October 22, 2010

COLUMBIA UNIVERSITY
SCHOOL OF INTERNATIONAL AND PUBLIC AFFAIRS
WORKSHOP IN DEVELOPMENT PRACTICE
Preliminary Terms of Reference
Fall 2010 - Spring 2011

Title:

Host
Agency/Research
Partner:

Environmentally and Socially Sustainable Production of Bisabolol

from Threatened Candeia Forests in Brazil: Adding Sustainable
Value in the Global Cosmetics and Pharmaceutical Chains

Instituto de Relaces Internacionais (IRI) and Centro de Estudos

das Negociaes Internacionais (CAENI) do Departamento de
Cincia Poltica da Universidade de So Paulo, both based at
Universidade de So Paulo (USP)

Research Partner:

Atina Ativos Naturais Ltda. (www.atina.com.br)

Background:

The Instituto de Relaces Internacionais (IRI) at Universidade de So

Paulo (USP), a major Brazilian university in So Paulo-SP, offers
undergraduate and now doctoral degrees in international relations
conjunction with the universitys other social science departments. It
sponsors academic and policy research, and will be providing
assistance for the participation of USP faculty and (ps-graduated?)
students involved in this project.
Established in 2001, the Centro de Estudos das Negociaes
Internacionais (CAENI) conducts research and training on negotiations
in different areas, from industrial relations to international trade
bargaining in comparative perspective. CAENI is affiliated with the
Departamento de Cincia Poltica at USP. This is the second year that
IRI and CAENI have been partners with Columbia University for a
workshop project, and the fourth year that Dr. Veiga has worked with
Columbia on such projects as the principal client contact.
Atina Ltd., a local Brazilian medium-sized company, is a major supplier
of alpha-bisabolol (or bisabolol for short), a naturally derived substance
highly valued for its anti-irritant and anti-inflammatory properties for
use in skincare, cosmetic, and pharmaceutical products. The most
concentrated (but not exclusive) natural source for bisabolol is candeia
(Eremanthus erythropappus), a native tree from Brazils ecologically
threatened Atlantic Rain Forest (Mata Atlntica). In these forests, Atina
prospects for groves dominated by this species (so-called candeal),
suitable for a sustainable management plan. Atina has its own farms
with candeia groves and candeia plantations in Carrancas/MG, and
also manages forests of about 80-100 rural producers in the candeia
occurrence region. After the forest extraction, the harvested wood is
transported to Atinas industrial plant, where the essential oil is

extracted and purified. The final product is sold to cosmetic industries,

such as Natura Cosmticos, S.A., the giant eco-cosmetics direct-sales
company headquartered in Brazil, with operations in Latin America and
Western Europe.
Unlike all its local competitors who also supply bisabolol, Atina
operates in accordance to the sustainability standards of the Forest
Stewardship Council and ILO labor standards, as well as Ecocert
organic production rules. Atinas competitors also sell bisabolol to
major branded cosmetic and big pharma multinationals, but operate
with illegal raw material, bought from informal loggers who engage in
clear-cutting and other unsustainable practices. They also condone or
promote questionable labor standards in remote forests, all with little or
no external governmental or buyer oversight.
Despite the commitment of Atina and its principal buyer Natura to
operate only with socially and environmentally sustainable bisabolol,
Atina has experienced difficulty in expanding its market beyond its one
key buyer and in thus getting a fair return for its expensive investment
in certifiable processes.
In this context, Atina contacted IRI and CAENI at USP to seek their
assistance in trying to identify alternative markets and certification
schemes that would enable it to expand its sustainable bisabolol
operation.
Objective:

Working in close conjunction with an USP graduate student team

directed by Dr. Veiga, a Columbia workshop team will be tasked with
(1) conducting a study of the global value chain for those goods that
use (or potentially use) candeia-derived bisabolol, including how
industrial consumers (cosmetic and pharmaceutical industries) view
bisabolol in terms of cost, benefits, similar natural actives, synthetic
substitutes, and other less tangible values such as forest origin or
certifications (FSC, Ecocert, UEBT); as well as (2) identifying what
existing or potential alternative social and environmental certification
mechanisms might enable Atina to access expanded markets and face
the challenge of illegal, low-cost, environmentally and socially
degrading bisabolol production (e.g., other types of organic
certification, standards similar to Fair Trade that combine
environmental and social concerns, etc.). These tasks are closely
interconnected, as a creative, diligent, comprehensive effort aimed at
matching the conditions of this little studied product with potential
uses, buyers, and eco-social certification schemes has not yet been
undertaken.
An important parallel task, particularly for the USP members of the
team, will be gathering available information from secondary sources
and selective interviewing in Brazil regarding the local market and
regulatory environment.
This could include documentation of
environmental and social abuses in candeia exploration localities;
enforcement by the government of the state of Minas Gerais of existing
laws governing candeia harvesting; enforcement by state and/or
federal authorities of relevant labor laws; and the identification of

environmental and other civil society organizations in Brazil or abroad

who may be concerned about exposing illegal candeia harvesting and
related social abuses and fostering enhanced certification as a local
and industry best practice. The underlying concern is fostering a local
and international network of active stakeholders who can promote the
sustainable bisabolol.
The Columbia team will work in close collaboration with a small team
of up to three USP graduate students coordinated by Dr. Veiga; these
students will accompany the Columbia students on site visits to
candeia-harvesting sites in Minas Gerais state and Atinas production
facilities. There will also be ample time for additional primary research
(e.g., interviewing, questionnaires) in the city of So Paulo, where
Atina maintains a commercial office, and Natura is headquartered, and
where IRI/CAENI can provide logistical assistance.
Deliverables:

The expected deliverables include:

(1) a detailed workplan (see preliminary research outline attached);
(2) a draft outline of the teams final report;
(3) a draft final report;
(4) a final report;
(5) a presentation of preliminary findings to CAENI and USP staff and
Atina representatives at the end of the teams March field trip; and
(6) a final presentation of the teams findings and recommendations to
SIPA faculty and staff in late April/early May.

Requirements:

Ideal candidates for the project team (of approximately four-five

American and two-three Brazilian students from USP) should possess
the following skills:

Logistics:

Familiarity with CSR principles and multi-stakeholder methodology,

core labor and/or environmental standards;
Familiarity with field research and evaluation methods;
Country/regional experience;
Fluency in English (for all Brazilians) and Portuguese (for some
Americans Spanish would be a plus for those who dont speak
Portuguese);
Experience working in rural areas (a plus);
Availability to travel in January or March for 15 days each; and
High performance in group working.

The Columbia student team will conduct desk research and

informational interviews in New York City beginning in November
2010. The USP team will make arrangements to organize travels and
develop support material for interviews in order to conduct joint field
research in Brazil in January and March 2011. The joint team will
complete its final report by early May 2011.
The project will entail a close working relationship between the
Columbia student team, the USP student team and Atina (the subject
of the study and a key partner). The Columbia and USP students will
work together as much as possible as a joint team, with divisions of
labor as appropriate. IRI/CAENI will assist the team in receiving

relevant background documents on Atina policies and operations, will

facilitate the teams meetings with Atinas staff and other relevant
stakeholders, and will provide logistical support to the joint team in So
Paulo. Atina will provide logistical support for the teams field visits in
the state of Minas Gerais, at the companys candeia groves and to its
industrial plant in Pouso Alegre/MG.

Annex
Preliminary Study Outline
1. GLOBAL OVERVIEW - Market Structure for Rainforest Products and Cosmetic Industry
1.1. Construction of the value chain: The drivers? Leadership?
1.1. Competitors profile in the global cosmetic industry
1.2. Substitute goods for bisabolol
1.3. Price constraints
1.4. Structural aspects of the market for cosmetics and health care industry
1.5. Possible marketing upgrades
1.6. Certification: a real premium for rainforest products?
2. NATIONAL CONTEXT The Candeia/Bisabolol Market, Regulation and Certification in
Brazil
2.1. Institutional arrangements for candeia/bisabolol: Markets, state and local institutions main constraints.
2.2. Greenwashing effects: How competitors downgrade standards and destroy the market
for natural bisabolol
2.3.Certification for bisabolol: Why hasnt it worked? Consider FSC, Ecocert and
UEBT (Union for the Ethical Biotrade)
2.4. The Natura supply chain: A model for sustainability? Applicability elsewhere?
3. ATINA IN COSMETIC AND HEALTH CARE SUPPLY CHAINS
3.1. Bisabolol: a rainforest product
3.2. Bisabolol in the supply chain: From Natura to global brands
3.3. Local level: Upgrading standards and institutional drive
3.4. Corporate level: Integrating marketing strategies
3.5. Market value and social and environmental standards: what does bisabolol mean for
sustainability?
4. CONCLUSION