Brazilian president vetoes new law, activists fear worst

Brazilian Luiz Inacio Lula da Silva vetoed a measure on Friday that activists feared could worsen the plight of debt slaves in Latin America's largest nation.

The bill aims to unify two federal tax departments and eliminate bureaucracy, but it also includes an amendment that would strip government auditors of some power to investigate relationships between employers and employees, and to fine abusers.

"The amendment interferes with labor procedures. It prevents investigation," Finance Minister Guido Mantega told the government news service Agencia Brasil. "Besides, it is not clearly explained and allows room for legal controversy."

Rights said that the amendment would restrict the government's ability to fight debt slavery -- a common practice in the Amazon rain forest, where workers are often lured to remote jungle ranches with promises of well-paying jobs and then charged exorbitant prices for food and transportation, turning them into virtual slaves.

Mantega the government will send a new bill to Congress that allows labor inspectors to examine work conditions and relations between employers and workers, but with provisions that allow employers time to prepare a defense if suspected of irregularities.

Mantega the decree would honor the bill's true intent without eliminating the ability of Labor Ministry auditors to immediately impose fines and penalties on ranches found to be using slave labor -- one of the government's strongest tools in the fight against debt slaves.

Brazilian organizations lobbied in favor of the amendment on labor auditors, seeking more flexibility in the way they employ freelancers.