Operation Car Wash and Slave Labor in Brazil: Who Really Pays for Corruption in Civil Construction?

Investigated by the Federal Police, Brazilian construction companies OAS, Odebrecht, Camargo Corrêa, and Andrade Gutierrez reveal an extensive running list of workplace violations including hiring workers with false promises and exploitation of workers under slave-like conditions.

The three case studies listed below have three elements in common. The similarities may surprise you.

Case One: In a house on the outskirts of Guarulhos in São Paulo, 38 men have been crammed into the space of four rooms and two bathrooms. Many have been sleeping in the kitchen, and others, underneath the stairs. There aren’t enough mattresses for all of them. The inhabitants have had to share amongst themselves, or sleep on the ground rolled up in sheets. There is no stove or refrigerator, and not even the water works on a daily basis.

Coming from Pernambuco to São Paulo in 2013, the laborers had expected to work on the expansion of Cumbica Airport, a project with the construction firm OAS. They were promised signed employment record cards, a wage of R$1,412 per month (US$375), a per diem of R$320 (US$85), and transportation vouchers in the amount of R$360 (US$95). To guarantee a spot, each worker had to spend about R$500 (US$133). The Ministry of Labor and Employment has blamed the construction company for the exploitation of workers under slave-like conditions. In November that same year, OAS reached a judicial agreement with São Paulo’s Ministry of Public Labor Prosecution and agreed to pay R$15 million (US$4 million) for the flagrant violation.

Case Two: A few years before, and on the other side of the Atlantic Ocean in Angola, Brazilian laborers had to drink non-potable water, make their precarious meals in an environment infested by rats and cockroaches, and they resorted, time and again, to defecating in the woods. Vomiting and diarrhea became common, as well as cases of malaria and typhoid fever.

The majority of the laborers were recruited from the interior of São Paulo and worked on the construction of a Biocom sugar and ethanol plant for Odebrecht. In September 2015, the company—along with two of its subsidiaries—was condemned by São Paulo’s Labor Court to pay a fine of R$50 million (US$13.3 million) for human trafficking and the exploitation of 500 workers for manual slave labor.

Case Three: In 2009, 38 laborers from Maranhão state were forced over many days to compete for the small space of an improvised, wooden shed in order to rest after the arduous construction of the village Nova Mutum. The locale was destined to house the families who had resided in the area flooded for the construction of the Jirau hydroelectric dam on the Madeira River in Rondônia state. The workers slept on improvised mattresses, since there were no beds. The electricity was precarious, threatening the risk of fire, and the bathroom, made from wooden boards, did not have a ceiling. In this case, at least drinking water was supplied.

The Ministry of Labor and Employment and the Ministry of Public Labor Prosecution held the construction company BS liable for the exploitation of manual slave labor. The firm had serviced the trust responsible for the plant’s construction, for which Camargo Corrêa was a contractor.

Besides the exploitation of slave labor and the recruitment of immigrants, these three cases have a third element in common: they occurred during the course of projects by large contractors linked to the corruption investigations by the Federal Police’s Operation Car Wash. [See the International Bar Association for more on this investigation].

PHOTO: Laborers in the construction of the Jirau plant in Rondônia state. Source: Film: Jaci – Seven Sins of an Amazonian Construction Project.”

The unstable conditions offered to workers contrasts with the high rates of corruption linked to these same companies under investigation. While laborers slept on the ground and had no access to bathrooms, denunciations presented to the Federal Public Prosecutor have claimed that Odebrecht has spent R$144 million (US$38 million), that Andrade Gutierrez has spent R$123 million (US$32.5 million), and Camargo Corrêa, R$110 million (US$29 million) in a corruption scheme that involved politicians and Petrobras employees.


The frugality regarding its employees is even more eyebrow-raising when compared to the voluminous public funds destined for these construction companies. The expansion of Guarulhos Airport, for example, received an initial investment of R$1.2 billion (US$320 million) from BNDES, the Brazilian Social and Economic Development Bank. In December 2013, a few months after the slave labor violation, BNDES approved an additional expenditure of R$2.28 billion (US$600 million). Along with Airports Company South Africa, OAS was one of four companies making up Invepar (a Brazilian transportation infrastructure firm), that held 51% of the partnership with Infraero (the state-owned Brazilian Airport Infrastructure Company) for the administration of Guarulhos International Airport.


Suspicion weighs heavily over Odebrecht’s construction of the Biocom plant, according to the Ministry of Public Labor Prosecution, which had “occult financing” from BNDES. Likewise, the construction of the Jirau plant—part of the federal government’s Accelerated Growth Program (PAC) and linked to Camargo Corrêa—received initial financing upwards of R$7.2 billion (US$1.9 billion) from BNDES.


Regarding the Angolan case, Odebrecht asserts that it retains a minority interest in Biocom and is not responsible for the construction of the undertaking, citing that the project “was executed by specialized companies contracted by Biocom itself.” They also said that the working conditions are “adequate,” and that “no curtailment of freedom ever existed for any worker.” (Read the statement in its entirety).


Odebrecht has been condemned as a result of the official complaint. The construction firm must also explain the liberation of 11 workers at the end of July 2015 from the Olympic Village site, which will house competitors of the 2016 Olympic Games in Rio de Janeiro. The victims—from the states of Maranhão, Paraíba, Bahia, and Espírito Santo—slept in small kitchenettes in a local favela. Some of the workers confirmed that they had spent the night outdoors due to the filthy conditions of the accommodations. A strong smell of sewage was coming from a drain in one of the house’s rooms, and the laborers had to live alongside rats and cockroaches. According to attorney Guadalupe Louro Turos Couto from Rio de Janeiro’s Ministry of Public Labor Prosecution, in addition to the outsourced company Brasil Global Serviços [Brazil Global Services], all of the companies linked to the construction projects will also be held responsible, including the members of the Ilha Pura Consortium, Odebrecht, and Carvalho Hosken.


When questioned by Repórter Brasil regarding the slave labor charge, the Ilha Pura Consortium said they identify and supervise all lodgings maintained by its suppliers, and Brazil Global Services declared that they have no accommodations since all of the contractors had proof of residence in Rio de Janeiro. (Read the statement in its entirety). OAS and Camargo Corrêa have not responded to requests for an interview.


PHOTO: Workers set fire to Jirau plant’s accommodations during a strike in 2011 Source: Secretary of State Security and the Defense of Citizenship / Rondônia.

In addition to slave labor in the construction projects intended for social compensation, the Jirau hydroelectric plant’s construction site became the stage for a workers’ revolt in March 2011. Workers protested the non-payment of overtime, the lack of treatment for sick laborers, and the failure to fulfill promises when recruited from other states. Part of the construction site was destroyed and troops from the National Public Security Force occupied the locale. The rebellion resulted in the signing of the National Commitment for the Perfection of Working Conditions in the Construction Industry in February 2012, an agreement criticized for not considering all of the sector’s work-related problems. Two months after the agreement took hold, a new revolt broke out at Jirau.


Andrade Gutierrez—another large contractor denounced for corruption in the scheme investigated by Operation Car Wash—is also accused of a series of workplace irregularities, for instance, in the state of Amazonas. Responsible for the construction of the Arena da Amazônia stadium in Manaus, the construction firm arrived at a judicial agreement in September 2014 for the payment of R$5 million (US$1.3 million) in damages for collective pain and suffering. Workplace irregularities in the construction project included the violation of rules related to overhead work safety, machines and equipment, electrical installation, and the projection of materials. Negligence cost the lives of three laborers as a result of accidents: Raimundo Nonato Lima Costa, Antônio José Pita Martins, and Marcleudo Melo Ferreira. In the case of the latter, the accident occurred at night, raising suspicions that the construction company was pressuring workers to finish the project, which received financing of R$400 million (US$106 million) from BNDES via the state of Amazonas.

Corruption and Slave Labor

Are slave labor and grave workplace violations directly related to corruption?


For some, the answer is yes. “Workplace fraud, the great fuel of slave labor, is one side of the same coin of corruption and tax fraud,” says Renato Bignami, a former state coordinator of the program for slave labor eradication with São Paulo’s Regional Superintendent of Labor and Employment. He believes that companies using public resources for corruption may need to “heat up”—meaning to launder—money in some way. “Either they create fictitious companies or pay slips, or they benefit from various types of workplace fraud.” For Bignami, if there were an inquiry into white-collar crime and tax fraud along with the investigations into slave labor, other offences would be found.


For others, the relationship is less direct. For Cláudio da Silva Gomes—president of the National Confederation of Labor Unions in the Construction and Lumber Industries, affiliated with the national trade union CUT [Central Única dos Trabalhadores]—from the moment a contractor has to consider corruption as a cost, it compensates on some other aspect. “How does it do this? By keeping the workers’ conditions precarious,” he explains.


As a way of addressing all of these issues, Bignami proposes the implementation of a national plan to combat workplace and social fraud. “A plan that involves the issue of employment contracts, the discussion of outsourcing and subcontracting, the question of production chains—mainly those that utilize public money, which is the source of corruption—but also security-related crimes. I suggest that this be made with the participation of institutions such as the Labor Inspection Department, the Federal Revenue Service, and the Federal Police.”

Photo: There have been 2,700 accidents and 9 deaths at the Jirau plant alone. Source: Jaci – Seven Sins of an Amazonian Construction Project.”





In contrast to reporting on Operation Car Wash, the innumerable instances of workers’ rights violations in the civil construction sector haven’t featured prominently in the press. Not even the extensive list of deaths, slave labor, obstruction of freedom, unpaid wages, inhumane accommodations, and worker recruitment has been able to generate commotion or concrete measures to improve of the situation.


According to statistics from Social Security and the Ministry of Labor, civil construction is the fifth economic sector in number of accidents in Brazil, but second in fatal occurrences; currently, the average is around 450 deaths per year. The risk of worker deaths in construction is more than double the average of other sectors, while the probability of being permanently incapacitated is six times higher.

The increase in the release of urban workers from conditions analogous to slavery is striking, contradicting the trend of such discoveries mainly in the countryside since 1995, when a national policy was instituted to combat the crime. In the city, incidents occur mainly in the textile sectors and in civil construction.

“In the construction branch, there is a lot of disdain for complying with labor obligations,” explains labor attorney Guadalupe Couto. “In talking with proprietors of large construction companies, one finds the attitude that ‘if the employees are receiving meals, then the wages can be late.’”

Data from the Ministry of Labor collected by the CPT [Pastoral Land Commission] has revealed that civil construction was the sector with the greatest number of victims of slave labor in 2013: 866, which represents 40% of the total rescued workers in the country that year. The sector had already been leading in 2012, but by a much smaller margin: 23%. In 2014, according to a survey by the federal government, civil construction continued out front, with 27% of the total freed workers.


Large contractors are directly responsible for such numbers. For example, MRV has been caught out five times since 2011. In addition to the Guarulhos Airport case, OAS was considered responsible for using the manual slave labor of 124 people in the construction of the Shopping Boulevard commercial high-rise in Belo Horizonte, Minas Gerais, also in 2013. The episode meant the company was included in the so-called “dirty list” registered by the Federal Government in July 2014, which published the names of employers caught using slave labor. The list has been suspended due to a decision by the Federal Supreme Court at the request of the association of incorporated real estate agents. Before the suspension, however, the construction company had already been excluded from the list.


Holly Holmes is a freelance Portuguese-English translator, proofreader and copywriter at Language Artisan. As a 2011 Fulbright scholar in Belo Horizonte, Brazil, Holly conducted research on politics, censorship, and popular music in the 1970s during the military dictatorship. Holly currently resides in Tucson, Arizona, where she conducts research toward music education programming for disadvantaged student populations.