Earlier this week, we reported that Nucor, the biggest steel manufacture in the U.S. and the the biggest buyer of Brazilian pig-iron, has agreed to take steps to eliminate slavery in its supply chain. Pig-iron is used by virtually every car manufacturer, including Ford and General Motors. The “Socially Responsible Investment” firm Domini worked, in part, with Free the Slaves partners Reporter Brasil and Comissão Pastoral da Terra to negotiate this agreement with Nucor. In an email today, Reporter Brasil President Leonardo Sakamoto sent us his thoughts:
“We expect good results on Nucor/Domini action. You can say that it’s an important step toward—finally—bring car industries to join the Brazilian National Pact for the Eradication of Slave Labor. The Pact has been signed by important companies that promised to cut out business relationships with employers that used slave labour in their farms and charcoal camps. Companies like Wal-Mart, McDonald’s, Carrefour, Cargill, Bunge, Vale, Petrobras, Mahle, among others that represents 20% of Brazil’s GDP.Until now, not a single representative from the car industry had signed the pact. And almost all car companies produce in Brazil, including Fiat, Ford, GM, Toyota, Volkswagen, Renault, Peageut, Scania and Volvo. It’s a challenge.”
Reporter Brasil conducted a comprehensive study that exposed Brazilian slave labor in the supply chains of several industries, including cattle ranching, coal, soy, cotton, lumber, corn, rice, beans, fruits, potato and sugarcane. With the results of this study, a “dirty list” of companies that use slave labor was created—and with it, the Brazilian National Pact for the Eradication of Slave Labor. In its agreement with Domini, Nucor says it will only work with pig-iron suppliers that have either signed the Pact, or have joined the Citizens Charcoal Institute (an association of Brazilian companies that works to eliminate slavery in their supply chains).
Domini Social Investments takes a pragmatic approach to advancing social causes: only invest in companies that are socially and environmentally responsible. The $1.8 billion firm’s CEO and co-founder, Amy Domini literally wrote the book on socially responsible investing back in 1984. She is considered the groundbreaker and Grande Dame of the SRI movement.
Recently, DSI flexed their SRI muscle and made significant advances in minimizing slavery in the Brazilian steel industry. Three years of negotiations with Nucor, the largest steel manufacturer in the U.S., and the biggest buyer of Brazilian pig-iron yielded an agreement to enforce a comprehensive review process of Nucor’s steel supply chain.
Back in 2006, Bloomberg Markets published a feature article on slavery and illegal deforestation in the charcoal camps of Brazil—and its connection to American industry.
Charcoal from some of these camps was used to produce pig-iron, a key ingredient in steel, used by virtually every major auto manufacturer including Toyota and General Motors. The Bloomberg story shed light on how modern day slavery lives in the supply chain of products consumed every day in the U.S. (You can download the story here.)
According to an announcement released by DSI, their agreement with Nucor will focus directly on the pig-iron supply chain. Nucor will do the following:
- Ensure that all its top-tier pig-iron suppliers in Brazil either join the Citizens Charcoal Institute (an association of Brazilian companies that works to eliminate slavery in their supply chains), or sign the Brazilian Pact for the Eradication of Slave Labor (pledging not to buy from suppliers on the Brazilian government’s “dirty list“).
- Publish an annual progress report on these activities.
DSI calls this action “Shareholder Activism”—leveraging one’s rights as part owners of a corporation to influence the business decisions of the management.
Back in 2008, Free the Slaves bestowed our annual Harriet Tubman award on two Brazilian anti-slavery organizations that work to eradicate slavery in Brazil, including in the charcoal camps: Reporter Brasil and Comissão Pastoral da Terra. Both of these organizations helped provide information used by DSI in its dialogue with Nucor.
Read more about their work here.