VZCZCXRO9524
RR RUEHRG
DE RUEHBR #1044/01 2361033
ZNR UUUUU ZZH
R 241033Z AUG 09
FM AMEMBASSY BRASILIA
TO RUEHC/SECSTATE WASHDC 4916
INFO RUEHRG/AMCONSUL RECIFE 9842
RUEHSO/AMCONSUL SAO PAULO 4434
RUEHRI/AMCONSUL RIO DE JANEIRO 8102

UNCLAS SECTION 01 OF 02 BRASILIA 001044 
 
SIPDIS 
SENSITIVE 
 
E.O. 12958: N/A 
TAGS: EAGR ENRG PGOV ELAB BR
SUBJECT: TRIPARTITE DIALOGUE RESULTS IN AGREEMENT TO IMPROVE LABOR 
CONDITIONS IN SUGARCANE INDUSTRY 
 
¶1.  (U) SUMMARY: Responding to international concerns over poor 
working conditions and forced labor in the sugarcane sector, 
Brazil's President Lula signed on June 25, 2009, the National 
Commitment to Improve Labor Conditions in Sugarcane Activity. A 
tripartite dialogue between organizations representing businessmen, 
workers and the Federal Government of Brazil developed the 
Commitment during a year of negotiations led by the Secretary 
General of the Presidency, Luiz Dulci. This is the first nationwide 
labor accord with the entire sugarcane sector, and is particularly 
relevant to Brazil's interest in increasing international investment 
in its sugarcane ethanol production. However, without significant 
funding and action by the GOB, implementation of the National 
Commitment throughout the country depends considerably upon efforts 
of the private sector companies involved. END SUMMARY. 
 
Terms of Commitment 
------------------- 
 
¶2. (U) The National Commitment addresses business practices and 
public policies aimed at improving labor conditions in the 
cultivation of sugarcane. The Commitment requires mills to engage in 
direct hiring of workers for manual planting and harvesting of 
sugarcane, thus eliminating irregular intermediaries. Mills are also 
obliged to ensure transparency in measuring and paying for worker 
production, providing support and transportation for migrants hired 
from other regions, enhancing labor health and safety, strengthening 
unions and collective bargaining practices, and disclosing good 
business practices to sugarcane suppliers. The Federal Government is 
committed to encouraging actions that ensure adequacy of Personal 
Protective Equipment (EPI) used by workers, improving the Public 
Employment System's services in hiring workers, advancing literacy 
and workers' schooling, promoting qualification and requalification 
of workers, and strengthening services in regions prone to 
immigration for seasonal work. 
 
¶3. (U) Adherence by the sugar and ethanol companies to the 
Commitment is voluntary. Companies that sign are subject to 
inspections by the National Commission for Dialogue and Evaluation, 
which is composed of the Commitment's signatories. The National 
Commission is responsible for creating a system of evaluation and 
recognition for companies that carry out the Commitment's good 
business practices, establishing criteria for implementation and 
evaluation, and discussing the Commitment's revision after its 
two-year validity. According to Marcos Sawaya Jank, President and 
CEO of the Brazilian Sugarcane Industry Association (UNICA), the 
National Commission has met twice and agreed that mills will have 
one year from the time they sign the Commitment to comply with its 
mandates; those mills found in compliance with the Commitment's 
requirements at the time of inspection will receive a 'conformity 
certificate.' Jank added that the third meeting of the National 
Commission will define procedures for mills that do not comply with 
the Commitment. 
 
Hitting the Ground Running? 
-------------------------- 
 
¶4. (U) Marcos Sawaya Jank reported that in the beginning of June 
2009, UNICA, the Federation of Waged Rural Employees in the State of 
Sao Paulo (FERAESP), Syngenta, John Deere and Case New Holland, with 
support from the Inter-American Development Bank (IDB), launched the 
largest retraining and requalification program for the sugar-energy 
industry in the world. Jank told pol assistant that more than 7,000 
workers in six sugarcane regions in Sao Paulo will benefit from the 
program each year. 4,000 manual laborers will be retrained for jobs 
in the sugarcane sector, such as specialized driving, operating 
tractors, and mechanical and electrical operations. The other 3,000 
will be trained to work outside the sector in jobs such as 
reforestation, construction and tourism. Jank also commented that 
training will be specific to each region, allowing individuals in 
the unions to identify the courses they need. Jank stated that the 
training will be paid for by the mills and UNICA, with likely 
support from an IDB grant. In an article that appeared in "O Estado 
de S. Paulo" on June 25, 2009, Jank wrote, "These are groundbreaking 
advances which will have a far-reaching effect and should be 
recognized as historic steps in the direction of a better future." 
Jank told pol assistant that over 80 percent of Brazilian companies 
involved in sugarcane production have already agreed to the 
Commitment, accounting for approximately 90 percent of sugarcane 
production in Brazil. Although Jank remained optimistic about the 
Federal Government's involvement, he noted that the GOB has not 
implemented any policies or projects, nor directed any funds for the 
Commitment. 
 
¶5. (U) Geraldo Melo Correa, Special Assistant to the Secretary 
General of the President of the Republic, commented that the 
programs necessary for the Federal Government to meet its 
responsibilities already exist, but that the companies in the 
sugarcane industry need to implement good business practices to 
comply with the National Commitment. Correa stated that although the 
 
BRASILIA 00001044  002 OF 002 
 
 
mechanization process is necessary for the expansion of Brazil's 
sugar-based ethanol industry, it is also leading to the loss of jobs 
for sugarcane workers: one machine provides as much labor as 100 
sugarcane workers. In Correa's opinion, the Commitment will play a 
vital role in helping laid-off workers find new jobs. 
 
¶6. (SBU) Despite the positive remarks and press highlighting the 
Commitment's achievements, skeptics remain. Dr. Otavio Brito Lopes 
(protect), Prosecutor General of Labor, told pol assistant that he 
believes the National Commitment will not bring about true changes 
in labor conditions within the sugarcane sector. 
 
¶7. (SBU) Comment: UNICA is clearly invested in improving business 
practices in the sugarcane sector and has taken concrete actions, 
but the degree to which the Federal Government will actively advance 
the plan is not yet clear. UNICA has undertaken similar creative 
initiatives in the past to address negative perceptions of the 
industry.  UNICA is best positioned to effect the implementation of 
the Commitment in the State of Sao Paulo, where most of its members 
are located, but success in other areas may rely more heavily on the 
GOB taking an active role.  Given the GOB's tendency to announce 
high-profile programs with little funding or delayed follow-up, an 
active role for the GOB is less than a certainty.   Nevertheless, 
the program's rollout demonstrates that international pressure 
regarding labor conditions in the sugar industry is having an effect 
on Brazilian government and business. Businesses recognize that 
improving labor conditions is beneficial to their bottom line, and 
the government is realizing that the issues must be dealt with to 
protect its reputation and the future of Brazilian industry. 
 
KUBISKE