Combating forced labour in the Brazilian charcoal and steel sector
A multi-stakeholder initiative to combat slave labour in the steel supply chain
Citizen's Charcoal Institute (ICC)
Coal and Steel
No. of employees:
The Citizen Coal Institute (ICC) was created in 2004 by the Steel Industry Pact – and signed by 15 companies, the International Labour Organization (ILO), the Association of Steel Industries in Carajas, Instituto Ethos, Instituto Observatorio Social and the trade union for the sector, National Confederation of Steel Workers. Among the 12 companies involved were Vale, Sinobras, Iberica, Cikel and Cosima. The ICC conducted monitoring of company supply chains to ensure that forced labour was not present.
Dilemma: Accusations of forced labour in the steel supply chain cause concern among US and EU investors
Forced, compulsory and trafficked labour is a serious problem in Brazil. According to the ILO’s latest available data (2008), between 25,000 and 40,000 people are estimated to be subject to conditions equivalent 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 – has made certain regions more 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 northern region of Carajas, Para state, where around 1,000 charcoal operations produce 3.9 million tons annually, worth around US$400 million. This charcoal is mostly 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 Carajas
- Instituto Ethos
- National Confederation of Steel Workers
The ICC was created to conduct monitoring to ensure that the companies abide by the agreement, with a role 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 enable them to comply with the policies of the ICC
- Present findings to the stakeholders, including the government
Where forced labour was found, the suppliers' certification was withdrawn and ICC companies no longer worked with that provider. In addition, the ICC rehabilitated rescued workers and provided them with skills training. This included working with the Ministry of Labour and Employment to find job placements for workers who had been rescued.
Results: Effective supply chain monitoring and rehabilitation creates trust within the supply chain
Between 2006 and 2007, the ICC provided decent work opportunities for 161 former slaves. An independent and highly respected NGO, Observatorio Social, subsequently 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.