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Summary:

As if biofuels needed any more negative press, along comes this doozy. A Brazilian ethanol firm backed by hundreds of millions of dollars from a who’s who list of investors — among them former President Bill Clinton, cleantech VC Vinod Khosla, supermarket bigwig Ron Burkle, AOL […]

guardianbrazilethanol.jpgAs if biofuels needed any more negative press, along comes this doozy. A Brazilian ethanol firm backed by hundreds of millions of dollars from a who’s who list of investors — among them former President Bill Clinton, cleantech VC Vinod Khosla, supermarket bigwig Ron Burkle, AOL co-founder Steve Case and ex-World Bank President James Wolfensohn — is being accused of “terrible” working conditions in a Brazilian labor probe. The company, called Brazil Renewable Energy Co. and known as Brenco, raised $200 million in financing from investors in March 2007 and aims to be one of the largest ethanol producers in the world.

The findings were pretty bad. According to the AP, the living conditions for 133 of Brenco’s sugarcane workers were found to be “degrading;” workers were hungry and cold and the sites were overcrowded. This isn’t the first time Brazil’s ethanol industry has come under fire for substandard working conditions ( for more info. see the documentary film, “Deadly Brew, the Human Toll of Ethanol”). And the Guardian described the conditions of Brazil’s ethanol workers in a story last year as:

“12-hour shifts in scorching heat and earning just over 50p per tonne of sugar cane cut, before returning to squalid, overcrowded “guest houses” rented to them at extortionate prices by unscrupulous landlords, often ex-sugar cutters themselves.”

Brenco’s been quickly scaling its operations as it reportedly aims to reach an annual output of 1 billion gallons of ethanol from sugarcane by 2014. The company plans to spend $2.2 billion to build 10 ethanol mills with 1.5 million acres of sugarcane.

And as Alarm Clock points out, that operation will “need a massive upgrade to working conditions to prevent Brenco’s American investors from being forced to withdraw.” Investors quoted in the AP story say that the Brazilian ethanol producer will move fast to try to rectify the situation. We contacted Khosla Venture’s PR team and are waiting to hear back. Hopefully Brenco cleans up quick, but the investors should have been watching their backs all the same.

Photo courtesy of the Guardian.

  1. There should be Fair Trade Ethanol like other Fair Trade products to ensure that workers are treated right.

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  2. Labor Ministry lifts restrictions over Brenco’s Operations

    BRENCO – Companhia Brasileira de Energia Renovável hereby informs that, on the date hereof, Ms. Jacqueline Carrijo, the Labor Ministry auditor leading the taskforce that has been investigating the company’s operations, stated that BRENCO “fully complied with all requirements presented by the Labor Ministry”, addressing all issues raised by her last Friday. BRENCO presented to the Labor Ministry the measures it has adopted during the past days for the addition of steel cables for the attachment of security belts to its trucks, the repair of one of its recently built Lodging Center’ bathrooms, as well as the modification of a bus and sanitary facilities of one of its planting sites.
    BRENCO is a Brazilian company created to produce ethanol and power from sugarcane. Its shareholder base includes both Brazilian and foreign investors. BRENCO is a company that abides to the highest standards with regards to corporate governance and to the welfare of its workforce, directly hiring and registering all its employees, including those hired for a pre-established period, pursuant to all applicable Brazilian regulations. BRENCO provides its employees with health insurance and dental plans, life insurance, high-quality meals supplied by a specialized company, individual protection equipment, sunscreen and physical training and exercise.
    Sustainability aspects are also considered in BRENCO’s entire production chain. In such sense, it is important to stress that BRENCO’s sugarcane harvests will be 100% mechanized, without burning of sugarcane.
    For more information, please contact our press advisor:
    CDN – Comunicação Corporativa
    Edson Gushiken 55 (11) 3643-2767

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  3. [...] under construction at a cost of $2.4 billion. While the company suffered some bad PR following accusations of illegal labor practices, the Brazilian Labor Ministry has lifted the operation restrictions and declared Brenco [...]

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