By Sreelatha Babu, Denis Nolasco and E. Constantinos Pappas
While browsing the seafood aisle of the local supermarket, few consumers think about the course that products take before they arrive on the shelf. Even fewer consumers imagine that the seafood that ends up on their plate might have come from exploited, abused or even enslaved workers half a world away. Nonetheless, this exact scenario is playing out on fishing vessels and in factories, hatcheries and fisheries throughout the seafood industry in developing countries such as Thailand. Often times, these abuses occur at the acquiescence of or with the involvement of state and local authorities. Worse still, this seafood ends up in supply chains used by some of the most prominent brands in the world, leaving consumers and investors in developed economies as unwitting bankrollers of egregious labor and human rights violations.
Despite the existence of international labor rights standards, many national governments either fail to enact laws that adequately protect workers or fail to enforce existing laws that do. In the face of this impunity and lack of action, there are a number of approaches that retailers can take to prevent or mitigate harmful labor practices that take place within their supply chains, including using their leverage to work with governments to improve regulation and enforcement. One of the approaches taken by multinational companies has been to adopt and comply with third party certification schemes. These certification schemes help companies to identify and remove such violations from within their supply chains while signaling to consumers that the product they are purchasing is “sustainable.” Unfortunately, because of a litany of issues ranging from lax standards and auditing requirements to business influence over the formulation of the standards themselves, these certification schemes are generally insufficient in preventing the worst kinds of human rights abuses, as evidenced by their continued practice.
This two-part series will explore some of the human rights violations plaguing global supply chains and the role that third party certification schemes can play in helping prevent or curb these abuses. The first part of this series will discuss human rights violations in global supply chains, with the Thai seafood industry as a specific example of how trafficking of undocumented migrants, forced labor, debt bondage and child labor can be used to produce items sold all over the world. It will also examine how voluntary third party certification schemes have developed to help companies understand and address human rights violations within their supply chains. The second part of this article series will delve into the major criticisms of these third party certification schemes and propose some reforms to strengthen their efficacy in preventing human rights and labor violations. This research and the reforms that will be proposed in the second article stem from the work of the Spring 2016 Corporate Social Responsibility Clinic in partnership with the International Labor Rights Forum.
HUMAN RIGHTS AND LABOR VIOLATIONS IN THE THAI SEAFOOD INDUSTRY
The globalization of supply chains has caused competition among developing countries to attract investment. In 2007, multinational corporations contributed $3 trillion in foreign direct investment. As a result, national labor laws often fall short of internationally recognized standards, providing little protection to workers. Further, the enforcement of labor laws is often weak, sometimes as a result of political unwillingness or due to corruption or bribery. In the case of Thailand, a combination of these factors has resulted in reports of trafficking of undocumented migrants, forced labor, debt bondage and child labor throughout its seafood industry.
In 2009, the U.S. imported 552,206 metric tons of shrimp, which totaled $3.8 billion, with Thailand making up 35 percent of that supply. In 2015, shrimp imported to the U.S. increased to 587,185 metric tons of shrimp worth $5.3 billion, out of which 11.4 percent was from Thailand. These imports are destined for U.S. food stores such as Whole Foods, Costco and Wal-Mart, as well as prominent restaurants, including Red Lobster and Olive Garden. In fact, an Associated Press investigation found 150 stores across the U.S. selling shrimp associated with human and labor rights violations.
The Thai seafood industry is currently thriving, with the most recent year of exports bringing in approximately $7 billion dollars in revenue. This growth is primarily due to the industry’s ability to maintain low production and processing costs, often through the employment of undocumented migrant workers. In 2011, the International Labor Organization (ILO) estimated that approximately 193,600 migrants from Burma, Cambodia and Laos worked in fishing and fish processing factories, toiling in inhumane working conditions. In the case of shrimp, currently 80 percent of the 700,000 shrimp workers are migrants. Given that many unregistered migrants workers live in the shadows out of fear of deportation, it is difficult to accurately assess the amount of undocumented workers in this industry. However, in Samut Sakhon, the most prominent province in shrimp processing facilities, only 70,000 of approximately 400,000 migrant workers were legally registered, implying a large rate of undocumented migrants in this industry as well.
Thailand’s harsh penal laws for undocumented migrant workers make them especially vulnerable to abuse by their employers due to fear of being reported to authorities, being deported or even facing imprisonment for terms upwards of five years. This gives employers substantial leverage, often culminating in conditions of forced labor. In fact, government officials themselves are often directly responsible for the precarious situation of undocumented migrants. A 2015 U.S. State Department report found that officials “on both sides of land borders accept payment from smugglers involved in the movement of migrants between Thailand and some neighboring countries,” with these migrants often becoming the victim of human rights violations.
In addition to the fear of deportation, most workers are hired in their countries of origin (including Burma, Cambodia and Laos) through labor brokers that charge a recruitment fee ranging in the hundreds to thousands of Baht (between $270 and $570). The workers arrive believing they will pay back their fee with the money they make from working. However, they are often paid meager wages. Laborers in Thai shrimp processing factories peel 175 pounds of shrimp for just $4 a day, far too little to cover their recruitment fee and additional debts charged by their employers for food and equipment. Before long, workers’ debts far outpace their income. But with no alternative to meet their obligations, they must continue to work, resulting in situations of debt bondage.
Moreover, workers are often coerced or forced into enduring inhumane working conditions. Laborers in shrimp factories can spend up to 16 hours a day with their hands in ice water peeling shrimps. They are not given adequate time to rest and are often forced to work while ill or are denied adequate medical attention. Beyond this, many factories are woefully inadequate with respect to safety and living conditions, often with 50 to 100 workers crammed into tiny sheds. Workers are threatened with violence (to themselves or their families) or with arrest and deportation (for their undocumented status or outstanding debts) to prevent them from leaving. For those who do manage to escape, they are often caught and returned by complicit local authorities, according to reports, or are sold or forced into a neighboring operation by owners competing for labor.
Furthermore, many reports document child labor in these factories. According to the International Labor Organization report, “Child Labor in the Value Chain of the Shrimp Industry in Thailand,” in Samutsakhon—one of the main Provinces dedicated to shrimp exportation—most children employed in this industry started working before their 15th birthday. In at least one reported case, a worker at a shrimp peeling factory was so tiny that she had to stand on a stool in order to reach the peeling station.
These violations are not limited to the shrimp industry, but are issues throughout the Thai seafood supply chain. Many ILO reports detail how migrant workers in the fishing industry are often tricked into inhumane working conditions. An article by the Guardian also recently found egregious human rights violations aboard fishing vessels operating in and out of Thailand. And until the recent Trade Facilitation and Trade Enforcement Act amended the law, U.S. officials were often powerless to exclude these seafood exports pursuant to their power to exclude goods procured as a result of egregious human rights violations, due to an anachronistic exception for goods that cannot be procured by another source.
THE PRIVATE SECTOR RESPONSE: THIRD-PARTY CERTIFICATION SCHEMES ON HUMAN RIGHTS AND LABOR RIGHTS
In the face of government inaction and impunity, the private sector has turned to third party certification schemes as a tool to ensure that human rights and environmental concerns are addressed within their global supply chains. These schemes seek to reassure retailers, restaurants, suppliers and consumers that certain labor rights protections and sustainability standards are being met. By enabling companies to identify and remove violations that occur within their supply chain, these schemes in turn help companies avoid negative publicity associated with being linked to those practices.
In a third party certification scheme, an independent organization works with stakeholders such as NGO representatives, trade unions, key retailers, academics and the general public to formulate a set of standards that certified companies must meet. A company wishing to gain certification must agree to have their supply chains audited to ensure compliance and follow-up audits are often mandated. Once the company is certified, it receives a license to use the certification mark on all goods it sells. A retailer may also require certification from a certain scheme as a condition for its suppliers, so applicants must be certified to retain access to the most profitable markets.
In the seafood industry, the major certifications for human rights and labor rights compliance include, among others, Social Accountability International 8000 (SA8000), Best Aquaculture Practices (BAP), Marine Stewardship Council (MSC), Aquaculture Stewardship Council (ASC) and Friends of the Sea (FOS). These certifications are voluntarily adopted by both retailers and participants in their supply chains and rely on basic international human and labor rights standards such as those established by the International Labor Organization (ILO) and the Food and Agricultural Organization (FAO). The standards set by these certifications address issues such as forced labor, child labor, traceability and transparency of production processes.
While each of these certifications more or less protects foundational human rights in the same way, there are some differences in how they protect other labor rights. Many certifications differ in the extent to which they require adherence to core ILO conventions or merely defer to national standards. There are also differences in their organizational governance and the rigor of their audit procedures. With governance for instance, the standards of some certifications are formulated by an independent technical committee, as in the case of FOS and MSC. Others, such as BAP, rely on such committees, but have the discretion to adopt or reject proposals. Similarly, with audit procedures, there are disparity in the manner of auditing and level of scrutiny, with some providing more protection than others. These variances in protections, governance and auditing can determine the success or failure of a scheme in ensuring that companies uphold basic human and labor rights.
After the Associated Press and several other media sources reported on widespread slave labor and human rights abuses in the Thai seafood industry, new attention has been focused on the practice of adopting third party certification schemes as a way to prevent such abuses from occurring in the future. While these certification schemes are certainly a step in the right direction, their efficacy will be limited unless reforms are made. In the second part of this series, we will discuss the shortfalls of third party certification schemes and possible changes to benefit workers, corporations and consumers.
Sreelatha Babu is an LLM student at Fordham Law School. Denis Nolasco is a 2L at Fordham Law School. E. Constantinos Pappas is a 3L student at Fordham Law School. They all participated in the Spring 2016 Corporate Social Responsibility Clinic at the Leitner Center for International Law and Justice.
The views expressed in this post remain those of the individual author and are not reflective of the official position of the Leitner Center for International Law and Justice, Fordham Law School, Fordham University or any other organization.
Photo Credit: Rienk Nadema/Marine Stewardship Council/Creative Commons