(Bloomberg) -- JBS NV and Cargill Agrícola SA are defendants in a public civil action brought by Brazil prosecutors after authorities determined the companies had systematically sourced supplies from vendors linked to slavery-like labor conditions.
The case is part of “Reação em Cadeia,” or Chain Reaction, an operation by the Public Prosecutor’s Office for Labor exposing traces of modern slavery across Brazil’s supply chains. The investigation, covering the period from 2024 through 2026, targets more than 30 Brazilian companies and public entities.
Companies have been formally notified to provide clarifications over transactions with suppliers determined to have used slave-like labor. Prosecutors said the financial volume traced exceeds 48 billion reais ($9.6 billion) in commercial operations between top-tier companies and suppliers on the Labor Ministry’s so-called dirty list.
“The Public Prosecutor’s Office for Labor has strong evidence that these companies systematically acquired supplies from vendors who subjected workers to conditions analogous to slavery,” national coordinator Luciano Aragão told journalists in Brasilia on Wednesday.
The prosecutors didn’t give details of evidence related to the labor conditions. A recent civil inquiry by prosecutors in the state of Pará that cited JBS focused on purchases of cattle from farms included on the ministry’s “dirty list.”
Aragão said additional companies are under review and could either be found compliant or required to sign a conduct adjustment agreement.
JBS and Cargill declined to sign a conduct adjustment agreement that would have required stronger oversight of their supply chains, authorities said. The companies didn’t immediately respond to a request for comment.
Nine other companies, including Gol Combustíveis SA, agreed to the terms and committed to stricter compliance measures.
The operation underscores growing scrutiny of corporate supply chains in Brazil, particularly in agriculture and fuel distribution, as authorities step up efforts to combat forced labor practices. Since 2013, Brazil’s agricultural sector has accounted for roughly 3.2 billion reais in purchases from suppliers identified as using slavery-like labor, according to prosecutors.
“Throughout this first phase, labor prosecutors across the country produced more than 30 technical tracking reports, mapping the flow of goods and services in key sectors of the economy,” the ministry said in a statement. “The consolidation of this national data reveals a challenging scenario: Large companies and economic groups, often with billions in revenue, appear as direct or indirect beneficiaries of a degraded workforce.”
Among the penalties established for companies that fail to meet due diligence requirements are financial compensation for moral and collective damages, as well as fines for failing to ensure proper monitoring of their supply chains.
--With assistance from Dayanne Sousa.
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