Parallel Paths to Enforcement: Private Compliance, Public Regulation, and Labor Standards in the Brazilian Sugar Sector

Key Insights for Managers

How do government regulation and private-sector supplier codes of conduct affect working conditions in the Brazilian sugar industry? This study focuses on the sugar farms and mills in Brazil that supply The Coca-Cola Company’s (TCCC) bottlers, and that are subject to the TCCC’s “Supplier’s Guiding Principles” code of conduct. Audits, field visits, and interviews at more than 50 mills and farms conducted from 2002 to 2008 indicate that they became more compliant with labor standards after the code was introduced, and subsequently between successive audits. Authors Salo Coslovsky and Richard Locke find that improvements include the elimination of child labor, a decline of occupational accidents, more direct contracting with workers, and greater provision of adequate clothing, housing, and transportation for workers.

Over the same period, labor courts came to support the view that farms and mills were liable for violations of labor rights among any directly subcontracted workers who harvested their cane. As a result of both these public and private authorities, the labor conditions of sugar cane workers improved dramatically over the years: most workers became formally registered and entitled to benefits, overtime pay, and unemployment insurance. Moreover, mills came to provide mandatory personal safety equipment, and some put in place support staff including doctors, nutritionists, and psychologists.