The orange juice supply chain is an index of the development dilemma in Brazil
 
For many years now, giant orange juice producers Cutrale, Citrosuco and Louis Dreyfus have been engaged in heated, costly legal battles with Brazil’s Public Prosecutor’s Office. Their confrontation is a prime example of the dilemmas Brazilian society experiences today. It also serves as a memento of how thorny an equation emerging democratic countries have to face: they need to develop the country and protect social rights and the environment, while remaining highly competitive on a global scale. Finding the best way to solve this puzzle is one of the main challenges for Brazil.
The first piece of the puzzle is the new socio-political climate of Brazil. Since the return to democratic rule in the country and the enactment of the new 1988 constitution, a much more politically conscious population has increased its demands for effective legal entitlement. In this context, human rights and the right to a healthy environment have become particularly prominent. In tandem with such demands, government institutions such as the Labour Public Prosecutor’s Office (MPT in Portuguese) have been given extensive powers of investigation to hold both public officials and private actors accountable for offences in these areas.
The active role MPT has played in overseeing the labour conditions in three major orange juice companies is characteristic of this new mindset and the value Brazilians place in making rights count. Since 2000, MPT has started around 200 proceedings against Cutrale, 43 against Louis Dreyfus and 126 against Citrosuco. Together, these companies have recently been sentenced to a fine of R$ 455 million (around US$ 120 million) for violation of labour laws. More procedures are said to be forthcoming. MPT’s efforts have considerable popular support and signal a widespread desire to set clear rules for corporate activities, making sure that workers and the environment are protected.
The second piece of the puzzle is economic. The task of combining macroeconomic stability with social-environmental fairness only grows more difficult when economic activity slows down. This is especially true if agribusiness is staple to the economy as a whole, and indeed is the case Brazil faces today.
Agroindustry accounted for 23.3 per cent of Brazil’s GDP in 2014 and for 43 per cent of the country’s total exports. Orange juice is a key component in this sector. When MPT and producers come to the negotiation table, everybody is aware that the labour and ecological concerns of regulation have to find a way to co-exist with the economic rationale of business. Given the dire economic situation of the country, the Brazilian administration is wary of seriously antagonising some of its largest exporters.
This is understandable. After a decade of impressive economic and social gains, which catapulted Brazil to the fore of world attention, the country is witnessing a fast-paced deterioration of its socio-economic forecast. GDP is expected to drop by 2.7 per cent in 2015 with an inflation of over 9 per cent. Unemployment has reached 8.3 per cent in the third quarter, the highest rate since 2012.
To make things even more difficult, President Dilma Rousseff has seen her popularity plummet. A recent poll has shown that only 10 per cent of Brazilians approve of Dilma’s administration while 69 per cent consider it to be “bad or very bad” for the country. This is the lowest approval rate ever recorded in Brazil and has considerably hindered her ability to implement policies and face opponents.
It also makes the president more dependent on tax money for keeping inclusion programs afloat – a must if recent social gains are not to be corroded – and, thus, she is potentially more sensitive to the needs of those, such as the agroindustry, still capable of generating cash in a time of crisis.
On the eve of the of the United Nations conference on climate change in Paris (COP21), Brazil is a much less optimistic country than it was in May 2012 when, at the end of the United Nations conference on sustainable development (Rio+20), the prospects of a bright, ecologically sustainable future seemed well within reach.
However, there may be unseen benefits, and not negligible ones, in the present hardship. Too often the country has embarked in hyperbolic Manichean readings of its future, which was to be either of “absolute success” or “absolute failure” as dictated by the moment. Decades of democratic rule have contributed to the emergence of more nuanced approaches.
More and more, it is recognised that Brazil is facing formidable problems including corruption and poverty, but also that it has the institutions and capacity to deal with them. Part of this is its independent judiciary, sentencing even high profile politicians to jail, demonstrating that popular commitment to greater social inclusion is still strong and freedom of speech is protected.
A more mature approach to the country has also led to a rejection of a crude, shallow-minded opposition to both socio-ecological responsibility and economic growth. The firm response Brazilian institutions have been giving to accusations of foul play in the orange juice supply chain – as well as the political negotiations to end corruption, while respecting commercial concerns – bespeak this new understanding that the road to sustainable, inclusive development is long and bumpy. It also shows that Brazilians have made a commitment to follow it, even in hard times.

Image from: http://blogs.wsj.com/moneybeat/2014/03/05/orange-juice-wakes-up-to-brazils-drought/