Broken promises

Thanks in great part to its "green" image British company Body Shop has prospered in the 80s. In the 90s the firm tried to increase its world visibility linking its image to Brazil's rainforest and approaching the Brazilian Kayapo Indians with a program they called `Trade Not Aid.' The association generated a barrage of free and laudatory media stories about the activities of Body Shop. More recently however this image has been bruised. Is the Body Shop social conscience just a sham?

Saulo Petean*

Body Shop's much vaunted `Trade Not Aid' policy with indigenous peoples is running into serious problems in the Amazon where it sources Brazil nut oil for one of its best-selling beauty products.

Since 1991, Body Shop has been buying oil processed by the Mebengokre Indians, also called the Kayapo. Brazil nut oil makes up about one and half percent of its rainforest hair conditioner. The `Trade Not Aid' project has long been the centerpiece of Body Shop's attempts to market itself as a `socially responsible' business. But the relationship, rocky for years, has become a sore point for the Indians.

The problems hit the international press in March when the Amazon Chief featured in Body Shop promotions sued the company for failing to deliver on its commitment to pay for using Indian images in marketing efforts. The picture of Chief Pykati-re, in traditional feathered headdress making a `thumbs up' gesture, has been used in posters and leaflets, and decorates the Body Shop factory in England. It has also adorned the walls at more than 1400 Body Shops around the world. The chief's lawyer, Hildebrando Pontes Neto, is a specialist on image rights.

Pykati-re is an elder of Pukanu village, which along with Aukre village in remote northern Brazil, processes the oil. His image was featured in an American Express advertisement alongside Body Shop founder Anita Roddick. It was also used in publicity to raise funds in Europe to help the Kayapo. Village elders complain that much of that money never made it to the communities.

Problems with the Kayapo have been simmering for years. In 1993, Body Shop was showered with favorable press when it announced it had reached the world's first cultural and `intellectual property' agreement between a Western company and an indigenous tribe. However, an independent evaluation of the `Trade Not Aid' links with the Mebengokre, commissioned by Body Shop but ultimately suppressed because it was so damning, says Body Shop has consistently misrepresented the relationship.

According to the 56-page study by the Institute for Development Studies at Sussex University (UK), "The Kayapo leaders do not consider that they have conceded rights of use of image to the Body Shop." Among the other charges: Body Shop International (BSI) misrepresents the for-profit trade link as a non-governmental organization (NGO) activity; the company has disrupted centuries-long social structures; BSI also used to buy hand-braided wrist bands but unilaterally discontinued that business to the consternation of Kayapo women. The report ads: "Is the Body Shop's trading link with the Kayapo "aid", or has it been deliberate profitable investment in the marketing of the company's name?"

This is only the latest in a series of ethical blow-ups involving Body Shop. In recent months, BSI has suffered sharp criticism for selling products with formaldehyde, for its strained relationships with employees, franchisees and investors, as well as for exploiting its third world suppliers. Terrence Turner, an anthropologist from the University of Chicago who speaks fluent Kayapo says Body Shop is engaged in classic exploitation. He calls its trade program `Aid Not Trade,' a play on the Body Shop `Trade Not Aid' slogan. "Body Shop gets the aid in the form of native images," says Dr. Turner. "In return, natives get almost no trade".

The distrust between Body Shop and the Kayapo dates back to its founding in 1989. Among Body Shop head franchisers Anita Roddick raised some $800,000 for chief Paulinho Paiakan and his community. Of this, $100,000 went toward the purchase of a used aircraft and initial expenses. The rest of the money was never accounted for. In 92 and 93, Gordon Roddick, Anita's husband and BSI's executive director, brought four Body Shop country head franchisers to the Indian communities, charging them $25,000 each. Again, the Indians never saw any of this money.

After one of Anita Roddick's earliest visits, she announced that Body Shop would extend the project to other Mebengokre villages. They began competing for Body Shop's favor, which strained relations among the traditionally egalitarian culture. Roddick and Body Shop never made good on their promise.

In the meantime, Body Shop began heavily promoting its links to the Kayapo. It announced what it called the "first ever" intellectual property rights agreement. However, the Kayapo had agreed to nothing. In 1993, a group of 30 Kayapo chiefs were hastily called by Gordon Roddick to a meeting in Brasília, capital of Brazil. The chiefs happily believed that Body Shop was at last going to make good on its promise to expand purchases of nut oil. What they did
not know was that Body Shop had recently gotten word that the press was about to report that it had never reached an intellectual property rights agreement with the Kayapo. The chiefs were stunned and frustrated when it became clear that Body Shop was trying to get the chiefs to legitimize the agreement, which still had not been negotiated.

The Body Shop has publicly dismissed the recent allegations but has worked feverishly behind the scenes to contain the damage. Gordon Roddick and Body Shop's Brazilian liaison Junéia Mallas happened to be in Brasília when they found out that Pykati-re had contracted a lawyer. Mallas, who is the ex-wife of the NGO "Friends of the Earth" director, Charles Secrett, tried to dissuade Pontes Neto from taking the case by offering him a contract to work for Body Shop. Pontes Neto refused.

Body Shop then retained Brazil's largest legal firm, Pinheiro Neto, and promised to work out an indemnification settlement to keep the case out of court. Chief Pykati-re fixed a sum of $1 million.

But behind the scenes, Body Shop pulled strings to pressure the chief to drop the claim. In early March, Roddick and Mallas, accompanied by the Funai's (National Indian Foundation) regional administrator, Benigno Pessoa Marques, flew to the Pukanu village in a freighted plane. Roddick reportedly threatened that Body Shop would discontinue purchases of all oil from the indigenous communities. Only a small proportion of the Indians benefits directly from the project, but villagers in Pukanu and Aukre generally support the project because of the extra income it generates. Under intense pressure, Pykati-re agreed to drop the suit.

Body Shop helped craft a letter for Pykati-re and sent it to Pontes Neto together with a note from Marques. "Body Shop pays more for the nut oil bought from the village," it reads, "than the price of the oil including the price that Body Shop pays for the use of the Indians' images." Of course, that directly contradicts Pykati-re's original accusations.

The Body Shop says it pays $35 a kilo for the oil, well above the `world market price.' In fact, there is no market price for the oil since Body Shop is the only commercial user of the product. Body Shop unilaterally sets the price it pays to the villages. The Kayapo project has provided a windfall for the company. Over five years, Body Shop has sold 1.3 millions liters of Brazil nut oil conditioner valued at $28 million. From this the Kayapo of Aukre and Pukanu villages have received $686,000.

The marketing value of the project is immeasurable. Anita Roddick had starred in an international American Express and print campaign which stressed Roddick's concern for the Kayapo. The commercials gave the company a high-profile boost. While Roddick herself received $600,000 for the campaign, the Indians got $1,632.50 for the use of their images.

Even getting that meager amount took some doing. At first, Gordon Roddick tried to maneuver American Express to give the Kayapo payment first to Body Shop so he could deliver it personally. He wanted to demonstrate his "generosity" and help diffuse public criticism for exploiting the Indians. Ogilvy & Mather, the American Express advertising agency, refused to hand it over to Body Shop, instead demanding a receipt directly from the Kayapo.

Although Body Shop has managed to get the Kayapo controversy out of the headlines, problems still linger. BSI still misleadingly presents itself as the sponsor of an indigenous health project. In 1993, Mallas spearheaded a fund raising effort among Body Shop head franchisers from various countries. It raised $367,000 that was supposed to be earmarked for health care programs in Aukre and Pukanu villages. However, the funds were never used to help those communities.

Mallas then claimed that she discovered a "forgotten" $89 million loan for the control of malaria in the Amazon that she claimed she directed to the villages. In fact, the health care projects were developed by the Brazilian Ministry of Health and Funai, funded by the World Bank.

Meanwhile, the contract dispute still remains unsettled. Roddick and Mallas returned to Brazil twice last spring trying to get Funai's president Júlio Geiger to give Brazilian government support for the "new" contract with the Aukre and Pukanu villages. Geiger refused. The contract is not considered valid under Brazilian law because the indigenous communities were not represented by independent counsel when the contract was drawn up. Under Brazilian law (The Indian Statute -- law no. 6,001), the state does not recognize the trade that Body Shop conducts with the Kayapo.

The Indian share

Body Shop has cultivated a reputation as a "green" company that has pioneered trading links with indigenous cultures. They have provided the company millions of dollars in free advertising and marketing. However, Body Shop's own trading records indicate that the amount of products was tiny by 1993. At the height of Body Shop's promotions, only 0.16% of its turnover was with the Third World.

Body Shop shares fell sharply in August 1994 when US-based ethical investment fund, Franklin Research and Development, recommended that clients sell Body Shop shares because of ethical concerns about its operations, particularly its `Trade Not Aid' programs. The London Stock Exchange stock dropped from 253 pence to 107 pence before recovering slightly.

The Body Shop has long benefited from its self-promotions as an ethical company with a high-minded Mission Statement and Trading Charter. If Body Shop does not match its own promises with deeds, it faces severe problems. Unless it begins respecting indigenous cultures who ask only for fair compensation for the use of their image and intellectual property, it may find itself unwelcome in Brazil which has always opened its arms to foreigners, especially those who promise fair trade.

Indigenous natives who have been used as a very effective marketing tool by Body Shop now run the risk of being discarded when their usefulness runs its course. The Mebengokre (Kayapo) are approximately 4,500 Indians in 20 villages occupying seven reservations covering 120,000 sq. kilometers in the south of the State of Pará and the north of the Mato Grosso State. Each village constitutes a politically and economically independent unit. They call themselves "men bengokre" which means "people from within (or between) the waters".

The Pukanu village is located on the left bank of the Iriri river, a tributary of the Xingu. It is 400 kilometers to the east of Redenção in the south of Pará, and is part of the district of Altamira. Together with the Kubenkokre, the Pukanu village is part of the 49,000 sq. kilometers Mekranoti reservation, delimited by the Brazilian government in 1992. Pukanu has at present 254 inhabitants.

Aukre has a population of 150. It is located on the right bank of the Riozinho river, a tributary of the Xingu, in the Pará district of São Félix do Xingu. Together with five other villages, Kokraimoro, Kubenkankren, Gorotire, Moikarako and Kikretum, it is part of the 33,000 sq. kilometers Kayapo reservation, delimited in 1985.

The Brazil nut is the fruit of the Brazil nut tree (Bertholletia excelsa), one of the biggest native Amazon trees, reaching up to 130 feet in height. The tree flowers in December. The capsule-shaped fruit have a diameter of 4 to 6 inches and weigh from 2 to 3.5 pounds. The fruit takes from 12 to 14 months to ripen. Each capsule contains from 12 to 20 nuts.

Behind the scenes

The Body Shop is a multinational cosmetics company with 1,407 shops in 45 countries and a billion dollars in retail sales. It started out as one tiny store in Brighton, England, founded by Anita Roddick in 1976. She has since emerged as the world's best known feminist business leader. The company's rapid expansion on the 1980's was in great part due to its "green" brand image and its association with social causes such as: recycling, AIDS awareness, human rights and opposition to animal testing.

On the 1990's the centerpiece of Anita Roddick's marketing efforts was the rainforest promotion with Kayapo (Mebengokre) Indians from whom she sourced a tiny amount of Brazil nut oil produced by two villages for her hair conditioner, generating dozens of enthusiastic stories about Body Shop's socially conscious activities.

But the Body Shop's association with indigenous communities and its business ethics have been the source of severe criticism worldwide in recent years, becoming an example of how the company takes advantage of native imagery to pocket a lot of money. Consumers have paid a hefty premium for Body Shop's products believing that they were natural, and that the company practiced social responsibility consistent with what it preached.

The company's reputation suffered a serious setback in September 1994 when the article "Shattered Image: Is the Body Shop Too Good to Be True?" was published. The indicting story was written by American investigative journalist Jon Entine, and published in the US magazine Business Ethics. In the article, Entine revealed that the company stole the Body Shop name and marketing concept from a San Francisco commercial outfit, fabricated the origins of key products, misrepresented its charitable contributions and fair trade programs, and has been beset by employee morale and franchise problems. Moreover, its lotions, shampoos and fragrances were never "natural."

* Saulo Petean, 44, is a Brazilian independent consultant. From 1990 to 1996, Petean was a consultant for Body Shop. He lived with the Mebengokre Indians as business advisor for the Aukre, Pukanu, Kubenkokre and Kapoto villages. Petean helped establish the first two Indian export companies in Brazil: the Aukre and Pykany Trading companies. Before working with BSI, he lived with the Parakateje Indians in the Pará state and the Ashaninca from the Envira river, in the Acre State, and he also worked with the rubber tappers' leader Chico Mendes before his murder in 1988.

Saulo was fired by Body Shop in January 1996 after being accused of stirring up trouble. BSI's executive director Gordon Roddick then engineered a police investigation of Petean in an attempt to prevent him from disclosing the contents of a highly critical 56-page report on the troubled relationship between the Kayapo and Body Shop. That document, written by two Brazilian anthropologists, Iara Ferraz and Rubem Almeida, and English sociologist Pat Stocker, substantiate the history of the broken promises between Body Shop and the Mebengocre.

Currently Saulo works as an independent consultant researching ethical market for Indian communities. He can be reached by E-mail at: saulopet@eline.com.br