While World Demand for Slave-free Coffee Grows, Brazil Finds Ways to Cheat Consumers

As the coffee harvest drew to a close in the rolling hills of southeastern Brazil, labor inspectors raced to two sprawling plantations with one goal – to rescue workers from slavery.

The convoy, escorted by armed police, hit the road early one August morning in Minas Gerais – a state bigger than France – that grows more than half the beans in Brazil, the world’s top coffee exporter.

Our journalistic team joined officials on a high-speed chase over fields, searching for coffee bean pickers crouched amid countless rows of lush trees.

The inspectors knew they had to act fast as supervisors running plantations were known to order workers to flee at the first sight of authorities, using WhatsApp to issue warnings.

By sunset, they had raided both plantations and found 59 workers – including children aged 13 – all undocumented, underpaid and lacking safety equipment as required by law.

“The workers had no rights whatsoever,” said Marcelo Campos, the labor inspector who coordinated the raids.

The laborers knew they were being exploited but felt they had no choice in a country of rising poverty and scarce jobs.

“There is no other way,” said one, declining to be named in case it lost him work on another of the state’s many thousands of plantations that are home to at least 245,000 workers.

“It’s not worth it … but we are weak, right?”

An investigation over six months uncovered extensive slave labor running largely unchecked in Brazil’s billion-dollar coffee industry despite years of efforts to clean up the sector – which could now put sales at risk.

Exclusively obtained data, analysis of public records, and dozens of interviews revealed coffee produced by forced labor was stamped slavery-free by top certification schemes and sold at a premium to major brands such as Starbucks and Nespresso.

Labor inspectors said they were hampered by a shortage of staff, money and political will – and fear abuse is rising even though consumer demand for slave-free products is growing.

Prosecutor Mateus Biondi said he was alarmed by the large number of investigations into labor violations in the main coffee growing area of Minas Gerais in recent years, but that such efforts did not match up to the true scale of the problem.

“The numbers are scary,” said Biondi, regional anti-slavery coordinator for Minas Gerais, referring to new data showing an average of about 25 probes per year into coffee plantations since early 2014.

Civil society groups, unions and lawmakers voiced concern about the reputation of Brazil’s coffee industry being damaged on the global stage if the failure to stop slavery continued.

“We started a dialogue with the coffee sector in 2016, predicting that human rights violations, especially slave and child labor, would grab the world’s attention,” said Mercia Silva, director of Inpacto, a leading anti-slavery charity.

“This is proving to be true now.”

The state’s coffee plantations this year attracted the attention of U.S. customs officials who can block imports of slave-tainted goods, fueling fears about trade with Brazil’s biggest buyer.

U.S. Customs and Border Protection (CBP) met this year with labor inspectors and prosecutors in Minas Gerais – thought by sources to be the first such meetings – to discuss the industry.

CBP officials can block any goods they suspect were made by forced labor, and have this year ramped up efforts by stopping several imports including tobacco from Malawi and gold from artisanal mines in Democratic Republic of Congo.

Two Brazilian sources present at separate meetings with CBP officials voiced concern some coffee exports could be detained.

“We are not naïve, we are aware it’s a possibility,” said one Brazilian source on condition of anonymity.

Two U.S. officials confirmed the meetings. A CBP source said they could not discuss “potential or ongoing investigations”.

“The government of Minas Gerais is aware of the concern of the United States … and other importing countries regarding coffee and other products,” a state government spokesman said.

Missing: Money, Staff, Support

Starbucks, Swiss-based Nespresso and Brazil’s Nucoffee have all used coffee plantations found by labor officials to have exploited laborers in recent years.

Asked about the findings, the companies – two global heavyweights and a major Brazilian player – said they were committed to tackling slave labor and were working with producers to improve their labor practices and avoid slavery.

The Rainforest Alliance, a global non-profit that certifies farms as slave-free, said it was considering changing its system to boost the number of unannounced audits and visit more farms.

Minas Gerais’ government – which runs a similar scheme – said it was monitoring cases filed by labor prosecutors against farms it had certified after the investigation found that three were suspected by officials of having violated labor laws.

Brazil’s Ministry of Economy said it started discussing ways to improve labor practices with coffee producers last year, but it lacked data on how many workers were trapped in slavery.

More than 300 coffee workers were found by officials in slave-like conditions nationwide in 2018, the highest in 15 years, but the true extent of slavery in the sector is unknown.

The economy ministry said in a statement that there were “no reliable statistics” on the number of workers in slavery-like conditions in any industry in Brazil when asked if the scale of labor abuses in the country’s coffee sector was underestimated.

“We are a great global producer, and the number of abuses identified is not proportional to our production,” said federal judge Carlos Haddad, who runs a legal aid scheme for victims of modern slavery.

Worldwide coffee consumption is set to reach a record in 2020, U.S. data shows, and Brazil accounts for more than a third of global supply. It exported about US$ 4.4 billion of coffee in 2018, according to United Nations trade data.

Lawmaker Helder Salomão, head of the Human Rights Commission, a Congress body that proposes laws and carries out investigations, warned that Brazil stood to lose without action.

“Either we solve this problem, or more workers will lose their dignity, while we lose business opportunities,” Salomão said. “Soon, Brazil will have losses because of this.”

Statistics compiled by a labor prosecutor showed that 121 farms were probed in Minas Gerais’ southern and central-east region since April 2014.

Labor violations were identified by officials in 10 farms certified by Rainforest or Certifica Minas, raising questions about the effectiveness of labels that lead to higher prices.

“Certifiers know that there are big problems with non-compliance in certified supply chains,” said Genevieve LeBaron, a politics professor at Britain’s Sheffield University, who has studied labor conditions at certified tea plantations in India.

“Consumers believe that when they pay US$ 2 more for certified coffee, that money is being handed to workers when there is very little actual evidence that is the case.”

The scale of slave labor across Minas Gerais is likely to be significant and largely unchecked, academics and activists said.

In Brazil, slavery is defined as forced labor but also covers debt bondage, degrading work conditions, long hours that pose a risk to health, and any work that violates human dignity.

The state has at least 119,000 coffee plantations and hundreds of thousands of workers but only 245 inspectors.

“There is a lack of resources, technical support and personnel,” said Adriano Santos, a sociology professor at local university Unifal-MG, who has studied the state’s coffee sector.

He said the true picture was one of “dramatic” worker abuse.

Under the Radar

Labor officials in Minas Gerais and beyond are concerned as the overall number of workers rescued from slavery tumbles.

Last year 1,154 laborers across all industries were rescued, down from 2,604 in 2012, government data showed.

Labor judges and inspectors told Congress in April that the main government body responsible for the fight against slavery and workplace infractions in Brazil was in a “calamitous” state.

Facing a deep recession in 2017, Brazil’s previous government cut funding for labor inspections by about half, which led to a sharp drop in the number of workers rescued.

Labor associations and anti-slavery groups said they were also wary of President Jair Bolsonaro, who earlier this year said child labor was not harmful and complained that the legal definition of slave labor under Brazilian law was too broad.

Against this backdrop, Brazil’s leading anti-slavery labor prosecutor said her office would next year hone their efforts on a couple of sectors – with coffee likely to be one of them.

“Given our financial limitations, lack of personnel, and the size of Brazil, both we and labor inspectors need to act in a … strategic way,” said newly-appointed Lys Sobral Cardoso.

For while mechanization has boosted productivity, replacing man with machine may also have exacerbated worker exploitation.

More than two-thirds of workers on coffee farms in Minas Gerais are estimated to be informal workers, with no right to a minimum wage, overtime pay, severance or state benefits.

“With mechanization, the number of workers has fallen,” said Jorge Ferreira dos Santos, a director at the local chapter of Brazil’s biggest trade union confederation, known as CUT.

“But their situation is more precarious, as they submit themselves to work in whatever conditions they can find.”

Undocumented work is deep-rooted and common in the coffee industry, fueling widespread labor exploitation, said Paula Nunes, a lawyer for anti-slavery charity Conectas Human Rights.

“This makes it very hard to track who they (coffee bean pickers) are, or where they are from. They have none of the rights guaranteed by … Brazilian legislation,” said Nunes.

“(But) some companies prefer to turn a blind eye to it.”

Dozens of workers caught on one plantation in the August raid – Alvorada do Canta Galo farm – told labor inspectors that the owner had provided them with no safety gear, food nor water.

“With what we earn, we can’t afford to buy (boots),” said 55-year-old Maria Helena Marques. “We pay rent, gas, food, water, power. What’s left? They give us nothing.”

More than 50 workers found at Canta Galo were judged by labor inspectors to be victims of slave labor. The owner of the farm, José Maria Domingos da Silva, declined to comment.

Days later, he struck a deal with labor prosecutors – paying a fine to the state and compensation to the victims, and vowing to improve conditions to avoid the risk of being prosecuted.

Workers said they were paid 14 reais (US$ 3.43) for every 60 liters of beans they picked, which could take a day or more of work.

One woman earned 672 reais (US$ 164) for 43 days work – about 2 reais (49 cents) an hour. Inspectors found many other workers who were earning less than the legal minimum of 998 reais per month (US$ 247).

The rescued workers lived in Campos Altos – a nearby town that hosts hundreds of seasonal coffee workers from northeast Brazil – mostly in dirty, sparse shacks without beds or fridges.

“We’re paid too little,” said Sales Felix, who shared a room with his wife and two young daughters next to another room housing three men, at the cost of about 300 reais (US$ 74) a month.

“We come from far away, and we gain nothing.”

Dirty List

Industry certification schemes used to reassure customers that goods are slave-free and environmentally friendly have come under particular scrutiny in Minas Gerais as brands certified as clean have been punished for falling short of the standards.

Many have been added to the government’s “dirty list” of employers that have engaged in modern slavery, considered one of Brazil’s sharpest anti-slavery tools as blacklisted firms cannot get credit from state banks or other public money.

On the latest dirty list from August, 18 of 190 companies were coffee producers – 13 based in Minas Gerais.

The coffee sector was topped only by the cattle industry in terms of the amount of companies featured on the register.

Cecafé – Brazil’s main council of coffee exporters with 120 members – would not be drawn on the industry shortcomings uncovered and instead listed anti-slavery measures it had taken.

“Social responsibility and sustainability are fundamental aspects in all Brazilian coffee agribusiness,” a spokesman said.

Domingos’ farm – which the inspectors raided – supplies Nucoffee, part of agribusiness giant Syngenta, which said it sources beans from 4,000 farms and helps producers sell abroad.

Nucoffee said Domingos had signed a deal with labor prosecutors promising to improve working conditions but it would “follow the case to evaluate appropriate measures”.

Farms found to have used slave labor risk official fines that can exceed 1 million reais (US$ 250,000), legal damages, court orders mandating improved labor conditions, or even closure.

Those that strike deals with officials – standard practice to avoid court proceedings – face sanctions if caught again.

“Nucoffee repudiates practices that go against fair work and has clear commitments regarding respect for rural workers,” a spokesman said. If Domingos were to be added to the “dirty list”, Nucoffee said it would break all ties with the supplier.

Domingos was also a supplier to Nespresso until March 2018, when the relationship ended after a company review of suppliers.

“We work with producers who are constantly seeking to improve their processes, as well as those who are certified by Rainforest Alliance,” said a spokesman for Nespresso, without revealing why the relationship ended.

Starbucks cut ties this year with a Rainforest-certified farm, which was added to the “dirty list” in April after 25 workers were found by officials in slavery-like conditions.

“We have zero tolerance for any form of slave labor and have engaged (with) … farms about this topic,” a Starbucks spokesman said.

No Way Out

Rainforest endorses hundreds of coffee plantations in Minas Gerais through a system of ‘group certifications’ despite auditing only a fraction of any collective’s many farms.

In 2017, a Rainforest-backed farm was judged by officials to have exploited workers who were forced to do illegal overtime.

Rainforest said its group certification system was “strong and efficient,” but was considering a change to ensure all farms were independently audited at least once every three years.

“We believe certification is an essential tool for solving … labor challenges on the ground,” Rainforest said in a statement.

“(But) a certification system alone is not enough to achieve the change we want to see on the ground. We need governments, business, and other stakeholders to play a significant role.”

Back in Campos Altos, workers from Domingos’ farm were pleased to receive up to 15,000 reais (US$ 3,700) compensation each from their former boss and three months of state unemployment benefits.

One 36-year-old worker said by phone he had received 7,500 reais (US$ 1,850) and bought a small plot of land in Bahia, after his rescue.

“It was good, because we found out we had the right to something,” he said. “God willing, we will build a house.”

Yet the prevailing attitude among the workers rescued in the August raids – most of whom asked to remain anonymous for fear of not finding more work in the future – was one of resignation.

“It’s hard,” said Joseilton de Jesus, who planned to return to the region to pick coffee next year despite having been exploited as a slave. “We have to go where the work is.”

This article was produced by the Thomson Reuters Foundation. Visit them at http://www.thisisplace.org

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It seems the future never arrives in Brazil What Lies Ahead in Brazil? Brazil Has No Exemplary Past or Present. But What Lies Ahead for the Country? Europeans, US, developed country, developing country. Bolsonaro, future B. Michael Rubin For years, experts have debated what separates a developing country from a developed one. The GDP (Gross Domestic Product) of a country is one simple way to measure its economic development. Another way to measure a country's progress is the extent of public education, e.g. how many citizens complete high school. A country's health may be measured by the effectiveness of its healthcare system, for example, life expectancy and infant mortality. With these measurement tools, it's easier to gauge the difference between a country like Brazil and one like the U.S. What's not easy to gauge is how these two countries developed so differently when they were both "discovered" at the same time. In 1492 and 1500 respectively, the U.S. and Brazil fell under the spell of white Europeans for the first time. While the British and Portuguese had the same modus operandi, namely, to exploit their discoveries for whatever they had to offer, not to mention extinguishing the native Americans already living there if they got in the way, the end result turned out significantly different in the U.S. than in Brazil. There are several theories on how/why the U.S. developed at a faster pace than Brazil. The theories originate via contrasting perspectives – from psychology to economics to geography. One of the most popular theories suggests the divergence between the two countries is linked to politics, i.e. the U.S. established a democratic government in 1776, while Brazil's democracy it could be said began only in earnest in the 1980s. This theory states that the Portuguese monarchy, as well as the 19th and 20th century oligarchies that followed it, had no motivation to invest in industrial development or education of the masses. Rather, Brazil was prized for its cheap and plentiful labor to mine the rich soil of its vast land. There is another theory based on collective psychology that says the first U.S. colonizers from England were workaholic Puritans, who avoided dancing and music in place of work and religious devotion. They labored six days a week then spent all of Sunday in church. Meanwhile, the white settlers in Brazil were unambitious criminals who had been freed from prison in Portugal in exchange for settling in Brazil. The Marxist interpretation of why Brazil lags behind the U.S. was best summarized by Eduardo Galeano, the Uruguayan writer, in 1970. Galeano said five hundred years ago the U.S. had the good fortune of bad fortune. What he meant was the natural riches of Brazil – gold, silver, and diamonds – made it ripe for exploitation by western Europe. Whereas in the U.S., lacking such riches, the thirteen colonies were economically insignificant to the British. Instead, U.S. industrialization had official encouragement from England, resulting in early diversification of its exports and rapid development of manufacturing. II Leaving this debate to the historians, let us turn our focus to the future. According to global projections by several economic strategists, what lies ahead for Brazil, the U.S., and the rest of the world is startling. Projections forecast that based on GDP growth, in 2050 the world's largest economy will be China, not the U.S. In third place will be India, and in fourth – Brazil. With the ascendency of three-fourths of the BRIC countries over the next decades, it will be important to reevaluate the terms developed and developing. In thirty years, it may no longer be necessary to accept the label characterized by Nelson Rodrigues's famous phrase "complexo de vira-lata," for Brazil's national inferiority complex. For Brazilians, this future scenario presents glistening hope. A country with stronger economic power would mean the government has greater wealth to expend on infrastructure, crime control, education, healthcare, etc. What many Brazilians are not cognizant of are the pitfalls of economic prosperity. While Brazilians today may be envious of their wealthier northern neighbors, there are some aspects of a developed country's profile that are not worth envying. For example, the U.S. today far exceeds Brazil in the number of suicides, prescription drug overdoses, and mass shootings. GDP growth and economic projections depend on multiple variables, chief among them the global economic situation and worldwide political stability. A war in the Middle East, for example, can affect oil production and have global ramifications. Political stability within a country is also essential to its economic health. Elected presidents play a crucial role in a country's progress, especially as presidents may differ radically in their worldview. The political paths of the U.S. and Brazil are parallel today. In both countries, we've seen a left-wing regime (Obama/PT) followed by a far-right populist one (Trump/Bolsonaro), surprising many outside observers, and in the U.S. contradicting every political pollster, all of whom predicted a Trump loss to Hillary Clinton in 2016. In Brazil, although Bolsonaro was elected by a clear majority, his triumph has created a powerful emotional polarization in the country similar to what is happening in the U.S. Families, friends, and colleagues have split in a love/hate relationship toward the current presidents in the U.S. and Brazil, leaving broken friendships and family ties. Both presidents face enormous challenges to keep their campaign promises. In Brazil, a sluggish economy just recovering from a recession shows no signs of robust GDP growth for at least the next two years. High unemployment continues to devastate the consumer confidence index in Brazil, and Bolsonaro is suffering under his campaign boasts that his Economy Minister, Paulo Guedes, has all the answers to fix Brazil's slump. Additionally, there is no end to the destruction caused by corruption in Brazil. Some experts believe corruption to be the main reason why Brazil has one of the world's largest wealth inequality gaps. Political corruption robs government coffers of desperately needed funds for education and infrastructure, in addition to creating an atmosphere that encourages everyday citizens to underreport income and engage in the shadow economy, thereby sidestepping tax collectors and regulators. "Why should I be honest about reporting my income when nobody else is? The politicians are only going to steal the tax money anyway," one Brazilian doctor told me. While Bolsonaro has promised a housecleaning of corrupt officials, this is a cry Brazilians have heard from every previous administration. In only the first half-year of his presidency, he has made several missteps, such as nominating one of his sons to be the new ambassador to the U.S., despite the congressman's lack of diplomatic credentials. A June poll found that 51 percent of Brazilians now lack confidence in Bolsonaro's leadership. Just this week, Brazil issued regulations that open a fast-track to deport foreigners who are dangerous or have violated the constitution. The rules published on July 26 by Justice Minister Sérgio Moro define a dangerous person as anyone associated with terrorism or organized crime, in addition to football fans with a violent history. Journalists noted that this new regulation had coincidental timing for an American journalist who has come under fire from Moro for publishing private communications of Moro's. Nevertheless, despite overselling his leadership skills, Bolsonaro has made some economic progress. With the help of congressional leader Rodrigo Maia, a bill is moving forward in congress for the restructuring of Brazil's generous pension system. Most Brazilians recognize the long-term value of such a change, which can save the government billions of dollars over the next decade. At merely the possibility of pension reform, outside investors have responded positively, and the São Paulo stock exchange has performed brilliantly, reaching an all-time high earlier this month. In efforts to boost the economy, Bolsonaro and Paulo Guedes have taken the short-term approach advocated by the Chicago school of economics championed by Milton Friedman, who claimed the key to boosting a slugging economy was to cut government spending. Unfortunately many economists, such as Nobel Prize winner Paul Krugman, disagree with this approach. They believe the most effective way to revive a slow economy is exactly the opposite, to spend more money not less. They say the government should be investing money in education and infrastructure projects, which can help put people back to work. Bolsonaro/Guedes have also talked about reducing business bureaucracy and revising the absurdly complex Brazilian tax system, which inhibits foreign and domestic business investment. It remains to be seen whether Bolsonaro has the political acumen to tackle this Godzilla-sized issue. Should Bolsonaro find a way to reform the tax system, the pension system, and curb the most egregious villains of political bribery and kickbacks – a tall order – his efforts could indeed show strong economic results in time for the next election in 2022. Meanwhile, some prominent leaders have already lost faith in Bolsonaro's efforts. The veteran of political/economic affairs, Joaquim Levy, has parted company with the president after being appointed head of the government's powerful development bank, BNDES. Levy and Bolsonaro butted heads over an appointment Levy made of a former employee of Lula's. When neither man refused to back down, Levy resigned his position at BNDES. Many observers believe Bolsonaro's biggest misstep has been his short-term approach to fixing the economy by loosening the laws protecting the Amazon rainforest. He and Guedes believe that by opening up more of the Amazon to logging, mining, and farming, we will see immediate economic stimulation. On July 28, the lead article of The New York Times detailed the vastly increased deforestation in the Amazon taking place under Bolsonaro's leadership. Environmental experts argue that the economic benefits of increased logging and mining in the Amazon are microscopic compared to the long-term damage to the environment. After pressure from European leaders at the recent G-20 meeting to do more to protect the world's largest rainforest, Bolsonaro echoed a patriotic response demanding that no one has the right to an opinion about the Amazon except Brazilians. In retaliation to worldwide criticism, Bolsonaro threatened to follow Trump's example and pull out of the Paris climate accord; however, Bolsonaro was persuaded by cooler heads to retract his threat. To prove who was in control of Brazil's Amazon region, he appointed a federal police officer with strong ties to agribusiness as head of FUNAI, the country's indigenous agency. In a further insult to the world's environmental leaders, not to mention common sense, Paulo Guedes held a news conference on July 25 in Manaus, the largest city in the rainforest, where he declared that since the Amazon forest is known for being the "lungs" of the world, Brazil should charge other countries for all the oxygen the forest produces. Bolsonaro/Guedes also have promised to finish paving BR-319, a controversial highway that cuts through the Amazon forest, linking Manaus to the state of Rondônia and the rest of the country. Inaugurated in 1976, BR-319 was abandoned by federal governments in the 1980s and again in the 1990s as far too costly and risky. Environmentalists believe the highway's completion will seal a death knoll on many indigenous populations by vastly facilitating the growth of the logging and mining industries. Several dozen heavily armed miners dressed in military fatigues invaded a Wajãpi village recently in the state of Amapá near the border of French Guiana and fatally stabbed one of the community's leaders. While Brazil's environmental protection policies are desperately lacking these days, not all the news here was bad. On the opening day of the 2019 Pan America Games in Lima, Peru, Brazilian Luisa Baptista, swam, biked, and ran her way to the gold medal in the women's triathlon. The silver medal went to Vittoria Lopes, another Brazilian. B. Michael Rubin is an American writer living in Brazil.

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