New face of slavery in Latin America !!!!!!!!!!!!!!!!!!!!!!

[Daanyeer]

Source: MJS
November 4, 2006 By MICHAEL SMITH and DAVID VOREACOS
Bloomberg News



Labor inspector Benedito Silva Filho and six armed police officers move cautiously through the gray smoke that hugs the ground in the Carvoaria Transcameta work camp near the city of Tucurui in the Brazilian Amazon. Enveloped in the haze is a solitary man, dressed in soiled red shorts and worn-out plastic sandals.

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Alexandre Pereira dos Reis stops shoveling charcoal from a kiln after working for eight hours and, wheezing, walks slowly toward the inspectors. The laborer says malaria, a chronic cough and the 95-degree heat have gotten the best of him. "This hits you hard," dos Reis, 32, says. "I would leave if I could, but I need the work."

Like hundreds of thousands of workers in Latin America, dos Reis collects no wages. He toils six days a week and can't afford to leave. He doesn't have enough money to get back to his home in Teresina, 500 miles away in northeastern Brazil. Dos Reis lives next to the brick kilns at Transcameta in a shack with no ventilation, running water or electricity.

The charcoal he and the other laborers produce by burning scraps of hardwood will be trucked south to a blast furnace that's six hours away. It will be used there to make pig iron, a basic ingredient of steel.

That pig iron will be purchased by brokers, sold to steelmakers and foundries and then purchased by some of the world's largest companies for use in cars, tractors, sinks and refrigerators made for U.S. consumers.
Nearly 1 million slaves

"This is slavery," Silva says. His eyes tear from the acrid smoke. Silva has descended unannounced in September on this charcoal-making camp - one of about 1,000 in the Amazon - to investigate reports that it uses unpaid labor. The policemen who flank him wield automatic weapons, ready to fend off the deadly violence that Silva says is part of his job.

They determine all 29 workers are slaves who haven't been paid in months.

More than a century after Brazil became the last country in the Americas to abolish slavery, in 1888, nearly 1 million men and women work for little or no wages as forced laborers in Latin America, according to the Geneva-based International Labor Organization (ILO), a United Nations agency that tries to improve working conditions.

The products of Latin American slave labor end up in cars and trucks made in the United States by Ford Motor Co., General Motors Corp., Nissan Motor Co. and Toyota Motor Corp. Pig iron that goes into steel used by Whirlpool Corp., the world's largest appliance maker, and is used in foundries at Kohler Co., which makes sinks and bathtubs, can be traced back to slaves in Brazil.
Kohler starts investigation

Three companies - Ford, General Motors and Kohler - say they didn't know that steel they were using was made from material produced with the help of slaves. Ford and Kohler have bought pig iron from importer National Material Trading Co., which is supplied by a charcoal camp that Brazilian officials say uses slaves.

Ford, the world's third-largest automaker, and Kohler, Wis.-based Kohler say they stopped buying pig iron from National Material Trading immediately after being asked by Bloomberg News about the Brazilian findings.

If National Material Trading can't certify that the charcoal in its pig iron was produced without slave labor, Ford says it will use alternate suppliers.

Kohler says it will conduct its own investigation. "It is clearly disappointing to find that our broker's supplier's supplier employed slave labor practices," says Steve Cassady, director of global procurement at Kohler. "The use of slave labor is an illegal, unethical and abhorrent practice."

National Material Trading, based in Elk Grove Village, Ill., imports 1.5 million metric tons of pig iron a year from Brazil, general manager Tim Hogan says. He says one of its major suppliers is Cia. Siderurgica do Para SA, or Cosipar, Brazil's third-largest pig iron exporter. Hogan declined to comment about slavery.

Brazilian pig iron is part of almost any product in the U.S. that uses steel, says Hogan, who's been trading scrap metal and pig iron for 30 years. "It could be in your car, your refrigerator," he says. "It could be in beams for the roadway, any kind of construction, any kind of oil industry stuff. Everything."
'Cheap labor'

Slave-labor charcoal camps like Transcameta are scattered along the Amazon in Brazil, in a rain forest that covers an area 10 times the size of France, says Marcelo Campos, who runs the Brazilian labor ministry's Grupo Especial de Fiscalizacao Movel, or Special Mobile Enforcement Group.

"Slavery is endemic to the charcoal camps that supply the pig iron industry," says Campos, whose group has freed more than 20,000 slaves in the past decade. "We see it time and time again."

Campos says worldwide demand for pig iron drives the use of slaves.

"These are people who have absolutely no economic value except as cheap labor under the most inhumane conditions imaginable," he says. "And none of it would exist without multinational companies demanding the products they produce. They are a key part of the globalized, export-oriented economy Brazil thrives upon."

Pig iron producer Cosipar, based in Maraba, Brazil, was buying most of the charcoal produced by slaves at Transcameta, says Luercy Lino Lopes, a labor prosecutor who participated in the September raid on the camp.

"They have a direct responsibility for those workers and the conditions at the camp," says Lopes, 43, who has been inspecting charcoal camps since 1993. During the raid, the task force ordered Transcameta to shut down, and Cosipar agreed to pay back wages to all workers, Lopes says.

Cosipar Executive Vice President Claudio Monteiro says he doesn't think workers at Transcameta were slaves because they weren't being held by force. "They were degrading conditions," he says. "But this is not slavery."

He says Cosipar, a privately held company, has built bathrooms and barracks for workers as required by inspectors. Transcameta, which supplies 7% of Cosipar's charcoal, has reopened and is legally producing charcoal now, Monteiro, 35, says.

Cosipar sells most of its pig iron to National Material Trading, he says.
Zero tolerance

Just a hint of slavery in a supply chain is unacceptable, says Kevin Bales, president of Free the Slaves, the U.S. arm of the oldest human rights group in the world. "Slavery is a very serious crime," says Bales, author of "Disposable People: New Slavery in the Global Economy."

"It's not a crime where it's OK to have a little," Bales says. "This is a crime where all national and international law makes clear that a single instance is far too much."

The immigration and customs enforcement arm of the U.S. Department of Homeland Security has active investigations into imports of commodities from Brazil that may have been produced by forced labor, spokesman Dean Boyd says.

Companies that knowingly buy such products can be prosecuted under the U.S. Tariff Act of 1930, he says.

Modern-day slaves in Latin America aren't bought and sold as slaves were in the U.S. before the Civil War. They're lured from impoverished cities in Brazil's northeast or from the Andean highlands of Bolivia and Peru.

Recruiters dispatched by slave camp owners promise steady-paying jobs, Campos says. Once at the Amazon camps, some workers are forced - at times at gunpoint - to work off debts to their bosses for food and clothing bought at company stores.

Many go months without pay or see their wages whittled to nothing because of expenses such as tools, boots and gloves. Lack of money, an impenetrable jungle and a long distance to get home make it impossible for the slaves to leave.

Most of the 330,000 tons of pig iron Cosipar expects to produce this year will be shipped to the U.S., mainly via New Orleans, Monteiro says. National Material Trading has been Cosipar's broker in the U.S. for nine years.

Kohler has been buying about 900 tons of pig iron from Brazil yearly from National Material Trading, says Kevin Fair, Kohler's metals buyer for sinks and tubs.

Kohler feeds the pig iron into a foundry in Wisconsin to make the base for enameled bathtubs and kitchen sinks. "Anything we make out of cast iron uses pig iron, and a lot of it comes from Brazil," Fair says.

Kohler's Cassady says the company forbids suppliers and their subcontractors from using slave labor. He says Kohler has stopped buying pig iron from National Material Trading so it can investigate the Brazilian government's findings.

Waupaca-based foundry and casting company ThyssenKrupp Waupaca Inc. buys about 35,000 tons of pig iron a month from National Material Trading to make parts for DaimlerChrysler, Ford, GM, Nissan and Toyota, says Doug Pohl, who purchases metals for ThyssenKrupp Waupaca, a unit of ThyssenKrupp AG, Germany's biggest steelmaker.

"Virtually every model that Ford and GM sell have our parts," Pohl says. The pig iron the company uses is made to its specifications by Cosipar and purchased from National Material Trading, Pohl says.
Social responsibility

ThyssenKrupp spokesman Christian Koenig says he's surprised to learn about the use of slave labor. "ThyssenKrupp Waupaca is committed to policies that promote, and do not diminish, social responsibility," he says. "We are looking into your allegations." GM spokeswoman McGill says the company contacted ThyssenKrupp Waupaca to make sure there was no slave labor in its supply chain.

The products of slave labor enter the U.S. economy because corporations don't ask their suppliers enough questions and haven't worked to root out slavery, says Seungjin Whang, co-director of the Stanford Graduate School of Business's Global Supply Chain Management Forum in Stanford, Calif.

"The major companies should be jointly responsible for labor practices with their suppliers and their suppliers' suppliers," Whang says.

Bales of Free the Slaves says all corporations have a responsibility to find the source of products they buy and sell. "Companies have an absolute obligation to understand what's in their supply chain and review it from a moral and a human standpoint," says Bales, a sociology professor at Roehampton University in London.

"Slavery is theft of life," he says. "It's just about the most profound loss of human dignity that you can have, short of murder."