Pig Iron and Modern Slavery

Slaves in Brazilian Charcoal Camps

The TakeAway: Shareowner Activism Can Help Deter Human Rights Violations

A few decades ago, The New Yorker ran a famous cartoon in which a startled gas station attendant, having raised the hood of a fancy car to check the oil, discovers a man in rags and shackles secretly peddling the driveshaft.  The bearded prisoner looks up and says, “For God’s sake, call the police!”  Both the shock and humor of the image arose from the impossibility that the automobile – our sleek modern means of conveyance – might somehow rely on the ancient evil of human slavery.

Yet now, as we learn more about the globalized process of manufacturing of vehicles, we have discovered how painfully true this image is.  In November 2006, Bloomberg Markets magazine broke the story tracing the supply chain for cars to one of its sources: the Carvoaria Transcameta work camp near the city of Tucurui in the Brazilian Amazon.  There, workers spend their days in bondage amidst the smoky haze generated by brick kilns, burning hardwood – often illegally felled trees from the rainforest – until it becomes charcoal.  Then, the charcoal is transported to blast furnaces six hours away, where it’s used to make pig iron, a basic ingredient of steel.  Eventually, this pig iron ends up in manufacturing plants around the world, owned by the likes of Ford, General Motors, Nissan, and Toyota.

That’s why a landmark agreement released on 4 August 2010 is so significant and far-reaching: it commits Nucor, one of the biggest steel companies in the US, to a transparent process of combating slavery in supply chains.  The Nucor agreement resulted from three years of shareowner engagement by Domini Social Investments. Domini was careful to point out that the Brazilian pig-iron industry “is not the worst offender,” and that “many – perhaps most – manufacturers do not use slaves”.  Moreover, “the problem suppliers are generally unknown to Nucor, lying several tiers down their supply chain”, according to Domini, which has filed proxy resolutions over the past several years on the issue.

This year, Domini and its partners in the Interfaith Center on Corporate Responsibility agreed to withdraw their shareowner resolution upon assurance from Nucor’s general counsel that “Any amount of [pig iron] sold with the use of slave labor is too much.” The UN Special Rapporteur on Contemporary Forms of Slavery defines this to include: debt bondage; serfdom; forced labour; child labour and child servitude; trafficking of persons and human organs; sexual slavery; children in armed conflict; sale of children; forced marriage and the sale of wives; migrant work; the exploitation of prostitution; and certain practices under apartheid and colonial regimes.

Nucor agreed to monitor the Brazilian government’s “dirty list” of employers found to use forced labor, and require its direct suppliers to certify that slavery was not involved.  Nucor also will require its top-tier Brazilian pig-iron suppliers to either join the Citizens Charcoal Institute (ICC), a regional industry monitoring group, or sign and adhere to the National Pact for the Eradication of Slave Labor.  Created in 2004, the National Pact is a multi-stakeholder initiative coordinated by the International Labor Organization (ILO), Ethos Institute, and Repórter Brasil, along with various other Brazilian civil society and government groups.  It was the first stage of private sector involvement.

Despite the fact that Brazil became the last country in the Americas to abolish slavery, in 1888, the use of forced labor continues.  According to the ILO, in 2005 nearly one million women and men worked for little or no wages as forced laborers in Latin America.  Citizens Charcoal Institute claims that 12 percent of Brazil’s Amazon charcoal camps still use forced labor.  Globally, an estimated 27 million people live in slavery today, more than any other time in history, according to Disposable People author Kevin Bales, co-founder of Free the Slaves.  In this 1999 book, Bales links the resurgence of forced labor to “changes in the world’s economy and societies over the past 50 years”.

That’s why shareowner activism – combined with corporate efforts such as the Athens Ethical Principles against human trafficking, created in 2006 through advocacy by David Arkless of Manpower – plays such an important role in transforming the economic underpinnings driving the market for slavery.

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