they have been operated by a Costa Rican company, Costa Rica Fast Food Service S.A., trading as "McDonald's Costa Rica", and that the company is owned partly by the original licensees and partly by the First Plaintiff or a subsidiary. According to Mr Cesca the First Plaintiff has recently become more involved with a view to making the market grow faster, although he did not know the exact legal arrangements. This probably does not matter. Whatever the precise status of the company which I will refer to as "McDonald's Costa Rica" for convenience, the First Plaintiff has throughout had the capacity to control or influence the source and chain of supply of beef and patties. McDonald's Costa Rica originally obtained its beef patties
from a company called Coope Montecillos. More recently a company called Gisa became an additional supplier. Now 92 to 95% of the beef patties are supplied by a company called Fogasa in which Coope Montecillos and Gisa and another company called Eccsa each have a one third share. The remaining 5 to 8% are still supplied by Coope Montecillos. The Plaintiffs served statements, many in the form of letters, from witnesses in Costa Rica. Those statements were admitted in evidence under the Civil Evidence Act. The effect of the statements of Sr Juan Segueira and Sr Rodolfo Madrigal C. is that all the cattle slaughtered by Coope Montecillos for McDonald's have come from ranches in the Guanacaste and Nicoya regions in the northwest of Costa Rica (80%) and the San Isidro region in the southwest (20%). Mr Arturo Wolf junior comes from a family which has farmed cattle in Costa Rica since the turn of the century. He was educated in Texas where he worked for Standard Meat company between 1979 and 1991 when he returned to Costa Rica. He was then sales manager for GISA before becoming Assistant General Manager of Fogasa. He came to London to give evidence because he felt strongly about some of the defence allegations made in this case. He said that the cattle for processing by Gisa and Fogasa come from the central region of Guanacaste. He said that they have never used cattle from Nicoya or San Isidro. All this was confirmed by the oral evidence of Mr Ray Cesca that the cattle -which were slaughtered for processing into patties for McDonald's Costa Rica came from the west of Costa Rica; that is from Guanacaste (but not north of the mountains), the peninsula of Nicoya, the Puntarenas area and down the Pacific coastal strip as far as Dominical and San Isidro de E1 General. Although Mr Cesca had only visited a small proportion of the ranches himself and his evidence must have come very largely from what he had been told by others, that is hearsay, his evidence amounted to an accurate summary o' all the Plaintiffs' admissible oral and Civil Evidence Act evidence on this point. As Mr Morris pointed out, I have not had the benefit of hearing cross-examination of the Civil Evidence Act witnesses, but I have heard the Defendants' cross-examination of Mr Cesca and Mr Wolf and Dr Gomez Gonzales, a manager of meat products in the International Quality Assurance and Purchasing Department of the First Plaintiff, in so far as his evidence was relevant. I
have heard what the Defendants put to those witnesses. I have read the statements of the Defendants' Civil Evidence Act witnesses and heard their "live'' witnesses. There was no evidence that cattle for beef for McDonald's restaurants in Costa Rica came from areas other than those described by the Plaintiffs' witnesses. I have no reason to doubt the evidence of the Plaintiffs' witnesses. I am not impressed by Mr Morris's suggestion that some Civil Evidence Act statements are evasive or of limited value because they speak, for instance, in the present tense at the time of writing. I accept the evidence of the Plaintiffs' witnesses and find that the cattle for beef for McDonald's patties in Costa Rica have always come from Guanacaste but not north of the mountains, from the peninsula of Nicoya, from the Puntarenas area and from the Pacific coastal strip as far as Dominical and San Isidro, but no further south than that. I find that the vast majority of the cattle have come from the Guanacaste and Nicoya regions. The extent, timing and causes of the destruction of rainforest and other forest in Costa Rica was the subject of evidence from a number of expert witnesses. Both parties relied upon Civil Evidence Act evidence from Dr James D. Nations. Since the late 1970s his working life has been devoted to the conservation of tropical ecosystems in Mexico, Central America, including Costa Rica and Guatemala, and South America. In 1983 he published (with Daniel I. Komer) a carefully researched article called "Rainforest and the Hamburger Society". He is held in high regard by both Plaintiffs and Defendants. Both sides served Civil Evidence Act statements by Dr Nations. The Defendants' Civil Evidence Act Notice covered his article also. The Plaintiffs also served a Civil Evidence Act statement by Dr Daniel Janzen who had been doing research in Costa Rica since 1963. His studies have included the development of land use, and he has been the Technical Adviser to the National Institute of Biodiversity of Costa Rica. The Defendants called Dr Jean A. Carriere. He is a political scientist whose main research area is politics and ecological degradation in Latin America. He did field work in Costa Rica in 1979, 1980, 1988 and 1995. He told me that I could
safely rely upon Dr Janzen's reputation on Costa Rican matters. The Defendants served a Civil Evidence Act statement by Mr Douglas R. Shane who conducted a study of Latin Americans tropical rainforests between 1976 and 1978 and a study of the causes and consequences of cattle ranching on the tropical forests biomes of Central and South America in 1979 and 1980. This led to a report entitled "Hoofprints on the Forest: Cattle Ranching and the Destruction of Latin American Tropical Forest" which was updated and revised in 1986. The revised report was the subject of a Civil Evidence Act notice. The Defendants also called Mr Charles Secrete who is Executive Director of Friends of the Earth in England, Wales and Northern Ireland. The Defendants introduced Civil Evidence Act evidence from Mr Ronald Cummins, which related to the alleged worldwide hamburger connection, rather than to particular detail, so far as Costa Rica was concerned. The Plaintiffs relied upon parts of Mr Cesca's evidence although he was not, in my view, expert on the range and causes of rainforest destruction to anything the like the same extent as Dr Nations, Dr Janzen, Dr Carriere and Mr Shane. Mr Secrett was clearly knowledgable, although his statement and evidence were advocacy in parts. Certain matters were clear from the common ground between Dr Nations, Dr Janzen, Dr Carriere and Mr Shane in particular. Costa Rica is an agrarian country with no significant mineral or industrial resources. Land there has been developed in response to the economic needs of its people and the apparent profitability of its crops including cattle, and their value for export. The country was almost entirely forested at one time. The forest type included tropical rain, wet, moist and dry forest. By the time of the arrival of the Spaniards over five hundred years ago about 10% of the land had been cleared. By 1940 or 1950 about half the country had been cleared for agriculture, including cattle ranching. Cattle ranching is a very longstanding form of farming in Costa Rica, especially in the Guanacaste region where deforestation began in the sixteenth century when the Spaniards moved cattle there.
In the last fifty years the rate of forest clearance appears to have accelerated as the result of a combination of local, regional and international activities. Tropical forest conversion, including rainforest conversion, usually occurs in stages, according to Dr Nations, and this applies to Costa Rica as to Guatemala and Brazil. First, logging companies enter the forest to extract valuable hardwoods. Because trees of the rainforest are locked together in an intertangled web of leaves, vines and lianas, many other trees are damaged, but the real damage comes from the roads which commercial loggers leave behind. In the second stage, landless peasants from other areas of the country use these roads to gain access to the forest where they clear and burn in order to plant subsistence crops such as beans, rice and maniac and small scale cash crops such as coffee, chillies, bananas and cacao. Control of large areas of agricultural land by a relatively small number of large farmers, including some large cattle ranchers, is one cause of lack of land for peasant farmers, although I accept that this appears to be less so in Costa Rica than in Guatemala. Population growth is clearly a strong factor. So is the need to bring cash in from wealthier countries. In the third stage of tropical deforestation, land cleared by small farmers is absorbed by individuals or companies into larger holdings which are used to produce export crops such as sugar cane, bananas, pineapples, coffee, oil, palm or beef cattle. In addition, land which has deteriorated after a few years peasant farming is turned to pasture. Even the pasture becomes less productive in time. The procedure repeats itself, encroaching on further forest land. This is a summary of part of Dr Nations' evidence (in the form of his article) taken with some of Dr Janzen's more distant history. Mr Shane and Dr Carriere essentially agreed. Dr Janzen's evidence was that cattle ranching has contributed to the clearing of land in Costa Rica, but to a significant degree only in the dry forest areas of the country. He accepted that some areas of wet forest have become cattle farms, but he said that the great majority of deforestation was for the sale of timber
followed by agricultural crops such as rice, beans, oranges, coffee and bananas where feasible, and cattle where those crops were not feasible or where those crops had exhausted their possibilities. In my view any difference between Dr Nations and Dr Janzen was a difference of emphasis only. I think that I must accept Dr Nations' evidence, taken with the evidence of the other experts, that the expansion of beef cattle production, financed to some extent by international credit, and interwoven with other forces such as logging and colonisation, has put pressure on Central and Latin American rainforests, including rainforests in Costa Rica, and that this has been in large part a response to lucrative beef exports, to the US in particular. Mr Secrett stressed the point that the expansion of beef production in Central America and Brazil was far from being just a question of supplying beef for people in Costa Rica, Guatemala or Brazil to eat. With a lot of the development pressure came domestic government incentives and international aid agencies trying to promote benefits for the countries in question by building up their economic resources through earning money from the export of beef. Mr Secrett also believed that continuing to graze cattle on deforested land meant that forest could not regenerate. He said that were it not for continued grazing, pioneer forest would re-establish itself in ten to twenty years although later stages of tropical forest development would take hundreds of years to mature. Dr Carriere supported both those points about outside agencies and regeneration. There was some dispute as to the proportion of Costa Rican beef which was exported. Mr Wolf's evidence was that about two thirds was exported in the early 1980s but that about 60% was consumed internally by the time that he gave evidence in 1996. In fact figures which Dr Gomez Gonzalez spoke to showed a total production of 64.S million kg of meat in 1981 in Costa Rica, of which slightly more than half was exported. In 1991, 71 million kg were produced, of which 25 million kg or 35% was exported.
The same schedule of figures showed that McDonald's use of meat in 1981 in Costa Rica was about 109,000 kg or 0.17% of total national production. In 1991 it was about 250,000 kg or 0.35% of national production. It was 0.38% in 1990, the highest percentage between 1981 and 1991, during which period McDonald's took an average of O.27% of national production. It was common ground that in every country where McDonald's operates its patties are made from only two cuts, fore quarters and flank. Various estimates and calculations put those cuts, together, at about 10% to 15% of each carcass. Although all these figures related to "meat", I understood the meat to be almost entirely beef. The figures for McDonald's use are consistent with Mr Cesca's estimates that each McDonald's restaurant in Costa Rica used 40,000 to 50,000 kg of beef patties in a year. Since there were fourteen McDonald's restaurants in Costa Rica in 1995, McDonald's Costa Rica's consumption of beef must have risen to about 560,000 kg or more by then, and clearly the intention is to increase this, but I cannot say just what proportion of Costa Rican beef production is taken by McDonald's Costa Rican restaurants there now. Figures in Dr Nations' article show U.S. imports of beef and veal at about 61 million pounds or about 27 million kg in 1981, which roughly accords with Dr Gomez Gonzalez' figures for export of meat. Mr Wolf accepted what appeared to be Costa Rican government figures for exports of "carne" between 1989 and 1991. Again I understood the came, or meat, to be almost entirely beef. The figures showed between 42 million and 45 million pounds being exported each year, nearly all of it to the United States. These figures do not quite accord with Dr Gomez Gonezales' figures, but whatever the exact figure the amount and proportion of Costa Rican beef which has been exported generally and exported to the United States in particular has been substantial. I conclude that over the years beef production or cattle ranching has been part of the cause of the destruction of forest including some rainforest in Costa Rica. The question is whether McDonald's, that is the Plaintiffs and particularly the First Plaintiff, can justly be said to be responsible for this in any real way and to any extent of substance, by any ordinary, unbiased judgment.
The scale and broad areas of destruction of tropical rainforest since 1940 are graphically shown on a map prepared by Dr John V. Cotter in 1983, based on information provided by Dr Nations (the Cotter map). In 1940 large parts of the country were still covered by what Dr Nations and Dr Cotter, a geographer, were apparently happy to call "tropical rainforests". Tropical rainforest then covered an area along the northern border of Costa Rica, and down the north eastern side of the country to the east of the central spine. It also covered an area in the south-west of the country. There was no rainforest in Guanacaste save north of the mountains. There was no rainforest in the peninsular of Nicoya. There was no rainforest in area around Puntarenas, but rainforest is shown up to 1940 along the Pacific coastal strip to the south of Puntarenas on to Dominical, San Isidro and beyond. In my view this is consistent with the evidence of Dr Jenzen that the San Isidro region was an area of both dry and deciduous forest and wet forest, the dry forest being on the flat land near the coast and the wet forest on higher ground on the slopes of the mountain range. My inference is that Dr Nations treated what Dr Jenzen calls wet forest as rainforest, and that the scale of the Cotter map is too small to show the mixture of dry and wet forest. A Porras and Vittareal map made in 1986, to which Dr Carriere referred, and a Sader and Joyce map made in 1988 both show dense primary forest coverage in a small part of Guanacaste and much of the peninsula of Nicoya in 1940. The two maps accord, and the Sader and Joyce map notes that the forest formations shown over parts of the whole country ranged from rainforest to thorn forest in progressively drier climates. In my view the remaining forestation in Guanacaste, south of the mountains, and Nicoya must have been dry forest to be consistent with the Cotter map. Both the Porras and Vittareal map and the Sader and Joyce maps show that dense and primary forest had gone from Guancaste, south of the mountains, and from Nicoya and from the Puntarenas area and from the Pacific coastal strip to what seem to me to be as far south as Dominical and San Isidro by 1961, save for two very small areas in Guanacaste which Dr Jenzen described as a dry deciduous forests and plains area. The Civil Evidence Act statement of Sr Juan Segueira says
that the areas from which cattle slaughtered by Coope Montecillos for patties for McDonald's were deforested in the 1950s and the 1960s without saying whether the forest in question was wet or dry. The Cotter map does not show any intermediate state of affairs, as far as rainforest is concerned, between 1940 and 1982 by which time the remaining rainforest was in the very north of the country, down the east coast, in the middle of the very south of the country and on the Peninsula de Osa in the deep south. None of those areas are near the sources of cattle for McDonald's Costa Rica's patties. None of the "Tosi maps" which were also produced are really inconsistent with what I have set out, although they show a narrow strip of forest between Dominical and San Isidro in 1961. My conclusion is that some cattle which were slaughtered for beef for patties for McDonald's restaurants in Costa Rica may, and I stress ''may", have come from ranches which were rainforest up to 1961, nine years before McDonald's appeared in Costa Rica. The evidence does not establish that they probably did. In any event, the Plaintiff have proved to my satisfaction that cattle which were slaughtered for beef patties for McDonald's restaurants in Costa Rica did not come from land which was rainforest after 1961. The Defendants arguments to resist these conclusions included two overlapping points. Firstly, David Rose who was then the Observer's Home Affairs Correspondent, told me that on 5th February, 1993, Ms Eddie Bensilum, whom he described as the Second Plaintiff's press officer in London, told him that when the first McDonald's restaurant opened in Costa Rica in 1970 it was buying beef from its suppliers Coope Montecillos, which came from farms established between 1920 and 1960 and from farms which had been rainforest and which were deforested in the 1950s. She told him that when the first restaurant opened, they were buying from farms established only ten years earlier. That was policy until 1988. By the time of their conversation the policy was not to use meat from "recently deforested lands by which was meant land which had been deforested within the last twenty-five years. When Mr Rose asked Ms Bensilum if the ten year policy employed before 1988 meant that land which was rainforest in the mid-1970s
could have been used to grow McDonald's beef in the mid-1980s, she replied in the affirmative. There was no challenge to Mr Rose's account of his conversations with Ms Bensilum. There is reason to believe that Ms Bensilum had some relevant documents and that she consulted the First Plaintiff's head office in Oakland, but the conversations between Ms Bensilum and Mr Rose took place within a few hours and I have no reason to believe that she consulted the First Plaintiff's subsidiary in Costa Rica or their suppliers or Mr Cesca. Mr Cesca said that it was not possible that she spoke to him. I do not believe that what Ms Bensilum said to Mr Rose is inconsistent with what I have so far set out. In effect she spoke of deforestation up to 1960 and the possibility only, of clearance of rainforest in the mid 1970s. I prefer the evidence which I have previously set out as to what actually happened. Secondly, the Defendants spent much time testing the First Plaintiff's rainforest policy, the argument being that unless the First Plaintiff had a clear rainforest policy at the material time there would be a real risk that its activities would result in damage to the rainforest. In May, 1989, the First Plaintiff published a written statement in the following terms: n CORPORATE POLICY START McDonald's is committed to establishing and enforcing responsible Environmental practices in all aspects of our business. As part of this commitment, it is McDonald's policy to use only locally produced and processed beef in every country where we have restaurants. In those isolated areas where domestic beef is not available, it is imported from approved McDonald's suppliers in other countries. In all cases, however, McDonald's does not, has not and will not permit the destruction of tropical rainforest for our beef supply. We do not, and will not purchase beef from rainforest or (recently deforested rainforest) land. This policy is strictly enforced and closely monitored. Any McDonald's supplier who is found to deviate from this policy - or who cannot prove compliance with it -
will be immediately discontinued. "The Defendants contended that the First Plaintiff did not have a rainforest policy before 1989 although it had operated in countries with rainforest for may years by then, having opened its first restaurant in Costa Rica in 1970, in Guatemala in 1974 and Brazil in 1979. They relied on the fact that there was no written policy until 1989 and they pointed to a number of earlier documents which made no reference to rainforest policy but which might have been expected to do so. Mr Cesca gave evidence that the First Plaintiff had always had a rainforest policy in the sense that from the very start it had been sensitive to the environment. It was clear from events in 1983 to which I will come, that McDonald's was sensitive about any association with destruction of rainforest by then, but there was no evidence that it had formulated a rainforest policy which could systematically be made known to all those working in or from rainforest countries or trading with them, before 1989. There was much cross-examination as to the meaning of the words "recently deforested" when the policy was formulated. When was deforestation "recent for McDonald's purposes? Was it ten years and later twenty-five years before, as Ms Bensilum said? Both Mr Cesca and Dr Gomez Gonzales were adamant that the ban on cattle from "recently" deforested rainforest land meant that McDonald's would not take beef from cattle reared on land which had been deforested after the time when McDonald's first went into a rainforest country to organise opening a first restaurant. I accept this. Mr Cesca said that McDonald's could not be responsible for a country it was just going into and I thought that this was a candid comment whether one accepted it as valid or not. He had not heard of ten year or twenty-five year definitions before he saw the papers in this case. He thought that the twenty-five years which Ms Bensilum spoke of in 1993 when answering Mr Rose's questions might have been a count back to 1968 which might have been when it was first planned to open a restaurant in Costa Rica. This made some sense. I accept Mr Cesca's evidence of what "recently deforested" was meant to mean, although I do not believe that meaning, or
even the policy, was as widely known as it should have been. Indeed I found it difficult to see to whom the policy as formulated had been published and I suspect that the written policy was produced for public relations reasons as much as anything. All this is by the way, however, in my judgment, because it is obvious that lack of a rainforest policy or a clearly defined and properly promulgated rainforest policy cannot of itself prove that the First Plaintiff or any of its subsidiaries has in fact damaged or destroyed rainforest. It might support and explain other evidence of damage or destruction, but that is the extent of it. Although the portion of Costa Rican beef taken by McDonald's Costa Rica has been small, the Defendants contended that Costa Rican beef had been imported into the United States for processing by McDonald's pattie suppliers there. It was likely that some of it had come from recently deforested rainforest land, and even if it had not, the possibility of selling beef to the suppliers of McDonald's together with other fast and convenience food chains in the U.S. was part of the cause of continuing deforestation for cattle ranching. The thrust of Dr Nations' article was that the United States' appetite for cheap beef had been a critical factor in the future of Central America's tropical rainforests which were being replaced by pasture land, much of which was consumed by U.S. citizens; and the Defendants' case was that the First Plaintiff had a part in this. In any event the alleged export of beef to the U.S. for McDonald's was relevant to the leaflet's allegation of trapping poor countries into producing more and more food for export to it in the States. The defence case of imports of beef from Costa Rica to the U.S. for McDonald's products there, fell into two parts. The first relied on statements made to the makers of a film called Jungleburger and admitted under the Civil Evidence Act. The second relied on the large amount of Costa Rican beef imported into the U.S., combined with what were said to be slack labelling provisions which meant that imported beef could lose its identity before reaching one of McDonald's suppliers who would, in any event, it was said, be tempted to take cheap imported beef without the First Plaintiff knowing.
The Plaintiffs denied that imported beef had ever been used in McDonald's burgers in the U.S: it had always been part of their specification that only home grown beef was used in their U.S. patties and this was part of their advertising and appeal to their U.S. customers. Much the same contest arose in relation to Guatemalan and Brazilian beef. The Jungleburger film was made by Herr Peter Heller of Munich. He and his team did research in Costa Rica in 1983, filmed there in 1984 and released the film in 1985. The first page of Mr Heller's Civil Evidence Act Statement dated June, 1991, relates that a number of named and unnamed people in the forest and cattle industry in Costa Rica told him of meat from Costa Rica reaching U.S. meat plants supplying McDonald's franchisees in the U.S.A., either through Coope Montecillos or through packers to Florida. Dr Rodolfo Quiros Guardia, Gerente (Manager) General of Coope Montecillos and Sr Sergio Quintana, Director de Mercadeo (Marketing) of the same plant, were said to have stated to camera that they were selling meat to the U.S. meat plants supplying McDonald's in the U.S.A. Sr Alberto Jose Amador Zamora, President of the Federation de Camaras de Ganaderos (Suppliers) de Costa Rica was said to have confirmed that quite reasonable amounts" of Costa Rican beef had been sold to McDonald's suppliers in the U.S. market in 1982 to 1984. Sr Donald Monroe, Gerente General of GISA, was said to have explained that McDonald's U.S.A. was "not willing to inform about its imports from Costa Rica." Dr E.A. Brandt, from the promotions department of the Ministry of Agriculture in San Jose, was said to have confirmed on tape and to camera that McDonald's U.S.A. was buying Costa Rican beef through middle men. The first page of Herr Hellers' statement ends there and the Defendants were never able to get the rest of it. I have seen what purport to be transcripts of some of the interviews but the original film cuts or tapes were not available. In October, 1995, Herr Heller wrote to Mr Morris to say that the off-cut of film not used in the released film and the tapes of conversations could not be found. He said the cuts of Sr Quintana speaking on film were genuine and he forwarded what purported to be original transcripts of what was said in full and
a copy of Sr Quintana's receipt for his fee for co-operating in the film project. The film in its released form shows Dr Arturo Wolf senior and Sr Arturo Wolf junior who was filmed at his U.S. employer, Standard. Both speak of the U.S. importing Costa Rican beef for fast food processing. A Vice-President of the First Plaintiff denies buying meat from Latin American countries and says that all beef served at McDonald's in the U.S. is 100% pure domestic American beef. The marketing manager of a well-known competitor (which I will not name as it is no party to this case) accepts that they occasionally use Costa Rican beef although he says that it comes from areas which have been supplying beef since 1900. Sr Quintana of Coope Montecillos is shown saying, in English: "We export a big quantity of meat that is used in the U.S. We sell it through some brokers on a commission basis and 70% of this meat is sold - its industrial meat for food chains -fast food chains - like McDonald's, [name of rival]. etc. Sr Munroe says that 70% of GISA's production goes for fast food or making hamburgers and that 95% goes to the United States. He names restaurant chains which GISA supplies in the U.S. He says: "But not McDonald' s. They have their own policy. They say they only use meat produced in the U.S. They don't import meat from other countries.... As far a I know McDonald's have never imported meat directly from Costa Rica. But I don't know - they could be buying it here through middle men." Sr Quintana reappears to say that he knows they supply the fast food chains because the type of meat they produce has to comply with chemical specifications that they need in the U.S. "We are supplying McDonald's and [name of rival]. "Other transcripts attribute to Sr Quintana the statement: "We export meat to the U.S.A. and 70% of that goes to outlets like restaurants like McDonald's ....." Sr Quintana's Civil Evidence Act statement said that between 1980 and 1985 when he was Marketing Director for Coope Montecillos it supplied beef to McDonald's restaurants in Costa Rica but it did not supply beef to McDonald's anywhere else, although it did export beef to other countries. He said that parts of interviews relating to different topics had been joined together on film to make it appear as if he said that Coope
Montecillos exported beef to McDonald's in the United States, which was not true. Sr Munroe's Civil Evidence Act statement said that he was deceived as to the purpose of the film. He was GISA's General Manager of Farms and Slaughterhouses at the time when the film was made, with the additional responsibility of World Wide Marketing of all GISA's meat markets. Herr Heller and his crew told him that they were producing a film which could help open German markets for GISA. He said that the film was inaccurate and misleading in many specified respects including mistranslation of what he and others said. The Civil Evidence Act evidence of Sr Arturo Wolf senior was that Herr Heller told him that he was in Costa Rica to film a documentary on different aspects of commerce and industry such as cattle, coffee and banana production, which would be shown back in Germany and that it would be a good opportunity to try and attract German investment in Costa Rica. Sr Arturo Wolf junior said that Herr Heller told him that the purpose of the film was to show the growth of fast food in the world and the developing countries. He said that it misleadingly showed shots of cattle in drier areas of Costa Rica mixed with shorts of tree felling meant to signal destruction of rainforest. While a voice over spoke of soil dying and meat eating away at the land, cattle were in fact shown on his family's well established ranchland where the grass was just as green twelve years after the film was made. In fact it is clear to anyone watching the film that its theme is that McDonald's and other U.S. fast food chains are involved in the cattle industry's destruction of Costa Rican rainforest. It has a melodramatically doom-laden musical score in parts. I accept that it is intentionally misleading in its juxtaposed cuts of cattle in some established cattle ranching areas with cuts of forest clearance, not necessarily just rainforest, in others. So it lacks integrity. But it does fairly place statements that McDonald's do not use Costa Rican beef in the U.S. with the statements that they do, and if the film has been cut to misrepresent what Sr Quintana said it has been very cleverly done, so I will turn to the other parts of the Defendants' case on importation to the U.S. for McDonald' s. As I have already indicated, the Defendants case was that
once beef imported into the U.S. was cleared by the U.S. Department of Agriculture Food Safety and Inspection Service it became indistinguishable from home products, so any policy of the First Plaintiff that only beef produced in the U.S. should be used in McDonald's U.S. restaurants became useless. They pointed to the large proportion of Costa Rican product exported to the U.S., and contended that it was inevitable that some of this must have gone, unidentified, to McDonald's pattie suppliers. Mr Secrett gave evidence that during the 1980s Friends of the Earth was concerned that McDonald's U.S.A. was making what FOE considered to be misleading statements that it had never purchased imported beef from Central America or South America for use in its hamburgers and that nowhere in the world did McDonald's use of beef threaten or remotely involve tropical rainforests. It was clear that Mr Secrett held the view that these statements were false because of his understanding of the manner in which the beef imported from Latin America and other regions of the world to the United States was and is sorted and distributed to the fast-food sector of the meat trade in the United States and because of the grading and labelling system operated by USDA. His understanding and evidence was that beef supplied and imported into the USA, along with comparable beef supplies originating in the USA, was stored and checked for health and quality assurance purposes by USDA inspectors before being sold on to the wholesale and retail trade. Once beef consignments had been passed for consumption by the inspectors, and stamped USDA approved, they were graded according to the quality of the meat. To the best of his knowledge this was the only certification available to buyers, including retail purchasers, about the status, including the country of origin, of the beef. Once stocks of both imported beef, such as the meat used in the fastfood trade, and genuinely domestic reared beef, i.e. beef reared in the U.S. itself, had been checked by USDA inspectors, all such supplies consequently earned the status of US graded beef, and they were sorted and sold on to the retail trade according to quality and end-use criteria but, crucially, not according to the country of origin of the cattle used to provide such beef. Beef was imported into the U.S. in significant quantities for the fast-food sector from Central American countries like
Costa Rica and Guatemala and, through the 1970s at least, substantial beef imports came from Brazil. Tropical dry, wet and rainforest continued to be cleared in those and other countries to create pastures for rearing cattle. All this is well documented in official and scientific literature. So Mr Secrett argued that although one could not prove categorically that such beef definitely could be found in any specific consignment of hamburgers or other fast-food meats, the only realistic conclusion, given the circumstances operating at the time and which governed the supply of beef for the fast-food sector in the U.S., was that during the 1970s and much if not all of the 1980s, bee' from cattle reared on recently deforested tropical land in countries like Costa Rica was used by all major fast-food retailers in the U.S., including McDonald' s. Mr Secrett believed this conclusion to be what he called a statistical inevitability. Moreover, it was not possible for McDonald's USA to prove that it had never purchased imported beef from Central or South America for use in its hamburgers. Dr Nations' and Mr Shane's understanding of U.S. beef labelling laws appeared to be the same as Mr Secrett's. They thought that a problem arose because under U.S. law once imported beef was cleared by the authorities it lost its import identity and gained the status of U.S. graded beef. Thus if the meat was purchased by a broker for resale, the next or final buyer only knew the U.S. grade of the product and not necessarily the country of origin Efforts by some U.S. environmentalists to have Congress enact a labelling law designating beef's country of origin had been unsuccessful. Mr Howard F. Lyman ran a very large livestock farm in Montana until 1983. He has been an advocate for various causes since then. The first part of his evidence was concerned with what he saw as the inhumanity and danger of intensive farming, but he also said that he had seen boxes of meat imported from Central America, with labels showing where the meat came from, but in very small print. He said he had seen film of boxes of imported meat with no country of origin labels at all, although he did not know whether they came from Central America. He said that when supplies ran out of a product, processors would get it from wherever they could. Ground beef was impossible to trace. For twenty-seven months between 1979 and 1981, Dr Nations
travelled through Southern Mexico and Central America, gathering information on the conversion of tropical forest and agricultural lands to pasture land for beef cattle production. His work included interviews with farmers, ranchers, government officials, and beef packing plant operators in Costa Rica and Guatemala and five other countries. Only once did someone refer to exporting to McDonald' s. In July, 1979, Sr Oscar Mallorca, the plant foreman of Exquapagua S.A. in Guatemala, told Dr Nations and his colleague Mr Komer when discussing Expagua exports of beef to the U.S. that: "We export to McDonald' s." That was the sum total of his reference to McDonald' s. Dr Nations was not inclined to take Sr Mallorca's statement literally. He did not believe that the plant exported to McDonald's or McDonald's suppliers in the light of all the other information which he had gathered during his research and which indicated that McDonald's U.S. beef supplies came exclusively from the U.S. He believed that Sr Mallorca was generalising the export of beer to the U.S. fast food market as "McDonald's'', McDonald's being the best known of fast food restaurant chains. During the course of his investigation he did learn that other U.S. restaurants, including the rival referred to in Jungleburger, were importing Central American beef but he found no evidence that McDonald's imported Mexican or Central American beef at any time. In these circumstances I do not think that Sr Mallorca's statement can carry any weight whatsoever, even supposing it to be admissible as evidence of the facts contained in it, which it would not be under the 1968 Civil Evidence Act, but it would be under the 1995 Act. Dr Nations' lack of discovery of any evidence of exports of beef from Central America to McDonald's in the U.S.A. and his gathering of information to the contrary are significant, in my view. Mr Shane's researches into beef cattle ranching and exports involved site visits throughout the tropical forest areas of Central America, and extensive interviews in both Latin America and the United States between 1977 and 1986. When he conducted initial interviews with representatives of the food industry in the U.S. in 1979 and 1980, there was little awareness among those contacted of the impact that cattle ranching had on tropical forest ecosystems, so
spokespersons for meat brokerage houses, food processors and fast-food chains responded for the most part in an unguarded manner. Things had changed in this respect by 1982 to 1983. Some fast-food chains did say in 1980 that they used beef imported from tropical Latin American nations, but the First Plaintiff maintained that its U.S. franchisees did not use any imported beef. Its main suppliers thought that it would be difficult for it to use imported beef unwittingly in McDonald's hamburgers. Mr Shane appears to have found nothing to indicate that McDonald's in the USA used imported beef. Although clearly a distinguished environmentalist, he thought that the environmental movement needed to use solid information and gentle persuasion rather than strident rhetoric. The Plaintiffs met the Defendants' case of exporting of Costa Rican beef to the U.S. and, allegedly, to McDonald's there, with evidence that it had always been its policy to use home grown beef in its U.S. patties, that beef had not in fact been imported into the U.S. from Costa Rica or anywhere else to make McDonald's patties, and that the Defendants' witnesses had misunderstood the theory and practicality of the U.S. meat labelling laws as they bit on the issue. I have no doubt that the First Plaintiff has insisted from the very years of the McDonald's chain and before opening in Costa Rica, Guatemala or Brazil, that the beef processed by its U.S. pattie suppliers should come from cattle reared in the U.S. and that this has been a selling point Go its restaurant customers in the ITS. That is what U.S. customers want. An obviously old McDonald's Meat Specification issued by McDonald's Systems Inc. from 221 North Lasalle Street, Chicago, and said to date from 1967, although I am not sure that the precise date was ever proved, included "Imported Beef" among "Ingredients Absolutely Not To Be Used". The First Plaintiff's Corporate Policy Statement to which I have already referred states that "it is McDonald's policy to use only locally produced and processed beef in every country where we have restaurants. The Defendants argued that practice showed that this was meaningless since there was a considerable number of cases of countries where foreign beef was imported, usually in pattie form, for use in McDonald's restaurants. Mr Cesca's answer was that some countries do not have their own beef or adequate processing facilities. There are clearly countries where the policy does not bite at all, but I did not consider
that this was any indication that it does not bite in the U.S. which has a large cattle and beef industry and where the pull of it home-grown" beef is particularly strong. I bear in mind that Mr Robert Beavers, a Senior Vice President and Member of the Board of Directors of the First Plaintiff, said that in the early years of the McDonald's chain all meat products were fresh, not frozen, so it had to come from local suppliers. The result was that before McDonald's began converting to frozen hamburgers in 1968 its meat suppliers hit a peak of something like 175. There were so many that they were difficult to police and some were caught cheating on aspects of the First Plaintiff's specification for instance on fat content and even to the extent of putting ice in the meat. It was not until the early to mid 1980s, over a two or three year period, that the First Plaintiff reduced its pattie suppliers to only five highly efficient companies, although the five suppliers ran more than five plants. But by the time when Sr Quintana was speaking this reduction must have been almost, if not completely, achieved. There was no evidence that anyone was found "cheating" with imported beef. In 1983 there was a fuss about an allegation concerning McDonald's and rainforest beef. It arose from an incident involving H.R.H. Prince Philip and Mr George Cohon, the President of McDonald's Canadian subsidiary, when they met at a World Wildlife Fund (now World Wide Fund for Nature) function in Toronto in late 1982 or January, 1983. According to a letter written by Mr Cohon and admitted as evidence under the Civil Evidence Act, Prince Philip mentioned that McDonald's was involved in the removal of rainforest to provide land for grazing for cattle which in turn would provide beef for McDonald's hamburgers worldwide. Mr Cohon told Prince Philip that this was not the fact, but Prince Philip was insistent that McDonald's was ruining the rainforest. I should say that it was later said on behalf of Prince Philip that he did not recall the conversation as it was recounted, but whatever was said between Prince Philip and Mr Cohon sent shock waves through the McDonald's system. McDonald's thought that what Prince Philip was said to have said was untrue and set about trying to disprove it. Some of the statements or letters which they obtained were admitted under the Civil Evidence Act. In April, 1983, Presidents or major executives of
a number of McDonald's largest pattie suppliers in the U.S., namely Keystone Foods, Golden State Foods, Anderson Meat and Provisions and Pabst Meat Supply wrote to say that they had never used imported beef. Sr Ricardo Loew, Managing Director of McDonald's Costa Rica, wrote to say that no hamburger meat supplier exported meat for the use of McDonald's in the U.S. His enquiries showed that Costa Rican meat exporters sent their beef to major distributors, but that no meat exporter had sent meat for the use of McDonald's anywhere. In November, 1993, Sr Manuel Jimenez, General Manager of Coope Montecillos, wrote that it was producing patties for McDonald's Costa Rica but "we have never produced or manufactured patties for McDonald's in the U.S.' and that "Coope Montecillos exports beef which is commercialised by some distributors. It is my understanding that McDonald's in the United States does not utilise any imported beef to produce its hamburgers. "In 1989 and 1990 the First Plaintiff collected a large number of certificates or guarantees from beef suppliers in the U.S. to the effect that they did not use imported boneless beef or any meat from carcasses slaughtered outside the U.S. There were many other certificates at the same time saying that only "domestic beefs was used, but I accept that this term on its own could be ambiguous. In November and December, 1995, executives of Keystone Foods Corporation, Golden State Foods, Normac Foods Inc., OSI Industries Inc. and Pabst Meat Supply Inc., McDonald's U.S. big five pattie suppliers, wrote virtually identical letters saying that their companies manufactured beef patties for the First Plaintiff in the U.S.A. and had done so in the case of OSI since 1955, Golden State Foods since 1957, Pabst since 1961, Normac Foods formerly Anderson Meat and Provisions since 1968, and Keystone Foods since 1970. They said that it had always been a requirement of the First Plaintiff that the patties supplied to them in the USA should contain no imported beef which meant that the beef which they used to manufacture patties for McDonald's in the USA must come from cattle slaughtered within the continental boundaries of the U.S.A. They had always complied with those requirements. They imposed the same requirements with regard to imported beef on all their suppliers who were all in the U.S.A. and whom they knew well. The suppliers slaughtered the cattle and then deboned the meat before supplying the five
large pattie manufacturers. They said that no imported beef had been used. Transporting live cattle from Central America to be slaughtered in the U.S. would be uneconomical for a number of stated reasons. Imported meat could not lose its foreign identity, short of fraud, for a number of reasons which tallied with the evidence of Mr Cesca and Mr Kevin G. McAnaney, a U.S. lawyer. No doubt the suppliers' letters were drafted for them, hence the same form of words; but I have no reason to doubt that they were honestly signed. Mr Cesca's evidence was that beef could only be imported into the U.S. if it came from a U.S. Department or Agriculture approved slaughterhouse abroad. It arrived in the U.S. in large refrigerated containers on trucks or ships with a bill of landing. The containers held between 20,000 and 60,000 lbs of beef packed in individual boxes which were labelled with the country of origin. The meat was stamped too. The boxes stayed intact save for specimens which were opened by USDA inspectors. The meat remained in the labelled boxes as whole cuts of meat until it reached the processor and its chemistry was changed, as Mr Cesca put it, by grinding or cooking etc. When people talked of it being treated as "U.S. beef" this in fact meant so far as quality was concerned. It had nothing to do with labelling. This had been so since the late 1950s and early 1960s. Mr Cesca's evidence was consistent with the expert legal evidence of Mr Kevin G. McAnaney introduced under the Civil Evidence Act in the form of a comprehensive letter to the Plaintiffs' leading counsel. U.S. Federal statutory provisions and regulations for the import of carcasses, parts of carcasses, meat food products, in effect over the relevant period, required that they complied with the marking and labelling requirements applicable to domestic products except that they must include the words, "product of ...." and the establishment number assigned to the foreign meat inspection system certified to USDA. Although it was provided that imported products should be deemed to be domestic products, it was made clear that in addition to the quality requirements for domestic products the imported products must be marked and labelled as imported product with the country of origin stated. It was unlawful for someone importing meat products into the U.S., or moving them on to commercial processors, to remove the official markings and labelling showing the country of origin. I have no hesitation in accepting the combined effect of Mr
Cesca's practical evidence and Mr McAnaney's expert evidence of the law relating to the identification and labelling of beef imported into the U.S. It follows, in my view, as Mr Cesca said, that use of imported beef by McDonald's pattie processors and suppliers would require their sub-suppliers to remove the imported beef from the marked containers and then place it in their own boxes in order to deceive the pattie processors and suppliers, or it would require fraud by the pattie suppliers of McDonald's whose home grown beef specification was known perfectly well. I accept the evidence of Mr Cesca and the big five suppliers that this would be too labour intensive and uneconomical for the sub-suppliers. It would be commercial suicide for the subsuppliers with an ultimate customer like McDonald' s. It would certainly be commercial suicide for McDonald's pattie suppliers to participate in the deception. I believe that Mr Secrett, Dr Nations and Mr Shane have misunderstood U.S. law at least in so far as it affects McDonald's whose pattie suppliers do not buy in beef which has already been ground in the U.S. and lost its foreign origin labelling. They buy it deboned but not yet ground. So it should be in foreign origin labelled boxes, short of fraud, if it has come from outside the U.S. There was no compelling evidence of any pressing need for McDonald's suppliers to buy imported beef because of shortage home grown beef or to save significantly on price. On an occasion when beef was short at home McDonald's bought its own cattle to rear in the U.S., as I have already said. There was no evidence that it bought from abroad. Both Dr Nations and Dr Gomez Gonzalez said that the majority of U.S. beef imports came from Australia and New Zealand. Yet no one suggested that McDonald's suppliers in the U.S. had ever taken any part of those imports. I did not find Mr Lyman's evidence of the film referred to helpful. Accepting it as an honest recollection, I have not seen the film and I just cannot say that it was a reliable portrayal of what was going on. Even if Mr Lyman saw labels which were only in small print, they were there to be noticed by anyone in the trade. I am well aware that the Plaintiffs have not been able to
produce evidence from every U.S. meat supplier that it has always used beef grown in the U.S. and that parts of the evidence adduced by the First Plaintiff relied on a chain of hearsay information. But in my judgment the admissible evidence builds a compelling picture of a corporation determined from the start to use only home grown, non-imported beef in its U.S. patties. In my judgment it is very unlikely that anyone has tried or managed to slip Costa Rican beef or any imported beef to McDonald's pattie suppliers in the U.S. Apart from the Jungleburger "evidence" the Defendants' produced no evidence of actual export of beef from Costa Rica to the U.S. for use in McDonald's restaurants there. I can not place any sensible reliance on the Jungleburger evidence in these circumstances. Mr Heller's informers other than Sr Quintara remained background figures. If Sr Quintana did say what he appears to say on the film, uncorrupted by cutting, I believe that he was misleading the camera, either out of misinformation given to him, or because he had mistakenly put McDonald's in the same lot as some other fast-food chains, or for some ulterior motive such as a wish to impress the German film maker or the European audience to which it would be shown. In any event I reject Sr Quintana's filmed evidence of export of beef to McDonald's suppliers, directly or through middle men, to the U.S. On the evidence which has been produced to me, I am satisfied that McDonald's in the U.S. has not used beef imported from Costa Rica. There was no evidence that the First Plaintiff or any subsidiary owned land in Costa Rica apart from land upon which McDonald's Costa Rican restaurants and, I suppose, their offices stand. There was no evidence that any of the farmers or ranchers whose cattle have been slaughtered and processed into McDonald's patties have dispossessed small farmers or tribal people. Indeed there was really no case concerning tribal people at all. No evidence was brought to my attention of the export of staple crops from Costa Rica for use to feed cattle, either for McDonald's ultimate benefit or at all. I will come to the "worldwide hamburger connection,' after considering Guatemala and Brazil.
Guatemala is much larger than Costa Rica. The unchallenged history of McDonald's in Guatemala was that the first McDonald's restaurant was opened under licence by the Cofino family, a "developmental licensees according to Mr Cesca, in 1974. At some stage the business was incorporated in the name of Industria De Hamburguesas S.A. The business seems to have traded as "McDonald's Guatemala" from the start. According to the First Plaintiff's 1995 Annual Report there were four McDonald's restaurants in Guatemala in 1990, six by 1993 and fifteen in 1995. As in Costa Rica, the First Plaintiff has recently taken a greater part in the running of the business with a view to making the market grow faster. Although Mr Cesca did not know the exact legal arrangements, it seems fair to assume that the First Plaintiff or a subsidiary has shares in what is, in effect, a Guatemalan subsidiary company. As with Costa Rica, the precise status of the company probably does not matter in the light of the control which the first Plaintiff has been able to exercise. According to the Civil Evidence Act statement of Sr Jose Cofino who has been involved with McDonald's Guatemala since it began business in 1974, and his son Alvaro who has worked for them since 1981 and who has now taken over management of the business from his father, McDonald's Guatemalan restaurants at first purchased the beef from which they made their own hamburger patties, from local supermarkets. In 1975 they started buying meat from Industria de Granaderos Guatemaltecos S.A. ("IGG"). After about fourteen months IGG went out of business. It must have restarted business at a plant at Exguapagua under the name Exauapagua S.A., but McDonald's Guatemala has not done business with it since 1976. From 1976 until mid-1977 and from 1979 to date they were supplied by Procasa which appears to be the brand name for Procesadora De Carne S.A. Between mid 1977 and 1979 the supplier was a company called Pegusa. So far as Sr Cofino senior and Sr Cofino junior were aware, all those beef suppliers obtained their beef from land in the south of Guatemala, which has been used for agricultural purposes since the turn of the century. The Civil Evidence Act statement of Sr Rolando Robles, the General Manager of Procasa who has worked for Procasa since 1979, and has been General Manager since 1982, said that Procasa obtained its beef for McDonald's Guatemala from ranches in
Southern Guatemala, None of them were situated in rainforest or recently deforested rainforest areas. The regions in which the ranches are situated were deforested in the 1940s and early 1950s. If there is a difference between Senores Cofino and Sr Robles, I cannot solve it on the written statements. Other Civil Evidence Act statements said that 80% of Procasa's cattle came from the states of Retalhuleu, Suchitepequez, Escuintla and Tiquisate. These are regions on the Pacific coastal plain in the south of Guatemala. 15% came from the states of Zacapa and Chiquimula which are in the east of the country about half way between the Pacific and the Caribbean Bay of Honduras. 5% came from Izabal which is further north towards the Bay of Honduras. The Defendants were in no position to dispute this on any realistic basis. Procasa has a system which allows it to identify the ranch from which cattle for beef for McDonald's Guatemala come, but Sr Robles' statement does not say when this system began. The Guatemalan rainforest is primarily in the very north of the country and the evidence Sr Jose Cofino and Sr Alvaro Cofino and Mr Ray Cesca was that the roads from the north of Guatemala are very poor and unsuitable for carrying lorry loads of cattle to Procasa's plant which is in the south of the country near Guatemala City. Mr Cesca said that transport is costly and beef is a penny business. It appears, however that there were some areas of tropical rainforest in the east and south of the country, at least if one includes wet and moist forest. The 1983 Cotter map, to which I have already referred, shows areas of tropical rainforest in Guatemala deforested since 1940 and surviving in 1982. The map shows a narrow band of tropical rainforest "deforested in 1940" along the northern edge of the southern plain. It shows a band of tropical rainforest "deforested since 1940" some way north of Chiquimala and also north of Zacapa, and between those places and Izabal. Izabal appears to be in or near another line of rainforest "deforested since 1940n although the scale of the Cotter map makes it hard to tell. Another map of Guatemala produced by Mr Cesca is hatched with one area in the far north keyed "rainforest". It has two areas on the southern plain and around
and a little to the north of Zacapa, both keyed "where they buy now". The basis for this key was never made reliably clear so far as I recall. The only part hatched as rainforest is in the far north. The northernmost edges of the areas in the southern plain and to the north of Zacapa, hatched as "where they buy now", just enter the eastern and southern lines of tropical rainforest "deforested since 1940" on the Cotter map. It is difficult to tell from the Cotter map whether Procasa's limited source area near Izabal falls in an area of "surviving tropical forest 1982" on that map. The southern source areas and those around Chiquimala and Zacapa do not do so. If the maps were to be taken alone they would point to the possibility of some of the cattle for beef for McDonald's Guatemala's patties coming from rainforest destroyed at some time after 1940 but before 1982, although the large majority probably comes from the areas of southern plain which were no longer rainforest, if they ever had been, by 1940. Taking the maps with Sr Robles' evidence about the dates of deforestation, both being more favourable to the Defendants' case than the statement of Senores Cofino, some at least of the Procasa cattle for beef for McDonald's burgers came from rainforest land deforested in the 1940s and 1950s. However, in my view there is no evidence that any of the Procasa cattle came from rainforest land which was deforested after the 1950s, well before McDonald's arrived in Guatemala in 1979. There is no evidence that the early supermarket or I.G.G. or Pegusa beef came from land which had been rainforest since 1940. The reasons for deforestation in Guatemala appear to be the same as those in Costa Rica according to Dr Nations. This was confirmed by Sr Alvaro Cofino whose account was that "the normal process of the destruction of the forest" is that the lumbers take out all the precious wood. Then the 'colons" take all the other wood for fire and for planting their crops of corn, beans and rice. Because the soil is very bad in the region, by which Sr Cofino meant the far north, the land is only good for agriculture for two or three years after which the colons abandon the land they have cleared and plant elsewhere. The deserted land is used for cattle raising. The evidence of Guatemala's beef production and McDonald's
Guatemala's share of it was limited. Various articles admitted under the Civil Evidence Act contained figures from which calculations might be made, but they were never explored with witnesses and I do not propose to do rather speculative calculations of my own. As with Costa Rica, Mr Cesca established that each McDonald's restaurant in Guatemala would use about 40,000 to 50,000 kg of beef patties a year. So the four restaurants in 1990 must have used 160,000 to 200,000 kg and the fifteen restaurant s in 1995 about 600,000 to 750,000 kg. These appear to be large quantities but Dr Gomez Gonzales, giving evidence at the end of 1994, said that McDonald's share of total Guatemalan beef production was less than l%. Mr Cesca thought that the figure was 0.27% in both Costa Rica and Guatemala, but the only "McDonald 's Participation in Meat Market" figures shown to me related to Costa Rica. There was nothing to contradict Dr Gomez Gonzales' figure of "less than 1%", but how much less remained unclear. Dr Nations' article, written in 1983, said that Guatemala consistently sold U.S. companies between one quarter and one third of its beef E Production. His figure for Guatemalan beef and veal exports to the U.S. were about 10 million pounds (or about 4.5 million kg) in L 1981. The only direct evidence of the export of Guatemalan beef to McDonald's in the U.S. was the statement of Sr Mallorca to Dr Nations, to which I have already referred and to which I attach no weight. The Civil Evidence Act statement of Sr Robles said that Procasa did not supply beef to McDonald's in any other country than Guatemala; nor had it ever done so to the best of his knowledge. Dr Gomez Gonzalez said that Procasa exported beef to the U.S. but not to McDonald' s. Mr Morris argued that the fact that McDonald's Guatemalan suppliers supplied beef to anyone in the U.S. implicated McDonald's in the export of Guatemalan beef, but this was grassing at straws. All that I have said about imports of beef into the U.S. and about the labelling of imported beef and about McDonald's denials that they used imported beef in the U.S. applies to Guatemalan beef as it does to Costa Rican beef. On the evidence which has been produced to me, I am satisfied that McDonald's in the U.S. has not used beef imported
from Guatemala. It appears from Dr Nations' article that the imbalance of land ownership is greater in Guatemala than in Costa Rica or even Central America generally. Writing in 1983, he and Mr Komer said that according to the United Nations Food and Agriculture Organisation, in Latin America as a whole, 7% of the landowners controlled 93% of the arable land. In Guatemala, 2.2% of the population owned 70\ of the land, mostly in the form of coffee and banana plantations and cattle ranches. He then stressed that population growth was an equally important force behind rainforest colonisation. Mr Cummins' statement written in July, 1993, gave the same 2% and 70% figures and went on to say that 85% of its mainly indigenous and small farmer population were living in abject poverty. He said that the problems of poverty and deforestation were interrelated l' end made worse by the intervention of fastfood giants such as McDonald's in the Guatemalan economy". The whole tenor or Mr Cummins' statement makes it clear that he does not share Mr Shane's view of the advantage of "solid information" over "strident rhetoric''. The intervention of McDonald's in the Guatemalan economy seems to me to be minimal, on the evidence which I have heard and the figures for beef consumption which I have give. As with Costa Rica, there was no evidence that the First Plaintiff or any subsidiary has owned land in Guatemala apart from land upon which McDonald's Guatemala's restaurants and, I suppose, offices stand. There was no evidence that any of the ranchers whose cattle have been slaughtered and processed into McDonald's patties have dispossessed small farmers or tribal people. There was no evidence brought to my attention of export of staple crops from Guatemala for use to feed cattle for McDonald's ultimate benefit or at all. I will come to the "worldwide hamburger connection" after considering Brazil. Brazil is a vast country. For my own interest I scaled it off on the official vegetation map which I was given. I made it about 4250 km or 2650 miles from north to south at its deepest and from east to west at its widest.
The unchallenged history of McDonald's in Brazil was that the first restaurant was opened in 1979 as a joint venture partnership between the First Plaintiff and Peter Rodenbeck, an American who was resident there. Sometime later another restaurant was opened as a joint venture partnership with another American resident in Brazil, Gregory Ryan. In late 1994 or early 1995, Mr Rodenbeck sold his share in the first joint venture partnership to Mr Ryan, so "McDonald's Brazil" is now jointly owned by the First Plaintiff and Mr Ryan, although its precise legal status is not known to me. According to various McDonald's Annual Reports, the number of their restaurants in Brazil had grown to 33 by 1986, 63 in 1990, 123 in 1993 and 243 in 1995 which is the last year for which I can find a figure. According to Sr Morganti's Civil Evidence Act statement there were ten McDonald's restaurants in Brazil in 1983. There are enormous areas of rainforest in Brazil. The rainforest is mostly in Amazonia in the north of the country, but with tendrils reaching south along some river basins. The summaries which I have given of the expert evidence of the causes of deforestation in Costa Rica and Guatemala stand for Brazil also to some extent, but to the expert witnesses whom I have already mentioned must be added Mr George Monbiot, Dr James A. Ratter, Ms Sue Branford, Professor Susanna Hecht and Ms Fiona Watson who gave evidence for the defence on the causes and extent of destruction of the rainforest in Brazil and on the dispossession of small farmers and tribal people in Brazil as the result of cattle ranching. On 26th July, 1982, Ms Elizabeth Densmore, the First Plaintiff's Manager, Community and Consumer Issues, wrote to a member of the public who had asked about Brazil. She said: We understand that the greatest cause of deforestation is the desire for new agricultural land. Timber harvesting caused one million square kilometres to be cleared between 1958 and 1978. Between 1966 and 1975, highway construction resulted in the loss of 25 percent of the Brazilian Amazon, while cattle ranching contributed another 38 percent. Of the meat produced
from these ranches 85-90 percent was exported to the United States for use primarily in processed foods. However, this amount represents only 2 percent of the United States total beef consumption none of this meat is used by McDonald' s." Nevertheless Mr Cesca would not accept that large expanses of Brazilian rainforest had been destroyed for cattle ranching. He said that the reason for the destruction was the growth in population and poverty. The Brazilian economy could not provide work. The government encouraged people to go into the vast area of forest to the north and "improve" it, which meant cut it down. The poor ground provided two years of crops and then they moved on. Grass for cattle needs less nutrients so cattle were brought in. Mr Cesca said that he had read a great deal about the causes of deforestation but he was not putting himself forward as an expert on it. His account of the causes of deforestation in Brazil accords in part with that of the true experts, but in my view it errs in allocating only a consequential role to cattle ranching. I prefer the more specialised evidence of defence witnesses who told me that cattle ranching was a primary cause as well as a secondary cause of deforestation and that it involved the dispossession of small farmers and indigenous people who had occupied the land hitherto. ; Mr George Monbiot is a writer, broadcaster and academic who spent two years in Brazil, between 1989 and 1992, investigating the causes of deforestation in the Brazilian Amazon. His evidence was that cattle ranching had been and probably remained the greatest cause of deforestation in the Brazilian Amazon. It was both a primary and a secondary cause. Some forest was cleared for cattle ranching when ranchers moved in as the first arrivals on a new frontier. Some was cleared when ranchers completed the deforestation begun by timber cutters or colonists. Many of the Amazon ranchers were business people or corporations who had made money by other means and had turned to ranching as an auxiliary business. They included some of Brazil's largest companies, some of which operated in their own
names. Others operated through subsidiaries. There was significant foreign investment in ranching in the Amazon. It was generally hard to trace, as much of the foreign money was believed to be channelled through Brazilian companies. At the last count small farmers accounted for 21% of deforestation. By Amazon" Mr Monbiot meant the area which had a range of vegetation which was characteristic of the Amazon region and which extended beyond the political borders of Amazonian Legal. Mr Monbiot refuted Mr Cesca's claim that deforestation of the Amazon was driven by overpopulation and poverty. There was plenty of land outside the Amazon, but people had been pushed off it by larger farmers. In his first statement, confirmed in his evidence, Mr Monbiot said that deforestation in the Brazilian Amazon was variously estimated at between 8 and 12% of the forest area. After three or four years Amazonian pastures typically failed after which they must either be abandoned or expensively resuscitated. If the ranchland was swiftly abandoned, the forest would return, but it was typically less biodiverse than the forest which the ranchers cut. If the ranchland was resuscitated before abandonment it would take many years to revert to forest, and that forest was likely to be composed of just one or a few species of trees. In a later addendum which Mr Monbiot also confirmed in his evidence, he said that maintaining ex-rainforest land as cattle pasture would prevent the regrowth of forest on that land. There had to be a continuous process of applications of herbicides after the initial forest clearance to maintain the pastures because the trees wanted to keep coming back, but he related this state of affairs to the Amazon. He said that a cleared piece of land would very quickly be swallowed up by the forest again. The forest was very ferocious. However, when asked about the area near Sinop marked Agricultural activities" and asked how long it would take such an area to regenerate after twenty years grazing, Mr Monbiot very fairly said that he could not give a fair assessment because it depended on so many variables. Mr Monbiot said that cattle ranching outside the Amazon was the principal reason for the movement of peasants into the Amazon. This was because so much land had been taken over by cattle ranchers elsewhere in Brazil that the forests were the only place available for peasant agriculture. Land concentration
in Brazil was extreme, and most of the largest properties took the form of cattle ranches. Cattle ranching in the Amazon and elsewhere in Brazil had significant social costs. In many cases the ranchers, both individual and corporate, had seized their lands from weaker and poorer citizens without due process. This was often done through the use of hired gunmen, and every year rural people in Brazil were shot dead as they tried to resist the annexation of their lands by ranchers. There were documented cases of torture, rape and unlawful imprisonment by ranchers and their gunmen trying to push people off their lands. Colonists pushed off their lands by ranchers outside the Amazon were in many cases forced to travel into the forest to start a new frontier, causing deforestation. Some of the land that ranchers had seized belonged to the indigenous inhabitants of the forest, the Indians, according to Brazilian law. In many Indian reserves, ranchers had taken over large tracts of land. Nearly all the land in Brazil previously belonged to the Indians or peasants who were displaced by force or economic change designed to favour large landowners. Mr Monbiot did not say when this happened or mostly happened although it was clear that he thought that it had continued since McDonald's went to Brazil in 1979. Mr Monbiot said that McDonald's use of land meant that it was not available to other users, be they small farmers or other ranchers. This was likely to result in the clearance of further rainforest by such people. He said that McDonald's tenure of ex-rainforest land was likely to have contributed to the continued imbalance in landownership prevailing in all Central and South American nations. Dr James A. Ratter is a senior Principal Scientific Officer, Head of the Tropical Section at the Royal Botanical Gardens, Edinburgh. He has worked for thirty years on the biodiversity and soil and plant interrelationships of Central and Amazonian Brazil. His statement said that cerrado or tree-savannah was the predominant vegetation of Central Brazil which I would take to include all the general areas from which cattle for beef for McDonald's Brazil's patties has come, save for cattle for plants in the deep south, since Dr Ratter said that cerrado extended from the margin of the Amazonian forest to outlying areas in the southern states of Sao Paulo and Parana. Dr Ratter said that in addition to true savanna flora, the cerrado region had enormous extensions of gallery forests following watercourses and their
drainage, and areas of deciduous forests. Traditionally the cerrado domain was an area of sparse population of Brazilian country people and Indians. The domestic economy was largely based on low density cattle-grazing in the cerrado vegetation and raising small crops in clearings in the gallery or deciduous forests. It had proved succeptable to agricultural development and the establishment of a massive, highly mechanised capital intensive system of agriculture because cerrado vegetation, with its small trees, was much more easily cleared than tall forest and the soil was of good structure for cultivation. This included soya, maize, rice, and mandioca, but far more of the carredo was exploited as improved pasture than as arable land. Dr Ratter said that a far greater area or cerrado than rainforest, and in far greater proportion to its whole, had been destroyed. He distinguished between the two in saying: "So much emphasis has been put on the emotive issue of the destruction of the rainforests that the world has largely forgotten the fate of their floristic cousins, the savanna woodlands. "Ms Sue Branford is a specialist in Latin America, and particularly Brazil. She has worked for the BBC World Service since 1987. She has spent long periods in Brazil since 4971. She published a book on the Amazon in 1985, which was concerned with the violent struggles involving cattle companies, peasant families and Indians, over land in the north of Brazil. The book also spoke of the fast pace of forest destruction by the cattle companies. Ms Branford illustrated what she had to say about the causes of destruction of rainforest by referring to Acre in the far north west of Brazil near the Peruvian border. She said that it was one of the areas of tropical forest that suffered greatest devastation. When she first visited the region in 1971, most of the state was primary tropical forest, occupied only by Indians. Indeed, three-quarters of the land was classified by the government as Terra devoluta", that is unoccupied public land. But a road link was created with the rest of Brazil. The state government undertook a big advertising campaign in Sao Paulo and Rio de Janeiro to attract cattle companies. By "cattle companies'' Ms Branford meant large companies which moved into an area which had not been used for cattle rearing before, cleared it of vegetation, planted pasture and brought in cattle. They
included Brazilian companies and foreign multinationals but she did not include McDonald' s. By 1975, after just four years, four-fifths of Acre's land belonged to companies from the south. Those companies carried out horrifying environmental damage, cutting down primary tropical forest to plant pasture. They were involved in violent land conflicts with peasant families and Indians. One of the most active companies was the meat-packing group, Bordon. She, personally, saw forest being cut down by Bordon employees and she gathered evidence from peasant families that they had been forcibly evicted from their plots by Bordon employees. Another region that was being devastated at the time lay to the north of Cuiaba, the capital of Mato Grosso. After the construction of the highway linking Santarem, a port on the Amazon river, with Cuiaba in the early 1970s, numerous new ranches were opened beside this road. The incentives were tax breaks from the federal government and the new transport link that meant that the ranches could now take their cattle to meat packing plants in Cuiaba. Several multinational companies owned their own ranches and were directly responsible for forest devastation. This was not the case with McDonald's which never owned its own ranches although she went on to say that this did not seem to her to exonerate McDonald's from all involvement in the harmful consequences of the ranch industry. Brazil is a major producer of beef. According to USDA figures, in 1990 when these proceedings were commenced it produced 3.6 million metric tonnes of beef and veal, carcase weight which must include bones and not just deboned meat, out of 49 million worldwide. (The U.S. produced about 10.5 million.) In 1993 Brazil produced 4 million tonnes out of about 47.8 million worldwide. (The U.S. produced 10.7 million). Mr Cesca said that each McDonald's restaurant in Brazil would use about 40% more beef patties than the 40,000 to 50,000 kg per year which were used in Costa Rica. That must mean 55,000 to 70,000 kg per restaurant each year. I have no reason to doubt Mr Cesca's evidence on this point and if one takes a mean of 65,000 kg or 65 metric tonnes per restaurant, that would mean about 650 metric tonnes in 1983, about 2150 in 1986, about 4000 in 1990, about 8000 in 1993 and about 15,800 in 1995.
According to the first Civil Evidence Act statement of Sr Roberto Morganti, McDonald's beef patties in Brazil were originally supplied by a company called Sadia. Sr Morganti ran Sadia's meat processing plant. It took its supplies of beef from five suppliers north of Sao Paulo, namely Frimondelli at Baura in Sao Paulo State, Mataboi at Araguari in Minas Gerais State, Goias Carne at Goiania in Goias State, Bordon at Campo Grande in Mato Grosso do Sul State and another supplier at Cuiaba in Mato Grosso State, plus three suppliers in the very south of the country near the border with Uruguay. I must keep it in mind that a significant portion of McDonald's Brazil's beef must have come from the suppliers in the south, well away from any rainforest. Otherwise I can forget them so far as the issues in this case are concerned. All the towns which Sr Morganti named are large centres and for all I know those centres have other meat-plants owned by other companies. In 1982, Sr Morganti formed a company called Braslo Produtos de Carne Led which was a joint venture with a German company Lutz, and the U.S. company OSI Industries Inc., hence the name Bras(il)L(utz)O(SI). Both Lutz and OSI are major suppliers of patties to McDonald's elsewhere in the world. Since 1982 Braslo has been McDonald's sole supplier of beef patties in Brazil, taking deboned beef from the same plants as Sadia, save that it did not take beef from the plant in Cuiaba. Sr Morganti produced a photocopy of a map of Brazil on which he marked in yellow the places from which Braslo's four suppliers, apart from the three in the deep south, obtained the cattle which they slaughtered to supply beef to Braslo. Although Sr Morganti's statement was in the present tense in this respect, he must in my view have been speaking of the source of cattle since 1982, taking what he said in context. Campo Grande, Bauru, Araguari and Goiania themselves are marked in yellow on the map, as are a number of other places around Campo Grande, Baura, and Araguari and to the south of Goiania. Some of those other places are near to Campo Grande, Bauru, Araguari or Goiania, but others are some distance away. For instance, using the scale of 40 kilometres per centimetre on the map, the places marked in yellow at Corumba and Ladario are about 360 kilometres or 224 miles as the crow flies northwest from Campo Grande, and Pedro Gomes is about 270 kilometres or 170 miles to the north.
Although the places marked are towns, the wording of Sr Moganti's statement : identifies the areas with those places; and my inference is, therefore, that the areas from which the cattle have came are in the vicinity of the towns marked in yellow. This impression was confirmed by Mr Cesca who gave evidence to the effect that the practice was for farmers to walk their cattle to collecting points which I will call satellite towns and which are marked in yellow on Sr Morganti's map, before being transported anything up to 300km to the plants which are also marked in yellow, w here they were slaughtered and deboned before the deboned meat was transported to Braslo's plant at Itu, not far from Sao Paula, for processing into patties. It is true, as Ms Steel and Mr Morris reminded me, that at one stage in his evidence Mr Cesca appeared to say that cattle were transported from up to 200 to 300 km to satellite towns before being taken on to the plants, although I remember being puzzled by his answers at the time because they seemed to be inconsistent with the evidence which he had given earlier. In due course, however, Mr Cesca made it clear that his evidence was that cattle were walked a short distance from small farms in the immediate area of satellite towns like Pedro Gomes, and not from 200km or 300km away, before being taken 200 or 300km to a slaughterhouse and deboning plant. The clarification of his position, in answer to my questions, resulted from an intervention by the Plaintiffs' counsel during Mr Morris's cross-examination of Mr Cesca, but I do not accept that the intervention prompted Mr Cesca to change his evidence consciously and for sinister reasons. Mr Cesca did say that he himself had only visited 10 or 15% of the collection points and in my view Sr Morganti's evidence of the position and the number of collection points is likely to be more reliable than Mr Cesca's. Mr Cesca did not, however, say, as was suggested in argument, that the yellow flashes on Sr Morganti's map wete only one third of the collecting points. What he said was that he had seen a list of ranches. The yellow markers on the map were "less than a third of what the list would look like. It would maybe be about 20 per cent of the list because he (Sr Morganti) has identified all the areas. What he did not identify .... he identified all of the locations .... but he did not identify all of the ranches within the locations .... So there could be within a town like Pedro Gomes, as an example, ten ranches in there or twenty ranches. They are small,
and they supply, but he identified them. Now, if you wanted a map that identifies each of the ranches, that would really take a lot of time to do." Second, third, fourth and fifth Civil Evidence Act statements of Sr Morganti elaborated his evidence in various material respects. Firstly, Cuiaba from which plant Sadia took beef, is marked on Senor Morganti's map, but not in yellow. None of the places marked in yellow are near it or even in Mato Grosso, the state in which Cuiaba stands. In a second statement Sr Morganti said that he could not recall the names of all the places in the area of Cuiaba from which Sadia obtained cattle but he did remember that the furthest location to the east of Cuiaba was Nova Xavantina, to the north Sinop, and to the west Pontes e Lacerda. In any event, according to Sr Morganti the plant at Cuiaba was only a source of meat supply from 1979 to 1982 when there must have been very few McDonald's restaurants in Brazil, compared with the number in more recent years. Secondly, Sr Morganti's first statement said that although Braslo had increased the number of its suppliers since 1990, the cattle which these suppliers used came from the same areas of the country as the places marked in yellow on the map. In his third statement he said that the new meat suppliers were Bol Branco at Niogue, about 14Okm south west of Campo Grande, and Rochedo, about 60km northwest of Campo Grande. Both those places were already marked in yellow on his map. Thirdly, Mr Cesca's original evidence indicated that there were ranches in Goias State north of Goiania, which supplied cattle to the plant at Goiania, and it would seem to make sense that this should be so; but there were no yellow flashes north of Goiania on Sr Morganti's map. So Sr Morganti provided a fourth Civil Evidence Act statement with a list of 110 "collection points/towns where cattle are collected in Goiania for Goias Carne" and some of these places are in the very north and west of the present state of Goias, but not so far north that they are in the new state of Tocantins.
The Defendants suggested that beef might also have been supplied to Braslo from plants other than those named by Sr Monganti. Firstly, they produced a Civil Evidence Act statement from a Brazilian journalist, Ms Jan Rocha, saying that Sr Monganti had told her in February 1996, that Braslo obtained meat for McDonald's from Rondonopolis. Sr Morganti's third Civil Evidence Act statement denied this. It said that neither Sadia nor Braslo had ever obtained meat from Rondonopolis. It said that Ms Rocha's account of her conversation with him was wrong in other respects. This is the sort of issue which it is impossible to resolve satisfactorily on the basis of written statements without other cogent evidence pointing one way or the other. So all I can say is that I am not satisfied that Ms Rocha's account is right and that Sr Morganti's is wrong. Secondly, the Defendants relied upon evidence that a Vestey company in Brazil, Frigorifico Anglo S.A., had supplied Brazilian beef to McKey Food Services Ltd. the U.K. manufacturer and supplier of patties for McDonald's, in 1983 and perhaps in other years. They contended that there was evidence that Anglo had supplied beef to Braslo at around the same time. The Defendants argued that the export of beef from Brazil to the U.K. for processing in McDonald's patties here was important: firstly, because it demonstrated a McDonald's contribution to the Brazilian beef for export drive which had damaged the Brazilian rainforest; secondly, because the beef itself might have come from ex-rainforest land; and thirdly, because it made nonsense of claims made by or on behalf of the Plaintiffs that the only Brazilian beef used by McDonald's was that produced for the restaurants located in Brazil itself. If Anglo beef came from ex-forest land to Braslo, that would be important in itself and it would shake Sr Morganti's evidence about the sources of Braslo's beef. McKey Food Services Ltd ("McKey") has been the sole supplier of beef hamburger patties and many pork products to McDonald's restaurants in the United Kingdom since it was founded in 1978 as a joint venture between the Second Plaintiff, Keystone Foods of Philadelphia (hence "McKey") and Mr David Walker who held 20% of the shares. By 1983 Keystone had sold its holding and Mr Walker and the
Second Plaintiff owned the company jointly. Mr Walker bought the Second Plaintiff's shares and in 1993 OSI took a 45% holding in McKey, leaving Mr Walker with a majority shareholding of 55%. Mr Walker is Chairman and Chief Executive of McKey. He gave evidence on a number of aspects of the case, not just Brazilian beef. He has worked in the meat industry since 1956. He spent some of his early years working for the Vestey organisation in England and Australia. He has been a Fellow of the Royal Society of Health, by examination in food hygiene and bacteriology, since 1957. He is President of the British Meat Manufacturers Association and Commissioner of the Meat and Livestock Commission. He is a forthright man, big in form and personality. I found him to be an impressive witness. Nothing which was said or which was put to him led me to doubt his honesty in the witness box, and the account which I give of beef imported From Brazil in 1983 and 1984 for processing into patties for McDonald's in this country relies on his account and supporting documentation. McKey obtains most of its beef from the United Kingdom and Ireland (or at least it did so until the recent BSE debate), although it has also obtained beef from Holland, France, Spain, Germany and Denmark. Apart from supplying McDonald's in the At., it has exported finished products to McDonald's in Belgium, Denmark, Holland, Sweden and Hong Kong. McKey has also bought beef from Botswana, but not for McDonald's, and it got beef, known as Balance Sheet Beef, from the U.S.A. and Canada for McDonald's between 1980 and 1988. The Commission of the European Community calculates annually the amount of beef which is likely to be required for consumption within the Community and the amount which it is likely to produce. If there is a deficiency of supply the balance, known as Balance Sheet Beef, may be purchased from outside the Community subject to a very strict system of regulations administered by H.M. Customs and Excise within the U.K. In 1983, at a time when McKey was owned 72\ by the Second Plaintiff and 28% by Mr Walker, Mr Walker obtained a licence to buy about 83 tonnes of Balance Sheet Beef from Brazil for processing into patties for sale at specified McDonald's restaurants in this country. The beef came from cattle slaughtered and deboned at the
plant of Vestey's Brazilian company Frigorifico Anglo S.A. at Barretos in the State of Sao Paulo, and it was imported and sold to McKey by a Vestey company of meat wholesalers, W. Weddel & Co. Ltd of West Smithfield. It arrived in the U.K in five batches, the last of which, in July, 1994, was not actually Balance Sheet Beef because the licence had been rescinded due to pressure from commercial competitors. McKey had not bought Brazilian beef before 1983, although Mr Walker had been trying to obtain Balance Sheet Beef for some time as it was cheaper than European beef. He knew nothing of any McDonald's policy which might prevent this. Mr Bob Rhea, then the President of the Second Plaintiff, had asked Mr Walker not to handle Brazilian beef although Mr Walker did not at first know why. Mr Walker told Mr Rhea that he would ask for Balance Sheet Beef from Australia or New Zealand, but there were difficulties, so Mr Walker especially asked Mr Rhea for permission to take Brazilian beef. Mr Rhea then told Mr Walker that his reluctance to take Brazilian beef arose from the incident involving H.R.H. Prince Philip's alleged comments about McDonald's and the rainforest to which I have already referred. A version of events had reached Mr Rhea; hence his reserve about the export of beef from Brazil, a rainforest country, to be used by McDonald's elsewhere. With his knowledge of Vestey operations, and after making some telephone enquiries, Mr Walker was confident that all its Brazilian beef came from long-established estates and not from land claimed by destroying rainforest. He knew that the Vestey plant was at Barretos. He did not know where all the ranches supplying the plant were; but he knew that the rainforest was 2,000km to the north of Barretos and that "you do not travel cattle 2,000km". However, he took the precaution of asking Weddel's managing director to obtain a supportive letter which Lord Vestey wrote on 6th June, 1993. The letter was not admitted as evidence of the truth of its contents, but as part of the history of events. It read as follows: "Dear Mr Walker, I thought I should write to you to explain the situation about our beef from Brazil. Our plant, which supplies meat to the U.K.,
has done so since 1912. It is situated at Barretos in the State of Sao Paulo some 2,000 km south of the river Amazon and its surrounding rain forest. The 200,000 head of cattle killed there annually are bred on the natural scrub plains of the states of Minas, Goias, and Mato Grosso and also on the very extensive flood plain of the river Paraguay. All the areas are well within 1,000 kms of Barretos. They are fattened in the State of Sao Paulo where the records show that pasture has been formed since 1880, when the original forest was killed by an extremely hard frost and subsequent fires. This land is now extensively farmed. It is therefore obvious that this export works is not involved with pasture formation or cattle raising in the rainforest region of Brazil and we would never find it economically feasible to truck fat cattle 2,000 kms...." Mr Walker showed Mr Rhea the letter but later that year, after the first batches of Brazilian beef had arrived, Mr Rhea asked Mr Walker to go to Brazil to satisfy himself that what was said in Lord Vestey's letter was true and that it was not "rainforest beef". Mr Walker went to Brazil in December, 1993, with Doug Gullang who was employed by OSI and who was working in Germany where OSI also have a joint venture company, like McKey in the U.K., but this time with Lutz, also a partner in Braslo. Mr Walker spent a day at the Vestey company's head office in Sao Paulo before going to the plant at Barretos. He was taken out into the country by Peter Day, an Australian employee of Anglo, to see growing cattle. They were on "scrub pampas". They spent a long day driving around covering 150 or 200 miles. Mr Walker saw nothing inconsistent with Lord Vestey's letter. Nor did he hear anything to suggest that Lord Vestey' account was untrue. It is obvious that Mr Walker could not have visited all of the ranches which supplied the Barretos plant with cattle. He saw "road trains'' carryin |