Major companies found using courts to avoid Brazil's slave labor 'dirty list'

RIO DE JANEIRO (Thomson Reuters Foundation) - Major businesses in Brazil are using court injunctions to avoid being named and shamed on the country's slave labor "dirty list" - a practice that prosecutors and judges said weakened a key tool designed to stop companies profiting from slavery.

A dozen firms that were found by the government to have engaged in slave labor have gone to court to halt a two-year inclusion on the list while they appeal the decision, records obtained exclusively by the Thomson Reuters Foundation revealed.

Blacklisted companies are blocked from receiving state loans and have restrictions placed on their sales, while the list is also used by private banks to gauge credit risk and by global buyers concerned about their supply chains, legal experts said.

If after two years, a company can demonstrate that has taken steps to improve working conditions, it is removed from the list - which currently features about 186 companies and individuals.

JBS Aves, a unit of the world's top meatpacker JBS SA, orange juice giant Citrosuco, and fashion brand Fabula Confecçao e Comercio de Roupas were among the 12 companies uncovered by a request via Brazil's Access of Information Law.

Others included Rumo Malha Paulista, a logistics company, and Spal Industria Brasileira de Bebidas, a local maker of Coca Cola. All the companies revealed through the request said they never used slave labor and their inclusion was a mistake.

It is the first time such information has been revealed but the total number of slavery-related injunctions granted over the past 15 years is unclear.

While there was no suggestion of wrongdoing, more firms found to have used slave labor were likely to follow suit and seek injunctions rather than two years in limbo and having to show improvements, said labor prosecutor Catarina von Zuben.

"Those with vast economic resources to pay for great lawyers will come out on top," said von Zuben, head of the National Coordinating Office for Fight Against Modern Slavery in Brazil (CONAETE) - a network that includes several labor prosecutors.

"If I were an international buyer, I'd be very concerned," she said, referring to the fact that injunctions mean some companies are never publicly exposed over slave labor findings.

Brazil's labor secretariat, which is responsible for the "dirty list", declined an interview request about the findings.

In a statement, the secretariat said that the injunctions are judicial decisions that will be obeyed "with no judgment about the merit of any of them".

A state labor inspector - speaking on condition of anonymity as he was not authorised to speak to the media - said he thought that such court rulings undermined the work of his department.

"Labor inspectors know that a large company may not enter (the list) ... and that if it does, it will stay there only for a short period." 

NEGOTIATION

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

About 370,000 people in Brazil - a country of about 210 million - are modern-day slaves, according to the Global Slavery Index by the Australian human rights group Walk Free Foundation.

The "dirty list" was launched in 2004 and has been hailed by the United Nations as a key tool in Brazil's anti-slavery drive.

Some of the 12 firms with injunctions said they did not believe the conditions faced by their workers was slavery; others said they should not have been held responsible as the workers were not directly employed by them but by suppliers.

Applying for injunctions, several of the companies said they were not given the right to challenge the initial decision, and that to be added to the list without the right to appeal would cause irreparable financial damage, according to the documents.

Fabula, which is owned by Grupo Soma, a company with 4,000-odd employees, said it found its inclusion "unfair" but was negotiating with the government to get off the "dirty list".

The arrangement would see Fabula commission an independent audit of its supply chain and create a compliance department reporting directly to the chief executive of Grupo Soma, among other measures, its statement said in response to the findings.

"The majority of those obligations are already in practice since 2017, by the company's own imitative," Fabula said in the statement. "(The deal) should be signed in the coming weeks."

It was unclear whether the other 11 companies had agreed to change their business practices when applying for an injunction.

Federal judge Charles de Moraes, who approved Fabula's appeal, said the firm would be added to the list if they did not deliver on their pledges to improve their anti-slavery efforts.

"(If the deal is off) no doubt about it: the injunction falls."

"WEAKENING" THE LIST

In the court documents, some judges said they were concerned about the financial consequences of placing a firm on the list.

Granting an injunction to JBS Aves in November 2017, labor judge Janice Bastos said it was "necessary to act with caution" as adding the company to the list could negatively affect both the firm and its staff. She declined to comment on her ruling.

Luciano Frota, a labor judge and member of the National Council of Justice (CNJ) - a state body - said companies had the "right to resort to court", but that he was concerned about the number of injunctions that had been granted regarding the list.

The CNJ recently announced that all new labor judges must attend a class on slave labor, and Frota said the council was working to make all judges more aware about the "importance of the dirty list" as the extent of their knowledge was unclear.

"We must know how much court decisions may be weakening this valuable instrument," said Frota, who heads the council's committee on slave labor.

"We need to have the judiciary committed to what the Brazilian state is committed ... the fight against slave labor."

The issue of slave labor injunctions being granted to companies is set to be discussed at a hearing in the Senate next month about Brazil's efforts to combat modern-day slavery.

Senator Paulo Paim, who heads the Senate's human rights commission, said the granting of injunctions was part of a broader trend of "weakening" the list - referring also to a lack of funding for labor inspectors to travel and do field work. 

The Labor Inspection Secretariat is in a "calamitous" state, several top state officials told Congress in April.

"It's not just injunctions. The government does not invest in labor inspections, (inspectors) have no money to go to areas where slavery probably is. The structure is pitiful", said Paim.

Legislative attempts to strengthen the list, such as a bill put forward by Paim that would ban public contracts being given to blacklisted companies, were shelved last year, he added.

"It all points towards a weakening of the dirty list."

(Reporting by Fabio Teixeira; Editing by Kieran Guilbert and Belinda Goldsmith)