Rogue Ships and Human Trafficking in the Supply Chain


Human Trafficking

Photo Credit: Reuters

By Sascha Matuszak
Reporter, SCCE|HCCA

An Indonesian navy ship seized a fishing vessel earlier this month, after Interpol alerted authorities that the vessel was fishing illegally and had already escaped capture twice before. The fishing vessel, the STS-50, was carrying illegal gill nets stretching up to 18 miles, and had flown at least eight different flags to elude authorities from Sierra Leone, Togo, Cambodia, South Korea, Japan, China and Zimbabwe. The STS-50 was fishing for Antarctic toothfish, an important predator within the South Sea ecosystem normally caught using longline hooks. Gillnetting has been illegal in Antarctic waters since 2006, due to the huge risk the indiscriminate, fine-mesh nets pose to almost all marine life. Buried deep within most mainstream reports of the vessel’s capture was this passage regarding a potential case of human trafficking:

At the time of its capture, the STS-50 had 20 Indonesian and Russian crew, the ministry said. It was not immediately clear what would happen to them. Navy deputy chief of staff Achmad Taufiqoerrochman was quoted in the statement as saying the Indonesian crew lacked travel documents and had been at sea for a long time without pay, indicating they may have been victims of trafficking.

No determinations have been made yet, but it wouldn’t be unusual for the Indonesian crew to be made up of forced laborers serving on an illegal fishing vessel. Human trafficking in the fishing industry is a huge problem for desperate, impoverished communities in Southeast Asia. The Associated Press put together an in-depth series on slave labor in the seafood industry, featuring products that made their way back to major supermarkets in the US, UK, and the EU. Slave labor in the fishing industry also provides a perverse subsidy that facilitates overfishing in already depleted waters. As Stella Freitag writes for the 2016 Global Slavery Index:

“What if you can force your crew to work for you and pay them nothing (or very little) for the work they’re doing? Naturally, it decreases the fixed costs and thus, the overall costs – which means the tipping point where it becomes uneconomical to fish more, is pushed down the track. So, you can keep fishing more and longer, accepting two harmful spin-offs from this scenario.”

Regulations governing modern slavery and human trafficking

Human trafficking is considered to be the fastest growing criminal enterprise: From Thailand to California, people are being trafficked and forced to work for little or no pay in every conceivable industry, from entertainment and agriculture to manufacturing, domestic care, fishing and illicit sex work. There are an estimated 45 million modern slaves caught up in this global, $150-billion industry, and the number is rising.

Compliance Persepectives, SCCE’s podcast, has an informative two-part series on human trafficking. In part 1, Stephanie Molin, director of partnerships at the Los Angeles-based Coalition to Abolish Slavery & Trafficking (CAST), gives an overview of modern slavery in the world today and lists several affected populations in the US. She also provides the Polaris Project’s National Human Trafficking Hotline (1-888-373-7888), which connects people with local resources in their communities, such as lawyers, caseworkers, law enforcement, and shelters. In part 2, William Shephard, partner in the law offices of Holland and Knight, breaks down the two ways in which governments have decided to regulate companies and address the problem of human trafficking in supply chains.

The first step is to require annual reviews of a company’s supply chain be posted on the company’s website and made available to the public. The idea is that the marketplace will be the enforcement tool: companies with no or poor supply chain oversight will theoretically experience hits to their reputations and consequently the bottom line. Two examples of this method are the UK Modern Slavery Act and the California Transparency in Supply Chains Act (.pdf) (TISC). The second option is what the US Government does, which is to require companies sign paperwork certifying that their supply chains are free of modern slavery. Although the penalties for non-compliance are severe, US government regulations affect only contractors selling to the US government. The US Trade Facilitation and Trade Enforcement Act of 2015, as well as Executive Order 13126 (.pdf) and the more recent Executive Order 13627, are examples of the types of regulation that require certifications.

Many companies find the compliance aspect to be onerous and hard to understand, given the various laws of each region and the lack of a uniform global standard. The US and UK regulations together paint a broad brush when it comes to who is liable, and it is therefore very important to make sure the compliance department understands what is required of the company and what the possible risks and penalties are for not doing it right.

Brian Alster, global head of Supply & Compliance at Dun & Bradstreet, addresses the slow but steady adoption of US and UK protocols by companies around the world in the first of a two-part series on human trafficking:

“In October 2017, 42% of UK organizations reported they have mapped their supply chains to better understand risks, and this number is rising, according to a new survey by the Chartered Institute of Procurement and Supply (CIPS). CIPS also found that 40% of supply chain managers in the UK admit to not having read the government guidance on modern slavery.”

Modern Slavery is a major infection within supply chains around the world, and the tragic, destructive consequences of this profitable, illegal business can destroy communities, ravage natural resources, and sink a lackadaisical company. Compliance professionals play a critical role in auditing, discovering, resolving these types of problems. For more information on human trafficking in supply chains and how you can tackle the problem, check out some of our relevant blog posts here.