A new study targeting three of the world’s largest shrimp producers, released on Monday, claims that while major Western supermarkets are making windfall profits, their aggressive pursuit of ever-lower wholesale prices is causing misery for those at the bottom of the supply chain.
The regional analysis of the industry in Vietnam, Indonesia and India, which supply around half of the shrimp in the world’s four largest markets – the United States, the European Union, the United Kingdom and Japan – is based on research conducted by an alliance of NGOs. It noted a 20% to 60% decline in revenues from pre-pandemic levels as manufacturers struggle to meet price demands by cutting labor costs.
In many places this has led to unpaid and underpaid work due to longer working hours, wage insecurity as rates fluctuate, and many workers not even earning a low minimum wage.
Dita Alangkara / AP
Supermarkets associated with facilities where exploited worker labor was reported include Target, Walmart and Costco in the United States, Britain’s Sainsbury’s and Tesco, and Aldi and Co-op in Europe.
The regional report brought together more than 500 face-to-face interviews with employees in their native languages in India, Indonesia and Vietnam – published separately as country-specific reports – supplemented with secondary data and interviews from Thailand, Bangladesh and Ecuador.
In Vietnam, Hawaii-based researchers at the Sustainability Incubator found that workers who peel, gut and remove shrimp typically work six or seven days a week, often in extremely cold areas to keep the product fresh.
Dita Alangkara / AP
About 80% of those involved in shrimp processing are women, many of whom get up at 4 a.m. and return home at 6 p.m. Pregnant women and new mothers can stop an hour earlier, the report shows.
In India, researchers from the Corporate Accountability Lab discovered that employees are faced with ‘dangerous and unlawful conditions’. Highly salinized water from newly dug hatcheries and ponds, contaminated with chemicals and toxic algae, also pollutes the surrounding water and soil.
Unpaid labor prevails, including salaries below the minimum wage, unpaid overtime, wage deductions for the cost of work and ‘significant’ debt bondage, the report found. Child labor was also found, with girls aged 14 and 15 being recruited for fur work.
12-hour days below minimum wage
In Indonesia, three nonprofit research organizations found that wages have fallen since the COVID-19 pandemic and today average $160 per month for shrimp workers, below the Indonesian minimum wage in most of the largest shrimp-producing provinces. Shrimp peelers must routinely work at least 12 hours per day to meet minimum targets.
The Swiss Cooperative said it has a “zero tolerance” policy towards violations of labor laws and that its producers “receive fair and market-driven prices.”
Germany’s Aldi did not specifically address the price issue, but said it uses independent certification programs to ensure responsible sourcing of farmed shrimp products, and that it would continue to monitor the allegations.
“We are committed to fulfilling our responsibility to respect human rights,” Aldi said.
Sainsbury’s referred to a comment from industry group British Retail Consortium, which said its members are committed to sourcing products at a “fair, sustainable price” and that the well-being of people and communities in supply chains is fundamental to their purchasing practices .
The Vietnam Association of Seafood Exporters and Producers issued a statement calling the report’s allegations “unfounded, misleading and detrimental to the reputation of Vietnam’s shrimp exports,” citing government labor policies.
Dita Alangkara / AP
The NGO’s report highlights that the use of middlemen to purchase the shrimp obscures the true sources of shrimp found in Western supermarkets, potentially causing many retailers to fail to adhere to the ethical commitments they have made about purchasing shrimp.
Only about 2,000 of the 2 million shrimp farms in the major producing countries are certified by the Aquaculture Stewardship Council or the Ecolabel Best Aquaculture Practices, making it “mathematically impossible for certified farms to produce enough shrimp per month to supply all the supermarkets that can boast commitments to purchase certified shrimp,” the report said.
U.S. policymakers could use antitrust and other laws already in place to monitor and ensure fair prices from Western retailers, rather than imposing punitive tariffs on suppliers, says Katrin Nakamura of Sustainability Incubator, who published the regional report wrote.
In July, the European Union adopted a new directive requiring companies to “identify and address the adverse human rights and environmental impacts of their actions within and outside Europe.”
Officials from Indonesia and Vietnam met with the report’s authors to discuss their findings and seek solutions.
Given the current disparity in retail and wholesale prices, paying farmers more wouldn’t necessarily mean higher prices for consumers, the Sustainability Incubator report said, but it would mean lower profits for supermarkets.
“Labor exploitation in the shrimp aquaculture sector is not company, sector or country specific,” the report concludes. “Instead, it is the result of a hidden business model that exploits people for profit.”
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This story was supported by funding from the Walton Family Foundation. The AP is solely responsible for all content.
