JBS NV and Cargill Agrícola SA are currently embroiled in a public civil action initiated by Brazilian prosecutors. Authorities have uncovered evidence suggesting that both companies have systematically procured supplies from vendors associated with labor conditions resembling slavery.
This legal action is part of a broader initiative called “Reação em Cadeia” or Chain Reaction, led by the Public Prosecutor’s Office for Labor. The operation aims to expose modern slavery within Brazil’s supply chains and encompasses over 30 Brazilian companies and public entities.
Prosecutors have formally requested clarifications from these companies regarding their transactions with suppliers identified as employing slave-like labor. The financial implications of these operations are significant, exceeding 48 billion reais (approximately $9.6 billion), linked to commercial activities with suppliers on the Labor Ministry’s “dirty list.”
Evidence and Investigations: Luciano Aragão, the national coordinator of the Public Prosecutor’s Office for Labor, stated that there is robust evidence indicating that JBS and Cargill have engaged with vendors who subject workers to conditions akin to slavery. However, specific details regarding the labor conditions have not been disclosed. A recent inquiry in Pará highlighted JBS's cattle purchases from farms listed as problematic by the ministry.
As the investigation progresses, additional companies may be scrutinized, with outcomes ranging from compliance verification to the necessity of signing conduct adjustment agreements. Notably, JBS and Cargill have opted not to sign such agreements, which would have mandated enhanced oversight of their supply chains. In contrast, nine other companies, including Gol Combustíveis SA, have agreed to stricter compliance measures.
Implications for Corporate Accountability: This operation reflects an increasing focus on corporate supply chains in Brazil, particularly in the agriculture and fuel sectors, as authorities intensify their efforts to combat forced labor. Since 2013, Brazil’s agricultural sector has reportedly accounted for approximately 3.2 billion reais in transactions with suppliers identified as using slave-like labor.
The ministry has indicated that labor prosecutors have produced over 30 technical tracking reports detailing the flow of goods and services in critical economic sectors. This national data consolidation underscores a troubling reality: major companies and economic groups, often generating billions in revenue, appear to benefit directly or indirectly from a degraded workforce.
Companies failing to meet due diligence requirements may face significant penalties, including financial compensation for moral and collective damages, along with fines for inadequate monitoring of their supply chains.
