A body of public federal prosecutors in Brazil is investigating several South Korean companies contracted by Posco in the construction of Brazil-based slabs producer Companhia Siderurgica do Pecem (CSP). CSP is a joint venture (JV) between Vale, Posco and Dongkuk Steel.
According to a media report by Diario do Nordeste, Posco used a Brazil-based company Braco to underpay workers.
Posco wasn’t allowed to hire workers to build CSP, but it allegedly did so using Braco, and paying workers less than their work contracts demanded.
Another media report said a second company, Dongyang Construction, was contracted as a third party company to help in the construction of CSP. However, it left Brazil without paying for services it purchased, including equipment rental.
Dongyang and Braco, which was accused by public prosecutors, reportedly own BRL 20.3 million for six Brazilian companies in Ceara state.