Analysis: Brazil's leader defends ethanol

MIAMI, June 11 (UPI) -- Brazilian President Luiz Inacio Lula da Silva said the world's oil companies are behind the bad press regarding his country's ethanol sector, denying claims by some that the industry uses slave labor and is responsible for deforestation in the Amazon.

Da Silva, an ardent supporter of Brazilian ethanol, made defending the world's leading producer of the biofuel one of the focal points of his most recent national address.

"I believe the main attacks against biofuels come from oil companies," said the Brazilian president earlier this week.

"We are aware of the interests held by countries that don't produce ethanol, or produce ethanol from wheat or corn, which are not as competitive."

Hoping to dispel some of the anti-ethanol rhetoric regarding its environmental impact and the treatment of sugarcane cutters, da Silva noted that the cane processed into Brazil's sugar-based ethanol isn't grown anywhere near the Amazon and called "absurd" accusations that the industry was in part responsible for deforestation.

The one-time labor leader turned president also denied claims that the ethanol industry relies heavily on poorly paid sugarcane cutters who are sometimes forced to work for no pay as modern-day slaves.

However, human-rights groups have accused ethanol producers of treating their workforce like slaves and have called for the Brazilian government to exercise greater oversight of the industry.

This isn't the first time Brazil's growing ethanol industry has come under fire.

Last year, when Washington and Brasilia inked a deal to expand ethanol production in Latin America, Venezuelan President Hugo Chavez and Cuban leader Fidel Castro complained the deal in essence would reduce the amount of land used for food crops and rob the region's hungry of vital food supplies.

Da Silva rejected the comments, saying food production would not be affected by the effort to produce alternatives to petroleum, of which Venezuela is the largest producer in the region and counts the United States as its best customer.

"All South American countries and Africa can easily produce oil seeds for biodiesel, sugarcane for ethanol and food at the same time," he said, referring to Brazil's ambition to work with European nations to increase sugar production in Africa to promote ethanol production on that continent as well.

Brazil has been a world leader in alternative fuels since the 1970s, when Brazil's Pro-Ethanol Program subsidized sugar mills to produce extra product specifically for the production of the biofuel in the wake of the oil price spike experienced worldwide.

Today, Brazil is producing enough ethanol to meet its growing domestic needs, and, with the help of some foreign investment, one day could make the leap to becoming a major international vendor of alternative fuels, a bandwagon the Bush administration would like to join, considering the president's repeated pledge to reduce U.S. dependence on foreign oil.

However, analysts warn that closer alternative energy ties with the United States won't be easy, considering the much debated import tariffs on Brazilian ethanol and federal protection in the form of subsidies the U.S. corn-based ethanol industry enjoys.

"Lula (da Silva) is walking a very tricky road here, because his reputation comes from being a populist leader who instinctively distrusts multinational corporations, at least before he became president," Larry Birns, director of the Council on Hemispheric Affairs, told United Press International. "There can be constraints with becoming too chummy with the United States."