By Simon Jessop and Jake Spring
LONDON/BRASILIA, May 5 (Reuters) - A group of European companies including Tesco TSCO.L and Marks & Spencer MKS.L have threatened to stop using Brazilian agricultural commodities if the country's Congress passes a law expanding property rights for squatters on public land.
Environmental advocates warn that the proposal would encourage deforestation by rewarding land grabbers in the Amazon rainforest who occupy properties illegally, often clear-cutting areas for agricultural use in the process.
Proponents of the bill say that only by bringing properties into the legal system can they be forced to comply with Brazil's strict laws that limit deforestation in the Amazon to 20% of private property.
The retailers, also including Metro B4B.DE and John Lewis, as well as investors such as Norway's biggest pension company KLP, said that Brazil's environmental protections were increasingly inadequate, while the land bill potentially risked even greater threats to the Amazon.