A Judge Against The Body Shop

A Judge Against 
The Body Shop

A Brazilian judge has sentenced The Body Shop to pay
more than $100,000 in back wages and damages to a former employer, after
concluding that he was unjustly accused of misrepresentation and then fired
without just cause.
By Blair Palese

The Body Shop has never been just a manufacturer and retailer of cosmetics.
The company, founded by Anita Roddick in Brighton, England in 1976, does
much more than simply sell skin and hair care products. Anita Roddick’s
belief that trade with communities in need could provide her with the products
she needed to do business—and support those communities through employment
income, skill development and social initiatives—has led her to work with
some of the poorest communities in the world.

Under Roddick’s direction, The Body Shop has always dealt with really
big issues—social justice, equality, poverty and the imbalance of power
and money. "Our goal is to encourage the creation of working and living
conditions, where people can fulfil their potential, where their human
rights are respected… and where they can determine their own destiny,"
she says. Her attacks on the conventions of a greedy trading system have
not gone unnoticed. Nor have her attempts to put principles into practice.

Twenty-one years later, The Body Shop celebrates trade with over 25
Community Trade suppliers in Africa, Asia and the Americas. In financial
terms, trading with communities in need for raw ingredients and accessories
is worth over $ 3.3 million annually. These trading relationships are based
on trust, respect and an understanding that The Body Shop buys good quality
products at a fair price. That price includes production and fair wages,
and enables communities to invest in their own future. It’s also about
more than the exchange of goods and dollars—it’s about the quality of the
relationships involved.

The Body Shop Community Trade program stems from the company’s commitment
to "dedicate [its] business to the pursuit of social and environmental
change". These are lofty ideals, unusual for a company. And if your
goals are high, the pitfalls on the way to achieving them are certainly
going to be deep.

It has, over the years, been accused of exploiting its trading links
with struggling communities and exaggerating their importance to the Company.
Criticism—from many quarters, some with their own agendas—has not deterred
this commitment. The Body Shop aimed at making changes—and it has. In just
eight years, it has gone from trading with one or two suppliers to over
25 in more than a dozen countries. In raw material terms, this equates
to over 100 tons a year for inclusion in globally retailed products for
The Body Shop.

"We have established trading links for which there has been no
template, no handbook, only a desire to provide tangible benefits for marginalized
communities," says The Body Shop Fair Trade Development Manager, Elaine
Jones. "The image of our relationships is out of sync with their historical


In 1995, The Body Shop undertook a groundbreaking social audit, which
was a two-way independent analysis, both of The Body Shop business, and
of its claims to social responsibility. The integrity of the process was
judged by a panel of experts representing diverse stakeholders’ interests,
including those in the Fair Trade sector. Brought together by independent
verifiers, The New Economics Foundation, these experts attested to the
accuracy of company claims about its social effect and performance.

"Suppliers in India, Nepal and Mexico were clear there had been
significant economic gains through employment income and skill development,"
stated The Body Shop Social Statement in 1995. But the benefits went much
deeper. Out of the economic stability—and sometimes with extra funds provided
by The Body Shop—a whole range of social and community initiatives were

From the beginning, The Body Shop wanted its trade links to spread benefits
throughout communities, to give people a hand up from the worst conditions
of isolation and poverty. Through initiatives in countries as diverse as
Ghana, Zambia, Nicaragua and Brazil, The Body Shop puts hard cash in the
hands of those making the products, enabling them to make their own decisions
and help their own communities.

But achieving these goals was no easy task. In its early ventures The
Body Shop tested the feasibility of its ideals. Problems that were part
of the company’s development, were also part of its early Community Trade


A group of Kayapo Indians from the Brazilian Amazon forest was one of
the company’s first Community Trade suppliers. Loggers and miners were
manipulating the Indians out of their lands, then destroying them for quick
profits. As one of only a few Amazonian warrior tribes clinging to tribal
traditions, the Kayapo were desperately in need of international support.

In October 1990, Anita Roddick and her husband, Gordon Roddick, The
Body Shop Chairman, visited the Amazonian village of A-Ukre. From an initial
invitation from the Kayapo, The Body Shop established a trading relationship
working toward self-sustainability.

Understandably, mistakes were made. Creating a business from scratch
in inhospitable conditions was difficult enough, but The Body Shop also
tried to help support the Kayapo’s efforts to solve more far-reaching problems.

The Body Shop agreed to buy Brazil nut oil from two Kayapo villages
for a new product, Brazil Nut Conditioner. It agreed to pay a price, which
would compensate for the costs of production, allow for investments in
the communities, and provide personal income for the Indians. This price
turned out to be three times the market value. Pictures of the Kayapo Chiefs
would help us tell the world about the Indians’ plight and—hopefully—encourage
international customers to buy the product and support the Kayapo.

Since it took the Kayapo 15 days by boat to get to the nearest town,
The Body Shop and its franchisees raised money for a second-hand Cessna
aircraft to deliver goods back and forth. The Indians also asked for help
to build a hospital in the jungle—a complicated and political issue. The
Body Shop became embroiled in lengthy negotiations, balancing the needs
of the business with those of the indigenous communities, the Brazilian
Government, official Indian agencies, and the World Bank.

The Body Shop appointed a non-indigenous consultant, Saulo Petean, to
help the communities get their oil business up and running and to liaise
with the Company in England. "We wanted to help the Kayapo run things
for themselves," says Elaine Jones, "but The Body Shop discovered
that the Kayapo had become dependent on Petean, and he was abusing his
position of trust". Following a close review of the situation, The
Body Shop decided to terminate its relationship with Petean, who has since
waged war against The Body Shop.

The Body Shop had to bring in a structure to actively help the Kayapo
gain independence from The Body Shop. This was one of the conclusions it
reached following a number of independent reviews, which pointed specifically
to the need to ensure that Community Trade suppliers maintain their independence.

The Fair Trade department set up measures to deter communities seeing
The Body Shop as their sole market. These included establishing channels
to advise communities about how to find other markets, design new marketable
products and get marketing advice in addition to putting suppliers in contact
with other international buyers.


In 1994, The Body Shop sharpened its system of choosing, assessing and
developing trading links, and restructured its management team, bringing
in the General Manager from Oxfam Trading Canada. The new team laid down
strict guidelines for choosing communities to work with. One of these guidelines
was that a pre-condition for future trade links is that the group, co-operative,
women’s association or tribal council should already exist, and have a
product to sell.

"The Body Shop continues to be committed to its trading relationship
with the Kayapo and will continue to purchase oil," says Jones. At
the same time, oil production has become an integral part of the communities’
cycle of harvesting and festivals.

Other Community Trade suppliers, based on established trading groups,
had fewer development difficulties than the Kayapo. In Nepal, General Paper
Industries (GPI), a paper making factory in the Katmandu Valley, has grown
enormously since linking with The Body Shop. Situated in one of the poorest
countries in the world, it started with 20 employees and now has 130. GPI
operates in the international market and supplies such prestigious businesses
as the Conran Group. Since advice from The Body Shop, almost half of GPI’s
sales are now with other outlets, with a turnover in 1996 of $330,000.
Women—who are generally paid less than men in Nepal—have benefited in particular
from the trading link with The Body Shop, receiving the same wages as men
for the same types of work.

CORR , The Jute Works in Bangladesh, was already an established trading
organization when it started working with The Body Shop. In 1995, the Christmas
order alone gave 2,500 women employment for around 90 days each—this, in
a region where work is scarce and women are not encouraged to be bread
winners. After expenses, the organization uses surplus money for the welfare
of the organization and its female workers, education and other employment
in the area.

In the Kayapo region too, benefits have been long-lasting and have reached
more people than just the two villages with which we trade. In 1992, The
Body Shop learned from Kayapo chiefs of a crisis in the region. Children
were dying from diarrhea through poor hygiene and sanitation. Many of the
Kayapo were suffering from sight deficiencies and cataracts. Even basic
immunization was not being carried out regularly. The Kayapo chiefs turned
to The Body Shop for help.


When The Body Shop consultant on Amazonian affairs, Juneia Mallas, arrived
in A-Ukre, there was neither a hospital nor medical facilities available
to the Kayapo in Redenção, the nearest town to the Kayapo
reserves. The clinics in Redenção were private and all medical
assistance had to be paid for. Thus the Indians’ healthcare was completely
dependent on the miners and loggers who would pay for any emergency healthcare
required by the Indians and take `repayment’ in the form of gold and timber.

Through The Body Shop Foundation—a registered charity established in
1990—Mallas was able to channel funding to a healthcare project and work
with the Brazilian Federal Indian Agency (FUNAI) to create a suitable structure.

The Body Shop discovered that a World Bank loan had been granted to
the Brazilian Ministry of Health for the control of malaria. "Within
the loan was a component for indigenous health," says Mallas, "but
there were no projects being carried out with it."

To date, the Health Project has received over $2.9 million, which has
come from various sources: The Indian component from the World Bank loan,
the Ministry of Health, FUNAI and The Body Shop Foundation. The Body Shop
Foundation has provided over $700,000 for permanent equipment and training
promoted by expert medical consultants, doctors and nurses.

A clinic for the Indians built in Redenção is available
for 12 Kayapo villages. Medical staff who work in this clinic and with
the villages number two doctors, one dentist, and 24 nursing staff. The
Health Project also helps another 2,100 Indians from other ethnic groups
from the other side of the Xingu river, through another clinic set up in
the town of Altamira.

Summing up the Healthcare Project, Juneia Mallas says: "The project
focused on sanitation and education, it did not rely on drugs. Lack of
sanitation caused about half of all diseases. Many people were anemic.
Children were infected with worms. To prevent re-infection, we had to offer
much more than treatment alone. We wanted to de-drug the Indians and focus
on education. It was far more important to deliver help to a larger group
and the Kayapo were happy to extend the healthcare work to other tribes.

"As a result, the non-Kayapo villages have strongly embraced sanitation
and education and have eliminated diarrhea. However, The Kayapo are warrior
people and do not respond so fast to a change of habit.

"We have established a curative system in the Kayapo area of the
project with a good emergency and immunization program where malaria is
now better controlled. For the others we have moved into preventative medicine,
a stage we hope to achieve for the Kayapo in due course."


Through its Community Trade experiences, The Body Shop has realized
its limitations. In the future, says Elaine Jones, "in most cases,
The Body Shop won’t need to do much more than negotiate fair trade and
help build trading skills."

Technical help will continue to be vital to the communities. Over the
last several years, The Body Shop has sponsored workshops on quality control
and other issues communities needed to know in order to trade internationally.

In a commentary on the company’s performance, Guardian correspondent,
Roger Cowe, and investigative journalist and Brazzil magazine contributor,
Jon Entine, wrote, "The [Body Shop] controversies have highlighted
the difficulty of marrying an activist morality with commercial reality,
especially where complex development issues are concerned." Despite
the difficulties, The Body Shop remains committed to the principles behind
its community trading and plans to expand such trading.

Each of the 25-plus Community Trade suppliers represents a vast investment
in money, time and effort by The Body Shop. It is by no means the cheapest
way to do business and if profits were its only interest, the program would
simply not exist. Nor is it an easy thing to do. Buying from very poor
developing countries, such as Bangladesh, can be difficult. The communities
may not have a trading infrastructure in place, and there isn’t always
a high level of political stability in the countries where they live. But
work by The Body Shop shows that it’s possible—and other companies may
follow suit.

Saulo Petean and others critical of The Body Shop accuse it of disrupting
traditional cultures. Not so, says Elaine Jones. "Our trading provides
a level of income to meet basic needs. Our trade with the Kayapo, for example,
means they can earn an income that does not take them away from their reserves
and which can be integrated with their traditional lives.

"This can only be done with responsible local authorities and wider
development initiatives. What gives these trading relationships meaning
is that they buy people time to secure a hold on their own future,"
Jones says. "If in some way it gives them a grip on the process of
change, we believe it’s worth it."

Meanwhile The Kayapo project is entering a new phase of consolidation.
The Body Shop is working to get the Brazil nut oil business on a more secure
footing by giving advice on ways to operate more cost effectively, and
to encourage the Kayapo to become independent of The Body Shop. It is also
opening up debate about alternative initiatives for sustainable use of
the forest’s resources.

"Of course it would be simpler to pull out," says Elaine Jones.
Instead, The Body Shop is "dealing with outstanding problems and giving
it the best possible chance to succeed."

Why? "Because the alternative is that territories will be unregulated,
and resources exploited. The culture, which holds the Kayapo in the forest
lands, will disintegrate, young people will leave for outlying towns. The
Body Shop continues trading in the Amazon because our reason for being
is to bring about social change. We remain committed to the principles
that brought us here in the first place. And because the very future of
the people we’re working with is in the balance."

Blair Palese is head of PR of The Body Shop.

A Judge Against

The Body Shop

A Brazilian judge has sentenced The Body Shop to pay
more than $100,000 in back wages and damages to a former employer, after
concluding that he was unjustly accused of misrepresentation and then fired
without just cause.

Linda Jerome

The British cosmetics company The Body Shop has found in violation of
labor law by a court in Brazil and was condemned to pay US$ 110,000 to
a former Brazilian employee, Saulo Petean, in compensation for his unlawful
dismissal. Judge Miguel Peixoto, of the Labor Court in Conceição
do Araguaia, Pará State, announced the sentence on May 23, 1997.

The company will also be sued by the Brazilian government for defrauding
the country’s social security system with relation to the irregular employment
of Petean. The Body Shop might be fined another $30,000 if found guilty.

Saulo Petean, who has been working for Brazilian Indians on the last
two decades, was employed for six years to act as The Body Shop’s liaison
in its importation of Brazil nut oil produced by the Kayapo Indians villages
of Aukre and Pukanu in the Pará State, in northern Brazil. Petean
aided in the setting up of the export companies owned by both Brazilian
Indians villages, the A-Ukre Trading Company and the Pykany Trading Company,
the first ever to be run by Indians in the country.

The Body Shop uses Brazil nut oil bought from the Aukre and Pukanu villages
to make its hair conditioner, "Brazil Nut Conditioner", which
is one of the best selling products of the company in its 1,407 stores
located in 45 countries. The conditioner contains 1.5% Brazil nut oil.
According to Petean, The Body Shop sold $28 million worth of the conditioner
between 1991 and 1995.


When the company fired him, The Body Shop accused Petean of exporting
2,6 tons of Brazil nut oil in 1995, which did not originate in the Pucanu
village. The court dismissed these allegations, ruling that there was no
proof for them and that Petean had been unfairly dismissed.

According to Petean, the Pykany Trading Company documents he presented
to the Brazilian Labor Court proved that the 2,6 tons of nut oil, which
The Body Shop alleged to be of non-indigenous origin, were in fact produced
and exported by the indigenous community and that the payment for the oil
was recorded in the Pykany Trading Company accounts.

Petean points out that, in its anxiety to avoid being condemned, The
Body Shop actually falsely accused itself, by selling 180,000 liters (46,000
gallons) of the "Brazil Nut Conditioner" made with raw material
which were adulterated at their point of origin, which it supposedly knew
had not come from the Indians, and it had deceived its customers with misleading
advertising, since the product’s label states, "the world’s purest
Brazil nut oil, direct from the Kayapo Indians of the Amazon rain forest".

The Body Shop also accused Petean of appropriating the proceeds of sales
from the Brazil nut oil exportations belonging to the Indians companies.
Once again the labor court ruled that "The Body Shop did not succeed
in bringing concrete, irrefutable evidence to proof the allegation",
reiterating that Petean had been dismissed without just cause.

Petean declares that he disproved The Body Shop accusation by demonstrating
that Gordon Roddick, the executive director of The Body Shop, refused the
Indians request to reimburse Petean for his $30,679.97 loan to the indigenous
businesses A-Ukre Trading Company and Pykany Trading Company. The loan,
made to the two businesses in 1995, served as start-up capital for the
Brazil nut oil production enterprises.

A second trial

The Body Shop is also been sued in the Conceição do Araguaia
Labor Court in connection with the dismissal of the pilot Paulo Miranda,
contracted for four years by the company to fly the Cessna UF-206 in the
Kayapo reserves. The plane was donated by The Body Shop to the Aukre village
community. The decision in this lawsuit will be known on July 25, 1997.

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