Report shines partial light on worst labor offenders in opaque fishing industry

In recent years, labor issues on industrial fishing vessels have received increased attention, commanding headlines in prominent media outlets. Terrible working and living conditions — even forced labor — are commonplace, especially on distant-water fleets that ply the high seas and the waters of foreign countries. And yet ship owners are rarely held to account. One reason? It’s hard to identify who they are.

The industry is so opaque that it’s not possible to identify the beneficial owners — that is, the human beings who ultimately take in the profits — for the vast majority of vessels on which forced labor has been suspected, according to a new report from the Financial Transparency Coalition (FTC), a consortium of international NGOs. The FTC found cases of reported forced labor on 475 vessels since 2010, but could only identify the beneficial owners, or even an individual who represents them, for 20% of those vessels.

Industrial actors regularly use shell companies and complex transnational joint venture structures that obscure vessels’ true ownership.

“To me it’s like mining was back in the 1990s before any transparency initiatives,” Matti Kohonen, the FTC’s executive director and a co-author of the report, told Mongabay, referring to the fishing industry.

At least 128,000 fishers are trapped in forced labor at sea, the International Labour Organization (ILO), a UN agency, estimates. The coercive practice takes many forms. The ILO’s indicators of forced labor include holding crew members’ identity documents, withholding wages, debt bondage, abusive conditions, violence, and intimidation. The FTC only included cases in its report that matched the ILO’s indicators and definition of forced labor.

The report, published Nov. 15, calls for countries to create public registries of beneficial owners when licensing vessels, to treat forced labor as a financial crime under money-laundering laws, and to ratify international treaties on labor rights at sea, among other recommendations.

Outside experts who spoke to Mongabay agreed with the recommendations.

“[C]ountries have to get serious about demanding basic legal information like beneficial ownership,” Chris Armstrong, a political scientist and oceans expert at the University of Southampton, U.K., told Mongabay in an email after reading the report. “Countries should not be letting companies fish their waters unless the identity of the beneficial owners is clear,” he said.

“It is very difficult to apply labour laws when the identity of beneficial owners is shrouded in mystery,” he added.

Where is the problem?

The FTC analyzed the flag states, legal owners, beneficial owners and locations of the 475 vessels accused of forced labor, finding limited data for each due to opacity in the industry. It could only identify the flag, or licensing country, for 268 vessels, or 56%. Of these, China was the most common flag state, with 71 vessels, followed by Taiwan with 42, Thailand and Panama with 16 each, and Ireland with 13.

China-flagged vessels also topped a list of illegal, unreported and unregulated (IUU) fishing cases that the FTC compiled for a report last year. This is not news to observers of the industry. In recent years, a raft of reporting on China’s distant-water fishing industry has revealed it as the world leader in IUU fishing and labor abuses. In 2021, Mongabay reported on the systematic mistreatment of Indonesian crew members by Chinese tuna company Dalian Ocean Fishing, and in 2022 reported on the company’s rampant illegal shark finning. Later that year, the U.S. Department of the Treasury sanctioned Dalian and another Chinese fishing company, Pingtan Marine Enterprise Ltd., for human rights and fishery violations.

Dalian and Pingtan were among the top 10 companies involved in both forced labor and IUU fishing in the FTC’s recent and 2022 reports. The FTC’s top 10 lists are based on legal ownership: the first layer of ownership, which can be listed as a person but is more often a legal vehicle or company. This information is more readily available than that for beneficial ownership; the FTC found legal owners for 48% of the accused vessels in the new forced labor report.

Bad practices aimed at cost cutting tend to run together, experts say.

“If you’re a poor player on tax, very often you’re a poor player on environmental regulation, and very often you’re a poor player on the social dimensions as well,” Liam Campling, a political economist and fisheries expert at Queen Mary University of London, told Mongabay with regard to industrial fishing companies.

Campling said the companies listed as top 10 offenders in the new FTC report, seven of which are Chinese, could face financial consequences following the revelations, especially if their tuna business is involved, which the report doesn’t specify.

“[T]hese Chinese firms, these are massive,” he said, pointing specifically to Pingtan and China National Overseas Fisheries Corporation Ltd., another firm listed in the top 10. The FTC findings “open up all kinds of risks for these firms in terms of their ability to supply the EU, the United States, North America, where most of the canning-grade tuna is going to be going,” he said.

Neither Dalian, Pingtan nor China National Overseas Fisheries Corporation Ltd. responded to a request for comment for this article.

Last month, The New Yorker published a two-part exposé on terrible conditions and forced labor on China’s distant-water fishing fleets and in its processing facilities back home. The articles, produced by the Outlaw Ocean Project, a nonprofit journalism outlet, have already led to a U.S. congressional hearing and shakeups in the seafood supply chain.

The Chinese government has defended its fishing record.

“The Chinese government is responsible in distant-water fisheries,” Wang Wenbin, a spokesperson for China’s foreign ministry, said during a press conference earlier this year. “We conduct distant-water fishing in accordance with laws and regulations and continue to improve compliance and regulation related to distant-water fisheries.”

Wang said the United States should not “politicize and instrumentalize issues that are about fisheries in the name of environmental protection and human rights.”

However, the FTC report found that the problem of forced labor was by no means exclusive to China. While more than half the accused vessels for which it could identify legal owners are owned by Asian companies, nearly one-quarter are in fact owned by European companies, mainly from Spain, Russia and the United Kingdom.

“That to me shows that it’s really a global problem,” Kohonen said. “Of those that we found, the biggest proportion [of legal ownership] is Chinese. But that we kind of know. The European thing was something I didn’t know. That to me is a revelation” of the report.

The global nature of the problem can also be seen in the widely dispersed locations of the accused forced labor cases in the FTC report: the countries with the most cases were Indonesia, Ireland, Uruguay, Somalia and Thailand.

After Somalia, Senegal was the most frequent location of forced labor cases in Africa, with seven cases since 2010, according to the report. Mariama Thiam, an investigator and report co-author based in Senegal, said forced labor is a widespread problem in Senegal and beyond.

“It is worst in Asian boats, but even in European boats you have the same problem,” she told Mongabay.

Crew members working in Senegal’s waters often work very long hours: “all the day and all the night,” Thiam said. They’re subject to psychological harassment by superiors and can, as a form of punishment, be locked in a room that is like a “prison” on board, she said. Their superiors requisition passports before embarking and don’t give them back until the ship returns to port — a telltale indicator of forced labor. Crew members usually have little formal education and don’t know their rights, she said.

There is also a lack of transparency in Senegal, Thiam said. Like many low-income countries, Senegal doesn’t have a beneficial ownership registry, and the government grants some industrial fishing licenses in secret. Moreover, a government ministry would not share its list of forced labor cases with Thiam, she said.

A path forward?

The authors of the FTC report argue that countries should treat forced labor on fishing vessels as a “predicate offense” for money laundering. That way, regulators could treat it as a financial crime and use anti-money-laundering tools to punish companies and beneficial owners: Any financial flows that came via forced labor could be deemed illicit.

They also call for publicly available registries of beneficial ownership. Some countries do have beneficial ownership registries, but governments often don’t make them public, or don’t keep them updated, which compromises their ability to prosecute crimes.

The FTC recommends that fisheries be included in the Extractives Industry Transparency Initiative, which sets transparency standards for oil, gas and mining projects that more than 50 countries have agreed to, at least on paper. A newer organization, the Fisheries Transparency Initiative (FiTI), still has only about a dozen countries engaged in its processes. The FTC report says a “shortcoming” of FiTI is that it doesn’t require publicly available beneficial ownership registries, instead asking participating countries simply to report whether or not they have one.

The report also calls for countries to ratify the ILO’s Work in Fishing Convention of 2007, which is considered a key tool in protecting crew members’ labor rights but which fewer than two dozen countries have ratified; major players such as China, Indonesia, Taiwan and the United States haven’t done so.

Without global cooperation and enforcement, the harsh conditions and mistreatment that fishing crew members face, whether they constitute forced labor or not, are likely to continue.

“Forced labor is just the tip of the iceberg when we’re talking about labor abuses on vessels,” said Campling, the political economist. “It really is. It’s the kind of headline-grabbing problem, as opposed to the day-to-day problems the crew can encounter.”

Banner image: Workers on a Chinese fishing vessel in Guinea, in 2017. Image © Pierre Gleizes / Greenpeace. 

West African fishers strike for fair wages and ‘respect’ on EU-owned vessels

FEEDBACK: Use this form to send a message to the editor of this post. If you want to post a public comment, you can do that at the bottom of the page.