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PARIS, June 9 (Reuters) - A French judge on Thursday proposed mediation in a legal dispute between Casino (CASP.PA) and indigenous groups from Brazil over Casino's links to Amazon deforestation.

Lawyers for Casino said the French retailer supported the mediation proposal, while an attorney for the indigenous groups said he would be advising his clients to back the proposal.

The Amazonian groups allege Casino failed to do adequate due diligence of its supply chain, resulting in the sale of beef linked to deforestation and human rights abuses in the Amazon.

It is the first time a French supermarket chain has been taken to court over deforestation and the loss of land and livelihood under a 2017 law in France called "Devoir de Vigilance". The law holds companies accountable for human rights and environmental violations.

"We advise our clients to accept the mediation proposal," Sebastien Mabile, a lawyer for the indigenous groups told Reuters. "What we want is for Casino to stop buying from companies who are supplied by farms that have invaded indigenous lands and are implicated in deforestation."

Mabile said mediation would be faster than a trial: "We have a situation that is worsening everyday on the ground, so we're giving discussion a chance."

Casino lawyers Sebastien Schapira and Thomas Rouhette told Reuters that the retailer "hopes this mediation can help overcome legal action which, along with a hostile communication campaign from the plantiffs, is counter-productive."

The lawyers added that Casino and its subsidiaries were "without contest among the sector's most advanced companies in the fight against deforestation."

Environmental activists and representatives of the indigenous groups from Brazil, who claim that their rights have been violated, land and territory stolen, and their forests and livelihoods destroyed, earlier protested outside the courthouse.

"The Casino group's networks support intensive farming ... that devastate forests, deplete soils, and destroy the forest populations' social structures," said Crisanto Rudzo, a Xavante people representative from Mato Grosso.

Casino, which controls Brazil’s largest food retailer, Grupo Pao de Acucar (GPA) and through that also Colombian retailer Almacenes Exito, has repeatedly said it actively fought against deforestation by cattle ranchers in Brazil and Colombia.

Reporting by Dominique Vidalon and Juliette Jabkhiro; Editing by Bernadette Baum

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