BRAZIL: RESPONSE TO REQUEST FOR DUE

UNCLAS BRASILIA 001555 SIPDIS SENSITIVE SIPDIS DEPT FOR EB/EPPD NANCY SMITH-NISSLEY E.O. 12958: N/A TAGS: AMGT BEXP ECON ELAB ETRD KSEP SENV BR SUBJECT: BRAZIL: RESPONSE TO REQUEST FOR DUE DILIGENCE FOR THE SECRETARY OF STATE'S 2007 AWARD CORPORATE EXCELLENCE REF: A. STATE 47222 ¶B. STATE 71180 ¶C. STATE 109403 ¶1. (SBU) The below answers are in response to the request for information in ref C: A) Could there possibly be any downside or embarrassment caused by the selection of your post's nominee? --Post has no knowledge of any downside or embarrassment that would result from the selection of its nominee. B) Do you have any information concerning job creation in the United States resulting from the operations of the company you nominated? --Ruralfone employees six direct hire employees in the U.S. and has created 50 full-time jobs within four rural communities in Brazil. Within the next six months the company anticipates hiring 100 additional full-time employees (also in rural areas) with the anticipated receipt of World Bank funding. Because Ruralfone sources some telecom equipment and services from the U.S., the company indirectly creates an unknown number of U.S. jobs. C) What is your assessment of the company's trade and investment activities with regard to helping stimulate economic growth in the U.S. and increasing American exports (what is the U.S. content of its products)? --The company sources part of its equipment from the U.S. and sells American brand mobile phones. D) What is the state of labor conditions in the company's facilities and are workers unionized? --Ruralfone has been exemplary regarding labor conditions. The company has greatly invested in capacity building, provided jobs for youth, and shown a gender conscious approach (70% of their staff are women); their employees receive health insurance coverage, and the company is in full compliance with Brazilian Labor Legislation requirements. The company's employees are not unionized. E) Are you aware of any litigation pending in local courts involving the company? --Post is not aware of any pending litigation against Ruralfone. The company, however, is currently suing a Brazilian trader. F) Please confirm that the Chief of Mission and others involved in the nominating process do not hold shares of stock or have other financial interests in the company. --Chief of Mission and others involved in the nominating process do not hold shares of stock nor have other financial interests in the company. ¶2. (SBU) As the result of an internet search, EmbOffs found reference to a July 30 Verizon announcement of the purchase of an unaffiliated company called "Rural Cellular," which may have been confused with Ruralfone in an earlier unconfirmed report. In an August 8, 2007 telephone conversation, the CEO of Ruralfone's Brazilian subsidiary told EmbOffs that he was unaware of any such acquisition, and believed that Verizon is acquiring an entirely different company as stated above. Sobel