brazil - country of diversities and inequalities

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Brazil – Country of Diversities and Inequalities February 06

SustainAbility Brazil Country Study February 06

Table of Content 1 Introduction ................................................................................................................. 4 2 Governance................................................................................................................. 7

2.1 Political History ................................................................................................... 7 2.2 Current Politics ................................................................................................... 7 2.3 Governance ........................................................................................................ 8 2.4 Judiciary.............................................................................................................. 8 2.5 Civil Society ........................................................................................................ 9

3 Economics................................................................................................................. 11 3.1 General Characteristics .................................................................................... 11 3.2 Trade ................................................................................................................ 12 3.3 Business ........................................................................................................... 13 3.4 Poverty and Inequality ...................................................................................... 13 3.5 Employment...................................................................................................... 14 3.6 Land Distribution............................................................................................... 15

4 Society ...................................................................................................................... 16 4.1 Demographic Data and Trends......................................................................... 16 4.2 Human Development and Education ................................................................ 16 4.3 Food Security.................................................................................................... 17 4.4 Health ............................................................................................................... 17 4.5 Labour Rights ................................................................................................... 18 4.6 Human Rights ................................................................................................... 19 4.7 Violence and Organised Crime......................................................................... 21 4.8 International Treaties ........................................................................................ 21

5 Environment .............................................................................................................. 23 5.1 Geography ........................................................................................................ 23 5.2 Environmental Regulation................................................................................. 23 5.3 Water ................................................................................................................ 24 5.4 Air Pollution....................................................................................................... 24 5.5 Energy .............................................................................................................. 25 5.6 Biodiversity ....................................................................................................... 25 5.7 International Treaties ........................................................................................ 26

6 Corporate Responsibility (CR)................................................................................... 28 6.1 Overview........................................................................................................... 28 6.2 Governance and Management ......................................................................... 29 6.3 Accountability and Engagement ....................................................................... 30 6.4 Economic Impacts ............................................................................................ 31 6.5 Social and Community Development................................................................ 32 6.6 Environmental Actions ...................................................................................... 33

7 Best Practice Case Studies....................................................................................... 34 7.1 Natura ............................................................................................................... 34 7.2 ABN Amro Real ................................................................................................ 35 7.3 Native................................................................................................................ 36

8 Appendix One: Progress on Selected MDGs............................................................ 37 9 Appendix Two: Civil Society Organisations............................................................... 38


Map of Brazil

Source: Merriam-Webster, www.m-w.com/cgi-bin/nytmaps.pl?brazil


1 Introduction The SustainAbility Series of Country Studies has been developed to provide an informed and factual tour d’horizon of the key dimensions of our four key Emerging Economies: Brazil, China, India and South Africa. The aim is to provide an informed overview of the recent history and governance for each country; its economic and trade situation; the social and environmental context; and trends in corporate responsibility, including best practice and influential civil society organisations. All the country studies are researched and written by SustainAbility, with input and review by local experts. We would particularly like to thank the reviewers of the Brazilian country study for their comments and advice: − Nelmara Arbex, Corporate Responsibility Manager, Natura − Claudia Lins, Director, Brazilian Foundation for Sustainable Development (FBDS) − Carlos Nomoto, Vice President for Education and Sustainable Development, ABN

Amro Real − Tarcila Reis Ursini, Research Manager, UniEthos Initial input was also received from Soren Knudsen, Helio Mattar, Joe Sellwood, and Carmen Weingrill. Introduction Brazil has the largest economy in South America and the ninth largest in the world. It is a country of extremes, with extraordinary social, cultural and ecological diversity. Embracing the Amazon rainforest and the sprawling cities and shanty towns of Sao Paulo and Rio de Janiero, it is a land where modern industry and commerce has flourished alongside extraordinary inequality, poverty, crime and violence. In part because of these extremes, Brazil has long been associated with sustainable development: hosting the first Earth Summit in 1992 and convening the first World Social Forum in 2001. The country’s incumbent President Lula was elected on a platform to address some of the fundamental challenges of inequality, although his government has since been shaken by revelations of endemic corruption. In a year when Brazil will again be in the spotlight – with federal elections this autumn – this Country Study aims to provide an overview of the tensions, challenges and opportunities for sustainable development and corporate responsibility in Brazil. Global Influence In economic and political terms, Brazil is set to be amongst the major players shaping the world in the 21st century. Since returning to democracy in 1985, the country has been slowly gaining economic and political stability, while developing an increasingly central role in international affairs. For instance, Brazil has been advocating reform of the UN Security Council, to make space for major developing countries and - particularly under President Lula - has been working with countries like India and South Africa to push for world trade reforms, especially around agricultural subsidies. Whatever the outcome of the 2006 elections, Brazil will continue to play a pivotal international role.


Economic Reform Brazil has the most productive industrial base in the southern hemisphere, with important industries in automobiles, steel, petrochemicals, computers and aircraft. Nevertheless, low-value added primary products make up a significant proportion of the country’s exports – especially as China has become Brazil’s third leading export destination, based predominately on primary products like soya and iron ore. These strong export levels have converted Brazil’s trade deficit into a surplus and been an important factor in the 5% growth the economy underwent in 2004. Inequality Brazil continues to face many of the same social challenges as other developing countries – around poverty, health, education, food security, human rights and governance – although these are exacerbated by great extremes of inequality: a legacy that has its roots in the 16th century and Portuguese colonial rule. As a result, Brazil has amongst the highest income inequality in the world – with the richest 10% of Brazilians receiving 50% of the nation’s income, while the poorest 10% receive less than 1%. Brazilians also suffer from inequitable access to services like social welfare, and assets, particularly land. While there are ongoing efforts around land reform, continued disappointment – especially with the failure of the Lula administration, which was elected in part to tackle this problem – has led to ongoing and wide-scale land occupations, accompanied at times by violence and the death of protestors. The high level of violence in Brazil’s cities, amongst the highest of any region not at war, is another legacy of extreme inequality. Environment Brazil is, of course, home to the Amazon rainforest – consisting of 30% of all remaining tropical forestland in the world and providing shelter to 10% of all plant and animal species. However, illegal logging, cattle ranching, commercial agriculture and settlement/ subsistence farming are major ongoing causes of deforestation, which often goes unchecked due to weak law enforcement. Brazil is also the third highest energy consumer in the Americas, after the US and Canada. Renewable energy sources are being increasingly developed, however, and the country is already the world’s largest consumer and producer of ethanol from sugar cane. Business and Corporate Responsibility The corporate responsibility (CR) movement in Brazil has its roots in the 1980s with Brazil’s redemocratisation and the rise in civil society movements. It has tended to focus on social issues driven by domestic concerns and domestic actors. CR activities have also been largely philanthropic and associated particularly with community investment. Nevertheless, public pressure has been rising and there are indications that Brazilian companies are taking a more strategic approach. In December 2005, for example, the São Paulo stock exchange launched a new 28-member Corporate Sustainability Index (or ‘ISE’), in line with international indices linked to Dow Jones and FTSE. Civil society has also helped focus attention on key issues, particularly around labour conditions, land, forest and biodiversity, consumer rights, transparency and accountability. Best practice case studies on ABN Amro Real, Native and Natura are available towards the end of the Country Study.


Conclusion Compared to the emerging giants of China and India, Brazil is significantly smaller in the size of both its population and its economy. Nevertheless, the country is influential – ‘punching above its weight’ in international affairs. It has much to offer the world, from innovative social models like participatory democracy and the World Social Forum, to leadership on trade reform, and the rich diversity of its people and environment. However, the country’s social, political, economic and environmental progress will continue to be hampered by the fundamental issue of inequality. Addressing the centuries-old divide in income, power and assets between the privileged few and the many will require serious and ongoing efforts on the part of government, civil society and business. SustainAbility hopes business executives seeking to develop an initial overview of corporate responsibility in Brazil find this study useful. Our Emerging Economies Team can provide more detailed and bespoke guidance and insight. For more information, please contact Jodie Thorpe at [email protected].


2 Governance

2.1 Political History 300 years of colonial rule, leaving a legacy of inequality Economy dominated by cycles of commodity exports Political and economic stability developing since 1990s Prior to the arrival of Europeans, Brazil was home to at least 1,000 indigenous tribes with a total estimated population of 5-13 million people (see page 16). The three main groups were the Guaraní, the Tupí and the Tapuia. The Tupí-Guaraní (as the first two groups are known collectively) lived along the coast, and the Tapuia lived inland. Following the arrival of the explorer Pedro Alvares Cabral in 1500, the country was under Portuguese colonial rule. In order to entice settlers, the Portuguese crown made massive land grants, with sections averaging 130 miles along the coast with boundaries extending inland. The economy was dominated by successive cycles of commodity exports, starting with wood from the ‘Pau Brasil’ tree, which provided dye to Europe’s growing textile industry and gave the country its name1. Subsequent crops included sugar, rubber and coffee. It was a rural civilisation of large plantations and estates held by wealthy Portuguese settlers. When the sugar industry developed in the late sixteenth and early seventeenth centuries, Portuguese landowners first exploited indigenous Brazilians as labour. However as these groups rapidly fell victim to European diseases or escaped into the interior, the Portuguese started bringing slaves from Africa. Brazil gained independence in 1822. Since then, the country has alternated between periods of dictatorship and democracy. A military coup in 1964 brought a series of military governments into power for 20 years, until elections in 1985 ushered in the current democratic period. Since the 1990s, Brazil has been gaining economic and political stability. Fernando Henrique Cardoso, president from 1995 to 2002, brought economic stability through reforms to deregulate, privatise and open the economy.

2.2 Current Politics President = Luiz Inácio Lula da Silva (‘Lula’) of Workers’ Party Government = Republic Capital = Brasilia Following Cardoso, Luiz Inácio Lula da Silva (known simply as ‘Lula’) of the Workers’ Party became Brazil’s first left-wing president in four decades with 61% of the vote. The general respect for democratic institutions shown by both the right and left in recent years is often highlighted as evidence of democratic and political maturity, although recent corruption scandals have highlighted systematic misappropriation of public money. Political parties in Brazil tend to be fragmented and volatile.

1 The reddish wood resembled the colour of live coals or brasa in Portuguese.


President Lula, a former shoeshine boy, metal worker and union leader, came to power in early 2003 following three unsuccessful election attempts (1989, 1994 and 1998) on a platform of poverty reduction and social reform. However, he also recognised that economic stability required a conspicuously non-socialist programme of fiscal austerity – including a major reform of the country’s pension system, which had been operating under an annual $20 billion deficit. Lula has also prioritised reform of social security, the judiciary and bankruptcy laws. He has been very active internationally – fostering a leadership role for Brazil both in South America and amongst developing countries more generally (see page 12). Despite opposition to his economic policies by some sectors of society, Lula’s popularity remained relatively high until finally being shaken in 2005 by a series of revelations around endemic corruption involving the Workers’ Party. As a result, several members of the government resigned, and the Brazilian Congress voted to expel José Dirceu, the former cabinet chief. Although Lula himself was not implicated in the corruption, the revelations of illegal campaign funding, bribing Congressmen for votes, and the theft of funds from municipal authorities and corporations owned by the government have highlighted severe inadequacies in his management of the government. They have also undermined the self-esteem of Brazilian society. Surveys mid-way through 2005 indicated for the first time that Lula could lose the next presidential elections, due to be held in October 2006. If so, his likely successor will come from former president Cardoso’s Brazilian Social Democracy Party, keeping Brazil broadly on the same economic path.

2.3 Governance 26 state governments with significant power Corruptions Perception Index = 62nd of 159 countries (2005) Brazil’s Constitution of 1988 defines the political institutions of the country. Brazil is a federal state with a strong President. It is also highly decentralised, with significant political and economic power also vested in its 26 state governments and 5,656 municipalities. Political parties tend to be fragmented, and there is a proliferation of small parties. Government effectiveness in Brazil is reasonable by Latin American standards2, although problems include the lack of clear standards for public administrators, weak administration at the local level, lack of resources and excessive bureaucracy and red tape. Although Brazil suffers from less corruption than some of its neighbours, the problem is still widespread – affecting federal and state governments, the civil service, police and the judiciary. Brazil’s police are amongst the most violent and corrupt in the world (see page 20). Although there has been increasing recognition of the problem since Brazil’s Congress voted to impeach President Fernando Collor de Mello on corruption charges in 1992, tackling the issue effectively remains a major challenge.

2.4 Judiciary Judiciary independent but slow and unreliable

2 See World Bank Institute governance indicators. www.worldbank.org/wbi/governance/govdata


Each state in Brazil has its own judicial system, while federal courts deal with disputes between states and matters outside the jurisdiction of state courts. There are some 17,000 judges across the country. Although reasonably independent, the judicial system is tremendously slow and unreliable – some would say dysfunctional. Endless rights of appeal, the ability to take even trivial cases to the Supreme Court, and other procedural delays result in impunity and lengthy trial and judgement delays. A UN observer found that just 7.8% of the country’s 49,000 murders are “prosecuted with success”.3 According to the World Bank, a simple commercial claim takes on average 546 days to be settled, amongst the slowest in the world. The judiciary has also been implicated in corruption over the years. In 2003, for example, a number of judges were found to have been selling favourable sentences to criminals. In April 2005, the Supreme Court upheld the creation of an external review body for the judiciary that could bring about some needed reforms.

2.5 Civil Society Experiments in participatory democracy and broad social movements Strong social and political engagement 8,600 NGOs See Appendix Two for a list of key civil society organisations Since redemocratisation in the 1980s, civil society and social movements in Brazil have been on the rise – developing from illegal and semi-legal social organisations to some of the most vibrant and visible in Latin America. There are roughly 500,000 non-profit organisations registered in Brazil4 – and many more informal organisations like grass roots and neighbourhood groups. Of these, nearly 9,000 are non-governmental organisations (NGOs), many established since 1985, usually by strong leaders linked to the church, academia or political parties. Brazilian NGOs have a high capacity to network around common issues – both at the national and international levels. The Brazilian city of Porto Alegre has been home to the World Social Forum since 2001, bringing together 150,000 participants from 155 countries in 2005. Porto Alegre is also known for its experiments in participatory democracy, including joint management of the city’s budget by municipal bodies and civil society. Given the high level of poverty and inequality in Brazil, the civil society agenda has tended to focus on addressing social issues and helping to meet human needs, and many charitable organisations are involved directly in service delivery to poor communities. However, environmental consciousness is also on the rise.

3 ‘Not-so-swift justice’, Economist, 25 March 2004. 4 Includes all non-profits such as religious organisations, political parties, unions and professional associations, as well as NGOs.


Social movements like the Movimento Nacional de Trabalhadores Rurais Sem Terra (Landless Workers Movement or MST – see page 15) are another new and rising phenomenon defined either by their constituency (landless workers, street children) or an issue (human rights, urban reform). These include the MST, one of the most powerful and well-known popular movements in the world, and the Central Única dos Trabalhadores (CUT), the major representative of Brazilian labour. CUT speaks for more than 3,300 local trade unions and 20 million workers.5 Press freedom is relatively secure, although media ownership is quite concentrated, with six private companies controlling over half of all television, newspaper and radio outlets. Nevertheless, the press has played an important role in exposing corruption, leading at times to journalists being targeted through threats and occasionally killings. A proposal in 2004 to create a body to regulate the press, following an article by a foreign correspondent that Lula deemed offensive, was shelved following significant opposition from the press and other sectors of society.

5 Paola Cappellin and Gian Mario Giuliani, The Political Economy of Corporate Responsibility in Brazil, UNRISD, 2004 and John Garrison, From Confrontation to Collaboration: Civil Society–Government–World Bank Relations in Brazil, World Bank, 2000.


3 Economics 3.1 General Characteristics GDP per capita (US$) = $2,788 (2003)6 GDP per capita (US$ PPP) = $7,790 (2003)7 GDP growth = 5.1% (2004)8; 1.2% (1990-2003)9 World Bank categorisation = lower middle income, severely indebted With a GDP of US $1,492 billion, Brazil’s economy is the ninth largest in the world10 and the leading economy in South America. Accounting for nearly 40% of GDP, Brazil has the largest and most productive industrial base in the southern hemisphere, enjoying a comparative advantage in industries like automobiles, steel and petrochemicals, computers, aircraft and consumer durables. Nevertheless, given the plentiful land and sophisticated technology, agriculture (soya, coffee, sugar, beef, chicken) is a critical element of the economy, accounting for 10% of GDP and 40% of exports in 2004. Brazil’s economic history is one of ‘boom and bust’, based on the exportation of a sequence of natural resources – sugar, rubber, coffee – which made sustained growth difficult. After the Second World War there was a strong push to industrialise based on import substitution, and facilitated by the large domestic market. Thirty-five years of rapid economic expansion and diversification, created the ‘Brazilian Miracle’. From 1968 to 1974 growth averaged 10%, exports quadrupled and manufactured goods finally replaced coffee as the country’s leading export. In the 1980s, however, Brazil and the rest of Latin America experienced a ‘lost decade’ of hyperinflation, mounting debt and falling industrial production. In the mid-1990s, President Fernando Henrique Cardoso deregulated and liberalised Brazil’s economy, leading to a period of reasonable growth and much welcomed lower inflation. However, crisis hit in 1998-99 with the rising deficit and in the wake of the Asian and Russian financial crises. Cardoso was forced to devalue Brazil’s currency, the real (R$) which lost 25% of its value11 against the dollar. Brazil’s debt – most of which is tied to the exchange rate – rose accordingly. By 2005, however, the real had appreciated once again to reach a 3-year high, causing concerns about a negative impact on export performance. Today, public debt and inflation remain problematic, although inflation has at least fallen from 12.5% in 2002 to 7.6% in 2004. Economic growth in 2004 was the strongest in a decade, thanks to rising commodity prices and increased consumption. Projections for 2005 are less confident, however, due to continuing high real interest rates and the

6 Human Development Report, UNDP, 2005. 7 PPP = purchasing power parity; UNDP, 2005. 8 Real GDP growth estimate. World Fact Book, CIA, 2005. 9 GDP per capita (US$) average annual growth rate. www.unicef.org/infobycountry/brazil_statistics.html 10 Based on purchasing power parity calculations. Brazil is exceeded by the US, China, Japan, India, Germany, UK, France and Italy. CIA, 2005. 11 In January 2006, the exchange rate is US$1 = R$2.29.


political crisis. Nevertheless, over the next 50 years, Goldman Sachs12 predicts that the size of Brazil’s economy will overtake Italy by 2025; France by 2031; and the UK and Germany by 2036.

3.2 Trade Exports of goods and services (% GDP) = 17% (2003)13 Imports of goods and services (% GDP) = 13% (2002)14 Trade surplus = US$13.1 bn (2003)15 Brazil’s export performance is relatively weak compared to other important developing countries. Whereas Brazilian exports make up 17% of GDP, in countries like South Africa and China the figure is around 30%. Still, compared to just 7.6% in 1999, Brazilian exporters have been performing extremely well – transforming the trade deficit of $6.6 billion in 1998 into a US$40 billion+ surplus in 2005. Major exports have included transport equipment and parts; soybeans, meat and oils; metallurgical products; and chemical products. Recently, China has become the third leading export destination for Brazil after the US and Argentina, focused on low value-added primary products such as soya and iron ore. This has increased the pressure on the environment and environmental boundaries in Brazil (see page 23). Levels of imports are also low by international standards, reflecting the diversified and relatively closed nature of the Brazilian economy. Major imports include machinery and electrical equipment, chemical products, oil and derivatives, and transport equipment and parts. Brazil’s main suppliers are the US, Argentina, Germany and Japan. Brazil helped found Mercosur in 1991 – a free trade and partial customs area with Argentina, Paraguay and Uruguay. Trade within Mercosur reached US$ 16 billion in 2001. Brazil has also been co-chair with the US of the now stalled discussions over the proposed Free Trade Area of the Americas (FTAA). The FTAA would eliminate trade and investment barriers between the region’s 34 economies – from Chile in the south to Canada in the north. With its size, economic might and diplomatic force within Latin America, Brazil has stood out as the main counterweight to the US domination of the FTAA agenda. FTAA negotiations were to have concluded by January 2005, but have been on hold since early 2004 due to virtually irreconcilable differences between the US and Mercosur. At the global level, President Lula has made elimination of agricultural subsidies in the developed economies a key policy objective. Brazil joined India, South Africa and other leading developing countries to found the G-2016 group of developing nations to challenge rich world agricultural subsidies during the Doha round of WTO trade negotiations. 12 Dreaming with the BRICs: The Path to 2050, Goldman Sachs, 2003. 13 UNDP, 2005. 14 UNDP, 2005. 15 Brazil in Figures, Brazilian Institute of Geography and Statistics, Volume 12, 2004. 16 The G-20 is a group of developing countries established in 2003, to focus on trade and agriculture issues in preparation for the Fifth Ministerial Conference of the WTO in Cancún, Mexico. In addition to Brazil, members include Argentina, Chile, China, Egypt, India, Mexico, Nigeria, South Africa and Thailand.


3.3 Business Privatisation through 1990s High interest rates Total tax payable by business (% of gross profit) = 147.9%17 In the past there has been strong direct state involvement in the Brazilian economy, with many state-owned enterprises (SOEs). However, with increasing fiscal pressures since 1980, many SOEs have been privatised – over 100 during the 1990s. This generated over US$89 billion in proceeds for the government. At the other end of the scale, family-owned micro-businesses are an important element of the Brazilian economy, with an estimated 9 to 12 million micro-entrepreneurs – many of whom operate in the informal economy, outside government regulation. There is a scarcity of long-term capital for business, and the cost of capital in Brazil is high, with interest rates averaging 14.2% in real terms in the last ten years. Traditionally, companies have relied on retained earnings and government funding for capital needs. From the 1990s, however, the stock market has become more important, aided by privatisation. There are nearly 500 firms listed on BOVESPA, the stock exchange in São Paulo. The market capitalisation of listed companies increased from 8% of GDP in 1991 to 30% by 2001 (although still lower than other emerging economies like South Africa). Share offerings at preferable prices to employees of privatised companies, coupled with the increased popularity of share ownership plans for senior executives, have increased participation in the stock market (see page 32 for discussion of BOVESPA’s good governance and sustainability indices). Corporate governance in Brazil is still poor by international standards, however, with control often in the hands of a few shareholders. More than half of all publicly-held companies have just one shareholder controlling at least 50% of the voting shares. Other problems include poor functioning of boards, a disregard for minority shareholders’ rights and the low liquidity of stock markets.18 The result is a ‘corporate governance discount’ as weak corporate governance undermines foreign investment and capital flows. Brazil has been ranked 119 out of 155 countries in the World Bank’s survey of the ease of doing business – the lowest ranking of any Latin American country19. Key constraints identified include rigidity of employment, high taxes and the difficulty of closing a business – with the average time to resolve a bankruptcy being 10 years, the highest in the world alongside Chad and India. Other barriers to business include bureaucracy (see page 8) and the third highest rate of corporate tax in the world. Yet the return on the country’s high tax burden is low in terms of tangible social and infrastructure benefits, with a poorly-skilled labour force, lack of adequate infrastructure and relatively low technology development. Research and development expenditures amount to just 1% of GDP.

3.4 Poverty and Inequality Population living on less than $1/day = 8.2% (2001)20 Population living on less than $2/day = 22.4% (2001)21 17 Doing Business, World Bank, 2005. 18 George Dallas, Governance and Risk, McGraw Hill, 2004. 19 World Bank, 2005. 20 UNDP, 2005.


Gini-coefficient = 0.59 (2001)22 Although Brazil is not a poor country, it is one with many poor. There are roughly 35 million people living in poverty in Brazil, especially in the black and indigenous populations in the north and north-east, and the favelas (shanty towns) of major cities, where social conditions are particularly hard. In Rio de Janeiro and São Paulo 20-30% of the population live in favelas. Eleven percent of Brazilian households lack access to improved water sources and 9% of the population is undernourished (see pages 17 and 24). Income inequality is amongst the highest in the world, with many consequences in terms of social cohesion and human development (see pages 17 and 21). The richest 10% of Brazilians receive 50% of the nation’s income while the poorest 10% receive less than 1%. Brazil has thus been described as three nations in one23: a rich country with a population the size of Canada, a poor country with a population equal to Mexico and a country of indigents as big as Argentina. On the positive side, Brazil is one of the few countries in Latin America and Asia to show a significant reduction in poverty. The human poverty rate fell from 16% in 1999 to 11% in 2003. Inequality, however, is on the rise.

3.5 Employment Unemployment = 11.5% (2004)24 Minimum wage = R$300 per month (approximately US$130/month) Workforce by sector = agriculture 20%; industry 14%; services 66% The 1988 Constitution (see page 8) provides universal labour rights related to wages, the work week, annual leave, pay norms for overtime, etc. However, more than half of all jobs in Brazil are in the informal sector and only 15% of these workers are protected by social security standards, compared with 95% of workers in the formal sector25. A number of decrees and edicts since 1994 have resulted in deregulation of the formal labour market, affecting remuneration, working hours, recruitment and job security. With increased growth, the level of unemployment in Brazil fell from 12.4% in 2003 to 11.5% in 2004. During the same period, average real incomes rose slightly.26 Nearly 45% of Brazil’s workforce is composed of women. However, men tend to dominate the top positions – occupying 85% of managerial jobs. Female heads of household earn only 71% of what their male counterparts receive27. In addition, many women are employed as maids or nannies, often earning less than the minimum wage

21 UNDP, 2005. 22 A value of 0 equals perfect equality and a value of 100 perfect inequality. UNDP, 2005. 23 J. J. Thomas, Surviving in the City: The Urban Informal Sector in Latin America, Pluto Press, 1995. 24 Brazilian Institute of Geography and Statistics, 2004. 25 Cappellin and Giuliani, 2004. 26 Monthly Employment Survey, Brazilian Institute of Geography and Statistics, January 2005. 27 Brazilian Institute of Geography and Statistics, 2004.


and occasionally working in conditions tantamount to slavery, particularly in the countryside.

3.6 Land Distribution 1% of landowners own half the cultivable land, 40% of which is not cultivated Contributing to income inequality in Brazil is the lack of equity in the access for all to fundamental services and assets – particularly land. This is a legacy which dates back to the colonial period. According to the UN, Brazil’s Gini coefficient for land concentration is 0.85, making it one of the most unequal in the world28. As part of an ongoing process of land redistribution, the 1988 Constitution allows government appropriation of unoccupied and unproductive land for distribution to the landless. For the last 20 years, the MST (Landless Workers Movement – see page 10) has been using land occupations to create pressure for more land appropriation, agrarian reform and social justice – sometimes leading to clashes with the police and landowners, and the death of protestors. The Cardoso administration responded to the MST campaigns by setting up the Ministry of Agrarian Development to speed up land reform. According to official figures, over 500,000 families were settled on 20 million hectares of land under Cardoso. When Lula took power in 2003, he committed to resettle 400,000 families during his term, raising expectations amongst the country’s 4 million landless families. Lula’s government promised to reduce the time to appropriate unproductive land, increase the credit available for resettled families and provide better access to infrastructure. Yet so far only about 60,000 families a year have been settled on average (far fewer according to the MST). Disappointment with the pace of reforms has sparked wide-scale land occupations – nearly 1,700 invasions involving more than one million people took place in Lula’s first year in office, exceeding all previous records. Seventy-three people died when some of these disputes turned violent. Continued disappointment has contributed to ongoing land occupations through 2004 and 2005.

28 A value of 0 equals perfect equality and a value of 100 perfect inequality.


4 Society 4.1 Demographic Data and Trends 176.6 mn people (2003) – world’s 5th largest population Population growth = 1.06% (2005 est.)29 Percentage of urban population = 83% (2002)30 Brazil is an overwhelmingly Portuguese-speaking, Roman Catholic nation. Catholicism is the predominant religion (80%), merging in places with Afro-Brazilian cults, spiritualism etc. However, these facts fail to illustrate Brazil’s great ethnic and cultural diversity – resulting from the integration of native inhabitants (mainly Tupí-Guaraní – see page 7), African slaves, and European, Arabic and Asian immigrants. While 55% of the country have European backgrounds (Portuguese, German, Italian, Spanish, Polish), 38% are mixed white and black (‘mulatos’), 6% black and 1% Amerindian, Arab or Japanese (the largest Japanese population outside Japan). From an estimated population of between 5 and 13 million indigenous Amerindians before the arrival of Europeans, today there are just 350,000 in 200 tribes scattered across the country – the most numerous being the Guaraní. Most Brazilians speak Portuguese, although there are also currently over 100 indigenous languages (down from an estimated 700 when the Portuguese first arrived). The vast majority of indigenous languages are considered ‘endangered’, with less than 600 speakers. The north-east is the poorest region (see page 14), retaining much of the colonial past and a strong African and indigenous population. South-eastern Brazil, by contrast, is more urban, developed and European-influenced – making up 10% of the national territory but representing 43% of the population and contributing 60% of the industrial production. There are 13 cities in Brazil with over 1 million people. São Paulo is the largest, with 18.8 million people in the metropolitan area, followed by Rio de Janeiro with 11.4 million. Brasilia, built in 1960 to replace Rio as Brazil’s capital, is considerably smaller with 2.2 million. Between 1970 and 1990 about 30 million people migrated to Brazil’s cities – many of whom ended up in favelas (see page 14). This rapid urban expansion has strained the services and infrastructure of the cities, contributing to water scarcity, traffic jams and pollution.

4.2 Human Development and Education Human Development Index = 0.792, ranking 63rd of 177 countries (2003)31 Life expectancy at birth = 69 (2003)32

29 CIA, 2005. 30 UNDP, 2005. 31 The Human Development Index is measures achievements in health, based on life expectancy; knowledge, based on literacy and school enrolment rates; and standard of living, based on per capita GDP. UNDP, 2005. 32 Brazilian Institute of Geography and Statistics, 2004.


Adult literacy = 88.2% (2002)33 Human development and welfare have traditionally been considered a responsibility of the state in Brazil, with the government dedicating roughly one-quarter of GDP to social programmes – a greater proportion than countries like the US, Australia or Japan. However, much of the social spending is regressive, supporting the university educations and retirement pensions of the richest segments of the population. An insufficient proportion of this spending reaches the poorest of the poor. Unemployment insurance, for example, does not reach vast numbers of workers in the informal economy (see page 13). Corruption (see page 8) also has a negative impact on social outcomes. Overall, Brazil has made progress on education, however, with an average of 97% of children attending primary school (but only 59% completing it), and an adult literacy rate of 88%. In general, women do well on education, with a combined (primary, secondary and tertiary) enrolment rate of 93% for 2002/03 – higher than men at 89%. Quality of education is an issue, however, with one Ministry of Education survey finding that 70% of so-called ‘schooled adults’ are functionally illiterate. Inequality (see page 14) also undermines human development. Most of the progress on illiteracy is in the richer regions. Literacy rates in urban areas are 91% versus 72% in rural areas.

4.3 Food Security 15.6 million people undernourished = 9% of population34 Closely associated with social exclusion, poverty and the lack of access to health services, Brazil has a high level of undernourishment. On average 10% of children are undernourished, although in favelas and poor areas of the north-east this figure rises to 40 - 60%. Several health problems are caused or made more severe by poor nutrition, including anaemia, diarrhoeal diseases and vitamin deficiencies. Nevertheless, undernourishment has been decreasing in recent years, falling from 12% of the population in 1990-1992 to 9% in 2000-2002. A national effort to eradicate hunger – Fome Zero (Zero Hunger) – was launched in January 2003. President Lula, who has experienced poverty and hunger first hand, made it a central aim of his government to ensure that every Brazilian has three meals per day. While Fome Zero was considered a laudable aim, however, institutional and logistical problems have meant the programme has largely failed to deliver.

4.4 Health Infant mortality rate = 33 per 1000 (2003)35 Adult HIV prevalence = 0.7% of population (2003)36

33 Ages 15 and above. Brazilian Institute of Geography and Statistics, 2004. 34 Undernutrition refers to insufficient food intake for growth and maintenance. The State of Food Insecurity in the World, FAO, 2004. 35 UNDP, 2005. 36 Adult population ages 15-49. UNAIDS, www.unaids.org/en/geographical+area/by+country/brazil.asp


Malaria prevalence = 344 cases per 100,000 (2000)37 Tuberculosis prevalence = 91 cases per 100,000 (2003)38 Brazil is likely to meet most of its health targets under the Millennium Development Goals, although statistics on maternal mortality have regressed slightly in the last decade. Again inequality has an important impact on outcomes, with the disparity in child mortality rates amongst children born to rich vs. poor families rising significantly in the 1980s and 1990s – despite a decrease in child mortality overall. Brazil is very much the epicentre of the HIV/AIDS epidemic in Latin America, accounting for 57% of all cases in the region. However Brazil also has one of the most successful anti-AIDS programmes in the world – providing all those who need them with free access to antiretroviral drugs via the national health system. In addition, in 2001 the government created a programme for the production and commercialisation of generic medicines, which became an international model for combating AIDS. Brazil now produces eight generic versions of non-patented ARV drugs at low cost. Other features of the programme are the mass distribution of condoms, needle-exchange programmes for intravenous drug users, and the training of nearly 4,000 teachers and 33,000 students in HIV/AIDS prevention. The result has been a dramatic increase in the life expectancy of AIDS patients, and an associated reduction in hospitalisations and the cost of medicines. While the World Bank originally predicted that Brazil would have 1.2 million people infected with HIV by the year 2000 – in fact the actual figure was half that39. AIDS deaths have fallen from 15,200 in 1995 to 8,400 in 2001. The incidence of HIV/AIDS is on the rise, however, amongst women, young people and in rural areas. In addition to HIV/AIDS, malaria, tuberculosis and leprosy are other significant infectious diseases in Brazil. While the incidence of malaria is decreasing, periods of major new outbreaks remain a problem. Tuberculosis is slowly declining, although it is increasingly linked to HIV/AIDS. Leprosy remains endemic, with a prevalence rate four times higher than would be necessary for the disease to be eradicated. Non-infectious diseases such as obesity are also an increasing problem. In the period from 1975–1989 the proportion of obese adults in Brazil almost doubled, rising from 5.7% to 9.6%. By 2002, 6.9% of men and 15% of women were considered obese.40

4.5 Labour Rights % of children (5-14 years) in child labour = 7%41 Brazil has ratified seven of the eight fundamental ILO conventions, with the exception being the Freedom of Association and Protection of the Right to Organize Convention. Brazil’s Constitution also guarantees minimal labour standards, such as a minimum wage 37 UNDP, 2005. 38 UNDP, 2005. 39 UNAIDS, www.unaids.org/en/geographical+area/by+country/brazil.asp 40 Defined as those age 15+ with a Body Mass Index greater than 30 kg/m2. WHO Global InfoBase Online. 41 UNICEF, www.unicef.org/infobycountry/brazil_statistics.html


(see page 14). However, increasing service sector jobs, large companies contracting out services (e.g. cleaning and transport), an increasing number of jobs without any social protection and rising unemployment are said to have resulted in a decline in general labour standards. Many illegal immigrants from Bolivia, Peru and Paraguay work in ‘sweatshop’ conditions in factories in São Paulo. There is also some anti-union discrimination in the form of occasional violence and black listings. Brazil has the highest rate of work-related illness and injury in Latin America. In 2000, there were more than 3,000 fatal accidents in the Brazilian workplace – especially in the transportation, storage, commerce and building/construction sectors. Few of those affected have access to insurance against work-related accidents. The Brazilian Constitution prohibits any type of work for children under 14. Nevertheless, child labour is prevalent and the law is insufficiently enforced. It is estimated that 7% of children between 5 and 14 years are working – over half of these in the north-east. These children often leave their families due to poverty and violence, and end up living on the streets (see page 20). There has been some progress in recent years in bringing down the level of child labour, with government income-transferring programmes and Family Grants, which establish school attendance as a precondition. Another abuse of labour rights is forced labour, which occurs mostly although not exclusively in the north, and which is more or less ignored by the Brazilian police. An estimated 25,000 people are working as slave labourers, clearing the Amazon jungle for ranches or producing pig iron in the forest using charcoal smelters. They live and work in appalling conditions, are trapped in debt, and are beaten or even killed if they try to escape. Attempts by Lula’s government to crack down on these problems have had some results. In a national campaign in 2004, mobile inspections teams freed over 2,000 people in situations of forced labour. However, progress is hampered by the level of lawlessness in Brazil’s interior – three inspectors and their driver were killed investigating forced labour on a ranch in Minas Gerais. Entrenched interests are also delaying legislation to tackle the problem. Finally, sexual harassment in the workplace is another labour rights issue, which has only very recently begun to be addressed.

4.6 Human Rights Freedom House classification = free42 Violations = Torture, extra-judicial killings, harassment of human rights defenders, forced labour, forcible relocation, arbitrary arrest and detention43 In Brazil, civil and political rights are widely respected in comparison to many other Latin American states. The country is also free from civil conflict. Nevertheless, several major human rights violations exist including police torture, extra-judicial killings, arbitrary arrest and detention, and forced and child labour. 42 Freedom House, a human rights organisation, publishes an analysis of countries based on their degree of political and civil liberties, designating them ‘free’, ‘partly free’ or ‘not free’. 43 Business & Human Rights: A Geography of Corporate Risk, Amnesty International and IBLF, 2002.


Police brutality is common in dealing with organised crime and urban violence, with frequent reports of the systematic use of torture to extract confessions. Unofficial estimates are that police kill around 3,000 people annually.44 Extrajudicial killings are disguised as ‘shootouts’ with dangerous criminals, and ‘death squads’ – often composed of off-duty state police – terrorise favelas and intimidate human rights activists. In one of the worst cases recently, 30 people were murdered by rogue members of the state police in a poor neighbourhood of Rio. Brazil’s human rights secretary Nilmario Miranda has admitted that an Amnesty International report accusing the police of torturing and killing thousands of people "reflects the truth”.45 Police brutality perpetuates the cycle of violence against citizens as criminals adopt police tactics. Other abuses include domestic violence against women and children – thought to involve 35% of Brazilian households; domestic and international trafficking of human beings, mostly women and girls; and forced prostitution of children. From the late 1980s there has been significant international attention to human rights abuses committed against Brazilian children. In 1993, Brazil attracted international outrage for the ‘Candelaria massacre’ in which off-duty policemen opened fire on 72 homeless children sleeping or playing on the steps of the Candelaria church in Rio. Subsequently, the government has been working to tackle the problem of homeless children and to educate the public. While there is evidence that incidents of violence against children are declining – not least because of concerns about Brazil’s negative image overseas – the image of disadvantaged children as being synonymous with criminality and violence persists. Discrimination on the basis of race is another human rights issue, despite the argument of many Brazilians that racial and ethnic intermingling means that racism does not exist. Discrimination takes place in subtle forms and through unspoken attitudes. There is a very strong correlation between lighter skin colour and higher income, education and social status, for example. While blacks and mulattos make up 45% of the population, they account for 64% of the poor and 69% of the destitute.46 In terms of employment, blacks make up 23% of general employees and less than 2% of executives of Brazil’s largest companies.47 Indigenous people in Brazil also suffer from considerable discrimination. Over the centuries, they have been deprived of their lands, which have been lost to ranchers, industrial projects and settlers. Although Brazil’s constitution enshrines the right of the indigenous to land they have traditionally occupied, insufficient progress has been made on demarcating these lands. Of 580 officially recognised indigenous territories, 340 have been ratified and 139 are still awaiting identification. The resulting land disputes lead not infrequently to violence and sometimes death (see page 15). Attitudes towards women tend to show less ‘machismo’ in Brazil compared to much of Latin America, and institutionalised gender discrimination is on the decline. However, it 44 Human Rights Watch. 45 www.freedomhouse.org/research/freeworld/2004/countryratings/brazil.htm 46 Cappellin and Giuliani, 2004. 47 Social, Racial and Gender Profile of the 500 Brazilian Largest Companies and their Affirmative Actions, Ethos Institute, 2003.


was only in August 2001 that Congress approved a legal code making women equal to men under the law. Women’s representation in senior level positions in the public and private sectors remain weak. Women hold just 9% of seats in parliament, for example, and represent less than 9% of the executive staff of Brazil’s largest companies. Women’s wages are also consistently lower than men’s (see page 14). Yet women make up 43% of Brazilians with a post-graduate education.

4.7 Violence and Organised Crime Homicide rate = 26.2 per 100,000 (1999) Despite the great ethnic diversity in Brazil, the country has been free of any major ethnic conflicts or civil war. Nevertheless, violence has become a pervasive problem. Since the 1980s, poverty and inequality, the break down of social institutions (family, community, church) and the prevalence of drugs have led to a rising crime rate. Some 200,000 Brazilians are in prison – nearly half of them in São Paulo. Violence impacts all of Brazilian society in one way or another, creating insecurity and expending significant resources. The 500 largest Brazilian firms, for example, report spending R$2.8 billion (roughly US$ 1 billion) on security for property and managers.48 Brazil has one of the highest rates of gun-related homicides of any country not at war, with 26 death per 100,000 people – ahead of the United States (6 per 100,000) but well behind South Africa (75 per 100,000)49. Armed violence is the main cause of death amongst young men. Most victims are poor and 20% are killed in confrontations with or executions by the police (see page 20). Urban areas like São Paulo and Rio are the worst affected, with 60 homicides per 100,000 inhabitants in 1999 (compared to New York or Los Angeles, where the number is 7 per 100,000). Kidnapping has become another problem. Much of this violence relates to drug-trafficking and arms-smuggling. Although Brazil produces few drugs, it has become a major trans-shipment route for cocaine produced in Colombia and other Andean countries. By 2000, Brazil had become the world’s second-largest consumer of cocaine after the US. Recently a law has been adopted allowing Brazil’s air force to shoot down suspected drug planes as a measure to stop the large amount of cocaine coming in both for sale locally and for shipment to other countries. In October 2005, a plebiscite to prohibit the commercial sale of firearms and munitions was defeated when 64% of the electorate voted ‘no’. In part this was a protest vote against the government, following the corruption scandals that emerged during the course of the year. In part it can also be seen as a vote of non-confidence in the government’s ability to provide security.

4.8 International Treaties Status of major international treaties in Brazil:

48 C. Vassallo, ‘Fazer bem compensa?’ Revista Exame, 22 April 1998 quoted in Cappellin and Giuliani, 2004. 49 ‘One Victim Every Minute’, Economist, 23 July 2003.


Human Rights

Treaty Current Status

International convention on the prevention and punishment of the crime of genocide Ratified International convention on the elimination of all forms of racial discrimination Ratified International covenant on civil and political rights Ratified International covenant on economic, social and cultural rights Ratified Convention on the elimination of all forms of discrimination against women Ratified Convention against torture and other cruel, inhuman or degrading treatment or punishment Ratified Convention of the rights of the child Ratified Source: Human Development Report, UNDP, 2005. Labour Rights Freedom of Association and Protection of the Right to Organize Convention Not ratified Right to Organize and Collective Bargaining Convention Ratified Forced Labour Convention Ratified Abolition of Forced Labour Convention Ratified Equal Remuneration Convention Ratified Discrimination (Employment and Occupation) Convention Ratified Minimum Age Convention Ratified Worst Forms of Child Labour Convention Ratified Source: Human Development Report, UNDP, 2005.


5 Environment

5.1 Geography One of the richest countries in terms of biodiversity Arable land = 6.96% (2001)50 With a surface area of 8.5 million km2, Brazil occupies almost half the South American continent. It is the world’s fifth largest country, and is roughly equivalent in area to the US excluding Alaska. Brazil has four main geographical regions: the coastal band, which includes the Mata Atlantica (Atlantic Rainforest); the Brazilian Plateau in the south interior; the Pantanal (wetlands) in the Paraná-Paraguai Basin of the south, and the Amazon Basin. The growth of natural resource-intensive industries, including agro-business, has put pressures on environmental boundaries, encroaching on several of these environmentally sensitive areas. The Amazon River runs through the north of the country, with a drainage basin extending over 5,000 square kilometres in Brazil and neighbouring countries. The Amazon is the largest tropical rainforest in the world comprising 30% of the world’s remaining tropical forests and providing shelter to 10% of all the world’s plant and animal species. It is of great importance worldwide to food, medicine and chemical products. In addition, the forest is extremely important for sequestering CO2. An intact acre of Amazon sequesters about 1,000 pounds of CO2 per year. Brazil’s climate is mostly tropical, although temperate in the south, with droughts frequent in the north-east.

5.2 Environmental Regulation Environmental protection covered by Brazilian Constitution Environmental regulations still weakly enforced The Brazilian Constitution of 1988 introduced the country’s first explicit environmental regulations, giving the state the power to control pollution and conserve natural resources. Environmental protection is also supported by domestic laws and international commitments. Brazil has been ranked 35th out of 71 countries on the quality of its Environmental Regulatory Regime – taking into account stringency, structure, enforcement and subsidies.51 The National Environmental Policy of 1988 introduced the elimination of tax incentives for reforestation and cattle-raising in the Amazon, regulations on production, trade and use of chemical substances, and a requirement that steel and pulp companies create and use their own forests for their production demands. Policies also exist for water, biodiversity, forestry management and the urban environment. In 1998, the Environmental Crime Bill

50 CIA, 2005. 51 Daniel C. Esty and Michael E. Porter, ‘Ranking National Environmental Regulation and Performance: A Leading Indicator of Future Competitiveness’, Global Competitiveness Report, 2001-02.


was passed, with penalties of up to US$17 million, compared with the previous US$1,400 maximum penalty. The law also means that company directors and managers can be held personally responsible and liable to criminal prosecution if they are aware of a criminal act and do nothing to prevent it. In 1999, Brazil’s Congress passed an environmental pollution law that fines polluters between $50 and $50 million for violating environmental standards. While environmental legislation is advanced, enforcement remains weak. Ibama, Brazil’s government Institute for the Environment and Renewable Natural Resources, has insufficient power and resources. While Ibama estimates that 80% of logging in the Amazon is illegal, they argue that capacity constraints mean there is little they can do to tackle the problem. Other challenges faced by Brazil are the lucrative illegal wildlife trade and the rising environmental problems in Brazil’s rapidly expanding cities.

5.3 Water Total population using improved drinking water source = 89% (2002)52 Total population using adequate sanitation facilities = 75% (2002)53 Brazil has one of the world’s largest reserves of fresh water – accounting for 13% of the world’s fresh water supply – yet 40% of those in rural areas have access to improved water sources, and pollution is affecting water quality throughout the country. Nearly all waste water in Brazil is untreated and around 80% of the country’s solid waste is not collected, treated or disposed in an environmentally sound manner54. Water issues are closely linked with health problems, including infant mortality. In rural areas, mining activities and pesticide use in agricultural industries cause land degradation and water pollution. Several severe oil spills four or five years ago have been another problem, although investments to prevent and control accidents in the last few years seem to have had positive results.

5.4 Air Pollution Share of world CO2 emissions = 1.3% (2000)55 Air pollution is a serious environmental and health problem in Brazil’s major cities, resulting largely from rapid urbanisation without adequate infrastructure provision. In São Paulo, where traffic congestion is a serious problem, 90% of the smog is accounted for by motor vehicles.56 Health effects include respiratory and cardiovascular disease. Studies by the WHO suggest that increases in NO2 concentrations in São Paulo relate to a 30% increase in deaths from respiratory illness in children under five.57

52 UNICEF, www.unicef.org/infobycountry/brazil_statistics.html 53 UNICEF, www.unicef.org/infobycountry/brazil_statistics.html 54 Emerging Markets Economics, 2004. 55 UNDP, 2005. 56 US Energy Information Administration, www.eia.doe.gov/emeu/brazenv.html 57 US Energy Information Administration, www.eia.doe.gov/emeu/brazenv.html


Average carbon emissions in Brazil are 1.8 metric tons per capita, representing 1.3% of the world’s total emissions in 2000. These come from fossil fuel use, as well as land use, land use changes and forestry policies. Brazil has been an important player in carbon negotiations, hosting the Earth Summit in 1992 that opened the way for the Framework Convention on Climate Change and the Kyoto Protocol.

5.5 Energy Share of world energy consumption = 2.2% Energy consumption per capita = 2.183 kWh (2002)58 Rapid economic growth and industrialisation have brought increasing reliance on fossil fuels and increasing GHG emissions. Brazil is the third largest energy consumer in the Western Hemisphere after the US and Canada, and fourth largest carbon emitter after the US, Canada and Mexico. Brazil is set to become self-sufficient in petroleum, which accounts for 51% of energy consumption in Brazil. Other sources are hydroelectric power (31%), renewables (13%), natural gas (4%) and nuclear (1.7%).59 Brazil is the world’s largest consumer and producer of ethanol from sugar cane. Dating back to the oil price shocks of the 1970s, all petrol sold in the country is blended with 25% ethanol, which is also less carbon-intensive than petrol. Brazilian auto-makers have had great success since 2003 with ‘flex-fuel’ cars, which can run on petrol, alcohol or any combination of the two, and which account for two-thirds of all new car sales. Renewable energy will likely play an increasing role in Brazil’s energy consumption. The government is expecting biomass power to increase by 56% by 200760, while ethanol, biomass, hydroelectricity, wind and solar power are likely to be key sources of rural electrification, although large dams are increasingly being opposed due to the impact on ecosystems and the displacement of indigenous peoples.

5.6 Biodiversity Brazil accounts for 10%-20% of all known species in the world Over 15% of the Amazon rainforest and 93% of the Atlantic Forest destroyed Human assault on Brazil’s forests, a major source of biodiversity, has gone on more or less unfettered since the arrival of Europeans in 1500, and has intensified significantly in the last 50 years. Settlement of the Amazon was encouraged during military rule in the 1970s in order to consolidate Brazil’s jurisdiction over the territory, to develop tree cropping as a new source of foreign exchange, and to reduce unemployment and land pressures in coastal regions. This resulted in extensive deforestation by loggers and cattle ranchers, with Brazil losing its forests at a rate of over 20,000 km2 (an area equivalent to half the size of Switzerland) each year. The impact of this destruction on the remaining forestland is as yet unknown.

58 UNDP, 2005. 59 Brazil currently has two nuclear power plants, while construction of a third plant has been delayed for several years. US Energy Information Administration, www.eia.doe.gov/emeu/brazenv.html 60 US Energy Information Administration, www.eia.doe.gov/emeu/brazenv.html


While government-sponsored migration programmes have ceased and environmental consciousness has risen, deforestation and the trade in illegal wildlife continue to threaten Brazil’s biodiversity. Although not all deforestation is illegal – private land owners are allowed to clear up to 20% of forest cover on their property – illegal logging, cattle ranching, commercial agriculture and settlement/subsistence farming are major causes of deforestation. Cattle ranching has been on the rise recently, with beef exports up more than five-fold by volume since 1997. Cattle grazing tends to take place on deforested land, which is then often used to grow soya, as the ranchers move deeper into the forest. Brazil’s rural elite continue to push to relax legislation on the logging of protected forests. Other causes of forest degradation include oil spills, air pollution and flooding. Today 75% of Brazil’s population and all the main industrial cities are located along the coast in what used to be Atlantic Rainforest – an area of even greater biodiversity than the Amazon. Timber extraction, sugarcane, fires and acid rain have taken their toll, however, with only 7% of the Atlantic Rainforest remaining today. What remains, however, is still very rich in biodiversity. Some organisations including SOS Mata Atlântica and the Instituto BioAtlântica are working to preserve the remaining Atlantic Rainforest. Other potential threats to biodiversity include problems with invasive species, and the introduction of genetically modified crops. In early 2005, Brazil legalised GM crops for the first time, after having had a ban on their use, except for experimental purposes, for many years. Even with the ban, however, already over a third of Brazil’s soybean crop was planted with GM seeds due to smuggling from neighbouring countries. Although companies pushed for the relaxation of regulations, a survey of Brazilian public opinion suggests that 74% prefer to consume GM-free food, and 91% support the mandatory labelling of products with GMOs.61 Some farmers also argue that by allowing growing of GMOs, Brazil will lose access to lucrative non-GM markets. In 2006, Brazil is hosting COP8 (the Eighth Conference of the Parties) on the Convention on Biodiversity and MOP3 (the Third Meeting of the Parties) on the Cartagena Protocol on Biosafety. As a result, Brazil’s biodiversity practices and its approach to GMOs are under even greater scrutiny.

5.7 International Treaties Status of major international treaties in Brazil

Treaty Current Status

Kyoto Protocol Ratified Montreal Protocol on Substances that Deplete the Ozone Layer Acceded UN Framework Convention on Climate Change Ratified Convention on Biodiversity Ratified Convention on International Trade in Endangered Species (CITES) Ratified Biosafety Protocol Acceded

61 Cappellin and Giuliani, 2004.


Basel Convention on the Control of Transboundary Movement of Hazardous Wastes and Their Disposal

Acceded

World Heritage Convention Accepted

Source: United Nations http://untreaty.un.org/English/treaty.asp


6 Corporate Responsibility (CR)

6.1 Overview Growing number of companies involved Focus on philanthropy, but shifting towards core business Perhaps because of the environmental and particularly social challenges Brazil faces, the concept of sustainable development seems to naturally resonate with many in the country. The formal corporate responsibility (CR) movement has its roots in the 1980s with Brazil’s redemocratisation and the rise in civil society (see page 9) – focused particularly on social issues and driven largely by domestic concerns and domestic actors. By the 1990s, enlightened business leaders realised that the inability of the welfare state to deliver benefits to the majority of the population (see page 17) impacted the credibility of private companies as engines of wealth creation and social development62. Specialised business associations have played an important role in the development of CR. Early examples include GIFE (Grupo de Institutos, Fundaçoes e Empresas), which first met in 1988 to discuss business involvement in social investment and the ethical practices of business, and Am-Cham – the American Chamber of Commerce in São Paulo. More recently, the Ethos Institute, which mobilises and assists Brazilian companies in CR, has had an important role. Their ‘Ethos Indicators’ have been extremely influential in disseminating the concept of CR in Brazil. Mainstream business associations have also begun taking interest, including those from the steel, electricity and banking sectors, as well as associations from São Paulo (FIESP), Rio de Janiero (FIRJAN) and Minas Gerais (FIEMG). Brazil has been making links with other CR movements in Latin America and internationally – partially in response to negative perceptions of social and environmental performance of Brazil and Brazilian businesses. Key issues have included poverty, violence, child labour and environmental protection – especially in relation to the Amazon. Social and environmental criteria on access to markets or credit are other ways in which international stakeholders are affecting the agenda in Brazil. An increasing number of Brazilian companies are becoming involved in CR. For example, the Global Compact has 121 participants in Brazil, and five Brazilian banks support the Equator Principles (see page 30). The Ethos Institute has 1087 corporate associates – which together have a turnover equivalent to 30% of Brazil’s GDP. Despite this considerable energy around CR, and the important leadership role Brazilian businesses have played, especially in Latin America, the overall proportion of active companies is small. The number which embeds CR as a strategic part of core business activity is even smaller. As is the case in much of Latin America, CR activities have been largely associated with community investment, given the tendency for the private sector to take a paternalistic view of its role in society.

62 Cappellin and Giuliani, 2004.


Particular areas of weakness include: − transparency and engagement − understanding and commitment at CEO and senior executive levels − more balanced management of financial and sustainability concerns − the extension of CR principles throughout the supply chain, and − the adoption of suitable social and environmental indicators linked to corporate goals More recently, however, public pressure on business has been rising, and there are indications that Brazilian companies are taking a more strategic approach to CR. Civil society has brought issues to the attention of both foreign and local businesses, particularly in the areas of labour conditions, land, forest and biodiversity, and lately also consumer rights, transparency and accountability. The media has increased its focus on CR63, and institutional investors like the pension fund of the Banco do Brasil and the Workers’ Pension Fund for Petrobras have become more sensitive to the agenda, particularly following the launch of socially responsible investment criteria for pension funds in 2003. Academic institutions are also beginning to taking notice – creating initiatives that explore and develop the theme of CR.

6.2 Governance and Management 18 companies listed on Novo Mercado 1,008 companies with ISO 14001 certification 82 companies with SA 8000 certification Corporate governance in Brazil is weak by international standards, with the control of companies frequently concentrated with only a few shareholders (see page 13). However, there have been reforms in recent years, including changes in company and securities law and the introduction of the Novo Mercado or ‘New Market’. The Novo Mercado is a separate listing segment of the São Paulo stock exchange. It emphasises the promotion of ownership dispersion, better disclosure and transparency, and the protection of minority shareholder rights. There is also greater regulation of audits and the professionals who perform them. Currently there are 18 companies listed on the Novo Mercado64, which has had greater traction than investors originally anticipated. Companies listed on the Novo Mercado are traded at higher multiples than others, and new IPOs now tend to follow Novo Mercado rules. Nevertheless, analysts maintain that stronger legislation on governance will be necessary to ensure corporate Brazil’s investment needs are met. Environmental and social management systems are gaining popularity in Brazil – although they have much more uptake by multinationals or Brazilian companies with substantial links to overseas markets, than by domestically-focused Brazilian companies. 63 For example, one of the major business magazines, Exame, publishes a list of ‘The Best Companies to Work for in Brazil’ along with the ‘Exame Guide of Good Corporate Citizenship’; while the business newspaper, Valor Econômico, publishes a monthly supplement on ‘Firms and Communities Detailing Social Responsibility Initiatives’. Other important newspapers including O Estado de São Paulo, Jornal da Tarde, and O Globo have sections or supplements on social projects and CR. 64 See www.bovespa.com.br/Principal.asp for a list of companies.


There were over 1000 companies in Brazil with ISO 14001 certification65 as of 2003, and 82 companies certified for SA8000 by September 200566. In addition, in 2004, 442 companies completed the ‘Ethos Indicators’67 – a self-assessment tool for companies to evaluate their CR efforts. The indicators ask companies to assess their performance in seven areas: values and transparency, workers and staff, environment, contractors and suppliers, consumers and clients, community, and government and society. In addition, Brazil’s national standards body has created its own CR standard, NBR 16001, one of the few national norms for CR in the world. As a result of this experience, Brazil has been chosen to jointly lead (alongside Sweden) an international working group to develop the future ISO standard on Corporate Responsibility, ISO 26000.68 At the sector level, in 1991, the Brazilian Chemical Industry Association (ABIQUIM) established an industry code known as Atuação Responsável – modelled on the international Responsible Care code. It is mandatory for all of ABIQUIM’s members. Although this constitutes only about 20% of chemical producers in Brazil, it does include the largest firms, and hence most of the chemical production in the country. In finance, five Brazilian banks have signed up to the Equator Principles – Banco Bradesco, Banco do Brasil, Banco Itaú, Banco Itaú BBA and Unibanco – the only banks in developing countries to have done so. Banco Itaú and Unibanco, along with ABN Amro Real (see page 35) also have procedures for social and environmental credit risk analysis. A growing number of companies including ABN Amro Real, Belgo Minera, Petrobras and CPFL Energía are also beginning to evaluate their suppliers based at least in part on CR criteria.69

6.3 Accountability and Engagement 165 companies produce balanço social 11 companies produce GRI reports As early as the 1980s, some companies began to voluntarily produce a balanço social, or social audit, including Nitrofétril, a state-owned enterprise, which first published an audit in 1984. The practice gained traction from 1997 with a campaign in favour of standardised social audits led by the NGO, Ibase. Over 150 companies currently produce an audit based Ibase’s framework and guidelines70. Five civil society organisations have developed an award for social audits71. Winners in 2005 were: Banco do Brasil, COELCE, CPFL, CSN, Embraco, Grupo Skill, Itautec Philco, Multibrás da Amazônia, Natura and Samarco Mineração.

65 www.inem.org/iso/speedo.htm# 66 This is the fourth highest number of certifications by country in the world, behind Italy, India and China. www.sa-intl.org/index.cfm?fuseaction=Page.viewPage&pageId=616&parentID=473&nodeID=1 67 www.uniethos.org.br/docs/conceitos_praticas/indicadores/default.asp 68 Situación de la RSE en Latinoamérica: Hacia un desarrollo sustentable, Red Interamericana de RSE, 2005. 69 Red Interamericana de RSE, 2005. 70 www.balancosocial.org.br 71 www.premiobalancosocial.org.br/


Beyond the balanço social, some Brazilian companies are also producing a full sustainability report. Eleven companies were using the Global Reporting Initiative (GRI) guidelines at the beginning of 2006: ABN Amro Real, CPFL Energía , Natura and USIMINAS (all ‘in accordance’); plus Copesul, McDonalds Brazil, Petrobras, Samarco Mineração, Shell Brazil, Souza Cruz and Takaoka. Stakeholder engagement and partnerships with civil society are still limited. NGOs often do not see the potential of partnerships with companies, beyond funding for their projects, and companies are not used to involving external stakeholders in decision-making. While relationships between NGOs and companies may not be as conflictive in Brazil as in some other countries, on certain issues there is potential for significant conflict – land (see page 15) and genetic modification (see page 26), for example. Trade unions remain sceptical of CR activities, which they tend to see as focused on outward community investment at a time when deregulation of the labour market is seen to be eroding working conditions.

6.4 Economic Impacts Initiatives around microcredit and income generation Latin American leader on digital inclusion Rise in SRI While Brazilian companies have tended to focus social responsibility efforts on relatively paternalistic social investment projects (see page 32), some companies are starting to explore how initiatives tied to core business can promote economic empowerment and development, particularly related to microcredit, support for entrepreneurs and small businesses and digital inclusion. Microcredit was pioneered in Brazil in 1998 by Unibanco, which has been joined by ABN Amro Real and Banco Santander. ABN Amro Real’s programme, known as ‘Real Microcrédito’, has been undertaken in partnership with the NGO Acción International. The aim is to contribute to social and economic development by increasing access to credit for small business development, income generation and employment. Real Microcrédito made 4,348 loans in 2004 with a total value of 1.1 million euros. Another company contributing to economic development is the supermarket chain, Pão de Açúcar. Its programme ‘Caras do Brasil’ (Faces of Brazil) provides space for the commercialisation of goods from small agricultural and agro-industrial producers which promote economic development, support the environment and generate wealth within disadvantaged sectors of Brazilian society. The programme has 40 registered suppliers from around the country. Pão de Açúcar aims to help these producers commercialise and professionalise their products, as well as to raise awareness around responsible consumption. Brazil has also been recognised as a leader in Latin America for its efforts to combat digital exclusion. Support for these efforts has come from a number of companies in the IT sector. The Telefonica Foundation, for example, provides an educational portal for primary and secondary teachers and pupils – to help improve the quality of education in Brazil’s public schools. HP has a programme with the Abrinq Foundation to foster digital


inclusion of youths from low-income families in São Paulo. Each unit is given top-quality computers, software and internet connections. IBM has signed a letter of intent with the government in 2003 – to encourage the development of free software in Brazil. While initiatives around microcredit, digital inclusion and income generation are having some success, inequality remains extremely high. This is creating increasing pressures for corporate Brazil related, for example, to security issues and conflict over land. Tackling the root cause of these problems is likely to require bold measures, innovative thinking and collaboration across business, government and civil society. Finally, while socially responsible investment (SRI) is relatively new to Brazil, it has been rapidly gaining in importance. Unibanco became the first bank in an emerging economy to carry out SRI research and now runs its own social fund. Brazil’s largest pension funds have begun to incorporate environmental and social criteria into investment decisions, while ABN Amro Real launched the first ethical fund in Latin America in November 2001. Most recently, in December 2005, BOVESPA launched its Corporate Sustainability Index (ISE by its Portuguese acronym), in line with international examples like the Dow Jones Sustainability Index or the SRI index on the Johannesburg Stock Exchange. There are 28 companies included in the ISE, and this number is planned to rise to up to 40.72

6.5 Social and Community Development High level of social investment National drive to tackle child labour Few efforts as yet on diversity Social investment in Brazil in areas like health and education is considerable. According to the Institute for Applied Economic Research, more than 60% of companies analysed were found to invest in the social area – spending $1.7 billion per year beyond that which is legally required on community investment projects. While much of this is based on monetary donations, it is sometimes more directly linked to a company’s products and services. For example, GlaxoSmithKline has signed an agreement with the Ministry of Health to transfer technology for the production of measles, mumps and rubella inoculations for a period of five years. This was the only vaccine being imported by the Brazilian government under its National Vaccination Programme, and the initiative will save the country US$15 mn over this 5 year period.73 One particular Brazilian innovation is the Social Stock Exchange of BOVESPA, devised as a means of attracting resources from individual and institutional investors for selected educational projects. By replicating the model of stock exchanges, the exchange has managed to raise US$1 million in just over two years – supporting 13 projects around the country. Beyond philanthropy, one of the biggest areas in which corporate responsibility is tackling social issues related to operations is around child labour. An important national drive

72 For a list of current members of the ISE see www.bovespa.com.br/Market/MarketIndexes/def_isei.htm 73 Business Commitment to the Millennium Development Goals, Ethos Institute, 2004.


has been led by the Abrinq Foundation and its programme, ‘Empresa Amiga das Crianças’ (Business Friend of Children), started in 1996. It is based on recommendations from UNICEF and the ILO, and has been supported by sectoral pacts from automotive, shoe, alcoholic beverage and citrus producers, with the support of national government departments. More than 1,600 companies have been certified with the ‘Friend of Children’ seal for their commitment to 10 principles aimed at combating child labour.74 On the other hand, despite the widespread issue of discrimination, the number and scope of CR initiatives to address diversity is very limited. Although the Ethos Institute found that while 32% of companies have programmes to hire disabled people – due in part to legislation – only 7% of companies have an affirmative action programme to promote women or racial minorities.75 One positive example, however, is Kodak, which has an internal Diversity Forum which brings together individuals from all the hierarchical levels of the company to discuss challenges and barriers to stimulating diversity in the workforce, and to promote awareness of the issue. It is worth noting that while access to land proves a vehemently contested issue - particularly for forestry companies, but also others – there are very few established initiatives or emerging instances of best practice.

6.6 Environmental Actions Increasing focus on eco-efficiency and environmental opportunities In general, CR efforts in Brazil have focused more on social rather than environmental aspects. Nevertheless, some drivers for companies to address environmental impacts are coming from within and outside Brazil. Externally, given recent high levels of exports, especially around agro-business, Brazilian companies are facing important environmental demands from international customers and investors. Within Brazil, there has been an increasing awareness in the private sector of the benefits of eco-efficiency, starting from the Rio Earth Summit in 1992. Roughly 95% of large firms in Brazil report having made environmental investments, although only just over half of small firms have done so76. In addition, Brazilian companies are increasingly seeing new opportunities around the environment, with the beginnings of an industry to supply environmental technology and services, including sanitation and waste management. Other areas that are expanding include organic food, eco-tourism and energy generation from biomass. In addition, several companies have begun to take part in the carbon credits markets through instruments like the Clean Development Mechanism and the Chicago Climate Exchange. DaimlerChrysler do Brasil has been using coconut fibres for automobile interiors, as part of its support for the POEMA (Poverty and Environment in the Amazon) project to preserve Brazil's rainforest by addressing underlying problems of poverty. Outer husks of coconuts grown by participating communities in Amazonian Brazil are processed locally and delivered to the DaimlerChrysler factory to be made into car seats, vehicle sun visors and upholstery for beds in trucks. The project encourages small communities in

74 Ethos Institute, 2004. 75 Ethos Institute, 2003. 76 Cappellin and Giuliani, 2004.


the Brazilian rainforest to farm their land in a sustainable manner. The coconut shell waste is renewable and can be recycled, and coconut fibres decompose easily after the useful life of the car, unlike plastic which can accumulate in sprawling waste sites. The project secures an income for over 5,000 people.77 The private sector has also taken some steps to promote renewable energy and reduce greenhouse gas emissions. Unibanco, for example, has been taking a lead. It is active in the carbon trading market for some of its customers, including sugar producers and transportation companies. Its São Paulo branches became self-sufficient in renewable energy in 2004 due to the development of a methane-powered generation plant – the first biogas plant in Brazil and the largest in the world. Electricity fed from the plant back into the grid will be deducted from Unibanco's electricity bill – and it is estimated that this will pay for the São Paulo branch network's electricity bills.78 Another area of environmental concern has been around forestry and forest certification. Given consumer pressure and concerns around illegal logging in the Amazon, forestry companies have become increasingly interested in certification as a way to address consumer confidence. Nearly 1.5 million hectares of forest were under Forest Stewardship Council (FSC) certification by 2004.79 An alternative Brazilian forestry certification scheme known as CERFLOR has also been developed with criteria and procedures similar to, but are considerably more flexible than, FSC. A total of 216,000 hectares of forest have been certified under CERFLOR80.

7 Best Practice Case Studies Represented here are three examples of CR best practice in Brazil. They look at: − Two local companies with innovative approaches to CR (Natura and Native) − ABN Amro Real, the Brazilian subsidiary of the Dutch bank ABN Amro

7.1 Natura Natura (www.natura.net) is a Brazilian cosmetics and personal care products company, with sales in six countries in Latin America. Natura is currently the leading company in the Brazilian cosmetics market, supported by a network of over 480,000 sales consultants throughout Latin America in 2005. Natura is also developing its operations in Europe – starting with France. For Natura, social responsibility has been part of its strategic vision since its founding in 1969, and the company has developed a reputation domestically and internationally as one of the most socially responsible in Brazil. Natura defines its corporate culture as one based on harmonious relationships with oneself, with others and with nature; respect for 77 www.wbcsd.org/plugins/DocSearch/details.asp?type=DocDet&ObjectId=MTE1MTE 78 ‘Sustainable Finance in Brazil’, Market Intelligence Brief, IFC, May 2004. 79 Earthtrends, World Resources Institute, 2004. 80 www.pefc.org/internet/html/news/4_1154_65/5_1105_1163.htm


the environment; responsibility for social development; and the foresight to protect the planet for future generations. In industrial activities, for example, Natura endeavours to maintain a streamlined management of natural resources like water and energy, and to minimise the impact of products and services on the environment, for example by using a packaging life cycle approach to control waste generation. Natura also discusses environmental and social impacts with its main suppliers. Socially, the company is well-known for its support of basic education projects over the last 10 years. Natura has several product lines, including ‘Natura Ekos’, which first came onto the market in 2000. The line seeks innovation in nature and aims to use sustainably sourced natural Brazilian flora from poorer communities in the states of Amazônia, Pará and Rondônia. Communities are trained to produce and extract products for the company in a sustainable way, helping local people generate greater income opportunities and supporting environmental restoration projects. Natura is listed on BOVESPA’s Novo Mercado (see page 29) and is a member of the ISE (see page 32). The company reports annually in accordance with the GRI guidelines. Natura has benefited from its commitment to CR through better and more motivated employees; customer loyalty and willingness to pay a price premium for its products; and a better evaluation from financial institutions. In addition, there is a high level of public trust in the Natura brand – ranked fourth highest in brand value in Brazil. Within the cosmetics industry, surveys have shown the Natura brand to have the highest recognition for Quality, Credibility, Innovation, Social Responsibility and Transparency.

7.2 ABN Amro Real ABN Amro Real (www.abnamro.com.br) is the Brazilian subsidiary of the Amsterdam-based multinational bank ABN Amro. ABN Amro Real is acknowledged as a leader in CR within Brazil, as well as within the ABN group. This is driven in part by the commitment of its senior management, including its CEO Fabio Barbosa. ABN Amro Real’s approach integrates environmental and social sustainability throughout its business activities, including: − Evaluation of its loan portfolio based on social and environmental risk for virtually all

corporate clients, initiated with an extensive training programme for 1,100 branch managers and middle managers across Brazil (in partnership with the Eco-Finance Project, an initiative of Friends of the Earth-Amazonia)

− Creation of an Environmental and Social Business Development Department tasked with developing profitable products with direct social and environmental impacts

− Training of more than 1,800 relationship managers around opportunities arising from sustainability

− Creation of the first Ethical Fund in Latin America − Several credit lines for sustainable business − The Real Microcrédito programme (see page 31)


− Development of a supplier relationship department to address social and environmental issues – a process involving an extensive engagement of the company’s major suppliers

− Annual reporting based on the GRI guidelines

7.3 Native

Native (www.nativealimentos.com.br) is a brand of organic sugar belonging to the Balbo Group, which owns the São Francisco sugar mill. It is the largest producer of organic sugar in the world – accounting for more than 50% of world production. Native is sold in 24 countries around the world with annual revenues of R$ 20 million (about US$ 9 mn). In 1987 Usina São Francisco made a decision to begin harvesting sugarcane in a more environmentally and socially sustainable manner. In a major reorganisation, the harvesting of sugar cane was mechanised, replacing the traditional method of burning husks, which creates pollution and forest fires, and exposes workers to poor labour conditions. This created a significant social challenge, as it meant a large number of workers were no longer needed for harvesting. However, rather than laying them off, the workers were re-qualified and re-directed to other tasks. The company also uses biological pest-control, achieved by setting loose millions of natural enemies to control pests without endangering the environment. An entomological laboratory was developed where activities related to fitosanitary control are concentrated. Other initiatives include the reforestation around the mill, increasing native vegetation from 5 to 14% and creating ‘biological deposits’ of natural resources that contribute to the balance of the local ecosystem; the use of sugar cane waste as a fuel supply – generating sufficient energy to power the mill while also selling an excess to CPFL, a Brazilian electricity utility; and investments in the development of biodegradable plastic from sugar cane. The construction of the entomological laboratory brought a return of R$3 for every R$1 invested, due to enhanced productivity and the elimination of chemical pesticides. On top of Native's higher productivity than many of its competitors producing non-organic sugar, the price paid for organic sugar can be up to 60% higher.81

81 ‘NATIVE: Repensar os negócios de forma sustentável é sinônimo de lucro’, Atitude www.atitude.srv.br/index3.asp?id=29 and ‘Usina São Francisco – Native’ case study, SustainAbility www.sustainability.com/developing-value/searchAdvDetails.asp?bcid=169


8 Appendix One: Progress on Selected MDGs Indicator

1991 2000 Likelihood of Brazil meeting

MDG Goal 1 – Eradicate extreme poverty and hunger Likely % below national absolute poverty line 20.2 14.5 % below national relative poverty line 40.1 31.3 % of national income appropriated by poorest 20% 1.9 1.5 % of children underweight 7.87a 7.70

Goal 2 – Achieve universal primary education Likely % of children attending primary school 85.38 98.95 % of children who complete primary school - 59b Literacy rate (age 15-24) % 88.6 94.18

Goal 3 – Promote gender equality and empower women Likely Ratio of girls: boys in primary education - 95.78 Ratio of girls: boys in secondary education - 120.15 Ratio of girls: boys in tertiary education - 128.54 Ratio of literate women: men 106.67 102.98 % of seats held by women in the Senate 1.24 12.35b

Goal 4 – Reduce child mortality Likely Mortality rate among children under 5 (per 1,000) 47.96 38.10 Infant mortality rate (per 1,000) 38.80 32.53

Goal 5 – Improve maternal health Likely Maternal mortality rate (per 1,000) 50.15 a 63.67

Goal 7 – Ensure environmental sustainability Potentially % of population with access to drinkable water 71.46 80.53 % of population with access to sanitation 67.15 76.70 a) 1996 b) 2001 Source: ‘Summary Table Probability to Reach MDGs in Country Reports’, UNDP Regional Bureau for Latin America and the Caribbean, www.undp.org/rblac/mdg/, and Business Commitment to the Millennium Development Goals, Ethos Institute, 2004.


9 Appendix Two: Civil Society Organisations General ActionAid Brasil: ActionAid in Brazil started in 1999 with a particular focus on the poor rural north-east region and the large conurbations of the south-east. Part of the national strategy is to identify and create partnerships within Brazilian social movements and NGOs with development projects. ActionAid’s role involves financial and technical support with the aim of empowering impoverished people. www.actionaid.org.br Amigos da Terra: Part of Friends of the Earth International, Amigos da Terra started in Brazil in 1989. Amigos da Terra acts to promote the sustainable use of forest products, the prevention of fire, support for isolated communities and the development and monitoring of public policies. www.amigosdaterra.org.br Associação Brasileira de Empresários para a Cidadania (CIVES): CIVES is an association for business leaders and entrepreneurs focused on the issue of citizenship. www.cives.org.br Federação de Órgãos para Assistência Social (Fase): Founded in 1961, FASE works in six states of Brazil with programmes to support popular education, healthcare, human rights and the protection of social-environmental diversity. www.fase.org.br Fundação Abrinq: Founded in 1989 by the toy-makers’ association of Brazil, the foundation is an independent institution focused on the promotion of children’s rights and action against child labour. It organises the Child-Friendly Firm label for companies that prohibit using the labour of children under 14 in their operations and supply chain (see page 33). www.fundabrinq.org.br Fundação Brasileira para o Desenvolvimento Sustentável (FBDS): The Brazilian Foundation for Sustainable Development is an active think-tank striving to contribute to the discussion on sustainable development, spread know-how and help to draft public policies. Transparency and ethics are the cornerstones of its work. www.fbds.org.br Greenpeace-Brazil: As the local branch of the international environmental advocacy group, Greenpeace-Brazil is involved in a number of environmental campaigns. One of the most important, run in conjunction with the Brazilian Consumer Defense Institute, is the campaign against the production and trade of genetically-modified organisms (see page 26). www.greenpeace.org.br Instituto Brasileiro de Defesa do Consumidor (Idec): Idec is a consumers’ association founded in 1987 with the mission to promote the defence of the rights of the consumer and ethics in the relations of consumption. For Idec, the concept of ‘consumer’ is not restricted to those who participate in the market, but also includes those who lack the purchasing power to access essential goods and services. www.idec.org.br Movimento dos Trabalhadores Rurais Sem Terra (MST): Brazil’s Landless Workers Movement, known by its Portuguese acronym MST, was founded in 1985. It is the largest social movement in Latin America with an estimated 1.5 million landless members. The MST promotes land reform through occupation of unused land where they establish cooperative farms, construct houses, schools and clinics, and promote indigenous cultures, a healthy and sustainable environment and gender equality (see page 15). www.mst.org.br


Pastoral de Criança: Focuses efforts on sustainable solutions to fight hunger, joblessness and lack of basic sanitation and clean water. They have also expanded their efforts to Africa and Asia. www.pastoraldacrianca.org.br SOS Mata Atlantica: Foundation working on the conservation and preservation of the once bountiful Atlantic Rainforest which covered Brazil’s coastline. The Mata Atlantica has been dramatically reduced and is rapidly disappearing (see page 26). www.sosmatatlantica.org.br Transparência Brasil: Transparência Brasil is the national chapter of Transparency International, an NGO devoted to combating corruption by bringing civil society, business, and governments together in a powerful coalition. www.transparencia.org.br WWF-Brasil: Created in 1996, WWF-Brasil now has more than 5,000 affiliated members. Its mission is helping Brazilian society to conserve nature and harmonising human activity with biodiversity preservation and the rational use of natural resources for the benefit of present and future generations. www.wwf.org.br Corporate Responsibility Akatu Institute: Formed in 2001, Akatu is an NGO with the mission to increase awareness, motivate, provide instruments and mobilise a community of citizens to achieve conscious consumption in Brazil. www.akatu.net Conselho Empresarial Brasileiro para o Desenvolvimento Sustentável (CEBDS): CEBDS, the Brazilian Business Council for Sustainable Development, was created in 1997, and is the only Brazilian business organisation focused on the environment. It is a member of the official Brazilian Delegation to develop a national climate change strategy with representatives of the council and its members attending annual COP meetings. It provides the business sector’s input into a national policy proposal on biodiversity. www.cebds.org.br Ethos Institute: Founded in Brazil in 1998, Ethos is a non-profit organisation with the aim of sensitising companies to manage their operations in a socially responsible manner. Today, it is regarded as one of the leading organisations dealing with CR both in Latin America and outside the continent. Ethos member companies represent 30% of Brazil’s GDP (see page 28). Associated to Ethos is UniEthos, which focuses on research and training. www.ethos.org.br and www.uniethos.org.br Grupo de Institutos, Fundações e Empresas (GIFE): GIFE, the Group of Institutes, Foundations and Companies, brings together private organisations that finance or execute social, environmental and cultural projects of public interest. GIFE’s strategic objective is to influence public policy through partnerships and the sharing of ideas, action and learning with the State and other civil society organisations. www.gife.org.br O Instituto Brasileiro de Análises Sociais e Econômicas (Ibase): Ibase was created in 1981. Its mission is to contribute to democracy, combat inequality and stimulate citizen participation. Ibase launched a campaign to promote social auditing based on a consistent social reporting model in 1997 (see page 30). www.ibase.br Instituto Brasileiro de Governança Corporativa (IBGC): The Brazilian Institute of Corporate Governance was founded in 1995. Its objective is to optimise the concept of corporate governance in Brazilian companies. IBGC believes that good corporate governance involves equal treatment of shareholders, transparency, accountability and responsibility for results. www.ibgc.org.br


Observatorio Social: The Social Observatory analyses and surveys the behaviour of companies in Brazil with respect to fundamental labour rights, particularly as set out in the ILO conventions. www.observatoriosocial.org.br Management Schools (select list) − Fundação Dom Cabral (FDC) www.domcabral.org.br − Fundação Getulio Vargas (FGV) www.fgv.br

brazil - country of diversities and inequalities

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