October 7, 2024

 

Investigation reveals labour exploitation in shrimp industry linked to western supermarket pricing

A recent investigation has uncovered widespread labour exploitation in the shrimp aquaculture industries of Vietnam, Indonesia, and India, driven by the pursuit of windfall profits by major Western supermarkets, Invezz reported.

 

The report, published by the Associated Press (AP), highlights how low wholesale prices have put immense pressure on producers, leading to significant exploitation of workers.

 

The investigation, conducted by a coalition of non-governmental organisations (NGOs), focused on these three countries, which are among the largest global shrimp producers. According to the findings, shrimp producers supplying markets in the US, the European Union, the UK, and Japan have seen earnings fall by as much as 60% compared to pre-pandemic levels.

 

To meet supermarket demands for low prices, producers have resorted to cutting costs, primarily affecting labour. This has led to practices such as unpaid overtime, wage insecurity, and failure to meet minimum wage standards. The report is based on over 500 interviews with shrimp workers, alongside data from secondary sources.

 

In Vietnam, workers are often forced to peel and process shrimp for six or seven days a week in freezing conditions to maintain product quality. Women, who make up about 80% of the workforce, are particularly affected. Many of them work long hours, starting as early as 4 am and not returning home until after 6 pm. Pregnant women and new mothers are allowed to leave an hour earlier, but conditions remain harsh.

 

In India, workers face hazardous conditions, including exposure to highly salinated water, chemicals, and toxic algae from shrimp hatcheries. The report also uncovered the use of child labour, with girls as young as 14 being employed to peel shrimp. Unpaid labour is widespread, and many workers are paid below minimum wage, while facing wage deductions and uncompensated overtime.

 

Indonesia presents a similar picture. Since the COVID-19 pandemic, wages have plummeted, with shrimp workers earning around US$160 per month—below the minimum wage in most regions. Workers are often required to work 12-hour days just to meet basic production quotas.

 

Several of the world's largest supermarket chains have been linked to the facilities implicated in the report. These include US retailers such as Target, Walmart, and Costco, and European chains like Sainsbury's, Tesco, Aldi, and Co-op. In response, Switzerland's Co-op stated that it enforces a "zero tolerance" policy for labour violations, claiming that its producers are paid fair prices. Other supermarkets provided more cautious responses. Aldi pointed to independent certification schemes to ensure responsible sourcing but did not address pricing practices. Sainsbury's deferred to the British Retail Consortium, which reaffirmed its members' commitment to fair pricing and ethical sourcing.

 

The Vietnam Association of Seafood Exporters and Producers disputed the findings, calling them "unfounded and misleading." The association emphasised that government policies are in place to protect workers and ensure ethical practices.

 

A key finding of the investigation was the role middlemen play in obscuring the origin of shrimp, allowing supermarkets to maintain ethical commitments without necessarily following through. The report notes that only about 1,000 of the 2 million shrimp farms in Vietnam, Indonesia, and India are certified by recognised standards, such as the Aquaculture Stewardship Council or Best Aquaculture Practices ecolabel. This gap in certification enables labour exploitation to persist in many areas of the industry.

 

Katrin Nakamura, the author of the regional report for Sustainability Incubator, suggested that Western governments could take stronger action to hold retailers accountable. She proposed using existing antitrust laws to ensure fair pricing for producers, rather than imposing tariffs on suppliers. Nakamura argued that these changes could protect workers without raising prices for consumers, though supermarket profit margins might shrink.

 

In July 2024, the European Union adopted a directive requiring companies to address human rights and environmental issues in their supply chains. Additionally, officials from Indonesia and Vietnam have begun engaging with the report's authors to explore potential solutions.

 

-      Invezz