for-phone-onlyfor-tablet-portrait-upfor-tablet-landscape-upfor-desktop-upfor-wide-desktop-up
Mercados

SPECIAL REPORT-How COVID-19 swept the Brazilian slaughterhouses of JBS, world's top meatpacker

 (For more Reuters Special Reports, click on           )
    By Ana Mano
    SÃO PAULO, Sept 8 (Reuters) - JBS SA, the world's largest
meatpacker, has vowed to keep the world fed during the
coronavirus pandemic. Executives say the company has added more
than 15,000 new workers in Brazil this year to crank out cuts of
chicken, pork and beef, a lot of it for export. The meat giant's
$629 million second-quarter net profit was almost twice what
analysts expected.             
    But that windfall has come at a cost: More than 4,000 JBS
employees in Brazil are known to have tested positive for
coronavirus and at least six have died from COVID-19, according
to records from local health authorities and information
gathered by prosecutors and three employee unions investigating
the company. Outbreaks have struck at least 23 plants in seven
states, prosecutors, health officials and union representatives
told Reuters, helping to fuel the pandemic across South
America's largest country.
    JBS           , based in São Paulo, denied wrongdoing. The
company repeatedly has defended its response to the pandemic in
Brazil, saying publicly that the health of its workers is the
"principal priority." It declined to comment on infections and
fatalities, saying it shares COVID-19 data only with
authorities.
    With more than 4.1 million confirmed coronavirus cases,
Brazil trails only the United States and India in the size of
its outbreak; almost 127,000 Brazilians have died. Some JBS
plants have become a locus of community spread, Brazilian health
officials and prosecutors said.
    JBS's initial brush with the virus came in its U.S.
operations in March when it cut production at a Pennsylvania
beef plant after managers displayed flu-like symptoms. The
temporary closing of two JBS facilities due to major outbreaks,
one at a Colorado beef plant, the other at a pork facility in
Minnesota, also made headlines.                          
            
    Less well-known are its difficulties in Brazil, where the
company has become a magnet for litigation. Since April,
prosecutors in some of the nation's biggest agricultural states
have filed 18 lawsuits in the country's specialized labor courts
to force JBS to implement stricter worker protections in at
least 17 of the meatpacker's Brazilian plants that have
experienced coronavirus outbreaks.
    Other meatpackers, too, have battled the virus in their
plants. Brazil-based companies including Marfrig            and
BRF            have reached agreements with prosecutors to
conduct systematic, ongoing testing of their workers to minimize
spread and keep operating.
    JBS, in contrast, largely has resisted prosecutors' calls to
perform such testing, which is not expressly required under
Brazilian law.
    "There is no obligation coming from the government, the
regulatory or the health agencies for meatpackers to carry out
tests," JBS said in a statement.
    Reuters reviewed judges' rulings and information submitted
by prosecutors as part of their JBS investigations. The news
organization also interviewed more than 30 people with knowledge
of the infections at JBS plants in Brazil, among them
prosecutors, former and current health officials, union leaders
and workers.
    Among the claims made by prosecutors as well as by
government labor inspectors who documented conditions at two JBS
plants: The virus spread at JBS because the company did not
perform its own workplace testing, failed to provide frontline
employees with sufficient masks and other safety equipment, and
did not quickly isolate workers who tested positive or showed
symptoms of COVID-19.
    Prosecutors are seeking rigorous testing and quarantine
protocols, adequate personal protective gear and greater spacing
between laborers in the Brazilian meat factories. They are also
asking JBS for damages ranging between 3 million reais 
($566,091) and 20 million reais ($3.77 million) to help local
communities near most of the affected plants procure medical
equipment and fund social projects.
    "JBS is a world leader in its industry and should set an
example," said Heiler Natali, a prosecutor overseeing legal
action against the company in southern Paraná state. "JBS does
not want to test workers and take responsibility."
    The legal disputes resulted in the temporary shutdown of six
JBS plants in Brazil this year, according to prosecutors.
    JBS said only five of its hundred-plus Brazilian facilities
were affected by the shutdowns, and that the sixth factory cited
by prosecutors was never closed.
    The sixth plant is a pork operation in Três Passos in
southern Rio Grande do Sul state. A local labor judge ordered
that plant to furlough with pay for 14 days all workers who had
tested positive for COVID-19, and to test the rest for
coronavirus, according to a June 22 court order seen by Reuters.
    Some 40% of that facility's workforce of 1,017 tested
positive for coronavirus, and one died, according to
prosecutors.
    JBS declined to comment on pending litigation. It defended
the measures it has taken, telling Reuters that, among other
steps, it has hired consultants to advise it on health protocols
such as proper physical distancing at plants. The company in
July arranged for mass testing of workers at a pork plant in the
southern city of Dourados in southwestern Mato Grosso do Sul
state under a deal worked out with prosecutors.
    Chief Executive Officer Gilberto Tomazoni said on an August
14 earnings call that he was "proud" of JBS's response to the
crisis, which he said included $400 million in investment
worldwide to safeguard workers and communities surrounding its
facilities.
    All told, JBS operates 135 facilities in Brazil, including
beef, chicken, pork and leather plants, as well as offices and
distribution centers. Those operations account for about
one-fifth of its global revenue. JBS employs 240,000 people
worldwide, including 135,000 in Brazil.
    
    BROKEN PROMISES
    Coronavirus is the latest headache for JBS, which has been
rocked by graft and food-safety scandals in recent years. Those
woes battered its stock price, pushed back a coveted U.S. share
listing and led to massive fines.
    Global demand for animal protein has bolstered JBS, though.
It reported record profits last year. When the virus hit in
early 2020, the incentive to keep its Brazil plants running was
high. Shutdowns at its U.S. facilities led to production cuts in
that key market. A weakened Brazilian currency, meanwhile, made
meat produced in Brazil cheaper for foreign buyers. JBS'
Brazilian beef exports to China, for example, rose by 53% in
dollar terms in the second quarter. The company sells in 190
countries.
    In a March conference call, CEO Tomazoni promised investors
he'd keep the product flowing, but said employee health would
come first. He announced measures for JBS plants worldwide,
including paid furloughs for employees in high-risk groups, deep
cleaning of factories and increased spacing on company buses
that transport workers to its plants.
    Tomazoni said those actions might not be implemented in all
countries due to local laws, but JBS later confirmed to Reuters
that all the steps mentioned would apply in Brazil. In addition,
Tomazoni said on that call that JBS would screen its Brazilian
workers for fever, vaccinate them for H1N1 to boost their
immunity and increase employee spacing in common areas of
plants.
    In Brazil, JBS has not always followed its own pledges,
according to court documents and interviews with prosecutors,
unions and employees.
    One example is a mid-May audit by government labor
inspectors of a JBS chicken plant located in Ipumirim, a city in
southern Santa Catarina state. The audit report, reviewed by
Reuters, found that JBS sent at least one plant employee with a
confirmed coronavirus infection back to work, and kept 42
workers with underlying conditions such as hypertension on duty
-- seven of whom later tested positive for COVID-19.
    Inspectors found 86 confirmed COVID-19 cases at Ipumirim
after reviewing workers’ medical records, representing 6% of the
facility's workforce, their report said.
    JBS declined to comment on the report.
    A JBS worker at a beef plant in Colíder, in Mato Grosso
state, became the first confirmed COVID-19 case in that town in
May, according to public health data cited by prosecutors in
court documents. Of the facility's 602 workers, 84 had tested
positive for coronavirus as of June 17, an infection rate almost
12 times higher than that of the town itself, prosecutors
alleged.
    JBS denied wrongdoing at Colíder. It said it followed
federal rules as well as advice from renowned medical
institutions to deal with potential infections there.
    At a beef facility in the city of Araputanga, also in Mato
Grosso, prosecutors said the situation was “out of
epidemiological control,” with 51 infections among a workforce
of 1,070, court filings dated Aug. 4 show.
    JBS disputed the Araputanga infection tally, but did not
elaborate.
    
    WORKING 'SHOULDER-TO-SHOULDER'
    Brazil's meat sector, like that in much of the world, has
been hit hard by COVID-19. Federal health officials in Brazil do
not track cases by industry, so the total number of meatpacking
infections is unknown. National food workers' union Contac-CUT
in August estimated that as many as 25% of the nation's 500,000
slaughterhouse workers had been infected, based on its surveys
of local chapters.
    The Brazilian Association of Animal Protein (ABPA), an
industry group representing pork and poultry processors, called
those figures "disinformation" based on estimates.
    Prosecutors allege JBS has lagged rivals in implementing
steps to thwart coronavirus at its facilities.
    Marfrig and BRF, both headquartered in São Paulo, are among
30 firms operating a total of 98 slaughterhouses and employing
more than 185,000 people that reached settlements with
prosecutors in recent months that largely enabled them to keep
operating.
    A key commitment agreed to by all those companies: They
would pay for ongoing, routine testing of workers to spot cases
early. Marfrig said it started testing all its 18,000 employees
on June 1. BRF, which employs about 90,000 people in Brazil and
is the nation's largest chicken exporter, told Reuters it has
conducted 11,000 tests at its Toledo plant alone, located in
Paraná state.
    JBS often has opted to fight in court. Prosecutors say they
have had to obtain court orders to force JBS to shut plants
temporarily, and to make changes such as stricter physical
distancing.
    "Closing a plant is a measure of last resort," said Priscila
Schvarcz, a prosecutor in Rio Grande do Sul state. She is
directing litigation against JBS over conditions at a poultry
facility in the city of Passo Fundo. That plant was closed for
almost a month starting April 24 after some workers fell ill
with COVID-19.              At least 305 workers ultimately
tested positive for coronavirus after two outbreaks there,
Schvarcz said.
    JBS told Reuters it prefers not to settle with prosecutors
because it complies with all regulations set down by the federal
government for operating in the pandemic. It said it would
continue to defend its "robust" safety protocols in the nation's
courts.
    The company has had some success with its approach. On July
3, a state appeals court judge ordered the Passo Fundo poultry
plant reopened, ruling that keeping it closed "could cause job
losses, reduce tax collection and threaten food supplies."
    Some JBS workers told Reuters they feared getting sick but
couldn't quit because they needed the paycheck. Two employees at
JBS chicken plants in Santa Catarina state - one in Ipumirim,
the other in Nova Veneza -  said in July the company provided
them and their colleagues with one single-use face mask each to
last five working days. JBS also rationed masks at the Passo
Fundo poultry plant and the Dourados pork slaughterhouse in Mato
Grosso do Sul state, according to a prosecutor and an attorney
for a workers' union in Dourados.
    "My colleague caught the virus," said the Ipumirim worker,
speaking on condition of anonymity. "We really worked
shoulder-to-shoulder and the company refused to test us."
    JBS declined to discuss allegations that it rationed masks
or that employees at Ipumirim worked in close proximity.
    
    COMMUNITY SPREAD
    Some JBS plants have been linked to community spread. In São
Miguel do Guaporé, a small town in the western Amazon state of
Rondônia, 266 workers at a JBS beef plant were infected as of
June 6, representing more than 60% of the town's cases,
prosecutors said. They secured a May 26 court order to close the
facility temporarily to stem the outbreak.
    "The plant is the main source of contamination and
transmission in this little town,” Wadler Ferreira, a local
labor judge, said in his ruling. The São Miguel do Guaporé
plant, which employed 900 people when the outbreak happened, is
the town's largest employer.             
    In Mato Grosso do Sul state, JBS workers from the Dourados
pork plant started falling ill around May. Rather than seek a
court order to close the plant, prosecutor Jeferson Pereira
worked out a deal with JBS and local health officials to perform
mass testing in July, funded mainly by the state. Nearly a
quarter of the 4,300-person workforce tested positive, driving
one of the state's worst outbreaks, prosecutors said.
            
    Dourados, a city of 223,000, has been hit hard. Some 6,058
citizens have tested positive for COVID-19, while 82 people have
died, according to Health Ministry data as of Sept. 7. In
addition to JBS, other meat plants in the area experienced
outbreaks.                          
    "The entire pandemic in Dourados started at the meatpackers.
This is an epidemiological fact," said Julio Croda, an
epidemiologist and former head of the federal Health Ministry's
department of immunization and transmissible diseases.
    ABPA, the industry trade group, disputes Croda’s assessment.
It said the industry has always acted to control the virus as it
works to maintain meat supplies.
    A union representing JBS workers at the Dourados plant filed
suit July 14 to force the company to pay healthcare costs for
employees who contracted coronavirus. That suit is pending.
    JBS defended its actions. It said testing at Dourados
"yielded good results as it efficiently prevented and controlled
COVID-19 at that plant."


($1 = 5.2995 reais)

    
 (Reporting by Ana Mano in São Paulo
Additional reporting by Tom Polansek in Chicago
Editing by Gabriel Stargardter and Marla Dickerson)
  
for-phone-onlyfor-tablet-portrait-upfor-tablet-landscape-upfor-desktop-upfor-wide-desktop-up