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Slaves of Steel Update:
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Steel companies benefit from slave
labor in the Amazon jungle Dauro Veras and Marques Casara / Observatório
Social
This is the initial point of a production chain that involves some of Brazil's largest industrial enterprises, each with differing degrees of responsibility. Companies controlled by the Queiroz Galvão and Gerdau groups have been accused by the federal attorney general's office of benefiting from slavery to produce pig iron. Companhia Vale do Rio Doce and the United States' largest steel producer, Nucor Corporation, have commercial ties with these companies. The violation of human rights are at the foundation of a billion dollar economic activity. The Brazilian Amazon produces the world's best pig iron, used principally in the production of automobile parts. It is a market that moves US$400 million per year and - in the Brazilian North alone 2.2. million tons per year. The principal buyer is the United States steel industry. This pig iron supplies a high technology market for special steels. Yet at the base of the production chain is one of the worst forms of human exploitation, slave labor, which is found in charcoal plants located in the Amazon forest.
Charcoal production in the Amazon are controlled by 13 iron companies based in Maranhão and Pará. Some of the companies are owned by Brazil's largest companies and operate throughout Brazil and abroad. The Queiroz Galvão group is owner of Simasa and Pindaré. The Gerdau Group controls Margusa. Simasa and Margusa are accused by the federal labor attorney of using slave labor in illegal charcoal producing operations. This charcoal is in turn used to produce pig iron exported to the United States for the production of steel, which is then used in automobiles and various other products. Vale do Rio Doce and Nucor are not being accused of direct involvement with slave labor. Nevertheless, they conduct commercial business with companies involved in the exploration of slave labor. Basic social decency, as well as the Brazilian Constitution, international norms and even principles of corporate responsibility, as we will present below, do not permit the use of slave labor on any point of the production chain. Global context To produce pig iron, the principal requirements are charcoal and iron ore. The charcoal comes from thousands of small charcoal producing plants that burn trees from native forests. The iron ore is supplied by the Companhia Vale do Rio Doce, which also provides the logistics needed for the export of the pig iron produced by Simasa and Margusa: a railroad and port terminal on property belonging to Companhia Vale do Rio Doce on the Maranhão coast. The principal purchaser of pig iron that has slave labor in its production chain is the Nucor Corporation, the largest steel producer in the United States. This company uses the pig iron to produce products that supply most U.S. automobile companies. Various brands of U.S. cars leave the factory with special steels that had slave workers at the first link of their productive chain. Nucor and Vale do Rio Doce are partners in a project for a pig iron plant that will also be installed in the Brazilian North. It will have annual production capacity of 380 million tons of pig iron and could double this capacity in the future, according to Nucor. This iron will be produced in a form that does not harm the environment according to Nucor, with charcoal from reforested lumber.
The iron and steel manufacturers are interested in the Amazon because the region has immense mineral reserves and offers low cost production: labor is cheap and wood is abundant. In some cases, this labor costs practically nothing. The wood leaves the forest nearly free of cost, it is often illegally removed without authorization from environmental agencies. Add to this the brutal commercial competition between the companies on a global scale and you have a situation of growing pressure on the environment and working conditions. Brazilian industry, according to the New York Times article "China Fuels Brazil's Dream of Being a Steel Power", of May 21, 2004, is preparing to meet demand from China for steel and intends to invest billions of dollars to increase productive capacity by more than 30% in the next four years. The U.S. newspaper refers to Brazil as "fortunate" to have three factors that led the country to seek to be a major player in the world steel industry: abundant raw material, excellent technology and cheap labor. Executive Director for strategic planning of the Vale do Rio Doce company, Gabriel Stoliar, commented: "We are witnessing an enormous window of opportunity for growth in the Brazilian steel industry, and in a big way. But we cannot lose time. The time to invest is now, so that we can guarantee our place in the world", President of the Gerdau Group, Jorge Gerdau Johannpeter, maintained that Brazil is particularly important for the Chinese because of iron ore deposits. What is not said, is that one of Brazil's supposed strategic advantages,
cheap labor, is obtained in part with exploitation of degrading
and slave labor. .
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This report is part of the publication "Observatório Social Em Revista" - # 6 - June 2004 - Florianópolis, Brazil English version: Jeffrey Hoff Published by Observatório Social
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The
men who live and work at the charcoal plants have lost their liberty.
They receive no salaries, sleep in huts, eat like animals, have
no medical assistance and in many cases are guarded by gunmen authorized
to kill anyone who tries to escape. Most of these workers do not
know how to read or write. They have often forgotten their birthday.
They have difficulty speaking. They are afraid, they live in terror
and do not like to speak about themselves. They rarely have identification
cards or voting registration. They are like ghosts, with an uncertain
future.
