Perspectives in Responsible Sourcing

Brazil: Stronger punishments for those found using slave labor

In my January 2012 blog, Brazil’s Amazon Rainforest: Grounds for corruption and debate,  I wrote about the continued reports coming out of Brazil on deforestation in the Amazon and its link to illegal charcoal camps.  As a follow up, I would like to spotlight the issue of modern day slavery in the Amazon and Brazil’s recent approval of a constitutional amendment, passed last month, which strengthens the punishment for landowners and others who force people into slave labor.

Although conditions and wages for most Brazilian workers have improved over the last decade, the issue of exploitation of workers is all too common in many parts of Brazil with many poor laborers exposed to brutal working conditions across the Amazon region. Often the case, workers are lured and promised work and then placed in remote, unfamiliar areas and faced with harsh conditions they cannot escape from. With little to no pay and “debts” to pay off for their room and board, many cannot afford the journey back to home. 

 Last month the Brazilian Congress approved the Proposal of Constitutional Amendment Number 438 (PEC 438) to combat slave labor which is most common in remote farms but also occurs in urban sweatshops in places like Sao Paulo - South America’s largest city. Until recently, landowners who were found using slave labor would be fined but these penalties would often go unpaid- lost in the complex Brazilian legal system. However, this latest constitutional amendment allows the government to confiscate property (without compensation) and subject offenders to fines and jail terms of up to eight years. The passing of this latest constitutional amendment comes just before the Rio+20 Summit which aims to address a new set of sustainable development goals since the last meeting in 1992.

Furthermore, in 2004 the Brazilian Ministry of Labor created the “Lista Suja” (‘dirty list’) which publically exposes names of employers (persons or legal entities) caught using slave labor. The list is updated every six months and has serious financial consequences such as denial of credit from banks and other services to listed individuals and companies. According to the latest 2011 U.S. State Department Human Rights Report for Brazil, at year’s end the ‘dirty list’ contained 294 names of employers found responsible for urban and rural slavery – up from 220 at the end of 2010.  

With the passing of this most recent amendment and the country’s ongoing ‘dirty list’, traceability and labor issues continue to be key topics of discussion in Brazil and will continue to do so given the Rio+20 conference taking place there this month. Brands in particular will want to ensure their labor force in their supply chain complies with local labor laws and company standards. For more information on training services offered by UL RS surrounding the issue of slavery and human trafficking, please contact Susan Gebauer at Susanne.Gebauer@ul.com.  

2011 U.S. State Department Human Rights Reports: An Essential Tool for Assessing CSR Practices

The U.S. State Department has recently released a fundamental source of information for the CSR industry: the 2011 Human Rights Practices Reports. The reports cover over 190 countries and are updated annually with meaningful rights-related events. Such events are a critical means for CSR practitioners, companies, academics, and governments to better understand human rights conditions at the country and regional levels.

As stated by the reports, the 2011 citizen uprisings that took place in the Middle East and North Africa “…have sent aftershocks rumbling around the world…demanding citizens’ universal rights, dignity, greater economic opportunity, and participation.” Considering these events and demands can offer important insight to a country’s advancement on promoting respect for human rights.

This year’s reports document an unfortunate range of negative developments in overall human rights conditions. Although most of the negative backlash is related to political and religious freedom rights, there are also important reverses in the advancement of labor rights. Challenges are particularly related to freedom of association and collective bargaining, prohibition of forced labor, and prohibition of child labor and minimum age of employment.

Overall, national laws grant the right to form and join unions but registering a union has been highly restricted in practice and a considerable number of workers have been illegally penalized for joining unions worldwide. Likewise, unions are generally allowed to bargain collectively but this right was rarely practiced. In the case of compulsory work, although most countries prohibit forced or bonded labor, penalties were not sufficiently stringent to deter the offense—which affected particularly women and children—while governments did not seem to effectively enforce the prohibitions.

As for child labor, the reports indicate that even though minimum age and employment of children in certain hazardous sectors is generally regulated in most countries, child labor under the legally allowed age and in dangerous sectors is still widespread. Even though ministries of labor have the duty of inspecting worksites to enforce child labor laws, the events documented during 2011 suggest that inspections only took place after complaints were brought by workers, teachers, the media, or NGOs, and that penalties were rarely imposed.

These issues are critical to CSR practices and to accurately assess risks present along the entire supply chain. In order to advise clients on countries, regions, industries, and suppliers, UL RS products and services are heavily informed by these country reports. In conjunction with the UL RS extensive audit database and regional expertise, these reports allow UL RS to produce a wide range of comparisons and trend analyses related to CSR performance within and across countries.

For instance, UL RS has been producing since 2005 its Country Risk Index by combining the country level information provided in the Human Rights reports and the UL RS country audit grades. This index ranks over 180 countries according to social, economic, and political factors—both on the country and factory levels—in order to advise sourcing decisions, supplier segmentation, and allocation of audit resources. These country reports, together with the expertise of staff located on the ground, are also used to develop the UL RS Country Risk Profiles, which provide an overall picture of the most significant human rights violations for a specific country.

UL RS therefore recommends using these reports as means for surveying supply chain programs and targeting identified issues. They will allow CSR practitioners to have a more comprehensive understanding of human rights conditions at the country level and their potential risks, and thus to design strategies that better address these issues.