Alexander Hwang is a Concordia Research Fellow and an MBA student of the University of Virginia's Darden School of Business. He is interested in how business can be used to to affect positive and long-lasting social change.
by Alexander Hwang
It is no secret that the Thai seafood industry has been plagued with instances of forced labor trafficking. For years, a number of reputable organizations including The Guardian and Greenpeace have reported on instances of human trafficking or even launched their own investigations into the various points of the supply chain that govern the Thai seafood industry. Increasing pressure has been placed on the Thai Government to reform their laws to become stricter on this issue, to enforce appropriate regulation, and to enact policies that empower organizations to fight traffickers.
The situation in Thailand is a confluence of a number of geographic, political, economic, and environmental factors. With both Indonesia and Papua New Guinea cracking down on illegal, unreported, and unregulated fishing (IUU) in recent years, the waters off Thailand, which have not had the same level of enforcement, have become attractive for this type of illicit activity for both domestic and foreign fishing vessels. Overfishing has led to a depletion of fish populations, forcing boats to fish further and further out to sea in order to sustain the levels of demand for seafood. This leads both to increased operational costs as well as lower productivity. As would be expected in a free market economy, high demand and limited supply has led to an increase in overall fish index prices, but the commoditized nature of the resource has prevented prices from going up as high as they should. Therefore, many fishermen looking to reduce costs of their operations enter into practices that violate labor rights.
The high number of migrant workers seeking economic opportunity, primarily from neighboring countries like Myanmar, adds to the challenge. Traffickers employ coercion and manipulation through practices like debt bondage in order to enslave the labor that they need to run their businesses at lower cost. The complexity of the supply chain in the fishing industry, coupled with the lack of Thai government enforcement of anti-trafficking legislation, has enabled this travesty’s continued existence.
What can be done about this? A comprehensive examination reveals different touchpoints where work can and is being done to tackle this violation of human rights. In the way that we view legal trade as a system of sourcing, distribution, and retail, forced labor represents its own system. And yet, the global response remains underfunded and haphazard. Coordination between the private sector and public sector is fundamental in dismantling this system.
There are several elements in the current system where public-private partnerships (P3s) or other instances of cross-sector collaboration would positively impact and reduce the instances of labor trafficking in the Thai seafood industry.
Protecting Migrant Workers
The use of migrant workers as slave labor is no coincidence. Human trafficking of any sort thrives in situations where there is a discrepancy in power between two parties. Those suffering from extreme economic distress are most vulnerable to be taken advantage of, and migrant workers commonly fall into this category.
The most common tactic traffickers use to enslave victims is by collecting a recruitment fee as leverage to both confiscate identity documents and place workers in debt bondage, often adding on additional costs like transportation to their debt. The amount the victims are “paid” once placed on a fishing ship is not enough to pay off the debt, placing them in perpetual indentured servitude.
The public sector has attempted to address this issue in the past. The Thai and Myanmar governments, for example, worked out a process in 2009 to institute a national verification process to issue temporary passports to migrant workers. These efforts unfortunately have not had the desired effect. Due to the temporary nature of the measures and the state of corruption in the police ranks and government, the majority of workers choose to remain undocumented for fear of extortion. Continuing to reduce the cost of fees and foreign work permits while increasing the ease of obtaining documentation is necessary even though corruption often spoils the efficacy of these policies.
The private sector has a role to play in this as well. Raising awareness in neighboring countries like Myanmar, Laos, and Cambodia is key to helping future migrant workers understand how to navigate the legal process of obtaining approval to work in Thailand and also how to spot illegal debt bondage schemes. Survivors of trafficking have the personal credibility to work with the target population and help identify such schemes before they bear victims. Nonetheless, until the economic situation in its neighboring countries improves, the source of the problem will remain. Providing economic opportunities is therefore critical in this fight, whether they be through microfinancing, education, or other means.
Comprehensively tackling the recruitment process, however, would require the joint efforts of both sectors. While the private sector is making headway to eliminate recruitment fees entirely, a truly thorough approach cannot be taken without cooperation from the government as well. The private and public sectors must work together to develop comprehensive and fair solutions to challenges like documentation withholding, illegal or misleading recruitment practices, and lackluster regulation enforcement.
Protecting migrant workers, who more often than not exhibit this level of vulnerability, is therefore a critical step in cutting this problem off at the source. Undoubtedly, traffickers will continue to look for other populations to take advantage of, but the harder it is to find them, the higher the costs. Eventually, the economic advantages of using forced labor will no longer outweigh the added expense.
Another touchpoint that enables these practices to continue is the level of difficulty in tracing a product from catch to consumption in the fishing industry’s supply chain. Between reefers, cargo vessels, trash fish factories, processing factories, feedmills, and global retailers, there are hundreds of points of contact from the start of the supply chain to the end of it. Each represents an instance where a labor rights violation can occur. With the complex nature of these multi-tiered and international supply chains, it is extremely difficult to effectively track seafood products coming out of Thailand. Lack of transparency leads to lack of accountability that in turn allows IUU fishing to thrive.
Despite being one of the more challenging pieces to institute in the fight against labor trafficking, traceability has received a fair amount of attention from both the public and private sectors. Audits are done by both the public sector as well as third-parties to assess whether or not human rights violations are happening in the supply chain and to evaluate levels of traceability in the system. Report hotlines are being assembled to enable employees throughout the supply chain to report abuses and illegal activity. While these are important steps, more needs to be done to make sure auditing and reporting mechanisms establish true accountability and serve as more than PR exercises. Particularly in the case of measures like hotlines that give workers a voice, significant progress in establishing accountability can be formed at a minimal cost.
Software and data collection platforms play a critical role here as well. Because much of supply management in the fishing industry is still paper-based, it is not hard for “errors” to mask IUU activity. Implementation of digital programs can improve transparency in the systems to ensure traceability is accurately reported, providing ample opportunity for the formation of public-private partnerships. As an example, Thai Union has worked with various industry and government entities, including the US Agency for International Development, to implement a digital traceability program that not only improves catch reporting inputs but also improves operational efficiency and communications.
Other opportunities for improved traceability include analyzing Automatic Identification System (AIS) and satellite data to enforce and monitor fishing activity, implementing multilateral catch documentation schemes, and enforcement of port-in/port-out controls and at-sea inspections.
Because the effects of overfishing act as a driver for forced labor, no measure will succeed as a long-term solution unless this problem is addressed. The private sector has employed two main strategies to combat overfishing to date. However, an increased role of the public sector is needed to implement, enforce, and scale solutions.
The first strategy is a greater reliance on farmed fish. Aquaculture already supports half of the global demand for seafood, and as a land-based system, it is not only more flexible to implement but also easier to enforce anti-trafficking measures. Traffickers cannot escape to the high seas nor hold laborers hostage onboard.
The second strategy centers on better management of existing fisheries. Properly managed fisheries allow for sustainable harvests of natural populations, but as evidenced by Thai fisheries, there is plenty of space for poor management to lead to overexploitation of fish resources. Systems like rights-based management that control fishery access and use for long-term sustainability can align private sector interests with sustainable practices.
While seemingly a private sector led solution, the public sector has a major role to play in this space as well. Prioritizing the enforcement of sustainable practices would be helpful in ensuring that these practices take hold. Additionally, with challenges like the high implementation costs of some of these solutions (e.g. land-based aquacultures), providing financial incentives for capital expenditures would enable a more promising long-term future for the national economy that is currently very reliant upon the global seafood trade.
Increasing Consumer Awareness and Demand
As is the case with a number of social impact initiatives that concern ethical consumption of goods (whether that be seafood, textiles, electronics, etc.), much of the success will rely upon the consumers themselves. Consumers can raise awareness on this issue and place pressure on retailers to ensure that they are sourcing exclusively from suppliers with proper structures in place to guarantee that their products were not obtained at the expense of fundamental human rights.
Effective and collaborative activism is still missing in this area. While progress has been made on both the private and the public fronts, abuse still persists in the Thai seafood industry. The most recent Trafficking in Persons report marks the industry as a “significant concern”, citing corruption, lack of sufficient legislative measures, and incomplete victim identification and protection efforts. While the structure of the overall industry is complex and therefore the solutions are equally complex, there are fortunately a number of ways that tangible contributions can be made. Besides those that have been stated already, private-public partnerships are an excellent way to navigate the multi-faceted nature of this kind of work.
While both the private sector and the government have their unique responsibilities and challenges in this fight, partnering brings a number advantages including wider data accessibility and analysis, identification of pain points and barriers to policy implementation, appropriate resource allocation, more thorough compliance, and ongoing dialogue to ensure that solutions are constantly adapting and evolving to establish a long-term solution to forced labor trafficking.