On Tuesday, we explained here that Brazil gets high marks for enlisting businesses in the country’s campaign to eradicate modern slavery. Yesterday we profiled in some detail one of the two instruments that leaders in the country’s private sector use in their efforts to eradicate modern slavery from their supply chains: the Dirty List. Today, we profile the other: the National Pact to Eradicate Slave Labor.
The National Pact was established in 2005 by the UN’s International Labor Organization and three Brazilian non-profits: Instituto Ethos, a forum for corporate social responsibility in Brazil, the human rights organization Observatorio Social and the journalist collective Repórter Brasil.
The Pact itself is a two-page document. It establishes the existence of modern slavery in Brazil. It acknowledges the country’s obligation under international law to eradicate it. And it invites companies operating in Brazil that want to join the country’s fight against slavery to commit voluntarily to 10 specific measures in that effort, including but not limited to these: implement clear policies to eliminate slavery from their supply chains and restrict commercial relationships with business partners that appear on the Dirty List; support information campaigns designed to prevent slavery as well as efforts to reinsert workers rescued from slavery into the Brazilian economy; support public-sector efforts undertaken as part of the National Plan to Eradicate Slave Labor; monitor progress against corporate performance indicators; and report the results publicly. For more detail, see the full text of the National Pact.
At its height, the National Pact had more than 300 signatories representing over 30 percent of Brazil’s GDP. They included powerful national brands and the Brazilian subsidiaries of leading global brands. Think Coca-Cola. McDonald’s. Wal-Mart. This was not a fringe effort.
(There were no coffee companies on the list of signatories despite the fact that a small number of coffee farms appeared on the Dirty List for years.)
Over the past year, the National Pact has been institutionalized in InPACTO—the Institute for the National Pact to Eradicate Slave Labor—a trade association focused exclusively on collaborative efforts among dues-paying members committed to the goals of the National Pact. Whereas the National Pact process was governed by a steering committee comprised of the four founding members, InPACTO is now led by a full-time Executive Director and a Board of Directors comprised of representatives from different sectors of the Brazilian economy and currently chaired by Wal-Mart Brasil.
Our own conversations with companies that were National Pact signatories and are currently InPACTO members revealed three principal sources of member value to date:
Actionable information. Thanks to its coordination with public-sector authorities under the National Plan to Eradicate Slave Labor, InPACTO offers its members access to real-time information about labor inspections, giving them information about potential sources of supply chain risk. Since the time from inspection to inclusion on the Dirty List is frequently two years or more, InPACTO are rarely surprised to see a supply chain partner turn up on the list. One InPACTO member told us: “We know who is being investigated and who might appear on the list usually two years before it happens. That is the most critical information you can have.”
Brand resilience. Several members of InPACTO told us that membership gives them “brand resilience.” The public commitment and financial investment they make in eradicating slavery as members of InPACTO, they suggest, helps them build goodwill in the event that they might one day need to tap a reserve of it. I spoke with a sustainability director whose company has been working on sustainable sourcing and traceability in the agriculture sector for more than 20 years. The company is proud of the system it has built, and believes it is doing as much as it can to manage supply and reputational risk through that system. But it understands that agriculture is tricky, and there is a lot happening in the field that it is hard to monitor. It knows that one day it may find evidence of slavery in its supply chains. If and when that happens tomorrow, they believe they will benefit from their good faith effort to be part of the solution today.
Corporate visibility. Finally, InPACTO offers companies that have been working hard on sustainability issues a forum to showcase their practices while exchanging information and ideas with peers in a pre-competitive environment. The sustainability director we mentioned above is proud of his company’s sourcing program, and the company includes it in its corporate communications. Active participation in a voluntary initiative like InPACTO, however, brings a kind of external validation of their work that even the best corporate communications can’t deliver.
InPACTO understands that the game has changed with its restructuring, and that the cost of participating is higher. It is working to raise its game and is currently focused on developing services that will enrich its value proposition to members: supply-chain monitoring, performance assessment and benchmarking, advisory services, and action planning. It has also begun working strategically to facilitate sectoral processes in specific supply chains and moving to create industry-specific working groups.
(The organization is keen, incidentally, on the idea of forming a coffee sector working group.)
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This post is the seventh in an eight-part series on the CRS Coffeelands blog about modern slavery in Brazil’s coffee sector. The series draws on research coordinated by CRS and conducted by Repórter Brasil with the generous support of the Howard G. Buffett Foundation and allies working in the coffee sector, including: Allegro Coffee Company, CRS Fair Trade, Fair Trade USA, Equal Exchange, Keurig Green Mountain, Lutheran World Relief, the Specialty Coffee Association of America, United Farmworkers, UTZ Certified and others. The views expressed in this series are those of its author. They do not necessarily reflect the views of the companies or organizations that provided financial support for the research that informed this series.