The Secret World of Modern Slavery

Supplier Reinstated

On Oct. 19, GM reinstated Intermet as a supplier after concluding the company provided sufficient documentation that its supply chain was free of forced labor, says GM spokeswoman Deborah Silverman.

Intermet President Jeff Mihalic says his company doesn't buy any pig iron derived from slavery. ``Intermet asked for and received certification from National Material Trading that the company's suppliers, including Cosipar and Cosipar's suppliers, do not use forced labor,'' Mihalic says. He met with GM on Oct. 19 and persuaded the company to keep Intermet as a supplier.

Intermet also supplies parts to DaimlerChrysler Corp., based in Auburn Hills, Michigan. DaimlerChrysler spokesman Mike Aberlich says the company isn't aware of using any products that can be traced to slave labor.

``Intermet informed us they do not make direct use of slaves,'' Aberlich says. ``They are conducting an immediate analysis of their own supply base. We do not accept any involvement with slave labor in our supply chain.''

Toyota Reminds Suppliers

Toyota, the world's second-largest automaker, and Nissan, Japan's second-largest carmaker, say they have difficulty monitoring the parts and raw materials purchased by their suppliers.

``We are reviewing this situation, and if we determine that a supplier uses slave or child labor, appropriate action will be taken,'' says Frederique Le Greves, a U.S. spokeswoman for Tokyo-based Nissan.

Toyota, based in Toyota City, Japan, will remind suppliers that it doesn't accept parts from companies engaging in illegal or unethical practices and will ask them to check for abuses, spokesman Dan Sieger says.

Slave-labor charcoal camps like Transcameta are scattered along the Amazon in Brazil, in a rain forest that covers an area 10 times the size of France, says Marcelo Campos, who runs the Brazilian labor ministry's Grupo Especial de Fiscalizacao Movel, or Special Mobile Enforcement Group.

`Cheap Labor'

``Slavery is endemic to the charcoal camps that supply the pig iron industry,'' says Campos, whose group has freed more than 20,000 slaves in the past decade. ``We see it time and time again.''

Campos says worldwide demand for pig iron drives the use of slaves.

``These are people who have absolutely no economic value except as cheap labor under the most inhumane conditions imaginable,'' he says. ``And none of it would exist without multinational companies demanding the products they produce. They are a key part of the globalized, export-oriented economy Brazil thrives upon.''

Pig iron producer Cosipar, based in Maraba, Brazil, was buying most of the charcoal produced by slaves at Transcameta, says Luercy Lino Lopes, a labor prosecutor who participated in the September raid on the camp.

`Degrading Conditions'

``They have a direct responsibility for those workers and the conditions at the camp,'' says Lopes, 43, who has been inspecting charcoal camps since 1993. During the raid, the task force ordered Transcameta to shut down, and Cosipar agreed to pay back wages to all workers, Lopes says.

Cosipar Executive Vice President Claudio Monteiro says he doesn't think workers at Transcameta were slaves because they weren't being held by force. ``They were degrading conditions,'' he says. ``But this is not slavery.''

He says Cosipar, a privately held company, has built bathrooms and barracks for workers as required by inspectors. Transcameta, which supplies 7 percent of Cosipar's charcoal, has reopened and is legally producing charcoal now, Monteiro, 35, says.

Cosipar sells most of its pig iron to National Material Trading, he says.

`Not Fast Enough'

Charlotte, North Carolina-based Nucor has bought pig iron from suppliers that Brazilian labor officials say used slaves to produce charcoal.

Nucor Chief Executive Officer Daniel DiMicco says the company will launch its own investigation into whether its pig iron is derived from slave labor. ``We will look into the allegations,'' he says. ``If verified, we will not be buying from those brokers and producers until those matters are remedied according to Brazilian law.''

DiMicco says Nucor's suppliers told the company two years ago that Brazilian pig iron wasn't the product of slave labor. ``I was hopeful that the Brazilian government would have remedied this situation when it was first brought up several years ago,'' he says. ``Apparently, they're making headway, but not fast enough.''

Nucor will buy about 2 million tons of pig iron this year, including 150,000 tons from National Material Trading, Nucor General Counsel Douglas Gunson says. Of that, 760 tons come from Cosipar, he says. ``Any amount that is sold with the use of slave labor is too much,'' he says.

Zero Tolerance

Just a hint of slavery in a supply chain is unacceptable, says Kevin Bales, president of Free the Slaves, the U.S. arm of the oldest human rights group in the world. ``Slavery is a very serious crime,'' says Bales, author of Disposable People: New Slavery in the Global Economy (University of California Press, 324 pages, $19.95).

``It's not a crime where it's OK to have a little,'' Bales says. ``This is a crime where all national and international law makes clear that a single instance is far too much.''

The immigration and customs enforcement arm of the U.S. Department of Homeland Security has active investigations into imports of commodities from Brazil that may have been produced by forced labor, spokesman Dean Boyd says.

Companies that knowingly buy such products can be prosecuted under the U.S. Tariff Act of 1930, he says.

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