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Labor rights violations at Brazil coffee farm linked to Starbucks, Nespresso

  • Workers at Cooxupé, the world’s largest coffee cooperative, had up to 30% of their wages deducted to pay for the use of portable harvesting machines that their employers should have provided for free.
  • The violation occurred on the Pedreira farm in Minas Gerais state, which is owned by the family of the Cooxupé president, Carlos Augusto Rodrigues de Melo.
  • Cooxupé, which sells coffee to major international brands such as Nespresso and Starbucks, nearly doubled its profit in 2020 to $61 million, on revenue of $1 billion.
  • In 2020, 140 workers were rescued from slave-labor-like conditions at coffee plantations in Brazil, all of them in Minas Gerais state, according to labor inspectors.

Nineteen coffee farm laborers from one of the poorest areas of Brazil had their wages slashed illegally by a company that supplies beans to coffee giants Starbucks and Nespresso.

The violation of Brazilian labor law was revealed following an inspection on July 14 at the Pedreira farm in Cabo Verde municipality, Minas Gerais state. The farm belongs to the family of Carlos Augusto Rodrigues de Melo, president since 2019 of Cooxupé, the world’s biggest coffee cooperative. The farm owners subsequently signed an agreement with the Labor Prosecution Service and the Public Defender’s Office to return the money wrongly deducted and pay each worker 2,000 reais ($370) as compensation for moral damages.

Workers had up to 30% of their wages deducted to pay for the use of portable harvesting machines that remove coffee beans from the tree. Image by Lilo Clareto/Repórter Brasil.

The workers, many of whom had migrated from the Jequitinhonha Valley, one of the poorest areas in Minas Gerais, saw their pay cut by nearly a third to cover the cost of the portable coffee harvesters they used, as well as the fuel needed to run the machines. Such deductions are prohibited under Brazilian law, and came at a time when Cooxupé had reported bumper earnings from coffee sales to customers that include Starbucks. In 2020, the co-op saw its profit nearly double to $61 million, from $32 million the year before. Its total revenue was $1 billion, up a fifth from the $800 million it raked in in 2019.

Despite these figures, the Cooxupé president’s farm still went ahead and deducted $200 every month from the wages of workers making just $680 to $800 a month.

Cooxupé has 14,500 members and holds several certifications for sustainability, including from the Rainforest Alliance. When contacted by Repórter Brasil, the Rainforest Alliance said the Melo family’s Pedreira farm has been suspended from its program until an audit is conducted. The suspension also applies to the farms UTZ certification; UTZ merged with the Rainforest Alliance in 2018. (Read the Rianforest Alliance’s full statement here.)

Nespresso told Repórter Brasil that it is in contact with Cooxupé to “understand the developments of the case.” The company also said the Pedreira farm is not among its suppliers. (Read Nespresso’s full statement here.) However, about 720 farms linked to the cooperative are certified by Nestlé to sell coffee to Nespresso. Cooxupé sold 65,983 bags to the Swiss brand in just the first quarter of 2021.

While charging workers to use harvesting machines is illegal, it’s growing increasingly common in southern Minas Gerais, according to labor rights activist Jorge Ferreira dos Santos. Image by Special Mobile Inspection Group.

The cooperative is also certified by another multinational giant: Starbucks. “We take such allegations extremely seriously and demand that all of our suppliers commit to complying with our Supplier Code of Conduct,” the company said in a note. (Read Starbucks’ full statement here.) More than 2,000 Cooxupé member farms supply Starbucks. The company did not answer when asked whether it would take any action over the violation committed on the Melo family farm.

Starbucks’ and Nespresso’s certification programs have already proved to be flawed in other cases; instances of slave labor have been found at farms supplying both brands, with the companies only taking a stand after being approached by Repórter Brasil. These certification schemes serve as benchmarks for large buyers and, in theory, should attest to the product complying with labor and environmental regulations. However, the “Certified Coffee, Rightless Workers” report by Repórter Brasil identifies several flaws in these quality seals.

Contacted by Repórter Brasil, Cooxupé’s press office said that Melo would not comment on the labor violations found at his family’s property. In a statement, it said the Melo family had signed an agreement for “implementing improvements.” It also said the co-op “complies with labor legislation” and that “certified rural properties meet the requirements set out in the certifiers’ regulations.”

Melo declined to be interviewed. In April, while commenting on Cooxupé’s record sales, he told the newspaper Folha de São Paulo, “It’s a paradox: the pandemic was causing so much trouble, too much concern, but we managed [to have such a good result] after one year with high quantity and quality. This has leveraged the cooperative.”

While Brazil’s coffee production and exports hit record levels, not all those employed in the industry felt the benefits. In 2020, 140 workers were rescued from slave-labor-like conditions at coffee plantations, all of them in Minas Gerais, according to data from the Subsecretariat of Labour Inspection (SIT).

Most of the coffee workers in southern Minas Gerais migrate there from the Jequitinhonha Valley and northern Minas Gerais, as well as from states in Brazil’s northeast. Of the 32 workers found at the Pedreira farm, 23 came from Santa Maria do Salto municipality in the Jequitinhonha Valley. Image by Special Mobile Inspection Group.

Essential equipment

Labor inspectors found that the Pedreira farm management refused to pay for equipment that’s essential for harvesting coffee. Under the law, they’re required to provide it to workers for free.

The money deducted was supposed to pay for portable harvesting machines known as derriçadeiras, a type of motorized rake that’s used to remove the beans from the coffee plants. In addition to the $100 per month that the farm took from the workers’ wages, there was another $100 for the fuel needed to operate the machines.

Even after these deductions, however, the workers never even got to keep the machines, which cost around $550. With the coffee harvest season running just four to five months, each worker would have had $500 deducted from their wages for the machine alone, leaving them $50 shy of being allowed to take them home at the end of the harvest.

In addition to returning the money deducted and paying for moral damages, the family of the Cooxupé president pledged to provide places for workers to have their meals at work. Image by Special Mobile Inspection Group.

Under the farm owners’ rules, any machines not fully paid off by the end of the harvest were to remain on the farm and could be used by the same workers if they returned for the next harvest.

Brazil’s NR-31 legislation, which covers rural labor, stipulates that employers must provide work tools to their employees free of charge, including any fuel needed, according to a labor inspector interviewed by Repórter Brasil.

“Employers must provide work equipment. When employers make this abusive discount from wages, they reduce workers’ earnings,” said Jorge Ferreira dos Santos, head of the Coordination of Rural Employees of the State of Minas Gerais (Adere) and a member of the state board for the CUT labor federation.

“Farm owners’ logic is to profit as much as they can from the highest precariousness possible,” Ferreira said. He added that while charging workers to use harvesting machines is illegal, it’s growing increasingly common in southern Minas Gerais.

Wage deductions have a huge impact on seasonal workers, Ferreira said, because what they earn during the harvest months is often all they will get throughout the year. “They take it home and support their families until the next harvest,” he said.

Most of the coffee workers in southern Minas Gerais migrate there from the Jequitinhonha Valley and northern Minas Gerais, as well as from states in Brazil’s northeast, especially Bahia. Of the 32 workers found at the Pedreira farm, 23 came from Santa Maria do Salto municipality in the Jequitinhonha Valley.

In 2020, 140 workers were rescued from slave-labor-like conditions at coffee plantations, all of them in Minas Gerais, according to labor inspectors. Image by Special Mobile Inspection Group.

The person in charge of the Pedreira farm is Kátia Cristina de Paula Melo, the daughter of the Cooxupé president. Labor inspectors determined that the farm’s coffee production benefits the family, including her parents. In addition, the parents are listed on documents as having the right to “lifetime usufruct” over the property, despite the farm being registered to Kátia and a brother.

Kátia’s mother, Maria de Fátima Fonseca de Paula e Melo, appeared before the labor department in the municipality of Poços de Caldas a week after the labor inspection and promised to comply with 14 prescribed measures. These include returning the money deducted and paying for moral damages: improving transportation for workers; not making deductions from wages that are not covered by law or collective-bargaining agreements; providing places for workers to have their meals and toilets at work; providing working tools free of charge and lockers at the accommodations.

If they fail to comply with those obligations, the Melo family faces fines of about $2,000 per item, plus $200 for each worker affected.

André Campos contributed reporting.

This story was originally published in Portuguese by Repórter Brasil.

Image banner by Wenderson Araujo/Trilux.