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Know Your Supplier (Continued): Humanity United Releases Exhaustive Study on Exploitative Labor Practices in the Global Shrimp Industry

Today, Humanity United released a study – “Exploitative Labor Practices in the Global Shrimp Industry” – prepared by Accenture that provides in-depth analysis about the characteristics and causes of labor abuse in the shrimp industries of Bangladesh and Thailand.  The study explains that at least some of the efficiencies believed to exist with farmed shrimp are due to artificially low labor costs:

 

“An important factor for the low cost of shrimp is the availability of cheap labor in producer countries.  Farming and processing shrimp is particularly labor-intensive, often only feasible in countries where inexpensive labor is readily available.  This has led to exploitative labor practices in various parts of the supply chain in export countries.”

 

Humanity United’s study identifies particular segments of the supply chain in Bangladesh and Thailand that are especially vulnerable to labor abuses.  The study concedes that the shrimp industries in these two countries are quite different, but observes that “both industries rely on exploitation of vulnerable and otherwise marginalized populations.”

 

For Bangladesh, the study focuses on shrimp fry collectors, but also stresses exploitative practices tolerated throughout farmed production.  For Thailand, the study emphasizes peeling sheds that house substantial portions of the Thai shrimp processing industry’s labor force.  The abuses documented in peeling sheds surprise many experienced participants in the seafood market, as these practices are out of line with the sophisticated Thai shrimp industry that has developed over the last decade.  The study notes:

 

“The sophistications of the Thai industry has allowed Western companies to order highly processed shrimp products directly from Thailand, creating a high demand for migrant laborers to work in factories freezing, packaging, or breading shrimp products.  Preprocessing these shrimp – a work-intensive process of peeling by hand – is an underrgulated part of this sophisticated chain.  Migrant workers, often trafficked under false pretenses from Burma, are subjected to poor wages, high arbitrary fines, police or employer brutality, and long hours without proper protections.”

 

Based on extensive research, including an on-the-ground investigation, the study’s authors present an exhaustive account of shrimp production in Thailand.  The study observes that although the Thai Frozen Foods Association (TFFA) reports that there are 97 peeling sheds registered by the industry that provide shrimp to Thai exporters, approximately 200 peeling sheds are registered with the Thailand Department of Fisheries, and the TFFA estimates that there are at least an additional 400 unregistered peeling sheds operating in country.  The Labour Rights Promotion Network (LPN) “estimates that the true number of small preprocessing facilities is closer to 2,000.”  While the TFFA indicates that the use of unregistered, informal peeling sheds is forbidden within its membership, the study casts doubt on the claim, observing that “a common-sense comparison of the total Thai exported volume of shrimp with the processing capacity of just 97 registered sheds” supports the conclusion that significantly more peeling sheds are involved.

 

Reviewing the characteristics of the Thai shrimp processing industry generally, the study reports that Thai shrimp factories are “industrial plants with an almost entirely female work force.”  These factories “employ a large work force (usually in excess of 3,000 workers), 90 percent of whom are migrants, as Thai people prefer to work in other industries.”  Describing the nature of the peeling sheds, the study cites LPN’s finding that “19 percent of the migrant workers in small Thai processing plants are below 15 years of age, while another 22 percent are between 15 and 17.”  The study also cites LPN’s estimate that “for roughly 20-30 percent of Burmese migrant workers, the coercive and deceptive means by which they are recruited and retained in exploitative working conditions constitutes trafficking into forced labor.”  The peeling sheds employing these workers are difficult to regulate, as “these sheds can easily be closed or relocated with little effort.”

 

Because Humanity United’s objective is to eliminate slavery from the farmed shrimp supply chain, the study not only provides detailed analysis regarding how and through whom imported shrimp enters the U.S. marketplace, but also provides concrete recommendations as to how to counteract the problem.  One of the most powerful recommendations made requests that corporate buyers require registered peeling sheds.  Because only 97 peeling sheds are currently registered with TFFA, a “shortage of capacity resulting from this demand would result in registration of previously unknown facilities.”

 

“Corporate buyers should be able to confirm that their purchases from Thailand are not tainted by exploitative labor.  To regulate this, buyer inspectors should demand access to inspect preprocessing plants (i.e. peeling sheds), to speak to workers, and to have access to employment-related records.  Inspectors could also ensure that the production capacity of the nominated preprocessing plant correlated with the capacity of the main processing factory.  Finally, corporate buyers can demand that the ‘chain of custody’ documentation is complete and reflects all stages of production, including the deheading, peeling, and deveining of shrimp.”

 

In other words, simply asking a supplier if they are using unregistered peeling sheds is insufficient.  Also insufficient are existing certification programs, such as the Global Aquaculture Alliance’s (GAA) Best Aquaculture Practices (BAP) certification that do not meaningfully address labor practices.  The study observes that the BAP program “includes standards on health and safety, but they largely fail to address other key labor issues.”  On most labor issues, the certification standards punt, asking only that the operation abide by domestic laws.

 

“In the absence of specific standards, these certifications call for national standards and laws to be met, rather than international standards.  National labor standards in the developing world, however, often fall short of international standards.  Although the need for greater regulation than national standards was the impetus for market-based certification in the first place, these certification schemes were generally designed to ensure product quality, not fair labor practices.

The BAP standards do include additional criteria for working hours and remuneration, but both standards again point to national policies, which are often unclear or unenforced.”

 

This is particularly problematic in Thailand where, as the study notes in another recommendation, “Thai labor laws do not address the key indicators of forced labor, such as withholding of passports, wage deductions (i.e., penalties,, protective clothing), forced savings, access to workers’ bank accounts, and so on.”  The result?  According to the study, “This has led to widespread forced-labor practices that cannot be legally challenged.”  Thus, adherence to Thai labor rules is insufficient to protect against labor abuses.

 

Although Humanity United’s study focused on Bangladesh and Thailand, its authors indicate that the labor abuse problems identified are unlikely to be unique to the shrimp industries of just these two countries:

 

“While production models for shrimp in Bangladesh and Thailand are quite different, exploitative practices are common to both nation’s industries.  In looking at the underlying issues that allow and indeed cause exploitation to take place, it is clear the similar practices could be taking place in the other major shrimp-producing countries in Asia and Latin America.  While no widespread reports have been commissioned to study industries in China, Ecuador, Indonesia, India, or Vietnam, it does not mean that such practices do not occur.  Given the similarities in the comparable basic structures of the supply chains and the inability of developing countries’ governments to regulate appropriate labor standards, it is in fact highly likely that the problems that have been documented in Bangladesh and Thailand are also present in the other primary shrimp-exporting countries.”

 

Humanity United’s full study is long and an involved read.  But it is long because the study is an exhaustive and careful analysis of a problem that merits greater attention.  The study’s conclusions matter to the U.S. shrimp industry because they explain, in part, the less-publicized aspects of the “comparative advantage” supposedly held by overseas aquaculture.  Labor shortages and increasing wage costs are not unique to foreign producers.  But the options available to the U.S. industry and to its foreign competitors to respond to these increased costs are substantially different.  If one of those options is abuse of vulnerable populations, it is, again, worth asking what is the true cost of cheap shrimp.

 

Read “Exploitative Labor Practices in the Global Shrimp Industry” Prepared by Accenture for Humanity United:  http://humanityunited.org/pdfs/Accenture_Shrimp_Report.pdf

Read a short description of Accenture’s research in Thailand and conclusions: http://www.no-trafficking.org/docs/seafood/ADP%20Presentation%20for%20UNIAP%20Meeting%20on%20Human%20Trafficking%20in%20the%20Shrimp%20Industry_v1.pdf

 

Learn more about Humanity United:  http://humanityunited.org/

Review documents relating to the SIREN Public-Private Sector Seafood Dialogue on the Thai Seafood Industry (June 2012) available through the United Nations Inter-Agency Project on Human Trafficking:  http://www.no-trafficking.org/resources_seafood.html

 

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