A supply chain is no stronger than its weakest link

Ewelina Łukasik-Morawska By Ewelina Łukasik-Morawska, Engagement Manager at GES

Thailand’s seafood industry has recently undergone an assessment by the European Union (EU), which is evaluating the Thai government’s progress in tackling human trafficking and illegal, unregulated and unreported (IUU) fishing. The assessment is a consequence of the formal notice the European Commission gave Thailand last April for not taking sufficient measures to address IUU fishing, and if the current assessment shows that the country’s fishing conditions have not improved, Europe might exclude Thai seafood products from its markets. After the EU yellow card, the Thai government faced another wave of pressure when the United States kept Thailand on the lowest rank of the Trafficking in Persons (TIP) report. All these measures were taken after a number of independent sources in 2013-2015 reported on human trafficking as well as extensive instances of IUU fishing, and both the yellow card and the TIP ranking have raised concerns about whether the government has done enough to address the issues. Its response so far has been to introduce a new legal framework in an attempt to prevent the EU ban.

Thailand is the world’s third largest exporter of seafood; a status achieved through overfishing and reliance on low-paid, trafficked, often illegal immigrants from neighbouring countries such as Burma, Laos and Cambodia. The fishing and processing companies are using forced labour and debt bondage to produce the raw material which then enters diverse and numerous supply chains: from shrimp and pet food to poultry and fertilisers, some of which are destined for consumers in the US and the EU. US customs records indicate that Thai seafood has made its way into the supply chains of major US food stores and retailers, including some of the country’s best-known seafood and pet food brands. All the shrimp from Thai processors is considered to be associated with slavery. Long and complex supply chains that cross multiple borders and rely on an array of subcontractors hinder traceability and make it challenging to verify that the goods bought and sold every day are not produced by modern-day slaves. This means consumers may be connected with human trafficking more directly and frequently than they realise.

In order to tackle this sector-wide problem, the first priority is to encourage industry actors and market countries to apply a zero tolerance approach to abuses and take steps to eliminate slavery within the supply chains. Action by the Thai government is crucial in prosecuting trafficking cases, protecting victims and preventing forced labour. Companies should also take measures to minimise the likelihood of trafficking in their supply chains and respect the rights of the workers upstream who help make their businesses successful. For our part, GES is engaging with Thai seafood producers and buyers to underline investor concerns, and will continue to do so to ensure that proper measures are taken to mitigate the risk of human trafficking throughout the operations in both short and long term. We believe that a company’s commitment to responsible sourcing should be demonstrated by creating a clear and comprehensive anti-trafficking policy, which includes an enforcement mechanism that is applied throughout the supply chain. Such a policy should be approved and promoted by high-level executives and integrated into the company’s business model, so that supplier considerations go beyond price and include an assessment of labour practices.

Here, global investors as a party exposed to the risks relating to improper labour practices play an important role in engaging with companies and pushing them towards a better understanding of workers’ vulnerabilities in a multi-tier supply chain. Just as there are many links in the seafood value chain, there are also several pressure points through which stakeholders at different levels can add their voice to those calling for the industry to change.

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