Wyden Asks Auto Parts Supplier Lear to Defend Brazilian Leather Supply Chain

Senate Finance Committee Chair Ron Wyden, D-Ore., asked Lear Co., a multinational auto parts supplier, to defend its leather supply chain from Brazil, and, in a footnote in the letter, cited a Reuters story that said 1,324 workers had been rescued from slavery-like conditions while cutting down forests in Brazil from 1995 to 2021. However, that article also said Brazil defines slave labor as not just forced labor -- where workers are not free to leave jobs -- but also working in degrading work conditions, or working such long hours that it's a health risk.

The bulk of the letter concerns the links between Brazilian cattle hides and illegal deforestation in Brazil's rainforests. However, it is not illegal to import goods that are products of deforestation, though there have been attempts in both Congress (see 2103030044) and the EU, which is in the process of implementing a rule aimed at stopping the import of beef (and other products) that come from deforested land in the tropics.

The letter, which was publicized July 25 in a news release, cited a 2022 report from the Environmental Investigation Agency that said 70% of the leather Lear uses to make car seats comes from Brazil.

Wyden asked: "Does Lear conduct analysis to determine whether its suppliers source cattle from ranches that were illegally occupied at the time of their transaction under Brazilian environmental laws, or from ranches that received amnesty grants following illegal occupation?"

He asked how Lear validates documents on cattle transport and rural property registration. He wrote that Lear made an SEC filing that said it uses georeferencing to identify where cattle from its suppliers were living before their slaughter. The letter asks: "Please describe the process of “georeferencing” utilized by Lear and whether its suppliers apply this process to both their direct and indirect suppliers. Specifically, please describe how Lear makes use of serial numbers stamped into hides by its suppliers, including JBS, at their wet blue tanneries."

Wyden told Lear the answers are needed for the committee's investigation "of the effectiveness of trade-based efforts by the United States to combat forced labor and environmental abuses in the supply chains of products sold in the United States." He also said it's part of a larger effort to determine the extent of forced labor in auto supply chains, an inquiry that began with questions about inputs from China's Xinjiang province (see 2303290070 and 2303280069).

The letter also asks: "Has Lear ever terminated or curtailed, or threatened to terminate or curtail, a commercial relationship with a supplier or sub-supplier, including ranches, cattle transporters, slaughterhouses, tanning facilities, finishing facilities, and any affiliated entities, because of its use of materials linked to forced labor?"

He asked if any imports destined for Lear had ever been detained by CBP under the forced labor provision. "If so, for each such instance, please: a. describe the circumstances surrounding the CBP enforcement action," he wrote, as well as the information CBP provided about its forced labor suspicions, and Lear's response to the action.

Lear told International Trade Today that officials are reviewing the letter and will respond. "Lear takes these matters seriously and remains committed to protecting human rights and the environment in our operations and supply chain. Through our comprehensive supply chain management system, we work with suppliers that meet our contractual requirements, including compliance with our Supplier Sustainability, Human Rights and No Deforestation policies," the e-mailed statement said. "If a supplier violates our policies or requirements, we investigate and respond accordingly, up to and including termination of contract."

Lear was told to respond to Wyden's letter by Aug. 7.