Sometime in 1986, Miguel de Oliveira, a Brazilian labourer, left home to work in the Amazon. A few months later he smuggled out a letter.

'My Dear Family, I ask you to pray for me. I'm imprisoned on an estate working just in exchange for food. The gang master sells us everything at double the price and that's why I haven't sent you any money.

'Yes mother, we're here like slaves. All that's missing are the chains and padlocks. I'm under threat of death because someone told on me to the gang master. If I get out of here alive I'll telephone you. Bless the children for me.'

De Oliveira was unusual in being literate, but not in his despair. Seven years later, in 1993, the Catholic Church in Brazil found nearly 20,000 men, women and children in conditions of near slavery. The individual cases reported, often only as a result of escapes, are evidence of a practice spreading throughout the low-cost labour market, including forest clearance, charcoal production and mining. They are not caused by underdevelopment or a few backward landowners, but have been linked to national banks and multinational corporations. Many of the activities in which labour is abused are also environmentally harmful: environmental destruction and human degradation are going hand in hand.

In 1992, Anti-Slavery International commissioned me to do six months' field research. As I wasn't likely to be able to bluff my way into work camps, I decided to trace fugitive slaves to their home towns. Armed with details from press and case archives, and helped by priests and trade unionists, I covered more than 15,000 miles following trafficking routes, interviewing labourers and their families, government officials, police and academics.

The main mechanism of enslavement is through debt-bondage. Workers are held captive on estates until they work off debts they have been saddled with through fraud. Gang masters, or gatos, tour areas hit by recession or drought, recruiting workers with false promises about wages and conditions. They are then transported thousands of miles in trucks - the equivalent of Lisbon to Moscow, or London to Cairo. They almost never get the wages promised, and immediately find themselves burdened by debts for transport, food and tools which they can neither check nor contest. The chance of being able to pay to get home becomes dimmer by the day, and malaria can set them back further. Their letters and personal documents are often confiscated. They are sometimes guarded by hired gunmen, who threaten or kill those who try to leave.

In Dom Pedro, four hours' drive into the interior of the state of Maranhao, 16 workers piled into a roadside house to tell me how they had been taken to an estate in Par, from which they were later rescued with the help of the Church. 'There were 80 men in each truck, like cattle, piled on top of each other in hammocks.' Some had been injured by falling against the truck's metal bars on the journey. They had done backbreaking work clearing vegetation for three months without pay.

The gato, Chico Cazuza, though facing charges for 'enticing them into conditions analogous to slavery', a criminal offence under the Brazilian penal code, was casually continuing his business in town. When I called on him, he claimed that he had been tricked by the next contractor along the line. He had always intended to pay the workers, he said, but only after they had paid him back pounds 230 for transport, food and tools (the legal minimum monthly wage at the time was pounds 40).

Luis Barbosa met me in Rio Maria, known as The Town Of The Death Foretold because of the assassination of six trade unionists after they had received public death threats. Barbosa had escaped from the Santa Helena estate in 1991 after hearing about plans to kill him for complaining about not being paid. 'I escaped this time,' he said, 'but I don't have money to leave the area. I'll have to work in another estate. If I'm lucky I'll be paid, if not, there's no way of seeking justice.'

Even off the estates there is no refuge. The network of hostels that serve itinerant workers often recover a bill for food and lodging by selling the debt to the gatos.

In the Ze Santana hostel in Acailandia the owner's son told me his father had been recruiting workers for estates for a decade: 'Sometimes the ranchers don't pay them, they kill them,' he said matter-of-factly.

There was no particular reason for him to be surprised. Professor Jose de Souza Martins, who has been documenting Brazilian slave labour for 20 years, found that a significant number of ranches who used debt-bondage also resorted to murder. A employee's testimony in 1991 to the Brazilian attorney general described how a state congressman had more than once hired gunmen to kill workers harvesting Brazil nuts; the men were shot immediately after they had been paid and their wages retrieved. Tales of beatings and perverse punishments abound.

The chain of exploitation stretches as far as Europe. The European steel industry, for instance, has secured cheap iron ore from Brazil's Greater Carajas Programme, which was partly funded by the EC. In the area whole families live next to batteries of charcoal kilns, burning tons of native woods to produce charcoal for smelting. As you reach the town of Acailandia the sun becomes obscured by a thick pall of smoke from pig-iron furnaces and the charcoal kilns that feed them. Within hours your throat and nostrils feel dry and itchy.

While her 10-and 11-year-old sons raked charcoal embers from the kilns in a timber yard, Maria das Gracas explained: 'The owner wanted us to accept vouchers to cash in at the supermarket (instead of a salary). We did our sums and worked out that it would not add up. So we didn't agree. It's a type of subjection for a person.' They had been told by the company to drink a litre of milk a day to counteract the effects of the smoke, but the owner had stopped providing it and they couldn't afford it at 2,000 cruzeiros (19p) a litre.

Paulo Souza Lopes claimed to be working more than 110 hours a week, stacking kilns with timber for around 250,000 cruzeiros, less than pounds 25 a month.

When asked if another charcoal project had brought benefits to Mato Grosso do Sul, where some 5,000 families were found by labour inspectors recently 'in conditions of real human servitude', the State Agriculture Secretary commented: 'There's nothing left, just the charcoal and the slaves.'

The Paradise Valley rubber estate looks a world away from Acailandia - a landscape of lush vegetation and rainforest. But here more traditional forms of servitude still survive, conditions identical to those described by the Brazilian historian Euclides da Cunha in 1905. 'The remoteness', he wrote, 'reduces rubber tappers . . . to being almost serfs, at the mercy and discretionary dominion of the bosses.' It took me four days by an outboard-powered canoe to reach the estate.

The families had been coerced into signing exclusive contracts with the owner and forced to exchange their rubber with him for food. In the company store I found powdered milk at 22,000 cruzeiros, though I had bought it for 9,000 in town a few days before. Vert Mello, who lived with his family in a small wooden house by the river, complained: 'We have to sell 20 kilos of rubber to buy one tin of dried milk in this store.' One family's bill had the amounts due left blank, to be decided later.

The estate owner forbade any alternative means of subsistence, such as raising pigs or hunting, which might make the tappers independent of his control. The local court had granted him injunctions that prevented human rights groups, trade unions and independent traders from using the local creek to reach the families.

The Brazilian government has acknowledged the problem - last year the then minister of labour, Walter Barelli, described modern-day slavery as 'the worst stain on Brazil's history'. But at a local level attitudes are more pragmatic. Between telephone calls about timber being stolen from indigenous reserves, the harassed federal police chief for Maraba in Para balked at liberating hundreds of 'unruly' workers from estates; he joked about dumping them on social activists to feed.

Ministry of Labour officials recognise that slavery is growing: 'With the recession people are really subjecting themselves to work in exchange for food alone, as they can no longer get the minimum wage,' said one. Officials regretted that many labour inspectors believed debt-bondage so 'normal' that they did not need to take action. So estates employ forced labour with relative impunity. The rare cases where criminal proceedings are started are limited to gunmen and smaller subcontractors, not the enterprises behind them. Even so, only two gunmen out of hundreds have ever been convicted.

'Slavery in Brazil' by Alison Sutton is published tomorrow and is available from Anti-Slavery International, The Stableyard, Broomgrove Road, London SW9 9TL at pounds 4 plus 50p p & p.

(Photographs omitted)