Forced labour

Dilemma:
Combating slave labour in the Brazilian charcoal and steel sector
Background:
A multi-stakeholder initiative to combat slave labour in the steel supply chain
Name:
Citizen's Charcoal Institute (ICC)
Sector:
Coal and Steel
Locations:
Brazil
Shareholders:
n/a
No. of employees:
n/a

Description:

The Citizen's Coal Institute (ICC) was created by the Steel Industry Pact, signed by 15 companies, the ILO, the Association of Steel Industries in the Region of Carajas, Instituto Ethos, Instituto Observatorio Social and the National Confederation of Steel Workers, the trade union for the sector. Among the twelve companies currently involved are Vale, Sinobras, Iberica, Cikel and Cosima. The ICC conducts monitoring of the supply chain to ensure that forced labour is not present.

Further information:

http://www.carvaocidadao.org.br

Dilemma: Accusations of slave labour in the steel supply chain cause concern among US/EU companies and investors

Slave labour is a serious problem in Brazil. The ILO estimates that between 25,000 and 40,000 people are subject to slavery. In 2002, the Brazilian government implemented a programme with the ILO to address the problem, including national inspection teams and awareness and prevention campaigns. Nonetheless, the size of the country - as well as relatively weak government communication systems - makes certain regions difficult to access and monitor.

Bloomberg reported in November 2006 that workers found in government raids in the area of Tucurui had not collected wages in several months and were 800km from home, working in extreme heat without access to medical facilities and clean water. These workers were burning hardwood to produce charcoal.

Charcoal is a major industry in the Carajas region, where around 1,000 charcoal operations produce 3.9 million tons worth US$400 million. This charcoal is then used in the production of pig iron, which is then used in the production of steel for use in manufacturing a wide range of goods, including auto parts, tractors, sinks and appliances.

Good practice: Create a multi-stakeholder programme composed of business, government and NGOs

In 2004, 15 Brazilian companies in the sector signed a letter of intent to combat slave labour, as did the following:

  • Association of Steel Industries in the Region of Carajas
  • Instituto Ethos
  • National Confederation of Steel Workers

The ICC was created to conduct monitoring to ensure that the companies abide by the agreement. The role of the ICC is to:

  • Hire and train monitors
  • Conduct site visits in three Brazilian states (Para, Maranhao and Tocantins)
  • Draft reports on irregular activities
  • Work with suppliers to come into compliance with the policies of the ICC
  • Present findings to the stakeholders, including the government

Where slave labour is found, the suppliers' certification is withdrawn and ICC companies no longer work with that provider. In addition, the ICC rehabilitates the workers and provides skills training. This includes working with the Ministry of Labour and Employment (MTE) to find job placements for workers who have been rescued.

Results: Effective supply chain monitoring and rehabilitation creates trust within the supply chain

Between 2006 and 2007 the ICI has provided decent work opportunities for 161 former slaves. An independent and highly respected NGO, Observatorio Social, has conducted an independent review of the initiative, interviewing 14 of the 15 original ICC signatories. The findings suggest that the initiative has been successful in restoring trust within the supply chain.