Pig-Iron Supplier Linked to Slave Labor

Ford suspends importer cited in investigation

November 6, 2006 -- National Material Trading Co., Elk Grove Village, IL, has imported and distributed Brazilian pig iron produced by a company that is said to rely on slave labor for its supply of charcoal. The allegations are contained in a long report published by Bloomberg News based on its investigation of widespread use of “slaves” to produce charcoal, harvest mahogany, and mine gold in Brazil.

Brazil is among the leading exporters of pig iron, but a weak international market for the metallic puts pricing pressure on the producers. In Brazil, charcoal produced in kilns near the forests where the wood is harvested is the primary carbon source for smelting iron from ore.

National Material Trading imports 1.5 million metric tons of pig iron per year. Among its pig-iron suppliers is Brazil's Companha Siderrgica do Para S.A., or Cosipar. It sources charcoal from a range of operations situated in remote Amazon locations, staffed by poor workers recruited by the promise of steady employment. Once employed, the workers are charged by the employers with debts relating to food, clothing, and housing, and made to work under pressure. The low wages are frequently delayed for weeks or months, according to the investigation.

The circumstances are common enough that Brazil's Labor Ministry employs special agents to investigate the work camps to document the circumstances and charge the violators.

Whether or not the circumstances constitute “slavery” is debatable to some, but Brazilian law identifies slavery as “severely degrading” labor conditions. The International Labor Organization, a U.N. agency, claims about 1 million men and women work as forced laborers for little or no wages in Latin America.

The allegations and the links to National Material Trading Co. were enough for Ford Motor Co. to suspend shipments from the company in early October. Ford had sourced the pig iron for its Cleveland Casting operation.

Other metalcasting companies listed as customers of National Material Trading in the Bloomberg report include Intermet Corp., Kohler Corp., Thyssen Krupp Waupaca, Whirlpool Corp. Nucor Corp., an electric steelmaker, also is named.

Intermet president Jeff Mihalic denied his group buys pig iron produced with material produced using slave labor. A Kohler spokesman decried the practice and stated the company will investigate the issue.

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