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RIO DE JANEIRO (Reuters) - Around 12 percent of Brazil's Amazon charcoal works still uses slave labor despite a major crackdown since 2004, the regional industry watchdog, Citizens' Coal Institute (ICC), said.
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Charcoal from the region's works is supplied to local producers of pig iron, a raw material for steelmaking.
Brazil's Carajas region in the Amazon is one of the world's major pig iron exporting centers, with exports of around 6 million tonnes per year. The Carajas region has a total of 1,500 charcoal works, according to the ICC.
"Great progress has been made, with the shutting down of 316 charcoal works that committed infractions," said Claudia Brito, ICC technical director, late on Friday.
The region's main villain today is the agricultural sector, which has a slave labor incidence much higher than the charcoal sector, Brito said in a telephone interview.
But charcoal producers have come under international scrutiny by U.S. pig iron consumers who do not like the idea that the origin of imported materials for their own products can be unethical for either labor or environmental reasons.
Brazil's Companhia Vale do Rio Doce (CVRD), the world's largest iron ore miner, last week announced it was axing iron ore supplies to two Para state pig iron producers, Cosipar and Usimar, because their activities "do not comply with the environmental and/or labor legislation in force in Brazil."
According to the ICC, the inhuman conditions which characterized slave labor in the past at some charcoal-making companies in the states of Maranhao, Para, Tocantins and Piaui have been largely eradicated.
"However, there are still striking differences between conditions from one state to another," Brito said.
"Slave labor has been largely eradicated among charcoal producers in Brazil's Maranhao state, although Para state still presents serious problems in this respect," she said.
Para state, which is a bigger producer of charcoal than Maranhao, is "the champion of slave labor in Brazil, with continuing problems in the charcoal sector," Brito said.
The main problem is that in Para there are several charcoal suppliers for each pig iron producer and supply links are not well-established.
Before 2004, when the institute started inspecting charcoal producers, only 2 to 5 percent of them in Maranhao state were in legal order, she said.
"Now 95 percent of these works are in order," she said.
"All the 316 works discredited by ICC members, which subsequently shut down, were in Maranhao state ... In Maranhao state each pig iron producer has a captive charcoal supplier which is thus forced to abide by the buyers' legal requirements," Brito said.
Maranhao-based ICC was formed and is financed by a group of 14 Carajas area pig iron producers including CVRD, Cosipar and Usimar following a pact they signed with Brazil's labor ministry to combat slave labor in September 2004.
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