Slaves in the Food Chain: When Compliance isn’t Enough

A new law in the U.S. state of California which took effect in January of this year – the California Transparency in Supply Chains Act - requires companies over a certain size with any retail or manufacturing presence in the state to post on their website what, if anything, they are doing to prevent slave labour and human trafficking in their supply chains. The requirement applies regardless of where the company is headquartered. Debt bondage and indentured labor are forms of slavery which can be found in almost every country in the world.

This new law is an encouraging step. But as a recent report in Bloomberg Businessweek shows, weaknesses in supplier codes of conduct and insufficiencies in complying with the California law mean further urgent actions are required to address modern forms of slavery. The report exposes how indentured labour has been used on fishing vessels in New Zealand waters that provide fish for U.S. and European dinner tables.

Benjamin Skinner traces the case of 24 indentured fishermen on Korean-flagged ships in New Zealand waters whose catch is sold across the world. The fishermen had been tricked to become indentured labourers under terms so severe there was never a chance the workers would be paid or return home without risking their lives. Such coerced labor is modern-day slavery, as the United Nations defines the crime. Skinner links the fish caught by the Korean company to suppliers to restaurants and grocery stores in the U.S., including CostCo, Whole Foods Market and Safeway.

Compliance with the new California law only requires posting what, if anything a company reports to be doing. It doesn’t require action, much less proof of efficacy. Thus companies sourcing fish that originate in New Zealand waters, although compliant with the new law because of their own stated policies against slavery, aren’t required to see to it that their suppliers - the companies who sell them the fish – monitor fishing vessels for labour conditions. The flashlight of transparency tragically dims at the exact spot where its light is most needed.

Evidence of fish harvested through slave labour highlights three important points:

1. Implementation of company polices to ensure there is no slavery in supply chains often stops short in two ways:First, the monitoring of codes stops before the point where labour and human rights violations are frequently found: at the site of extraction, harvest or catch. Fishing vessels sell to consolidators who resell the catch either directly to large retailers or to other consolidators who import to the U.S. and Europe. Buyers – retailers who make direct purchases or wholesalers that service restaurants and grocery chains – do not require consolidators to monitor fishing fleets. Thus, labour conditions at the most vulnerable part of the chain are not monitored.Second, slavery exists everywhere. Monitoring labour conditions needs to be extended to all areas, including in countries considered low risk. Many companies rely upon guidance from the U.S. Labor Department and the U.S. Department of State’s  Trafficking in Persons (TIP) report to identify high risk countries and products for forced and child labour. This is good practice. However, the example of fisheries in New Zealand waters shows such practices are insufficient.According to the U.S. Department of Labor, New Zealand is not considered high risk for labour rights violations. Thus companies such as Whole Foods Market didn’t take extra steps to monitor suppliers in New Zealand. The exposure of the slave ring on fishing vessels proves otherwise.Whole Foods Market, in response to a blog about the Bloomberg report, reported that they are in the process of requiring all seafood sold at their seafood counters to come through the Trace Register electronic traceability system, which is designed to trace seafood back to the fishing vessel and location of capture.
2. Agriculture and mining supply chains require monitoring down to the point of extraction.Slave labour in the fishing industry is a sign of larger challenges in agriculture and mining sectors that require extra diligence. According to the International Labor Office, the majority of modern slaves are found in agriculture and mining and at the site of source materials. Forced labour is often involved in producing basic commodities in agriculture such as cotton, sugarcane, tobacco, coffee, rice, fish and cocoa. It is also found in artisanal and larger scale mining. Because of the high prevalence of significant labour abuse, companies with these products in their supply chain need to ensure monitoring occurs to the sites of extraction, harvest or catch. This is true regardless of geography: 600 Thai laborers were freed from indentured work as apple and pineapple pickers in 2010 in the U.S. states of Washington and Hawaii.
3. The new California Transparency in Supply Chains law is working, but there is no consensus on best practice.Thanks to the new law, consumers can spend a few minutes and read websites of most large companies to discover what they are doing to avoid slavery in their supply chains. In addition, smart phone applications, such as Slavery Footprint are making it easier for consumers to understand what products may be tainted.However, there is no consensus best practice regarding how to meet the letter and spirit of the law. Thus consumers will find a wide range of information available, with little ability to determine if the company is indeed applying sufficient care to ensure slave-free products. Companies that are serious about good labour practices can fall short, and companies doing little may seem to be doing a lot.

The New Zealand fisheries case demonstrates that companies in this industry need a multi-stakeholder process to develop a consensus set of best practices for eradicating slavery in supply chains. The lessons extend beyond the fisheries. By consulting widely across sectors and with diverse stakeholders in developing their own common standards, companies with supply chains that include commodities which are extracted, harvested or caught can benefit by learning what’s worked in other industries.

For example, companies sourcing fish or cocoa can learn from the experience of those sourcing textiles, palm oil or hardwood. Once standards are agreed, protocols for transparent reporting are needed that accurately reflect a company’s progress and verification toward the ultimate elimination of slavery from supply chains. By taking such an approach, business leaders will understand what is really required, and consumers will have a better view on whether or not companies are living up to their commitments.