THE BLOG
06/27/2014 09:51 am ET | Updated Aug 27, 2014

Shrimp Supply Tainted With Modern Slavery: Why Global Business Transparency Is Needed

This post was co-authored with Nicole Vander Meulen

Americans love shrimp. In fact, we love it so much that we eat it more than any other seafood, and almost more than tuna and salmon combined. However, that love comes with a price -- and a steep one at that. Recent news has uncovered that the pink delicacy, which often conjures images of silver platters, ramekins of various colorful sauces, and people in cocktail attire drinking champagne may now be associated with images of exhausted and overworked laborers struggling to stay alive on ships, unable to escape, and in constant fear of being beaten and even killed.

An investigative report conducted by The Guardian revealed that Charoen Pokphand (CP) Foods, which operates in Thailand and is the largest prawn farmer in the world, buys the fishmeal it feeds its shrimp from suppliers that use slave labor on their fishing boats. The conditions on these boats are horrendous. Workers who have escaped described being chained up, starved and sold like animals. There are also reports that workers were subjected to torture, beatings and executions on these boats.

After the fishmeal is produced through this slave labor, CP Foods purchases it and either sells it as its own brand of fishmeal to other shrimp producers or uses it to feed its own shrimp. This shrimp is then purchased by big retailers such as Costco, Walmart and Tesco. By sourcing their shrimp from CP Foods, these retailers are participating in and perpetuating slave labor.

The shrimp industry in Thailand is just one example of a global problem. Forced labor, human trafficking, and child labor occur in many different countries and in the supply chains of many different industries. Governments have taken note of these horrific and widespread abuses, and have become more involved in the fight against human trafficking, forced labor, and child labor. For example, the United Kingdom is currently considering the Modern Slavery Bill, which aims to supplement existing legislation on forced labor and trafficking as well as strengthen the protection of victims of these crimes.

Additionally, the United States Department of State released its 2014 Trafficking in Persons (TIP) Report on June 20. This report considers the steps taken by governments to "prevent, protect, and prosecute" modern slavery, and ranks them into one of four tiers -- tier one, tier two, tier two watch list, and tier three. If a State is ranked in tier three, it may be subjected to certain penalties. At the release of the report, Secretary of State John Kerry drove home the point that "the United States is the first to acknowledge that no government anywhere yet is doing enough ... And we all need to try harder to do more."

This obligation to do more is taken very seriously by Congresswoman Carolyn B. Maloney (D-NY) and Congressman Christopher H. Smith (R-NJ), who introduced the Business Supply Chain Transparency on Trafficking and Slavery Act of 2014 (H.R. 4842) on June 11, 2014. If passed, this bill would require all listed companies that have global gross receipts (i.e. total amount received during the company's annual accounting period from all sources, without taking out costs or expenses) higher than $100 million to include information about human trafficking, child labor, and slavery in their annual reports to the Securities and Exchange Commission (SEC).

Specifically, these companies would have to indicate what measures, if any, they have in place to identify and address these abusive practices within their supply chains, and provide a description of those measures. This information would then be published on the company's website, on the SEC's website, and provided in hard copy by the company upon request. This bill would not be burdensome on companies, as it does not require companies to have these measures in place, but only requires that they publicly indicate whether they do or not.

This bill recognizes that States have a duty to protect against human rights abuses, and corporations have a responsibility to respect human rights, as elaborated on in the Guiding Principles on Business and Human Rights. By shining a light on the actions that companies are or are not taking, this bill allows consumers to make informed decisions about which companies to support. This, in turn, will incentivize companies to create or strengthen processes for preventing, identifying, and addressing instances of forced labor, trafficking, or child labor. Another way this bill increases consumer knowledge is by requiring the Department of Labor to consult with the Secretary of State, human rights groups, independent labor evaluators, and relevant federal and international agencies, to create a list each year of the top 100 companies that meet standards of supply chain labor laid out by international and federal guidelines.

In addition to incentivizing due diligence on the part of companies in managing their supply chains, this bill also provides critical information for investors. According to the Interfaith Center on Corporate Responsibility, Calvert Investments, and Christian Brothers Investment Services, the information that companies would provide under this bill is material to investors because if a company does not have mechanisms in place to prevent, identify, and address these abuses in its supply chain, that company is "exposed to a host of financial, regulatory, legislative, legal and reputational risks with the potential to adversely impact shareholder value." Knowing that a company is exposed to these types of risks is crucial for investors' ability to evaluate and manage their investment portfolios.

If the United States is truly committed to being a leader in the charge against modern slavery, Congress should introduce and pass laws like H.R. 4842 that hold corporations accountable for their human rights practices. Failure to do so will allow for the status quo to continue, and the status quo is not acceptable.