Focusing on the ‘S’ in ESG, How Far Have We Done in the Fisheries Industry?

In May 2020, Indonesia was shocked by a footage of a dead young man being thrown into the sea. A month after, the Indonesian crew unveiled the inhumane conditions in the foreign vessel, resulting in four men died on board. The 20 men who came back explained that their passports were confiscated and their salary was significantly cut. They were dropped off in Samoa in the middle and had to bear the return ticket to Jakarta. The case sparked concerns about labor exploitation and poor working conditions, specifically in the fishery industry. The legal instruments to protect human rights across the supply chain and consumers’ awareness of the “true cost” of the seafood are in question.

Seeing from the global trend, the demand for seafood is booming with the expansion rate of more than 500% in three decades. In 2017, Indonesia is among the 10 biggest seafood exporters worldwide, generating $3.11 billion annually. The remarkable global growth can be explained by the exponential demand for seafood in developed nations alongside the population growth and the availability of low-wage laborers in developing nations.

Fisheries provide livelihood for over 56 million people worldwide, with approximately 250,000 Indonesian crews on foreign vessels operating overseas and 2.6 million Indonesian fishers across the archipelago. Many of the workers, mostly from developing nations including Indonesia, Thailand, and the Philippines, were lured by the promise of high-paying jobs and the good condition on the deck. It turned out that they had to endure poor and unsafe working conditions, including working up to 18 hours per day while receiving only $150 for a year of labor. Preying on the poor and uneducated, the vessel owners also provide limited to no information on rights and grievance mechanisms for the fishers that further jeopardize labor’s vulnerabilities.

Not only the seafarers and fishermen, the land-based or less-skilled workers also face harsh working conditions, such as in shrimp processing plants. In the scrubbing, canning, and seasoning areas, the workers are exposed to the risks of getting cut and constantly inhaled chlorinated air while working, and incidences of child labors. In 2018, the salary they received is below the living wage, with only €0.02 for every 225g of shrimps peeled which were later imported and sold for €5 in a Dutch supermarket.

Along with the high global demand for seafood that corporations must meet, using cheap labor will be lucrative for fishery businesses to keep their product’s prices competitive. Stakeholders need to take actions to decrease factors that incentivize and enable illegal and inhumane work conditions in the fishery industry.

Big companies have a huge role in protecting labors, especially when they are highly vulnerable, by addressing human rights across supply chain. This action will put pressure on other enterprises to improve the work conditions of labors as well as the communities’ livelihood. In general, the current situation shows that enterprises can impact the labors’ human rights. With the complexity of seafood supply chain as well as geographical and legal aspects, it became increasingly important for companies to undertake strict due diligence and closely monitor supply chain labor standards to mitigate the risk.

In addition, having a strong human rights framework that is also important to mitigate the risk of media shedding light on human rights abuses in the supply chain. Especially, consumers are more rapidly informed due to the growing innovations of technology and the use of social media. This situation results in the increasing vitality for corporations to maintain a positive reputation.

The Guardian exposed a scandal of global supermarkets that sourced prawns from Thailand fishing vessels operated by trafficked slaves back in 2015. One of the supermarkets that has huge market in the US, UK, and Europe, had to face litigation for the mismatch of its code of conduct with label on prawns packaging. This case signifies how neglecting human rights in the supply chain can lead to legal action and reputational debacle.

Nestlé, also one of the accused companies, changed its conduct as a response to the scandal. It admitted to having forced labor and human trafficking in its seafood supply chain. In 2015, Nestlé partnered with Verite to carry out investigative research on the working conditions of fishery labors that supplied their seafood. The research results have driven Nestlé to stipulate a system that includes action plans; supplier code, and responsible sourcing guideline (RSG) to discipline its seafood supply chain. This good practice of a company disclosing abuses and taking actions is expected to be followed by other companies to implement corporate responsibility to respect human rights.

Several Indonesian NGOs and activists have also taken action. People’s Coalition for Fisheries Justice (KIARA), Surabaya Institute of Labor Solidarity (ISBS), Indonesian Seafarers Association (KPI), Indonesian Consumers Foundation (YLKI), and Indonesia Legal Aid Foundation (YLBHI) formed an advocacy campaign of ‘Di Balik Barcode’ or ‘Behind the Barcode’. The campaign aims to encourage consumers’ awareness of the workers’ welfare across the seafood supply chain.

Global initiatives addressing human rights in businesses have taken place. One of the early efforts was in 2006 with the initiation of the UN Guiding Principles (UNGP). It provides the first-ever reporting framework based on the three pillars of the obligations of State to Protect, Business to Respect, and Access to Remedy for the victims of human rights abuse. In relevance to sea labors, the principles aim to eliminate forced labors and human rights abuses in the supply chain of seafood production.

The United Nations Global Compact (UNGC) has ten universally accepted principles, including human rights and labor sector, for businesses to align their operations with. The UNGC has also set out a guide to traceability in supply chain sustainability, specifically in the areas of human rights, labor, the environment, and anti-corruption. These international instruments are also widely applicable in other extractive industries such as plantations, mining, oil, and gas.

At the national level, the Ministry of Maritime Affairs and Fisheries (MMAF) of the Republic of Indonesia has issued Ministerial Regulation 35/2015 on Fisheries Human Rights Management System and Certification to combat the rising issue. The regulation mandates fishing vessel owners and processing units to have human rights policy, conduct due diligence in human rights, remedy if human rights abuse occurs, and provide training on human rights to fishers. Another two regulations followed; Ministerial Regulation 42/2016 and Ministerial Regulation 2/2017. The first is on work agreement of fishers that must include the work condition and safety, salary, insurance, and legal protection.

The latter regulation regulates the requirement and mechanism of human rights certification. The requirements must be met in order to obtain a license to operate in Indonesia. It is expected that law enforcement is sufficient to make those regulations well implemented. Although these regulations only cover the fishing companies and farming, respect for human rights must occur throughout seafood value chain; community groups, intermediaries, and processors, buyers and retailers, and lastly, the consumers.

The consumers’ consciousness of the importance of human rights protection is also critical in the promotion of ethical fishery business. In response, companies must adapt to the changing behavior of more conscious consumers that demand transparency of compliance to the regulations and codes of conduct in the era of sustainability.

Celebrating World Oceans Day on 8 June 2021, the theme of ‘The Ocean: Life and Livelihoods’ encourages us to work together to protect the oceans. Our shared goals are protecting our oceans, not only from biodiversity loss, but also from illegal, unreported, and unregulated (IUU) fishing that threatens the livelihoods of communities.

Author:

Nabila Khoiru Nisa

Editor:

Dr. Semerdanta Pusaka – Country Director for SR Asia Indonesia

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