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 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.