[Joint House and Senate Hearing, 118 Congress]
[From the U.S. Government Publishing Office]
FROM BAIT TO PLATE:
HOW FORCED LABOR IN CHINA
TAINTS AMERICA'S SEAFOOD SUPPLY CHAIN
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HEARING
BEFORE THE
CONGRESSIONAL-EXECUTIVE COMMISSION ON CHINA
ONE HUNDRED EIGHTEENTH CONGRESS
FIRST SESSION
__________
OCTOBER 24, 2023
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Printed for the use of the Congressional-Executive Commission on China
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Available at www.cecc.gov or www.govinfo.gov
__________
U.S. GOVERNMENT PUBLISHING OFFICE
54-082 PDF WASHINGTON : 2024
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CONGRESSIONAL-EXECUTIVE COMMISSION ON CHINA
LEGISLATIVE BRANCH COMMISSIONERS
House Senate
CHRIS SMITH, New Jersey, JEFF MERKLEY, Oregon, Co-chair
Chair STEVE DAINES, Montana
JAMES P. McGOVERN, Massachusetts MARCO RUBIO, Florida
BRIAN MAST, Florida TOM COTTON, Arkansas
JENNIFER WEXTON, Virginia ANGUS KING, Maine
MICHELLE STEEL, California TAMMY DUCKWORTH, Illinois
SUSAN WILD, Pennsylvania DAN SULLIVAN, Alaska
ANDREA SALINAS, Oregon
ZACHARY NUNN, Iowa
RYAN ZINKE, Montana
EXECUTIVE BRANCH COMMISSIONERS
DANIEL K. KRITENBRINK, Department of State
MARISA LAGO, Department of Commerce
THEA MEI LEE, Department of Labor
UZRA ZEYA, Department of State
ERIN BARCLAY, Department of State
Piero Tozzi, Staff Director
Matt Squeri, Deputy Staff Director
(ii)
C O N T E N T S
----------
Statements
Opening Statement of Hon. Chris Smith, a U.S. Representative from
New Jersey; Chair, Congressional-Executive Commission on China. 1
Statement of Hon. Thea Mei Lee, Deputy Undersecretary for
International Affairs.......................................... 3
Statement of Hon. Jeff Merkley, a U.S. Senator from Oregon; Co-
chair,
Congressional-Executive Commission on China.................... 6
Statement of Ian Urbina, Director and Founder of The Outlaw Ocean
Project........................................................ 6
Statement of Robert K. Stumberg, Professor of Law at Georgetown
University..................................................... 9
Statement of Greg Scarlatoiu, Executive Director of the Committee
for Human Rights in North Korea................................ 11
Statement of Sally Yozell, Director of the Environmental Security
Program at the Stimson Center.................................. 14
APPENDIX
Prepared Statements
Urbina, Ian...................................................... 32
Stumberg, Robert K............................................... 34
Scarlatoiu, Greg................................................. 46
Yozell, Sally.................................................... 56
Smith, Hon. Chris................................................ 60
Merkley, Hon. Jeff............................................... 61
McGovern, Hon. James P........................................... 62
Sullivan, Hon. Dan............................................... 63
Zinke, Hon. Ryan................................................. 64
Submissions for the Record
``The National Security Imperative to Tackle Illegal, Unreported,
and Unregulated Fishing'' from Brookings Commentary, January
25, 2021, by Michael Sinclair, Non-Resident Senior Fellow,
Forward Defense Program, Atlantic Council's Scowcroft Center
for Strategy and Security; Adjunct Professor, George Washington
University Law School.......................................... 66
Statement of Judy Gearhart, Research Professor, American
University's Accountability Research Center.................... 69
Statement of Badri Jimale, Horn of Africa Institute.............. 70
Statement of Stephanie Madsen, Executive Director, At-sea
Processing Association......................................... 71
Letter from the Chairs to Secretary of Homeland Security
Alejandro Mayorkas............................................. 78
Question for Greg Scarlatiou of HRNK from Senator Sullivan....... 80
Questions for Ian Urbina, The Outlaw Ocean Project, from
Representative Zinke........................................... 81
Questions for Ian Urbina, The Outlaw Ocean Project, from Senator
Sullivan....................................................... 83
Questions for Robert Stumberg, Georgetown University Law Center,
from Senator Sullivan.......................................... 84
Questions for Sally Yozell, Environmental Security Program,
Stimson Center................................................. 85
CECC Truth in Testimony Disclosure Form.......................... 87
Witness Biographies.............................................. 89
(iii)
FROM BAIT TO PLATE:
HOW FORCED LABOR IN CHINA
TAINTS AMERICA'S SEAFOOD SUPPLY CHAIN
----------
TUESDAY, OCTOBER 24, 2023
Congressional-Executive
Commission on China,
Washington, DC.
The hearing was held from 9:02 a.m. to 10:49 a.m., in Room
2360, Rayburn House Office Building, Representative Chris
Smith, Chair, Congressional-Executive Commission on China,
presiding.
Also present: Senator Jeff Merkley, Co-chair, and Deputy
Undersecretary for International Affairs, Thea Lee.
STATEMENT OF HON. CHRIS SMITH, A REPRESENTATIVE FROM NEW
JERSEY; CHAIR, CONGRESSIONAL-EXECUTIVE COMMISSION ON CHINA
Chair Smith. The hearing will come to order. I want to
welcome each and every one of you to this hearing on ``How
Forced Labor in China Taints America's Seafood Supply Chain.''
The compass, as we all know, is an instrument of great
assistance to navigators and seafarers. Its origins lie in
ancient China, specifically in the Han Dynasty, which dates
back to the third century BC. It's one of the many enduring
contributions China has made not only to maritime exploration,
navigation, and safety, but also to world civilization.
Yet today, we find ourselves confronting a very different
reality in China, where its moral compass is adrift, both at
sea and on land. Recent revelations from a comprehensive four-
year investigation conducted by The Outlaw Ocean Project have
shed light on deeply troubling practices within the Chinese
distant water fishing fleet and seafood processing industry.
These practices involve egregious violations of human rights,
including forced labor and other exploitative activities. A
four-year investigation, led brilliantly by Ian Urbina, who
will testify before our Commission today, found, for example,
that ``almost half'' of the Chinese squid fleet, 357 of the 751
ships that they studied, were tied to human rights and
environmental violations. And that over 100 Chinese squid ships
engaged in illegal fishing, including trespassing into waters
of other nations.
On land, the investigation reveals a disconcerting pattern
of PRC-based companies exploiting the forced labor of Uyghurs
and North Koreans to process substantial quantities of seafood
destined for the United States market. From fish sticks to
calamari, these products infiltrate the supply chains of major
restaurants, wholesalers, and even find their way into the
meals served in American schools and military bases. Such
actions directly contravene the Uyghur Forced Labor Prevention
Act and the Countering America's Adversaries Through Sanctions
Act, both of which strictly prohibit the importation of goods
produced by forced labor into the United States market.
It is evident that the People's Republic of China is not
the sole party involved in these reprehensible practices.
Governments, including our own, have been complicit--
unwittingly or wittingly--in the procurement of tainted
seafood. Our panel of experts--and what a group of experts we
have indeed before this Commission today--will testify and
emphasize the extent to which government procurement processes
and policies have enabled these injustices. That is why Senator
Merkley and I have drafted a letter to the Department of
Homeland Security. Without objection, the letter to Secretary
Mayorkas will be made a part of the record. Calling for a
comprehensive investigation into not only the PRC's disturbing
activities at sea and on the land, but also the weaknesses of
our system and the complicity of the seafood industry.
Beyond these egregious abuses of human rights, there are
also national security implications as well. Chinese fishing
vessels serve as part of China's Maritime Militia. Earlier this
year, such vessels, under the guise of fishing boats, severed
cables on Matsu Island, an island off the coast of China still
under the control of Taiwan. Additionally, hundreds of Chinese
fishing ships reportedly operate in waters belonging to the
Philippines, Vietnam, Malaysia, and Indonesia, serving as a
civilian militia to escort Chinese oil and gas survey vessels
and drilling rigs.
More to the point, just last Sunday a Chinese Coast Guard
ship collided with a Philippine vessel enroute to deliver
supplies to an outpost that the Philippines maintains at Second
Thomas Shoal, located approximately 100 nautical miles off its
coast. China claims that this territory, far beyond its
legitimate boundaries--and despite the fact that the Permanent
Court of Arbitration in the Hague made a binding decision in
2016 under the U.N. Convention on the Law of the Sea that this
area lies within Philippine territorial waters.
This underscores an important fact. China, under Xi Jinping
and the Chinese Communist Party, is willing to upend the rules
of the global international order and act in a lawless,
predatory manner, both at sea and on land. It shows no respect
for human rights. We see that in a myriad of areas in addition
to this one today. And it does not respect labor rights. I will
point out parenthetically that when China was under
consideration and the United States was moving towards the WTO
with China, I held two hearings on that and voted against
ascension into the WTO. And we argued that they would change
the WTO and not the other way around. We were foolish, in my
opinion, to think that somehow a rules-based organization like
the WTO would somehow mitigate their abuses. Instead, they
exploit them, and they have not come under the banner of
international law even a little bit.
Thanks in large part, let me say this, to the reporting of
Ian and his team--and published in The New Yorker and
elsewhere--the consciousness of American businesses and
government leaders are awakening. And certainly, we're trying
to amplify that and we're trying to work with you, Ian, and our
other distinguished witnesses, to try to make real and systemic
reforms. Some are beginning to walk away from their abuse-
tainted sourcing. This includes the supermarket chain
Albertsons, as well as McDonald's Filet-O-Fish. Both have
severed ties with the supplier implicated in Ian's reporting on
forced labor practices. So there's already good things
happening, but so much more needs to happen because of this
landmark and historic human rights work.
And we're seeing similar actions taken beyond the seafood
industry. Over the summer, this Commission--after a hearing on
these issues of forced labor--the Wisconsin-based company,
Milwaukee Tool, regarding allegations that the company had
purchased gloves from a supplier that was utilizing forced
prison labor to make those gloves--Milwaukee Tool took action
to investigate its supply chain. And I and my distinguished
staff met with them. Last week, they discovered multiple
examples of counterfeit gloves originating in the PRC bearing
their brand name. Perhaps they were even made in a prison camp.
Part of that lawless behavior I spoke of includes
ubiquitous unauthorized counterfeit goods. We know they
proliferate all over China, and there needs to be far more
done. It's not just the theft of intellectual property. It is
the production of these counterfeit goods that flood our
market, the European Union, and really the world market. The
upshot is that Milwaukee Tool has cut ties with the glove
manufacturer in question and they are now moving that operation
outside of China altogether. I am deeply encouraged that the
company has taken these positive steps. It is yet another
example of an American company responding constructively to
reports of human rights abuses in the PRC.
I think all of you know, this is not just a bicameral
House-Senate, bipartisan Democrat and Republican commission;
this also includes the executive branch. We are really
privileged to have with us Thea Lee, whom I've known for
decades. When she worked for the AFL-CIO, she was a one-woman
force fighting against labor and human rights abuses. And now
she is the Deputy Undersecretary for ILAB. And I just want to
thank her for her leadership, and yield to her for any comments
she wants to make.
STATEMENT OF THEA LEE,
DEPUTY UNDERSECRETARY FOR INTERNATIONAL AFFAIRS,
U.S. DEPARTMENT OF LABOR
Ms. Lee. Thank you so much, Chairman Smith. And good
morning, everybody. It is a great pleasure to be here this
morning with all of you. And I would like to thank you and your
staff, Chairman Smith, for the courtesy extended to me to come
and to speak early in order to accommodate my travel schedule
later this morning.
This is my first hearing as a commissioner representing the
executive branch. And I want to thank you for your leadership
of the Commission in promoting human rights in China and for
exposing the government's corrupt practices that fall short--
fall way short--of universally recognized human rights and
international labor standards. I would also like to thank the
witnesses for being here today. And I look forward to your
testimony.
I want to recognize the contributions made by the
Commission staff in conducting research, producing reports, and
organizing hearings such as today's. Exposing the abusive labor
practices in fishing is of critical importance, as those abuses
impact America's seafood supply chain, global supply chains,
and community livelihoods around the world. This industry sits
at the intersection of key Biden administration priorities,
human and worker rights, environmental protection, food safety,
and national security.
It is clear that we are at a moment where further urgent
action is needed to achieve a whole-of-government approach to
address egregious abuse of worker rights in the seafood
industry. In 2022, President Biden signed a historic national
security memorandum on combating illegal, unreported, and
unregulated fishing and associated labor abuses. As shown in
the recent Annual Report, the U.S. Government has taken actions
to sanction human rights abusers and provide tools that help
protect fishers from exploitation.
At the Bureau of International Labor Affairs, known as
ILAB, an agency within the Department of Labor, our job is to
advocate for worker rights around the world. We engage with our
interagency and multilateral partners to fully leverage U.S.
enforcement mechanisms and trade frameworks to prevent tainted
seafood from reaching U.S. shores. We are pushing for better
governance, including of crew labor rights on the high seas,
and we are seeking to improve labor inspections on vessels and
in seafood processing.
I think folks know we publish and maintain a list of goods
produced with child labor or forced labor, based on our
evidence-based research. We have documented child labor or
forced labor in the production of fish, dried fish, shellfish,
and shrimp in 20 countries, including China. Our Comply Chain
and Better Trade Tool apps serve as useful resources for worker
protection and the private sector's due diligence process. We
have also dedicated more than $20 million in project funding to
address labor exploitation in the fishing and seafood sectors
globally.
Our research and advocacy work has directly contributed to
the U.S. Government's ability to stop tainted seafood at the
border. The sanctioning of Pingtan Marine Enterprise, a Chinese
fishing conglomerate, for labor abuse and illegal, unreported,
and unregulated fishing, was a significant step in our
enforcement actions. But we know that government action alone
will not solve this problem. We need more reliable information,
effective policy and enforcement actions, and transparency and
accountability in global supply chains. We would like to see,
as Chairman Smith said, the industry take greater
responsibility for global supply chains. We need more effective
tools to strengthen penalties and to deny market access to
actors that tolerate labor exploitation.
Chair Smith, while the challenges remain daunting, progress
is possible. And I saw this clearly. I met with some Indonesian
fishers and advocates earlier this year at the Seafood Expo
North America. And they told me that some simple improvements
in working conditions, such as having access to Wi-Fi so they
have means of communication at sea, could help prevent
exploitation. It could make an enormous difference in people's
lives. And we have been working with the Taiwanese government
and with others to see if we can move that forward, because it
provides a chain of communication, and it can help address
especially some of the most egregious labor abuses in terms of
unsafe conditions and forced labor.
So I'm looking forward to hearing from the witnesses today
on suggestions on how government, business, and consumers can
help turn the tide on forced labor in fishing. The Department
of Labor is deeply committed to building a more sustainable
seafood sector that respects labor rights and promotes the
welfare of all the workers on fishing vessels and in the
processing chain. Again, let me thank the witnesses, the
esteemed witnesses, for being here today. I'm looking forward
to hearing your testimony, but I also want to thank you for the
work that all of you do every day to bring attention to these
urgent issues. Thank you. I look forward to the rest of today's
hearing.
Chair Smith. Secretary Lee, thank you so very much. And,
again, this Commission is really, really blessed to have you on
it. You know, we worked with you, again, when you were not
within government. To have such an advocate who is so
knowledgeable is truly, truly remarkable. Thank you so much.
Now I'd like to introduce our distinguished witnesses,
beginning with Mr. Ian Urbina, who is the director and founder
of The Outlaw Ocean Project, a Washington, D.C.-based nonprofit
journalism organization that produces investigative stories
about human rights and environmental and labor concerns at sea.
Mr. Urbina and his team of international investigative
reporters conducted a remarkable historic landmark four-year
investigation both on land and at sea, exposing horrific labor
abuses in the global seafood industry attributable to the
Chinese Communist Party and how this has tainted the United
States seafood supply chain.
I'd like to note that this reporting is truly
groundbreaking. It's the first reporting of its kind revealing
how Uyghurs, North Koreans, and others are forced to work in
seafood processing plants. His team is doing incredible work to
shed light on the plight of persecuted communities and
individuals trapped and held either on Chinese fishing vessels
or in these plants, thousands of miles away from their homes.
Before founding The Outlaw Ocean Project, Mr. Urbina spent more
than a decade as a staff reporter for The New York Times. He
has received various journalism awards, including a Pulitzer
Prize and an Emmy. Thank you for your important work and for
joining us today.
Our next distinguished witness is Professor Robert
Stumberg, a professor of law at a place not too far from here,
Georgetown University. He directs the university's Harrison
Institute for Public Law, which often works with public
officials and coalitions on health and food, trade policy, and
human rights for workers. He's published several pieces,
incisive pieces, including one titled ``Turning a Blind Eye:
Respecting Human Rights in Government Purchasing.'' Professor,
we look forward to learning more about U.S. Government
procurement and much more from you today, which will help guide
us as we try to weigh in very strongly on this important issue.
Thank you.
We're also joined by longtime friend Greg Scarlatoiu, the
executive director of the Committee for Human Rights in North
Korea. He's testified before this Commission on multiple
occasions from as early as 2012, and before the Committee on
Foreign Affairs as well, when I was the chair of the
Subcommittee on Africa and the Subcommittee on Global Health,
Global Human Rights, and International Organizations. Mr.
Scarlatoiu brings a wealth of knowledge of the plight of North
Koreans, including extensive insight on North Korean forced
labor in both China and in Russia. Many of us who have met him
before are so impressed with his work, and that's why we
couldn't wait to have him back here today to give us his
counsel and insight.
Finally, I'd like to welcome Sally Yozell, the director of
the Environmental Security Program at the Stimson Center, where
she leads a team that conducts research and develops global
security strategies to combat illegal, unreported, and
unregulated fishing, put an end to forced labor and human
rights abuses in the seafood industry, and work to increase
transparency throughout the seafood supply chain.
While this is her first time as a witness before this
Commission--and it won't be the last--she is not a stranger to
Congress. As a matter of fact, she testified not too long ago
for the House Natural Resources Committee to discuss full
seafood traceability and how to stop Russian seafood, or
``Putin's pollock,'' from entering our borders. I fully agree
with their views that American consumers do not want, and
should not buy, seafood caught illegally or linked to labor and
human rights abuses. Again, thank you for your landmark work as
well.
We are joined, of course, by our very distinguished Co-
chair, Senator Merkley. And I yield him such time as he may
consume.
STATEMENT OF HON. JEFF MERKLEY, A U.S. SENATOR FROM OREGON; CO-
CHAIR, CONGRESSIONAL-EXECUTIVE COMMISSION ON CHINA
Co-chair Merkley. Thank you very much, Mr. Chairman, for
convening this hearing, which builds on several hearings this
Commission has held on topics such as the implementation of the
Uyghur Forced Labor Prevention Act, the plight of North Korean
refugees in China, the aggressive long arm of the Chinese
government, and the importance of holding American corporations
to account when they are complicit in human rights abuse. I'm
going to suggest that I put the balance of my statement in the
record, given the limited time that you have to be here, and
the desire to get right to the testimony. I'd rather jump right
in.
Chair Smith. Thank you, Senator Merkley.
Mr. Urbina.
STATEMENT OF IAN URBINA,
DIRECTOR AND FOUNDER, THE OUTLAW OCEAN PROJECT
Mr. Urbina. Thank you to Chairman Smith and Chairman
Merkley. And thank you to the rest of the Commission for
inviting me to speak. I'll briefly talk about a four-year
investigation that my news organization, The Outlaw Ocean
Project, conducted in collaboration with The New Yorker,
focusing on China's role in human rights and environmental
concerns tied to the world's seafood supply chain.
Seafood is a distinct global commodity. It is the world's
last major source of wild protein. It is the largest globally
traded food commodity by value. Seafood is also harder to track
than many other products. It is typically harvested offshore,
often on the high seas, where there is limited national
jurisdiction and little enforcement of what few murky rules
exist. Labor spot checks on ships at sea are rare. These
workplaces stay in constant motion. Deckhands are often
undocumented. They tend to come from poorer nations. Their
access to political capital and legal recourse in the form,
say, of lawyers, advocates, journalists, or unions, is minimal.
And between bait and plate there are an inordinate number
of handoffs of this product. It goes from fishing ship to
refrigeration ship, to port, to processor, to cold storage, to
exporter, to U.S. importer, to distributor or food service
company, and then, finally, to restaurant, grocery store, or
public food pantry, military base, or public school. These many
handoffs make it tougher to trace the true origin of the catch
and to ensure that there is no forced labor or other
environmental crimes in the supply chain. Worse still, the few
auditing entities that exist, what certification regimes that
have emerged in the private sector, whether they focus on
environmental or labor concerns, do a very poor job even at
identifying and countering such crimes in these supply chains.
China plays a unique role. It is the undisputed superpower
of seafood because its distant water fishing fleet, which is to
say those vessels in foreign or international waters, is vastly
bigger than that of any other country. So too is China's
processing capacity. Even seafood caught by U.S.-flagged ships
in our own waters is often shipped to China to be cleaned, cut,
and packaged before being sent back to American consumers.
China matters, and was the focus of our investigation--not just
because it is the global linchpin of seafood production, but
also because China is the most opaque of settings, the most
prone to illegal fishing practices, and, we've come to find
out, the most dependent on forced labor when it comes to
seafood.
This forced labor occurs in two distinct realms: at sea and
on land--on the fishing ships and in the processing plants. At
sea, the problem of forced labor is endemic and varied. Debt
bondage, human trafficking, beating of crew, criminal neglect
in the form of beriberi, passport confiscation, wage
withholding, denial of timely access to medical care, death
from violence. We found a widespread pattern on Chinese ships.
The investigation revealed that almost half of the Chinese
fleet, 357 of the 751 ships we studied, were tied to human
rights or environmental violations.
On land, the problem of forced labor is deep and
consistent, especially after the start of the global pandemic
led to severe labor and logistical and supply chain problems in
China. The government there began helping its massive seafood
industry keep production and exports up and running. It did so
by moving thousands of workers across the country from
Xinjiang, a landlocked and subjugated region in the far west,
to Shandong, a coastal eastern province in the far east, where
much of the seafood infrastructure is based.
Most of the global seafood industry is impacted. The
investigation found that since 2018, more than a thousand
workers from Xinjiang have been forcibly relocated to at least
ten seafood processing plants in Shandong that supply dozens of
major U.S. seafood brands, as well as brands in at least twenty
other countries. I need not tell this Commission about China's
labor transfer programs and the ways in which this state-run
effort has been legally defined as state-sponsored forced labor
because the ethnic minorities pressed into service do not have
an option to say no to these jobs.
I also do not need to remind this Commission that under the
Uyghur Forced Labor Prevention Act, there are very clear and
strict prohibitions of any products in part or whole being
imported to the U.S. that rely on Xinjiang labor. Lastly, I do
not need to tell the people gathered here that if credible
evidence is brought forward, as I think our investigation has,
indicating the existence of Xinjiang labor in a particular
supply chain, then this federal law, the UFLPA, puts the onus
on industry, on the companies themselves, to prove that they do
not in fact have Uyghurs or other ethnic minority Xinjiang
labor tied to their products. And until they do, U.S. Customs
and Border Protection is supposed to block shipments of this
import.
U.S. companies responding by simply saying that their
partners in China at the plants have reassured them that no
forced labor exists in their plants is probably not sufficient
evidence that they are free from forced labor. Similarly,
relying on social or marine auditing firms that inspected these
plants but, by their own admission, were not actually looking
for the presence of Xinjiang workers, is not sufficient
evidence that they are free from forced labor. The Chinese
seafood industry and the government have already responded that
using Xinjiang workers is not illegal under Chinese law and
that the use of these workers does not constitute forced labor
because they receive proper living conditions, a salary,
vocational training, and fair treatment.
But U.S. seafood companies need to understand that this
misses the point. Under U.S. law, any use of Xinjiang workers
is deemed illegal because it occurs in the context of a larger
government-run and coercive program, and whether these workers
are paid or they tell auditors or the state media that they are
happy to have the job is not relevant. Think here for
comparison of the use of child laborers in other countries,
which may be legal or defined distinctly in those nations, but
regardless of their laws it is not legal for those products to
come into the U.S.
As an aside, I will mention that I am intentionally
refraining, for the time being, from discussing an additional
set of processing plants in China that our investigation found
tied to U.S. seafood importers and that rely on another form of
state-sponsored forced labor, namely North Korean workers. As
you know, imports to the U.S. associated with this demographic
of forced labor is also strictly prohibited by federal law. We
will soon publish more of those findings about this topic.
But for now, I will humbly encourage the public to take a
deep look at the broken nature of the labor auditing of the
seafood industry and why seafood companies have been allowed
for too long to operate in a place where they have culpable
deniability, because to operate there they have to agree to not
look too hard at thorny issues like human rights. In fairness
to the industry, the world was not previously aware of how much
Xinjiang labor had tainted the global seafood supply chain. The
world was also not aware of how pervasive forced labor on
Chinese fishing ships is as well.
That moment has now passed. We now see that hundreds of
seafood companies are tied to these Chinese ships and these
Chinese factories. The question is, what will industry and
government do about it? The laws on the matter, at least in the
U.S., are pretty clear. The issue is whether they will be
enforced. Thank you for your time today.
Chair Smith. Thank you very much, Mr. Urbina, for that.
I'd like to now recognize Mr. Stumberg.
STATEMENT OF ROBERT K. STUMBERG,
PROFESSOR OF LAW, GEORGETOWN UNIVERSITY
Mr. Stumberg. Good morning, and thank you for this
opportunity to talk about four questions. Number one, which
U.S. Government agencies purchase seafood? Number two, is the
Buy American Act an effective antidote to purchasing seafood
that is tainted by forced labor? Number three, there's a
prohibition on purchasing goods made with forced labor in the
U.S. Federal Acquisition Regulation (The FAR). Is it effective?
And number four, what's on the to-do list for fixing any gaps
in these other laws? I've given you a relatively technical to-
do list, which we certainly will not cover in today's
conversation, but I'm happy to respond to any questions you
might have about it.
Which agencies? It's a relatively small world in the
context of seafood. The U.S. Department of Agriculture and the
Defense Department far surpass the other agencies that purchase
seafood, including the Federal Bureau of Prisons, the
Department of Justice, the Veterans Administration, and others.
Ian's team identified about $200 million over a five-year
period, which is certainly a conservative estimate. But that's
a very solid baseline number that could easily be double or
triple, if only better data were available.
It's interesting--when you look at who these agencies buy
from, USDA buys from companies that are themselves importers.
Almost all the purchasing for commodity programs is from three
importers. Defense, on the other hand, buys from companies that
are the two largest food service distributors in the United
States, U.S. Foods and Cisco. They, in turn, buy from the
importers. Two facts make that interesting.
Fact one, these two largest distribution companies are
enormous. Cisco, for example, has $68 billion in annual
revenue. Compare that to a couple million dollars in federal
contracting. It's just a blip on the scale of their revenue
scheme. But there's an opportunity to focus on procurement,
that tiny percentage, as the tail that might wag the dog. That
is because the same company is also obligated to comply with
the Tariff Act and its broad prohibition on any imports tainted
by forced labor. So you see the connection between the Federal
Acquisition Regulation and government purchasing on the one
hand, and the Tariff Act, which is the foundation for the
Uyghur Forced Labor Prevention Act.
When Ian's team asked USDA to comment on his reporting, he
got a very interesting answer, which was, first, we're
obligated to buy American only--both U.S.-caught fish and U.S.-
processed fish, in terms of our purchasing. And second, it's
audited by NOAA. And they said they do on-site audits. The
Federal Acquisition Regulation has three exceptions to Buy
American. One of them is if the supply isn't available. The
second is if the domestic prices are unreasonable, with a
litmus test to 20 percent compared to foreign prices. And the
third is, goods that are intended for resale, i.e., not for
public feeding programs like the national school lunch program.
The resale exemption applies to a military commissary or a
government cafeteria.
Those are the three exceptions. And you then have to ask
this question. If the USDA's answer is that they audit domestic
processing, they've excluded foreign sources from auditing. So
they presented a kind of Catch-22 on their own answer to the
question that Ian posed. I presume that most of their
purchasing probably does comply with the Buy American Act. And
yet, is there enough of a loophole here, legally authorized
under the Federal Acquisition Regulation, for them to buy based
on these exceptions?
Let's think about auditing for a second. They say they do
on-site auditing, but what's the site? Audits are often
typically based in companies' corporate headquarters. They say
they do on-site audits for processing but, again, the
headquarters of an audit of a processing company may be
different from the actual facility of the company. And so it
raises as many questions as it answers in terms of whether the
answer that Ian got is actually a clear explanation of the way
they do business.
And then, of course, there's a possibility that they do
perfectly comply with Buy American. These are big companies.
And so they could make sure that they are segregating their
sources for U.S. Government contracts, while on the other hand
for all of their other customers--practically every major
grocery chain in the United States and most institutional
purchasers, governments, universities, that huge market--they
are sourcing in Chinese processing facilities that used forced
labor. So that's possible too. But then it reveals the need for
a more comprehensive strategy for transparency, which simply
does not exist.
I'm pretty much at the end of my time. That's the big
picture. What's on the to-do list? I'll give you the broad
categories. And we can talk about details if you're interested,
either today or later. Number one, plug the gaps in the Federal
Acquisition Regulation. The exceptions that I told you about--
--
Chair Smith. With new law or through any kind of
administrative action, or both?
Mr. Stumberg. Could be either.
Chair Smith. Okay.
Mr. Stumberg. Every piece of the FAR, the Federal
Acquisition Regulation, can be traced back to an act of
Congress. If you try to amend the FAR, you have to go through
an elaborate rulemaking process under a council that's chaired
by the Office of Management and Budget, which is where
progressive regulations go to get sick and die. On the other
hand, Congress isn't exactly a model of democratic efficiency
these days either. But everything can be traced back to laws
such as the Trafficking Victims Protection Act, which is the
law that contains the prohibition on purchasing goods made with
forced labor, and the UFLPA, which is not synced with
procurement at all. The opportunity to sync the UFLPA, which is
run by the border control agency, and procurement is an
enormous opportunity. And there's no connection whatsoever at
this point.
And I should just say, in passing, that it's common for
government agencies of this scale, particularly when dealing
with new laws like the UFLPA, not to be connected to each
other. I mean, 9/11 was the story of agencies not connecting to
each other, so we all have learned a very painful lesson. The
U.S. Government does not have a strategy for monitoring or
policing human rights in its procurement, governmentwide. The
UFLPA contains the DNA, if I may say, for a governmentwide
strategy that's narrowly focused on Xinjiang-sourced goods.
There are interesting concepts and inventions in the UFLPA
and in CBP's implementation of it. You could take that DNA,
extract it, and plug it into the procurement system. And you
would end up with something that looks like a SWAT team of
lawyers, auditors, and guys that like to wear sweat suits and
jump on boats and, you know, chase around the ocean and do real
investigative work on behalf of the American people. That could
be a model for how that works.
The United States Government doesn't have it. Some smaller
progressive governments around the world do. Swedish counties,
for example, pool their resources for that kind of SWAT team to
support all of their counties, which do most of the purchasing
for governments in that country. Another example is that there
are about 900 universities and government entities in Europe
that have pooled their resources for electronics purchasing,
which are also subject to forced labor, much of it from China.
So for that industry, they pooled their resources through a
monitoring entity called Electronics Watch. Electronics Watch,
in turn, is based on the model of the Worker Rights Consortium.
So there are models out there that the U.S. Government
could learn from and incorporate into its strategy. What better
place to start than with seafood as a test case to build that
strategy and then expand it to other sectors?
Chair Smith. Thank you so much. I'm going to have to leave
for a few moments. We have a vote going on the Speaker's--talk
about dysfunction--Speaker's race. So I will go vote and then
come right back. But, obviously, you're in great hands with Co-
chair Merkley.
Co-chair Merkley. Well, thank you very much for your
testimony. And we'll just proceed.
STATEMENT OF GREG SCARLATOIU,
EXECUTIVE DIRECTOR, COMMITTEE FOR HUMAN RIGHTS
IN NORTH KOREA
Mr. Scarlatoiu. Chairman Smith and Chairman Merkley, thank
you for inviting me to testify this morning. Deputy
Undersecretary Lee, it's an honor to meet you this morning.
The official dispatch of North Korean workers to China's
seafood processing plants is a breach of applicable U.N.
Security Council sanctions, international human rights
instruments, and, most importantly, our own CAATSA. Mindful of
CAATSA provisions relating to sanctions for forced labor and
slavery overseas of North Koreans, my organization, HRNK, has
conducted a preliminary investigation into whether the working
conditions these workers face are subject to Section 302(b) of
the North Korea Sanctions and Policy Enhancement Act of 2016.
We further endeavored to identify Chinese entities that employ
North Korean laborers, with the aim of determining if such
entities and individuals in charge meet the criteria under
Section 111 of the Trafficking Victims Protection Act of 2000.
Until their repatriation began on August 23rd or the 29th,
there were thousands of North Korean workers officially
dispatched to Chinese seafood processing factories. In many
cases, these workers process seafood imported from North Korea.
The importation of seafood processed by North Korean workers in
China, seafood exported from North Korea to China, or a
combination of both into the United States would constitute a
blatant violation of CAATSA. Three major seafood processing
companies have historically employed North Korean labor and
have exported their products to the United States. Witnesses
mentioned the presence of at least three seafood processing
factories that employ North Korean workers in Donggang, Dandong
City.
North Korean seafood exported to China from Rajin Port is
primarily transported overland by vehicles through Chinese
customs. It is then distributed and sold in China's Yanbian
Korean Autonomous Prefecture, Jilin Province, or flown into
inland cities, including Beijing. Seafood processed in Hunchun
is exported as frozen or dried food to the United States,
Europe, Japan, and other countries.
The main North Korean seafood products transported inland
in this manner include various species of squid, croaker, snow
crab, hair crab, and blue crab. North Korean workers process
fish caught seasonally, such as cod and pollock, as well as
clams during clam season. They also process octopus and
shellfish packaged as Chinese export products.
There are reported instances of processed seafood marked
``made in China'' being shipped out to Vladivostok, where
labels are switched to ``made in Russia'' and exported to third
countries.
The employment of North Korean workers in Chinese seafood
processing plants and labor standards violations may contravene
the ILO's Forced Labour Convention (No. 29), and the Abolition
of Forced Labor Convention (No. 105), other ILO conventions,
the Universal Declaration of Human Rights, and the Protocol to
Prevent, Suppress and Punish Trafficking in Persons, also known
as the Palermo Protocol.
The North Korean seafood processing workers face inhumane
working conditions--long working hours, denial of proper rest
and breaks, harsh treatment, and minimal safety measures,
posing a risk to their physical and mental well-being. Lack of
freedom and communication--they're often isolated, facing
limited contact with the outside world and their families. They
are unable to exercise their right to freedom of movement and
communication. Absence of labor rights--such rights, including
the right to unionize and engage in collective bargaining, are
nonexistent.
North Korean workers covet overseas positions, as the
average monthly remittance of $70 is dramatically higher than
the $3 average monthly industrial wage in North Korea. The
average bribe paid to become a dispatched worker is $2,000 to
$3,000. The workers must borrow the funds from moneylenders and
pay it back with interest. The workers are lured with false
promises and subsequently entrapped under abysmal working
conditions.
Wage violations through compulsory contributions extracted
by the North Korean authorities, unpaid overtime, and
precarious safety and health conditions, are widespread. The
workers must moonlight for other companies to pay back their
loans, with the approval of three site supervisors--party,
security agency, technical manager--who must also be bribed.
Including moonlighting, a North Korean seafood processing
worker in China may make up to about $210 a month. The North
Korean worker's monthly wages are paid upon their repatriation
in North Korean currency at the official exchange rate.
During the COVID-19 quarantine, the workers received no
wages and the interest on loans increased, reportedly leading
to about thirty suicides, most of them women. The Chinese
companies pay the North Korean regime mostly based on
production volume. The payment is made in Chinese currency. Men
mainly carry frozen fish blocks, and women sit down and peel
fish or squid or sort clams and crabs by size. Most of the
North Koreans work the whole day in cold storage. Additionally,
the pungent smell inside is unbearable. North Korean workers at
the Chinese seafood processing plants usually work about 10
hours a day. If production targets are not met, the workday can
extend to over 12 hours.
I respectfully recommend the following: Continue to
encourage civil society groups with relevant networks to
continue investigating conditions of work at Chinese seafood
processing factories, and whether products processed by North
Koreans end up on the U.S. market. Propose that new findings on
violations affecting North Koreans at such factories be
included in the annual report on trafficking in persons
required under Section 110(b) of the Trafficking Victims
Protection Act of 2000.
Seek to determine whether the government of China has made
any serious and sustained efforts to eliminate severe forms of
trafficking in persons as they relate to the official
dispatching of North Korean workers to Chinese seafood
processing plants. And, finally, seek to confirm whether
seafood exported from China to the United States contains North
Korean seafood products and whether North Korean workers
officially dispatched to China processed seafood exported from
China to the United States. If confirmed--for example, if
confirmed based on newly available information and analysis,
such products would have to be denied entry at any of the U.S.
ports, pursuant to a prohibition under Section 307 of the
Tariff Act of 1930.
Thank you very much.
Co-chair Merkley. Thank you so much for bringing this
perspective to bear on the North Korean element of forced
labor.
And now we'll turn to Sally Yozell.
STATEMENT OF SALLY YOZELL,
DIRECTOR, ENVIRONMENTAL SECURITY PROGRAM,
THE STIMSON CENTER
Ms. Yozell. Good morning, Chairman Merkley and Under
Secretary Lee. Thank you for the opportunity to testify today.
I ask unanimous consent that my full testimony be included in
the record.
Co-chair Merkley. Without objection.
Ms. Yozell. I was asked to speak about illegal, unreported,
and unregulated fishing in the seafood supply chain. IUU
fishing can take many forms and has been linked to criminal and
illicit activities, such as smuggling of guns, drugs, and
wildlife, human trafficking and forced labor, as we've heard,
as well as money laundering and tax fraud. In all of its forms,
IUU fishing directly contributes to overfishing, threatening
the sustainability of fish stocks and damaging marine
ecosystems. IUU fishing harms the economic, food, and
environmental security of coastal communities, particularly in
developing countries, and can destabilize the security of
maritime states by fueling corruption and distorting markets.
I saw these impacts recently firsthand on a trip to the
Gulf of Guinea, where Chinese-owned operations have expanded
their industrial fleets, fishmeal operations, and fish bases.
These developing nations often lack the financial and technical
capacity to manage their fisheries. And they often lack the
political will--they can be influenced by Chinese investment.
This can lead to food insecurity and unemployment,
environmental degradation, and civil unrest. IUU fishing
accounts for a third of global fish harvest and it is valued at
more than $30 billion annually. Ultimately, it occurs because
it remains profitable, loopholes persist, and the opaqueness of
the global seafood supply chain has made it largely invisible
to governments, businesses, and consumers.
That is, until last week, when Mr. Urbina's reporting has
blown the lid off one of the most traded food commodities in
the world, revealing a very dark side that has flourished
undetected. Seafood accounts for more than $140 billion in
trade each year. The demand for seafood is greater than ever.
The United States is the second-largest seafood importer,
behind China. And last year we imported 340,000 metric tons of
seafood, valued at over $30 billion. We know one simple truth.
U.S. consumers and consumers around the world do not want to
eat seafood that is caught illegally or that is the product of
forced labor and human rights abuses. But how do they know?
The United States imports about 85 percent of all its
seafood. Just under 40 percent of U.S. seafood imports are
initially caught in U.S. waters, exported for processing in
Asia and China, and then reimported into the United States. An
illustrative example of this is pollock and salmon. Because of
the war on Ukraine, Russian-caught seafood is currently banned
from the United States. Yet, Russian pollock and salmon enter
U.S. commerce every single day. Under the U.S. COOL Act, fish
that is processed in China becomes a product of China,
essentially hiding its real origin. So Russian catch can be
processed alongside U.S.-harvested fish, where it is commingled
and processed into fish blocks, fish sticks, canned salmon, or
frozen filets, and then sent back to grocery stores,
restaurants, and even our own school lunch programs, and on to
unwitting American consumers.
Stopping the importation of ``Putin's pollock'' through
China is an easy fix if the United States Government were to
implement a more comprehensive traceability system that tracks
seafood throughout the supply chain. As a former co-chair of
the task force which created NOAA's seafood import monitoring
program, called SIMP, I can say with certainty that SIMP was
originally en-
visioned to prevent and deter IUU fish from entering the United
States. It was to effectively track all imported seafood from
the point of harvest to its initial entry into the U.S. market,
or as we like to say, bait to gate. SIMP has been in operation
for six years. Yet it only covers about 45 percent of U.S.
seafood imports. It does not cover several high-risk species,
including pollock, salmon, blue swimming crab, squid, and
haddock.
As NOAA Fisheries looks to improve its program, they must
consider the fact that SIMP is currently a single narrow
program, rather than a true traceability system. It is siloed
from other relevant monitoring programs and hamstrung by its
reliance on a paper-based framework. This opens the door to
falsification and prevents the use of advanced risk analytics.
Globally, the United States, Japan, and the European Union all
have traceability programs. And when you combine all three,
they make up more than 60 percent of the international seafood
market. This is a powerful bloc.
Several additional programs are coming online, such as
South Korea and Australia. And all of these countries are
looking to the United States as its global leader. At home,
numerous agencies are working to combat IUU fishing. NOAA
Fisheries manages the seafood and the SIMP program, as I noted.
The U.S. Coast Guard uses satellite, AIS, and radar to track
its fishing vessels at sea. The Department of Labor monitors
for forced labor and human rights abuses. The Food and Drug
Administration collects seafood data relating to human health
and food safety. And the Treasury Department follows the money,
which can provide valuable insight into beneficial ownership of
IUU fishing enterprises. And I could go on.
But despite all of this data and all of these programs, the
International Trade Commission estimates that $2.4 billion
worth of IUU-caught fish products entered the U.S. market in
2019 alone. In my written testimony, I have shared 10 next
steps that can be implemented now to achieve a broader, more
holistic vision to prevent IUU fish from entering our markets.
To summarize just a few, let me say that we need a full-
functioning traceability system that is, one, standardized:
Expand the Seafood Import Monitoring Program and work with
other countries to develop a consistent global list of high-
risk species. Two, streamlined: Move to a full, digitized
traceability system that will support the use of risk-based
analytics and reduce the burden on industry. And we have to get
rid of the paper. In today's world, how many billion-dollar
industries lack digitization and rely on paper-based records?
Third, synchronized: The U.S. should widen its aperture to what
is considered risky behavior.
First, NOAA Fisheries should follow through on its work to
amend the definition of IUU fishing to include forced labor in
the seafood supply chain and work across federal agencies to
consider other risks linked to vessel histories, ownership
information, and land- and sea-based processing, transshipment,
and ports. IUU fishing is a global problem that requires global
solutions. The United States Government has the opportunity and
the responsibility to ensure more transparency and to chart a
path forward that moves the seafood supply chain out of the
shadows. Thank you for your time, and I'm happy to answer any
questions.
Co-chair Merkley. Thank you very much, Ms. Yozell.
I'm going to note that there are submissions for the
record. These are from Judy Gearhart, Research Professor at
American University's Accountability Research Center; from
Badri Jimale of the Horn of Africa Institute, from Stephanie
Madsen, Executive Director, At-sea Processing Association, and
from Michael Sinclair, former Federal Executive Fellow at
Brookings. If there's no objection, their material will be
entered into the record. Hearing none, so ordered. And now our
Chair has returned. Is everything fixed? [Laughter.]
Chair Smith. No. We'll have another vote in 15 or 20
minutes.
Co-chair Merkley. Thank you.
Chair Smith. You know, Mr. Urbina, you mentioned auditors
and, you know, one of the things that I've been very concerned
about for the longest of times--as a matter of fact, back in
2012 I actually chaired a hearing on this Commission and
pointed out that the ability of anybody to say anything of
worth to an auditor, when potentially there are people around
who will snitch on them, especially within the company, or even
Chinese Communist Party security types, well, the audit hearing
that we had made it clear--we focused on Apple and some of the
other big companies--the auditors go in, they talk to six
people, they'd say, ``Oh, we met them separately,''--you know,
separately, with recording devices going. ``And they said,
`everything is just fine.' ''
I'm wondering if that's been your experience. You know, our
government, unfortunately, is too willing to accept that. They
say, oh, they got a clean bill of health by auditing company X,
Y, or Z. Many of them are foreign based. They're not
Pricewaterhouse. They're coming out of Europe and the UK. I
think it's a sham, frankly. You know, maybe there's some good
people involved, but the process is a sham, because you're
going to get a Potemkin village almost every time. And I wonder
what your thoughts might be on that.
And you mentioned, Mr. Stumberg, about NOAA. We're in a big
fight with NOAA on issues relating to ocean wind. I'm leading
the effort in my state, because they and others, including the
Bureau of Ocean Management, have been absolutely AWOL in terms
of doing their due diligence about the impact of radars and the
fish kill that we're seeing with whales. But, you know,
reasonable people can disagree on that, but the radars are
overwhelming. We will be blinded if these 3,400--it's the size
of the Chrysler Building--ocean wind turbines go off the New
Jersey, New York coast. And yet NOAA has been no help. I've
been shocked and dismayed by it. And I'm wondering if you might
want to speak to how valid their work is on this.
Senator Merkley and I, in our letter yesterday to Secretary
Mayorkas, we--bottom line, we believe the situation needs a
robust and coordinated response across all federal levels,
including DOD. What has the response been from USDA, and DOD,
which procures so much of this fish for our troops and for the
commissaries? I have a commissary in my district, joint bases
in my district. I've been to it many times, you know, with
others. I don't use it, but I go there when I do base tours.
And there they are, right on the rack, all these different fish
products. Which normally would be great, but if it's, as it is,
sourced through human rights abuse, we've got a problem.
So I'm just wondering what their initial responses have
been. Has there been a response? Because we're going to--you
know, we're going to push really hard. I don't care who's in
the White House, you know, we want no complicity in human
rights abuse. So whoever comes in next, might be the same.
Might be Biden again. It just has to change. There's got to be
an aggressiveness there that has been sorely lacking.
Mr. Urbina. Thanks for the questions. On the issue of
auditing, I would just sort of maybe pull up to altitude and
take a big bird's-eye view of it, and first start by saying
it's important to think of seafood in the way that it's
distinct from other products. And remember that there are these
two distinct universes where seafood is coming from and
processing through. And so, when we think about the auditing
system, and you think about the two universes--the at-sea and
the on-land--it's important to ask, ``Okay, what do the at-sea
audits look like versus the on-land ones?''
And the at-sea audits are nonexistent when it comes to
labor. And that's a huge problem that's easily overlooked
because it's the toughest problem to solve. Spot checks on
ships and conditions on ships are really a big challenge. So
that's one dichotomy I'd put forward. The second one is the
question of what kinds of audits we're talking about. Are these
marine audits or social audits? Marine audits are largely
environmental in focus. They're focused on IUU concerns and
these matters. And the private sector has more of an
infrastructure for marine audits. They're flawed, deeply
flawed, the marine audits are, but at least they exist. How to
check on the attempted traceability of where the fish is coming
from, what gear is being used, what ships, etc.
When it comes to social audits in the seafood space,
there's far less infrastructure. And there are some firms that
are doing these social audits, meaning checking on labor
issues, but only on processing plants. So that's a second
dichotomy that I think is important to bear in mind. The next
one is China. You know, audits in the rest of the world versus
audits in China. That's another dichotomy to really not forget
about. If you're going to operate in China, you've got to play
by their rules. And the U.S. business community knows that. And
so do NGOs who are now working there.
And those rules are pretty problematic. You know, you can't
ask certain questions. You can't say certain things. And so
auditing firms and U.S. companies that are operating there know
full well when they go in that they can't stay there unless
they play by those rules. So there is a bit of a sham in having
labor audits through private firms in China, because there's
this whispered sense that they're not really going to do what
even weak auditing is supposed to do. And then the last layer I
would go to is whether social audits, labor-focused audits on
land in China, are even looking for the right things and doing
them in the right way. Are they even looking for Xinjiang
workers? What we found is the answer is no. They were not
fluent on the issue of the problem of Xinjiang workers.
They were not looking in the right way for that issue. And
then also, are they doing them in a credible way? In other
words, are they calling ahead and saying we're going to show up
on Tuesday to check your plant? That's not a real audit,
because they know to clean things up because the auditor's
coming on Tuesday. So, these are the layers of questions I'd
ask of auditing. And for the most part, the answers we got in
our investigation were not hopeful ones.
Chair Smith: You know, at that hearing in 2012, I would
just point out that Thea Lee was one of our distinguished
witnesses that day, speaking on behalf of the AFL-CIO. But we
had Li Qiang--and I just say this because I think it speaks
volumes--who was executive director of China Labor Watch. And
he said, according to very conservative estimates, about 30,000
plants--over 100,000 audits are conducted for over 30,000
plants. The multinationals would then more often than not bribe
the auditing companies by giving them like $3,000 or so to
avoid making the investment to make the improvements and to
really bring the information forward. So people are chilled
from telling you what is actually going on. This hearing was in
relation to things like what Apple was doing with its workforce
in China. So, you know, big, big caution flag when we hear
about audits.
In terms of the response of DOD, for example, or any of the
government agencies, I know your research is new, but what has
the reaction been? Are they saying, let's meet with you, let's
begin plotting out, you know? And, Mr. Stumberg, I'm doing a
rewrite of my original law that--I'm the author of the
Trafficking Victims Protection Act of 2000--and we have a
reauthorization that we're working on. It will be marked up, we
believe, in the next Foreign Affairs Committee meeting. That
said, we're looking at some new language in a number of areas.
I'd love to get your input as to how we could amend that or
should amend that. So please, either now or in follow-up, we
just need that from you, if we could.
Mr. Stumberg. That sounds like bait. I'll take it.
[Laughter.]
Chair Smith. Thank you. I appreciate that.
Mr. Stumberg. The Trafficking Victims Protection Act, as
implemented in the FAR, requires prevention plans to prevent
the government from buying goods made with forced labor. Good.
It only authorizes prevention plans for services performed
overseas, not goods purchased by agencies, and explicitly not
goods that are commercial off-the-shelf items. These are so-
called COTS items, which include canned fish. So, yes, there
are prevention measures in the Trafficking Victims Protection
Act. But, no, they don't cover any of the products we've talked
about here today.
And for the overseas services, what they have in mind is
commissary services for military bases and embassies overseas,
not importation of goods produced overseas or processed
overseas. So there's a disconnect in the Trafficking Victims
Protection Act as relates to the FAR sections that aim to
prevent procurement sourced with forced labor. Fortunately, the
Uyghur Act provides a good model for closing this gap in the
FAR with respect to procurement of goods. For example,
purchasing agencies could require prevention plans for goods
that pose a high risk of forced labor based on guidance from
the Departments of Labor, Homeland Security, and other agencies
in the forced-labor task force. More specifically, the FAR
could incorporate the Uyghur Act's rebuttable presumption of
forced labor for purposes of procurement. So to summarize, the
agencies that are doing procurement should follow the precedent
set for trafficking victims by importing from the Uyghur Act
some of its standards. Does that make sense?
Chair Smith. It does.
Mr. Stumberg. And the threshold is very high.
Chair Smith. I deeply appreciate it. Because we're doing it
right now.
Mr. Stumberg. Right.
Chair Smith. Thank you. You know, finally, Mr. Scarlatoiu,
in your testimony you say that all North Korean workers in
Chinese seafood plants who were detained during COVID-19 were
recently repatriated. I understand that some of them had to
stay longer than three years due to lockdown during the
pandemic. Does that mean they will be reprimanded for staying
longer in a foreign land than the contracted three years, even
though it was out of their control?
Mr. Scarlatoiu. Basically, we're dealing with two
categories of North Koreans. The ones who are there without
government approval--China claims that they're illegal economic
migrants--they were arrested, punished, and forcibly
repatriated to North Korea, where they face a credible fear of
persecution. Workers have normally been okay for as long as
they follow the instructions of their three site supervisors,
the state security department fellow, the site technical
supervisor, and the party representative--the Korean Workers'
Party representative. So they go back home and for about three
years they're under the surveillance of the Gestapo, Stasi,
basically the Ministry of State Security. And then they're
okay.
However, in this particular case, they overstayed their
contracts. Most of them still moved around in groups. Their
humanitarian situation was dire. There were no contracts, there
was no money at their work sites. A few of them managed to
moonlight if some companies were still open for business, with
the approval of the three site supervisors, whom they had to
bribe. We have had very credible reports from sources within
the North Korean escapee community, who in turn have their
sources inside China, that things were so bad that these
workers had to work on Chinese farms. They barely had one meal
a day. And it went so far as these workers going to the local
markets to acquire vegetable clippings--the clippings that are
thrown away--and making vegetable soup out of them.
I have mentioned the issue of loan sharks. These workers do
want, at the initial stage, positions overseas. The average
monthly salary of a North Korean industrial worker is $3 a
month. They can make as much as $70 or, if they manage to
moonlight, even up to $210. They have to pay a bribe in the
amount of $2,000 to $3,000. They have to repay the loan sharks.
Interest accumulates. This is what happened under COVID. And
they were all under tremendous pressure. We have had reports of
about 30 suicides among these workers, most of them women.
In terms of the repression they face when they go back
home, based on what we know about how North Korea operates,
yes, sir. They will be under much more pressure than their
predecessors who were simply out there in China until the
contracts expired and then they came back home. In North Korea,
it doesn't matter that you haven't done anything wrong. There
is a perceived offense of having worked at an unauthorized
worksite, having overstayed your contract, regardless of the
reason why. The likelihood that they will face some degree of
punishment, if not harsh punishment, is quite high.
Chair Smith. Ms. Yozell, a few years ago I chaired a
hearing on Malaysia being red-carded for their abuses with
regard to their fishing. Can you explain the difference between
the U.S. seafood import program and the red carding program of
the EU?
Ms. Yozell. Sure. The EU system, as you say, is a carded
system. And basically it is a government-to-government system
in which literally there is catch verification that the seafood
that is being caught is not IUU fish. And if it is, then a
country will first receive a yellow card, and then if they
don't improve the work they do, then they get a red card. And
when they receive a red card, all seafood from that country is
no longer allowed to be imported. On the other hand, in the
U.S. system, the SIMP program, it's the industry that is
required to determine if seafood caught is IUU or not. And it
is not government-to-government. Information is then passed
through. And NOAA then determines, based on the information it
receives from the brokers, whether the seafood is IUU fish or
not.
Co-chair Merkley. Thank you so much. And I'm going to ask
you--Director Urbina, thank you for your four-year study. In
your testimony you note that you studied 751 ships. You've also
referred to how difficult that is. What does it mean to study a
ship? Like, were 751 boats tracked as to what they were
offloading and where they were offloading it? Or were these
conversations with 751 crews? How did you go about this very
difficult task?
Mr. Urbina. Sure. So, again, thinking in bifurcated
fashion, at sea, on land. Three of the four years we've really
focused on the at-sea universe. And our hope was to look at the
entire Chinese distant water fleet. That was too big to take
on. So we then honed it down to look at the portion of the
fleet that we thought was potentially most interesting and
illustrative. So we honed in on the squid fleet, for a bunch of
reasons. The squid fleet, and the distant water squid fleet, is
in the most interesting places around the world--North Korean
waters, coast of West Africa, high seas Falkland Islands, high
seas Galapagos.
The goal then was to go to those four places and lay eyes
directly on the vessels and try to talk our way onto the
vessels to witness crew, witness conditions, check seafood
traceability and their refrigeration, talk to officers and
captains, etc. And that was successful. In each of those places
we were able to get on vessels. When that didn't work, we
interviewed the crew through a very old-school method of bottle
communication. So we would write notes and put them in plastic
bottles weighed down with rice and, you know, cigarettes, and
candy.
And when the ship would try to leave when they saw us
coming, we would follow them and we--I would throw bottles onto
the back of the vessel. And the crew, usually the deckhands--
the captain was looking forward, the deckhands were facing
backwards--they would receive the bottle. Sometimes they
wouldn't open it, read it. Other times, they would. They'd take
the message out. It was written in Bahasa Indonesian, because a
lot of the crew were Indonesian, Chinese, and English. There'd
be a pen in there. Sometimes they would scribble responses to
the questions back, phone numbers of family back home, pleas
for help. They'd put it back in the bottle, throw it back over,
we'd pick it up. So that was a labor-intensive process, but
very effective in getting interactions with crew.
So that was sort of the on-the-water method of reporting.
The remote method of reporting was a deep dive on various forms
of data, which would allow you to understand where these ships
have been, you know, by way of tracking them through satellite
technology, etc. Are they engaged in sovereignty incursions, so
illegal fishing in that form? Is there a written record in any
universe--be it foreign media, or state reports, or other
databases--of dead bodies coming off of these ships, of
infractions by the ships?
So, vacuum in all that you can about the vessels and build
a database so that you can identify levels of concern for
different vessels. And then connect the supply chain dots from
those vessels, to refrigeration, to port, to processing plant,
to U.S. or European buyer. The only way you have impact is if
you can make it relevant to European and American consumers.
And for that, you need the supply chain work. You can just talk
about a bad thing happening on a vessel, but no one's going to
care unless they realize they're tied. So that was the on-water
investigation.
The on-land investigation was a whole different kettle of
fish, if you will. And this was done by the investigative team
at my organization--mining of media reports and cell phone
footage by workers from within processing plants, open-source
intelligence, to see what you can lay eyes on. That TikTok--
Chinese TikTok, there's a lot of footage of workers chronicling
their labor transfer from Xinjiang to Shandong. Here I am on
the plane. Here I'm arriving at my factory. Here I am working.
Here I am seeing the ocean for the first time. So, we mined all
of that material to connect the dots to actually figure out how
many workers were actually in these plants.
And then also a lot of companies have newsletters which are
very candid. Parent companies of the seafood processing plants
talk very openly about how appreciative they are of the Chinese
government helping them fill their labor shortage by
transferring workers. And so we mined that material as well,
and a number of other materials to build a grid of knowledge
about what the plants are that are using Uyghur workers.
Co-chair Merkley. It is truly a stunningly expansive
project you undertook, under incredibly difficult
circumstances. And just as you were describing throwing bottles
onto the boats and hoping somebody would open the bottle--and
you apparently got a lot of bottles thrown back, giving
firsthand accounts. So thank you for elaborating on that. I am
really kind of struck by all of your testimony of how complex
and difficult it is to tackle this particular challenge.
And one piece that I hadn't anticipated, that U.S. flagged
vessels fishing in their own waters ship their product to China
for processing. So immediately it's intermixed--U.S.-produced
food is intermixed with the Chinese flow. Is that one--is that
an inevitable piece of the economics of processing because it's
so labor intensive? Why is American seafood from U.S. vessels
in American waters being shipped to China for processing?
Mr. Urbina. I'll take that one on. Inevitable is the word
that I focused on in your question. I think the answer to the
inevitable part of your question is no, but it depends. The
challenge of solving that problem depends on the type of
seafood. If you look at the history of squid, very labor
intensive, costly, dirty work. And during the late '80s, early
'90s it was wholesale shipped to China for the cleaning,
processing of it. There is not much infrastructure for
processing of squid in the U.S. The challenge that the industry
will face for finding alternate places to do that work is going
to be tough.
Pollock, different story. You know, there are out of Alaska
at-sea processors who are doing a lot of the processing in U.S.
waters, on U.S. vessels, for U.S. consumers, and avoiding the
problem. Can they scale up? I don't know. But really an honest
answer would be to look at the type of seafood and then look at
how we could encourage processing alternatives that allow
industry players to not rely on North Korean or Uyghur-worked
factories in China.
Co-chair Merkley. I'll ask--thank you. And I will say,
Professor Stumberg, you described Director Urbina's work--James
Bond would be impressed. And I think that's certainly--the more
you know about your project, the more that that rings true. One
of the challenges we've had with the UFLPA is that even if
goods are detained, when they are released they are sent to
Canada. If they're banned from our market, they're sent to
Canada or Europe. How much do we have to accentuate
international cooperation to have any significant impact on
this challenge?
Mr. Stumberg. In addition to that, two years ago Congress
asked the Department of State and Defense to look around the
world and report back to Congress on the risk of forced labor
in seafood. Sally knows more about this than I do. But the
report that came back to Congress was that 29 countries,
including China, have a very high risk of forced labor in their
seafood. And so the need for this kind of monitoring is
profound. You're right, there are obvious markets all around
the world. If they can't sell their seafood in the United
States, they're going to go somewhere else. Someone else will
buy that seafood. So, why bother, right?
Well, from a moral point of view, ``why bother'' is easy.
The American taxpayers don't want to be trading in forced labor
products just to save a few pennies on the dollar. Why bother
in terms of the rule of law and a global economy that is
working for working people in the United States as well as
abroad? If American workers, including the processors in
Alaska, have to compete with forced labor in China, they're not
going to. How do you compete with slave labor?
Co-chair Merkley. So let me reframe the question, because
as a principal author of the UFLPA, I certainly believe that we
should be doing this. How do we get Canada and Europe to work
in concert with the United States to help us tackle this
challenge?
Mr. Stumberg. I don't have a profound answer to that
profound question, but I will observe this: Europe is ahead on
this. The European Union has already approved a comprehensive
sustainability disclosure mandate for all of their member
governments, a directive that was approved and is now being
implemented--the corporate sustainability reporting directive.
So they're years ahead of us, with that Europe-wide, industry-
wide disclosure system, the kind of systematic approach that
Sally was alluding to earlier, including very specific auditing
protocols. And they're implementing it now as we speak.
On the tail of that, both the European Parliament and the
Commission have approved proposals for mandatory due diligence,
which is legalese for doing the kind of homework that Ian was
talking about. And the kind of homework that CBP has outlined
for itself in its own work plan. It's just that when you read
the details of the European approach to due diligence, it's
pretty gauzy. It's chock full of legal jargon. It's hard to
understand how it's really going to happen. But when you read
the CBP program, you go, oh, this could actually work.
So in some sense, the United States is a thought leader,
but we're way behind Europe in terms of scaling this up and
applying it not just to seafood, not just to food, but
industrywide, regionwide. So getting in sync with what the
Europeans are doing, learning from the way they're scaling up
this kind of corporate accountability, understanding that
companies are going to have to comply with these EU directives
and they're going to be preoccupied with that for a decade or
more while the Americans are futzing around with vessel by
vessel withhold orders. You know, we're not on the same page,
and the Europeans are really making us look like we're still in
the 20th century. So that's a quick answer to your question.
Co-chair Merkley. Thank you.
Ms. Lee.
Ms. Lee. Thank you, Chair Merkley.
I think you could feel that I was getting interested in
this answer, because this is part of what I spend a lot of my
time doing--trying to think about how we can cooperate better
with other countries, how do we cooperate better within the
United States Government? Because we actually have some very
powerful tools. And I think all of you have mentioned several
of them. And I don't think we're using them to the full extent
that we need to or could. So I guess one quick thing with
respect to Canada is that in our most recent USMCA trinational
meeting, Mexico and Canada, under the USMCA, also committed to
institute a forced-labor import ban.
And they don't know how to do it. So we brought some of our
Customs and Border Protection folks. And we are going through
ongoing technical exchanges to help to see how far we can go in
terms of sharing information that would make that more
effective. Even the Canadian and Mexican businesses said to us,
We don't want to get all the forced-labor import rejects that
come from the United States. That's not good for our own
competitive atmosphere.
But, you know, Professor Stumberg, I don't totally agree
with you in terms of the European Union versus the United
States. I think our tools are amazing, the Uyghur Forced Labor
Prevention Act, the rebuttable presumption which gets around
some of the issues that Ian raised; that we don't have to prove
or get access to China, because we know China doesn't give
access. They don't give access to auditors. But you know, I
think we're at the very beginning of learning how to implement
those.
And one of the things that I've also been doing in the G-7
and the G-20 is trying to figure out how we can take the very
best of what the European Union is doing and what the United
States has--a lot of other countries are very jealous of a
forced-labor import ban, in whole or in part. Because if we
were able to enforce the Tariff Act of 1930, the Uyghur Forced
Labor Prevention Act, the North Korean sanctions, it would be
massively powerful. We can't really do it all of a sudden. But
I also think that the point that you raised, Professor
Stumberg, about the integration of U.S. Government procurement
with the trade measures, the import ban, and the Uyghur Forced
Labor Prevention Act, is exactly next.
So I know that wasn't really a question, but the question
is for each of you--and thank you so much for your testimony,
for your work. One thing, if you could, back to enforcement.
Because I'm in the executive branch, I don't know how long
it'll take Congress to enforce better and stronger laws. I know
we need them. But I think that there's so much that can be
done. What would be your number-one ``ask'' of the U.S.
Government in terms of strengthening enforcement of existing
laws? So if each of the witnesses wouldn't mind, I would love
to hear from you.
Mr. Urbina. I'm going to cheat and answer with multiple
small pieces that add up to one. I think that when it comes to
enforcement, as the point you made, there's a real problem
within the U.S. Government about agencies not actually working
well with each other. And I know that sounds boring and very
Washington-
focused, but as I've looked at this for over a decade it's a
huge problem. So you even look at things like trafficking
getting introduced as an element within SIMP. The bigger issue
is that the agency that oversees SIMP isn't built to be looking
at trafficking issues and labor issues.
ILAB is, and even State is, but the whole program of SIMP
resides under an agency that's a bunch of folks that are
really, really strong on fishery issues and marine issues, but
not labor issues. But everyone is defensive about their
jurisdiction, and therefore there's language in the rule, but
not real, actual implementation of it. That's got to be fixed,
and it's by people in this room. Similarly, a threshold issue.
Say Customs and Border Protection has their own interpretation
of WROs--what is the threshold for a case that might be brought
forward? This person was trafficked. Here's the evidence. The
burden is on NGOs and journalists to do all that work. That's a
problem. And then it's handed to Customs and Border. And
Customs and Border, sometimes their lawyers will say, Okay, but
we want recent stuff--recent defined as within the last two
years. These contracts--these people are at sea for two years.
So, your case is going to be automatically kicked out
because your case of a trafficking human being is three or four
years old. But the nature of the industry that that person's
working in, they're going to be offshore for two years. So,
there are fundamental interpretive flaws and threshold issues
in how these agencies are implementing the tools on the table.
And unless someone really pushes and fixes those, the best law
on the books isn't going to get what it's supposed to do.
Mr. Stumberg. First a note about SIMP. As Sally explained,
SIMP was built to cover environmentally illegal fishing. It was
not built to cover human rights illegal fishing, nor does it
cover any of the commercially valuable fish that the USDA and
the Department of Defense purchase. If you just applied SIMP to
what the U.S. Government buys, that would be a big leap
forward. And while you're at it, collect what relevant labor
rights information you can. I'm not trying to pitch SIMP as the
right place to have a human rights strategy, but it could be a
very valuable tool if expanded, as a coalition of eight civil
society organizations recommended back in March. They did a
really good report led by the World Wildlife Fund and seven
other groups.
Two other ideas: First of all, implement the Uyghur Forced
Labor Prevention Act. What do I mean by that? It's now been a
year and a half since the workplan hit the pavement, right?
Have some empathy for CBP. In response to their initial list of
20 known entities that have direct connections to Xinjiang
province, they've been flooded with thousands of pieces of
evidence about other entities. An entity could be anything from
a vessel to U.S. Foods. Thousands. So how do they process that?
They have yet to come out with a rule or a guideline on how
they're going to make decisions about how and when to add more
entities to the list, but so far they've gone from 20 to 27 and
that's it.
So I have empathy for them considering the workload, but
it's been a year and a half and at least they need a strategy
for telling the rest of us, this is how we're going to sift
through all this evidence. You can say the same about the five
high-priority categories where they're focusing on enforcement.
I'd make the pitch that Ian has--you know, give them an
invitation to add seafood next, simply based on his reporting
alone. He's done their work for them.
And not only that, if I can say one more thing--when I read
the CBP work plan published a year and a half ago, I couldn't
believe that this was from a U.S. Government bureaucracy
because it was so forward looking. They were talking about, and
I assume they're working on this now, using artificial
intelligence and the various computer databases--the very ones
that Ian used--to intentionally sift through and pull out all
the data that he's presented in his reporting. CBP implies that
they want to be able to do the same damn thing with AI.
Now, I don't know squat about AI, but I have a feeling that
that's probably possible. So could Ian's work be a picture of
what the future looks like at CBP? I hope so. Probably
everything except, you know, putting on your jumpsuit hopping
on a skiff and chasing down people on the high seas. I don't
expect CBP to do that. But we have to leave something for Ian
and his grandchildren to do. [Laughter.]
Ms. Lee. It's all about the jumpsuit.
If I could say one last thing--thank you so much for those
answers. And I actually completely agree with what you both
said here. And it's one of the things--ILAB is in cooperation
talks with both CBP and with NOAA because, as you said, we have
the expertise. I have 165 staff now. We have tremendous
technical expertise. And so we're doing some staff exchanges.
We're doing some contracting. And we really do want--and we're
in very deep conversation with NOAA about SIMP and ways that we
think it could be strengthened and improved, and the
definitions, and so on. I think that's really important.
And with respect to the Uyghur Forced Labor Prevention Act,
you know, I sit on the FLETF, the Forced Labor Enforcement Task
Force. In fact, I co-chair the entity subcommittee. So I will
tell you that we are trying as hard as we can. It's been very
slow going. It's been frustrating, I think, to all of us. But,
you know, we're trying to figure out what can withstand legal
challenge, what can be as robust as possible. But I share your
frustration with the slowness of the process. But I will tell
you that we are really trying to use those tools that Congress
gave us as effectively as we can. And I apologize, I'm going to
have to leave--to catch a plane. But thank you, again, to all
of you for your work.
Ms. Yozell. If I could just hop in for a minute, please. I
want to just note that you had asked what could be done, one or
two things. I think the number one thing that we've been
waiting for, for quite some time, is for NOAA to add labor and
human rights abuse to the definition of IUU fishing. They said
they would a while ago, and they have backed off of that. In
addition, I think it's really important--we recently
interviewed several federal agencies and said: What do you need
to do better at your job? Your agency, as well as others, all
said: Sharing data and information.
NOAA collects a significant amount of information through
its SIMP program, but it does not share it. You and other
agencies collect a lot of information that NOAA could use as
well, but they haven't asked for it. So we really need to open
that aperture and understand all that we can about risky flags,
risky vessels, risky ports, and I could go on and on. And I
also want to just note that there are a number of things that
were in the NDAA and appropriations that have asked NOAA to try
to harmonize the data and information more, and that has yet to
occur.
And then just finally, expanding the list of species
covered. It's such a small list, yet pollock, salmon, squid,
blue swimming crab, and haddock--all species we know have been
the result of IUU fishing but are not on NOAA's list. And they
must be expanded to those and others.
Co-chair Merkley. Thank you very much, Director Yozell. And
thank you, Deputy Undersecretary Lee. This is why it's so
valuable that this Commission have members of both parties from
the House and Senate, but also to have members from the
executive branch. And I think many of the recommendations and
ideas that are discussed here--having you here to hear them
directly, from your role inside the administration, is hugely
helpful. I hope we have given you sufficient time to catch your
plane. I really appreciate that you're here in person.
Ms. Lee. Thank you.
Co-chair Merkley. Thank you.
I'm going to raise some questions provided by others,
starting with one from Congresswoman Wexton, who would like to
have been here. And her question is for you, Mr. Urbina.
She asks: Currently, most Americans focus on where their
fish is caught, for example, was it caught in Alaska or was it
caught in Norway, not about where they are processed, as in
China or the Russian Far East, and by whom. How do we make the
complex supply chain more transparent, so importers in the U.S.
seafood industry understand that they're not violating the
Uyghur Forced Labor Prevention Act, and the Countering
America's Adversaries Through Sanctions Act?
Mr. Urbina. Yes, I think seafood, again, is distinct from
tomatoes, or cotton, or computer chips--it traverses these two
universes. And so one big thing that has to happen
intellectually in the public space is we need to not be talking
about seafood as a marine issue but be talking about seafood as
a product that crosses land as well. And so, I think, that's
one big step. So environmental groups, Oceana, for example, or
Greenpeace or Sea Shepherd or whatever, need to be really
working more closely with Human Rights Watch and lawmakers who
are focused on land issues, more than they are now.
Number two, I think the infrastructure that exists for the
private sector to monitor and trace its supply chain also has
to evolve a lot--and hopefully this will be a poke in that
direction--in that they can no longer, I think, simply put
forward that they're MSC certified or that they've been sort of
accredited as a good steward by a private entity, and
therefore, they're part of the ocean conservation team. That's
not enough anymore. I think there has to be much more
involvement by seafood companies on land labor issues.
And then lastly, I think Sally really said it best. The
definitional change in IUU to incorporate sea slavery or human
rights issues is one big step. And then building on, as Bob and
Sally have both said, SIMP, a flawed tool but the one that's
probably the most developed on the table. Building on SIMP,
expanding it, redefining it, getting more agencies involved in
it is--at least from what I hear from experts--probably the
best step for trying to get the supply chain of this product
more under control.
Co-chair Merkley. Thank you. Thank you very much.
Chair Smith would like a little bit more information
regarding how China has reacted to the reporting about forced
labor in their seafood industry.
Mr. Urbina. I'll answer that. With a wall of silence. I
mean, if you think of the three big players that you would
expect to respond to this reporting, one would be the market
players--seafood companies in Europe in the U.S. The second
would be government players, meaning this government. And the
third would be China. The history of the last two years of
engaging with market players, and we put all of our
interactions with all 300 companies up on our website, has been
largely a wall of silence. Most of the big companies refuse to
engage. A couple of exceptions engaged; Lunds is one example,
where these are companies that didn't agree, didn't like what
we were telling them, but were willing to converse and knew
they were on record the whole time. They pushed back at times
but were very open in trying to figure out how to fix these
things.
But the vast majority of market players did not. And I
think that's a big problem, because those who don't engage end
up getting very little journalistic light on them because
there's just this wall of silence from them. And those who do
engage end up getting a lot more spotlight on them, even though
they took the high road. In terms of the Chinese government,
there have been a couple of comments coming out of the Overseas
Fisheries Agency Association essentially calling the story and
the reporting fabricated. But there's something interesting in
that response, which is--and this is something I think the
public in the West needs to be mindful of--they elide
definitions. They are quick to point out under our own laws
nothing illegal is happening here. This is not forced labor.
These people are paid a wage. They're given vocational training
and happy to have these jobs. And it's all true. And it's all
coming from the Chinese government. But it's irrelevant. And I
think, luckily, the U.S. media and companies are understanding
that that's irrelevant, because of the category that is child
labor, or prison labor, or North Korean labor, or Uyghur labor.
That's point one. There has been market reaction since the
reporting. So big companies have already begun severing ties to
major factories in China. And so that's having clear financial
repercussions in China. But that's about what we've seen.
Co-chair Merkley. Thank you.
You know, as we're talking about this I was thinking about
a whole different piece of this forced labor, which is the west
coast of Africa. My daughter worked with children who were
basically sold into the fishing industry. The ships are
anchored under the old slave castles. So it's like a very
dramatic, ancient slavery, new slavery. But all of that seafood
is domestic consumption, so it doesn't enter into the supply
chains in the way that we're talking about here. And I've read
reports of other slave labor in other parts of the Pacific, in
which, again, it's mostly for domestic. But this is an area
where the supply chains affect the U.S. We have more--perhaps
more leverage if we can solve the complexity and bring all the
forces to bear.
I did want to go back to just one piece of this, which was
the purchasing by the U.S. Government. And I believe that it
was noted--and I'm not sure which of you raised this--but the
three exceptions. That was your testimony, Mr. Stumberg? That
the U.S. Government--the exceptions include, domestic supply is
unavailable, domestic prices are too high, or it's intended for
resale. So you're essentially saying that the U.S. Government
will purchase non-American seafood if it's in one of those
three exceptions and that this ties into the possibility of
purchasing seafood from China that has been produced
essentially by slave labor. Do I have that correct?
Mr. Stumberg. You do.
Co-chair Merkley. Okay.
Mr. Stumberg. I can illustrate one of those exceptions, if
seafood is not available. First of all, what does that mean? Is
it not available as U.S.-caught seafood, or is it simply not
available in terms of processing in the United States? The rule
itself is vague. It's open on that point. Let me just leave it
at that because it gets very technical at that point.
In terms of price reasonableness, it's a 20 percent range.
So comparing U.S. processing to any low-wage country, where you
get into a 20 percent range, I don't empirically understand or
know what that looks like. But when you add the prospect of
forced labor in that low-wage country, you can imagine how it
gets to the point where the price advantage may well be such
that unwittingly the U.S. standard for what's a reasonable
price encourages, incentivizes processors to go to foreign
suppliers in order to compete for U.S. procurement.
Co-chair Merkley. That third category, that it's intended
for resale. Why would the U.S. Government be purchasing these
non-American supplies for resale?
Mr. Stumberg. To help stock commissaries and to provide the
raw goods for other contractors who are running cafeterias for
U.S. Government facilities, that kind of thing. And I mention
it only because it's very explicit in the regulation. So
they've thought about it.
Co-chair Merkley. And, finally, I want to turn to you, Mr.
Scarlatoiu, for bringing the North Korean aspect to bear. You
noted the enormous stress in which individuals may be excited
about being able to leave North Korea for higher wages, but the
North Korean government takes 90 percent of the wages, and the
wages perhaps aren't paid until they return to North Korea,
what might be many years. And that meanwhile, the interest is
accumulating on the money they borrowed to pay the bribe to get
on that trip to begin with. And that the stress of these
combined factors has produced significant evidence of suicides,
primarily women, you mentioned. Why primarily women?
Mr. Scarlatoiu. In both categories, that of North Koreans
who cross the border without government approval and in some
industries where North Koreans are dispatched officially by the
government, depending on the industry, women represent a higher
proportion than men. In the case of refugees, about 80 percent.
In the case of the workers, if we're talking--and, again, it's
industry based--restaurant workers, textile workers--they're
mostly women. At the seafood processing plants, there are
particular tasks that are assigned to women--peeling the
seafood, measuring the seafood, and, of course, they have to
spend time within those terrible working conditions in the
refrigerated cold rooms, a very harsh environment. They have to
experience the pungent smell. These are jobs that North Korean
workers take up. Chinese workers would not take up these jobs
because the working conditions are so terrible.
It is very likely that these working conditions take more
of a physical and psychological toll on these women. Some of
them happen to be married women who have left families behind.
And the stress of not only having to live under these working
conditions but also to be unable to repay those loans and
interest, takes a very heavy toll on them. There is no proper
health care provided. And of course, there is no mental health
care provided--none what-
soever--to these North Korean workers.
Co-chair Merkley. And these suicides are happening while
doing foreign labor, or after returning to North Korea?
Mr. Scarlatoiu. We had reports that the suicides happen in
China while they were still unable to return home.
Co-chair Merkley. And the loans have to be repaid after one
returns to North Korea?
Mr. Scarlatoiu. They continue paying them once they're
dispatched to China; in this case, as seafood processing
workers. Of course, the $70 a month that they receive from the
North Korean regime--not in dollars but in North Korean
currency when they return--is not enough to cover the debt and
the interest. And thus, they have to moonlight and do odd jobs,
of course with the approval of their site supervisors. Unless
they do that, this would be perceived as great wrongdoing, and
they would be punished.
Co-chair Merkley. We touched on a lot of different pieces
of a complex puzzle. Thank you each for bringing your
perspective, knowledge, and experience to bear. Do we have
closing comments that need to be read into the record?
Staff Director Tozzi. I think we can leave--if there are
supplemental materials, people can submit them by close of
business Friday.
Co-chair Merkley. If there are any supplemental materials
or questions from members of the Commission, please submit them
by the end of the day on Friday. And if we do have additional
questions to send to all of you, please respond as promptly as
possible so we can get those into the record.
Again, thank you very much for your testimony and your work
on a very significant human rights challenge, one that this
Commission is determined to highlight and to develop as much as
possible legislative strategies to increase our ability to
improve those conditions. Thank you, and this hearing is
adjourned.
[Whereupon, at 10:49 a.m., the hearing ended.]
?
=======================================================================
A P P E N D I X
=======================================================================
Prepared Statements
------
Statement of Ian Urbina
Thank you to Chairman Smith and Chairman Merkley and thank you to
the rest of the Commission for inviting me to speak. I will briefly
talk about a four-year investigation that my news organization, The
Outlaw Ocean Project, conducted in collaboration with The New Yorker,
focused on China's role in human rights and environmental concerns tied
to the world's seafood supply chain.
Seafood is a distinct global commodity. It is the world's last
major source of wild protein. It is the largest globally traded food
commodity by value.
Seafood is also harder to track than many other products. It is
typically harvested offshore, often on the high seas, where there is
limited national jurisdiction and little enforcement of what few murky
rules exist. Labor spot checks on ships at sea are rare. These
workplaces stay in constant motion. Deckhands are often undocumented.
They tend to come from poorer nations. Their access to political
capital and legal recourse in the form, say, of lawyers, advocates,
journalists, or unions, is minimal.
And, between bait and plate there are an inordinate number of
handoffs of this product. It goes from fishing ship, to refrigeration
ship, to port, to processor, to cold storage, to exporter, to U.S.
importer, to distributor or food service company, and then, finally, to
restaurant, grocery store, or to public food pantry, military base, or
public school. These many handoffs make it tougher to trace the true
origin of the catch and to ensure that there is no forced labor or
other environmental crimes in the supply chain. Worse still, the few
auditing entities that exist, what certification regimes that have
emerged in the private sector, whether they focus on environmental or
labor concerns, do a very poor job even at identifying and countering
such crimes in these supply chains.
China plays a unique role. It is the undisputed superpower of
seafood because its distant water fishing fleet, which is to say those
vessels in foreign or international waters, is vastly bigger than that
of any other country. So too is China's processing capacity: even
seafood caught by U.S.-flagged vessels, in our own waters, is often
shipped to China to be cleaned, cut and packaged before being sent back
to American consumers.
China matters, and was the focus of our investigation, not just
because it is the global linchpin of seafood production, but also
because China is the most opaque of settings, the most prone to illegal
fishing practices and, come to find out, the most dependent on forced
labor when it comes to seafood.
This forced labor occurs in two distinct realms: at sea and on
land--on the fishing ships and in the processing plants.
At sea, the problem of forced labor is endemic and varied. Debt
bondage. Human trafficking. Beating of crew. Criminal neglect in the
form of beriberi. Passport confiscation. Wage withholding. Denial of
timely access to medical care. Death from violence. We found a
widespread pattern on Chinese ships. The investigation revealed that
almost half of the Chinese squid fleet, 357 of the 751 ships we
studied, were tied to environmental or human rights violations.
On land, the problem of forced labor is deep and consistent.
Especially after the start of the global pandemic led to severe labor,
logistical and supply chain problems in China, the government there
began helping its massive seafood industry keep production and exports
up and running. It did so by moving thousands of workers across the
country from Xinjiang, a landlocked and subjugated region in the far
west, to Shandong, a coastal eastern province in the far east where
much of the seafood infrastructure is based.
Most of the global seafood industry is impacted. The investigation
found that since 2018, more than a thousand workers from Xinjiang have
been forcibly relocated to at least ten seafood processing plants in
Shandong that supply dozens of major U.S. seafood brands, as well as
brands in at least twenty other countries.
I need not tell this Commission about China's ``labor transfer''
programs and the ways in which this state-run effort has been legally
defined as ``state-sponsored forced labor'' because the ethnic
minorities pressed into service do not have an option to say no to
these jobs.
I also do not need to remind this Commission that under the Uyghur
Forced Labor Prevention Act, there are very clear and strict
prohibitions of any products in part or whole being imported to the
U.S. that rely on Xinjiang labor.
Lastly, I do not need to tell the people gathered here that, if
credible evidence is brought forward, as I think our investigation has,
indicating the existence of Xinjiang labor in a particular supply
chain, then this federal law, the UFLPA, puts the onus on industry, on
the companies themselves, to prove that they do not in fact have
Uyghurs or other ethnic minority Xinjiang labor tied to their products
and until they do, U.S. Customs and Border Protection is supposed to
block shipments of this import. U.S. companies responding by simply
saying that their partners in China at the plants have reassured them
that no forced labor exists in their plants is probably not sufficient
evidence that they are free from forced labor. Similarly, relying on
social or marine auditing firms that inspected these plants but, by
their own admission, were not actually looking for the presence of
Xinjiang workers, is also not sufficient evidence that they are free
from forced labor.
The Chinese seafood industry and government has already responded
that using Xinjiang workers is not illegal under Chinese law and that
the use of these workers does not constitute forced labor because they
receive a salary, vocational training, proper living conditions, and
fair treatment. But U.S. seafood companies need to understand that this
misses the point. Under U.S. law, any use of Xinjiang workers is deemed
illegal because it occurs in the context of a larger government-run and
coercive program, and whether these workers are paid or they tell
auditors or state media that they are happy to have the job is not
relevant. Think, here, for comparison, of the use of child laborers in
other countries, which may be legal or defined distinctly in those
nations, but regardless of their laws, it is not legal for those
products to come into the U.S.
As an aside, I will mention that I am intentionally refraining, for
the time being, from discussing the additional set of processing plants
in China that our investigation found tied to U.S. seafood importers
and that rely on another form of state-sponsored forced labor, namely
North Korean workers. As you know, imports to the U.S. associated with
this demographic of forced labor is also strictly prohibited by federal
law. We will soon publish more about those findings.
But for now, I will humbly encourage the public to take a deep look
at the broken nature of the labor auditing of the seafood industry and
why seafood companies have been allowed for too long to operate in a
place where they have culpable deniability because to operate there
they have to agree to not look too hard at thorny issues like human
rights.
In fairness to industry, the world was not previously aware of how
much Xinjiang labor had tainted the global seafood supply chain. The
world was also not aware of how pervasive forced labor is on Chinese
fishing ships themselves.
That moment has passed. We now see that hundreds of seafood
companies are tied to these Chinese ships and these Chinese factories.
The question is what will industry and government do about it? The laws
on the matter, at least in the U.S., are pretty clear. The issue is
whether they will be enforced.
Statement of Robert Stumberg
1. Introduction
Two-hundred and forty--that's the number of name-brand stores and
institutional suppliers that we all depend on. Through them, we all buy
seafood from importers who sell what forced laborers process in Chinese
factories and vessels. We do it as families, as schools, as businesses.
What is not in that number are the ways we buy forced-labor seafood as
governments, mostly through five federal agencies and local school food
authorities.
The Outlaw Ocean team, led by Ian Urbina, made transparency happen.
They aren't the first to reveal Xinjiang supply chains.\1\ But what
distinguishes their seafood reporting is that they literally chased
outlaw vessels across the seas, surveilled trucks at the port, and
monitored internet traffic in multiple languages. James Bond would be
impressed. And they didn't stop with the report. They created power
tools for tracing supply chains, purchasing seafood, and fixing
policies that unwittingly enable an empire of exploitation. Now we can
trace our own families' supply chains for products we buy every week.
---------------------------------------------------------------------------
\1\ See, e.g., the interactive tools developed by the Helena
Kennedy Centre for International Justice at Sheffield Hallam University
and NomoGaia, Driving Force--Automotive Supply Chains and Forced Labor
in the Uyghur Region, which includes an interactive supply chain map
and a data base of companies at every stage of the supply chain,
available at https://www.shuforcedlabour.org/drivingforce/ (viewed
October 21, 2023).
---------------------------------------------------------------------------
The international Coalition to End Forced Labour in the Uyghur
Region has added the Outlaw Ocean reporting to its online library to
show the complex puzzle of affected industries--aluminum, apparel,
automotive, cotton, food, vinyl, polysilicon, solar, and more.\2\
---------------------------------------------------------------------------
\2\ Coalition to End Forced Labour in the Uyghur Region, Seafood
Imports in More Than 20 Countries Implicated in Uyghur Forced Labour
(October 2023), https://enduyghurforcedlabour.org/seafood-imports-in-
more-than-20-countries-implicated-in-uyghur-forced-labour/ (viewed
October 21, 2023). The coalition's on-line library includes the work of
this committee: https://enduyghurforcedlabour.org/ (viewed October 21,
2023).
---------------------------------------------------------------------------
I appreciate your invitation to address one piece of this puzzle--
the role of governments as wholesale buyers of seafood. I will briefly
respond to several procurement questions:
Which U.S. government agencies purchase seafood?
Is the Buy American Act an antidote to forced-labor goods?
Does the prohibition on purchasing forced-labor goods work?
What is on the to-do list for fixing related gaps in policy?
a. Forced labor in U.S. seafood supply chains
Outlaw Ocean reporters have linked Chinese forced labor to U.S.
Government suppliers who sent seafood worth $200 million over the past
5 years to military bases, federal prisons, and the National School
Lunch Program.\3\ By one estimate, half of the fish sticks served in
American public schools have been processed in China.\4\
---------------------------------------------------------------------------
\3\ See Appendix 1, Outlaw Ocean, Discussion, and Appendix 2,
Outlaw Ocean, Methodology; Ian Urbina, The Crimes Behind the Seafood
You Eat, New Yorker (October 9, 2023), available at https://
www.newyorker.com/magazine/2023/10/16/the-crimes-behind-the-seafood-
you-eat (viewed October 21, 2023; Ian Urbina, The Uyghurs Forced to
Process the World's Fish, New Yorker, News Desk (October 9, 2023),
available at https://www.newyorker.com/news/news-desk/the-uyghurs-
forced-to-process-the-worlds-fish (viewed October 21, 2023); Ian
Urbina, The return of an old scourge reveals adeep sickness in the
global fishing industry, Boston Globe (October 12, 2023) ($50 billion
from one NSLP supplier), available at https://www.bostonglobe.com/2023/
10/12/opinion/beriberi-fishermen-outlaw-ocean/ (viewed October 21,
2023).
\4\ Urbina, Uyghurs Forced to Process; see Appendix 2, Outlaw
Ocean, Methodology.
---------------------------------------------------------------------------
Even fish that is ``locally caught'' or ``wild caught'' can be
processed by forced labor because much of the fish coming out of U.S.
waters and U.S.-flagged ships is frozen, sent to China for processing,
refrozen, and then shipped back to the United States.\5\ In those
cases, country-of-origin labeling requires labeling as a fish from two
countries, e.g., ``Alaskan'' and ``Product of China'' on the same
label.\6\
---------------------------------------------------------------------------
\5\ Kristen Abrams, There's something fishy about your seafood.
China uses human trafficking to harvest it. USA Today, Opinion (October
11, 2023), available at https://www.usatoday.com/story/opinion/2023/10/
11/us-seafood-china-human-trafficking-uyghur-forced-labor/71127786007/
(viewed October 21, 2023).
\6\ Craig A. Morris, A Tale of a Fish from Two Countries, U.S.
Department of Agriculture, Blog Archives (posted December 5, 2016),
https://www.usda.gov/media/blog/2016/12/05/tale-fish-two-countries; see
also Frank Asche et al., China's Seafood Exports: Not for Domestic
Consumption?, Science, DOI: 10.1126/science.abl4756 (January 28, 202).
---------------------------------------------------------------------------
The report that suppliers to U.S. agencies import seafood from
China is not surprising. The rest of the U.S. market imports 75 percent
to 80 percent of its seafood.\7\ China is the leading exporter to the
United States,\8\ which is China's second-leading export market (after
Japan).\9\
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\7\ NOAA Fisheries, US Aquaculture, Current Status of Seafood,
updated September 20, 2022, https://www.fisheries.noaa.gov/national/
aquaculture/us-aquaculture (viewed October 15, 2023).
\8\ China exported 377,3221,296 kg to the United States in 2022).
NOAA Fisheries, Foreign Fishery Trade Data, Foreign Trade, 2022 (search
for all species and all countries), https://www.fisheries.noaa.gov/
national/sustainable-fisheries/foreign-fishery-trade-data (viewed
October 15, 2023).
\9\ The value of China's exports to the United States was $1.87bn
out of $16.12bn total exports in 2021. USDA Foreign Agriculture
Service, 2021 China's Fishery Report, Report Number: CH2021-0176, 15,
Table 11. China: Exports of Seafood Products by Country of Destination
(December 22, 2021), available at https://apps.fas.usda.gov/newgainapi/
api/Report/
DownloadReportByFileName?fileName=2021%20China%27s%20Fishery%20Report--
Beijing--China%20-%20People%27s%20Republic%20of--12-17-2021 (viewed
October 20, 2023).
---------------------------------------------------------------------------
b. Federal procurement of seafood
So how much seafood does the federal government purchase? There is
no clear statistic. The overlapping search filters on USAspending.gov
indicate which agencies are most likely to purchase seafood, but they
are not accurate as stand-alone measures. The following are dollar
amounts of federal procurement since fiscal year 9, just over 5 years.
The industry codes for wholesale trade in seafood and seafood
preparation/packaging also show USDA in the lead: Agriculture $1.046
billion, Justice $2.4 million, Defense $1.2 million, Smithsonian
$82,000, and Veterans $57,000.\10\
---------------------------------------------------------------------------
\10\ USAspending.gov, search parameters for FY2019-24, NAICS 3117
for seafood processing/packaging and NAICS 424460 for wholesale trade
in seafood (viewed October 21, 2023).
The product codes for direct purchase of meat, poultry and
fish shows Defense in the lead: Defense, $2.4 million, Agriculture
$1.046 billion, Justice $1.2 million, and Veterans $54,000.\11\
---------------------------------------------------------------------------
\11\ USAspending.gov, search parameters for FY2019-24, PSC 8905 for
meat, fish and poultry (viewed October 21, 2023).
The service code for accommodation and food would include
seafood as a very small percentage of a big absolute number. It shows
Defense in the lead, $5.9 billion, Homeland Security $403 million,
State $394 million, Agriculture $391 million, Veterans $139 million,
and Justice $48,000.\12\
---------------------------------------------------------------------------
\12\ USAspending.gov, search parameters for FY2019-24, PSC 72 for
accommodation and food service (viewed October 21, 2023).
In sum, USDA appears to lead the other agencies in terms of direct
purchase of seafood, in the range of $1 billion over a 5-year period.
Since July 2022, USDA has invited bids entitled Pacific Seafood
Products (8/3/22), Salmon Products (6/15/23), Pollock Products (11/17/
22), Shrimp Products (12/13/22), Salmon Products (12/22/22), Groundfish
Products (3/2/23), Pollock Products (5/9/23), Section 32 Purchase of
Salmon and Pollock Products (6/14/23), and Section 32 Purchase of
Rockfish and Shrimp Products & CCC Pollock and Haddock (6/15/23), and
Salmon Products (9/15/23).\13\
---------------------------------------------------------------------------
\13\ USDA, Agricultural Marketing Service, Open Purchase Requests
for Seafood, https://www.ams.usda.gov/open-purchase-
request?field_term_grades_and_standards_target
_id=865 (viewed October 3, 2023).
---------------------------------------------------------------------------
To illustrate one example, the June 2023 ``Section 32 Purchase of
Salmon Products'' requested fixed-price bids for Pacific Seafood Items,
Alaska Sockeye (Red) Salmon Products (Canned) and Alaska Sockeye (Red)
Salmon Products (Fillets).\14\ The award of this procurement listed
F.O.B. distribution to food assistance programs at various locations in
the United States. Awards totaled 1,269 discrete delivery locations
with a total procurement value of over $70 million (estimate).\15\
---------------------------------------------------------------------------
\14\ USDA, Solicitation--Domestic Commodity Invitation,
Description: 12-3J14-23-B-0467, Bid invitation number: 2000009419,
Purchasing Group: AMS-Livestock (Start date: June 15, 2023), available
at https://www.ams.usda.gov//sites/default/files/2000009419%20-
%20Bid%20Invitation.pdf (viewed July 27, 2023).
\15\ USDA, 2000009419-3, Reports :: Bid Array, Archive Date: 2024-
01-12, https://usda.jaggaer.com/clearview/
usda_domestic_2000009419_3_1689170424?p=reports_bid_
array;menu=1318;scenario=2 (viewed July 23, 2023).
---------------------------------------------------------------------------
The pre-solicitation announcement provided this notice of the Buy-
American regulation:
``Pursuant to Agricultural Acquisition Regulation (AGAR)
470.103(b), commodities and the products of agricultural
commodities acquired under this contract must be a product of
the United States and shall be considered to be such a product
if it is grown, processed, and otherwise prepared for sale or
distribution exclusively in the United States.'' \16\
---------------------------------------------------------------------------
\16\ USDA, Agricultural Marketing Service, Pre-Solicitation
Announcement for Section 32 Purchase of Salmon Products (May ll, 2023),
https://www.ams.usda.gov/content/pre-
solicitation_announcement-section-32-purchase-salmon-products.
The solicitation notice also required full transparency of
---------------------------------------------------------------------------
processing facilities at the bidding stage:
Offerors who intend to use more than one processing plant and
shipping point for contracts awarded under this solicitation,
other than the processing plant and shipping point entered in
their bids, may submit a list of their approved processing
plants and shipping points on a separate sheet of paper to be
uploaded in WBSCM, and to be submitted with their bids.\17\
---------------------------------------------------------------------------
\17\ USDA, Solicitation, Bid invitation number: 2000009419, at 1-2
(see above).
---------------------------------------------------------------------------
c. USDA comments on reports of forced labor
The Outlaw Ocean reporters asked USDA to comment on their evidence
that some USDA suppliers were importing from processors that used
forced labor in China. USDA replied that all the fish that it purchases
``must be grown and processed in the United States or its territories''
as required by the Federal Acquisition Regulation (FAR).\18\ When the
reporters followed up with more specific questions, the agency replied
that:
---------------------------------------------------------------------------
\18\ Appendix 1, Outlaw Ocean, Discussion, U.S. Department of
Agriculture.
1. USDA requires that seafood products be sourced in U.S.
waters by U.S. flagged vessels, which it confirms with onsite
---------------------------------------------------------------------------
audits.
2. The audits verify that processing facilities are based in
the U.S. or its territories.
3. For documentation, contractors are required to provide
documents during audits that show compliance with requirements
including domestic origin.\19\
---------------------------------------------------------------------------
\19\ For the detailed email exchange, see id.
The USDA comments imply that the Buy American Act is an antidote to
forced labor goods, specifically in seafood supply chains. On a
---------------------------------------------------------------------------
technical level, the USDA comments invite questions for a closer look:
What is the site of an onsite audit? The contractor's business
office? A sampling of fishing vessels? A sampling of processing
facilities? All facilities? In other words, are these audits any more
effective than the audits that failed, as shown by Outlaw Ocean's
reporting (e.g., audits by the Marine Stewardship Council, Sedex, and
several wholesalers).
Does verification of processing based on a declaration of
intent before performance establish ``domestic origin'' as performance
actually happened? Does ``domestic origin'' include both catch of
seafood in U.S. waters and processing of that seafood in U.S.
territory?
How would an auditor find out whether a contractor requested
use of foreign processing based on non-availability of that processing
in U.S. territory? Do USDA contract officers keep records of
determination of availability?
The more substantive question is, what is the domestic-origin
requirement? If a purchase is made under procurement rules that allow
foreign processing of fish, then there would be no domestic processing,
and thus, no audit of domestic processing.
Section 2 below looks into the ``requirement'' of purely domestic
sourcing and the several exceptions to that rule that allow contractors
to source seafood from foreign processors. Section 3 follows that with
a summary of federal rules that prohibit procurement of goods produced
with forced labor.
2. Exceptions to the Buy American Act
a. Federal agency procurement
The Buy American Act requires agencies to purchase only ``domestic
end products'' for public use in the United States. The BAA is
implemented through the Federal Acquisition Regulation (FAR) and
additional agency rules, including the Department of Agriculture
(AGAR).\20\
---------------------------------------------------------------------------
\20\ 41 U.S.C. ch. 83; FAR 25.002 Policy; Subpart 425.1--Buy
American Act--Supplies.
---------------------------------------------------------------------------
USDA requires that all commodities acquired for use by the Food and
Nutrition Service [USDA Marketing Service] must be a product of the
United States, ``except as may otherwise be required by law, and shall
be considered to be such a product if it is grown, processed, and
otherwise prepared for sale or distribution exclusively in the United
States . . . '' \21\
---------------------------------------------------------------------------
\21\ AGAR, 470.103(b) Exceptions.
---------------------------------------------------------------------------
A preliminary question is whether all U.S.-caught seafood is a
domestic end product, regardless of where it is processed. The answer
is no, to be a domestic end product, seafood must be ``processed and
prepared . . . exclusively in the United States.'' \22\
---------------------------------------------------------------------------
\22\ AGAR 470.103(b) Use by the Food and Nutrition Service and (d)
Product derived from animals.
---------------------------------------------------------------------------
There are three exceptions to the Buy-American mandate: (1) if the
supply is not adequate, (2) if domestic prices are unreasonable, and
(3) if the product is for resale in stores.
(1) Inadequate supply
(a) ``The Buy American statute does not apply with respect to
. . . supplies if . . . , either as end items or components,
[they] are not . . . produced in the United States in
sufficient and reasonably available commercial quantities and
of a satisfactory quality.'' \23\
---------------------------------------------------------------------------
\23\ FAR 25.103(b) Nonavailability.
(b) ``The head of the contracting activity may make a
determination that [a] supply is not . . . produced in the
United States in sufficient and reasonably available commercial
quantities of a satisfactory quality. A determination is not
required before January 1, 2030, if there is an offer for a
foreign end product that exceeds 55 percent domestic content.''
\24\
---------------------------------------------------------------------------
\24\ FAR 25.103(b)(2); see FAR 25.106(b)(2). While domestic content
is not explicitly defined, the FAR determines the amount of domestic
content based on the percent of the cost of all components. FAR
25.101(a) General. (``he cost of its components mined, produced, or
manufactured in the United States exceeds 60 percent of the cost of all
its components . . . '')
Let's interpret that language. The contract office may determine
that a seafood product is not available in sufficient quantities. But a
determination is not required before 2023.
That latter phrase is ambiguous; it could be read two ways.
The first is that a formal, written determination is not
required before 2030. If so, then decisions about availability will not
be traceable. They will become invisible decisions until 2030.
The second is that a decision about domestic availability is
not required at all before 2030, so long as the product from a foreign
processor exceeds 55 percent domestic content.
The first is a blow to transparency, and the second is a loophole
for foreign processors. In practice, the two meanings may be
equivalent.
In the case of seafood, a contractor could assert that the U.S.-
caught fish is available, but the domestic processing capacity is not.
Imagine the conversation: Domestic processing has become too expensive.
So why not process the fish in China? The processing won't exceed 45
percent of the total cost. Besides, no one will ever know the
difference.
(a) Unreasonable prices
A reasonably priced domestic product is not available if the lowest
domestic offer is more than 20 percent higher than the lowest foreign
offer (or 30 percent higher for a small business bidder). For example,
if the domestic price from a large business is 21 percent higher than
the lowest foreign offer, it is not reasonable. The agency must accept
the lower foreign offer.\25\
---------------------------------------------------------------------------
\25\ FAR 25.103(c) Unreasonable cost; FAR 25.106(b)(1) Determining
reasonableness of cost. For Seafood Product Preparation and Packaging
(NAICS 311710) the threshold for small business is 750 employees or
less. FAR 2.101 Definitions, ``Small business concern'' incorporates 13
CFR Part 121 Small business size regulations; 13 CFR 121.201 What size
standards has SBA identified by North American Industry Classification
Systems codes?
---------------------------------------------------------------------------
If there is no reasonably priced domestic offer, then a foreign
offer that uses U.S.-caught seafood would enjoy a 20 percent price
preference over a competing foreign product--so long as it has at least
55 percent domestic content (the value of the raw seafood).\26\
---------------------------------------------------------------------------
\26\ FAR 25.106(b)(2)(ii); see FAR 25.101(a) General.
---------------------------------------------------------------------------
The question here is, what is the cost advantage of processing
seafood in a low-wage country like China? A more severe question is,
how much more advantage can Chinese processors gain by participating in
forced-labor schemes with workers from Xinjiang and North Korea? Is
that advantage likely to exceed 20 percent compared to U.S. domestic
processing?
I was unable to find any recent cost comparisons of fish processing
in low-wage countries. A study done in 1995 indicates that the wages
can range from 6 to 18 percent of total product costs, with U.S. costs
on the high end.\27\
---------------------------------------------------------------------------
\27\ Aurora Zugarramurdi, Maria A. Parin, Hector M. Lupin, Economic
engineering applied to the fishery industry-4. Production Cost, 103,
Table 4.6 (Food & Agriculture Organization, 1995), https://
www.google.com/books/edition/Economic_Engineering_Applied_to_the_Fish/
a4lUTm1-f9kC?hl=en&gbpv=1 (viewed October 21, 2023).
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(b) Resale in stores
The Buy-American Act does not apply to agency procurement of
seafood for resale in a commissary at military bases or other
government-authorized retail stores. This is because resale to
consumers is not a public use (e.g., a public feeding program).\28\
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\28\ FAR 25.003; FAR 25.102 (Buy-American policy requires ``only
domestic end products for public use inside the United States.'') The
FAR does not define ``commissary,'' but other federal regulations refer
to ``Authorized resale outlets (military commissary stores, Armed
Forces exchanges and like activities of other Government departments
and agencies). See 41 CFR 51-6.4.
---------------------------------------------------------------------------
b. Grants to State and local governments
The U.S. Department of Agriculture (USDA) buys about 20 percent of
fish that is served in schools. The remaining 80 percent is purchased
with Federal funds by local buyers who rely on many of the same
importers.\29\ There is no exception for local buyers to buy foreign
seafood because there is no requirement to Buy American.
---------------------------------------------------------------------------
\29\ Appendix 2, Outlaw Ocean, Methodology.
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(1) School food authorities
When spending funds under the National School Lunch Program, local
school food authorities and state distributing agencies are required to
buy domestic commodities or products ``to the maximum extent
practicable.'' \30\
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\30\ 7 CFR 210.21(d)(2) Procurement. A domestic agricultural
commodity is produced in the United States, and a domestic food product
is processed in the United States substantially using agricultural
commodities that are produced in the United States. 7 CFR 210.21(d)(1).
See also 2 CFR 250.17(e) Use of funds obtained incidental to donated
food distribution.
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(2) Other recipients of Federal funds
When spending federal funds generally, state and local governments
``should, to the greatest extent practicable'' provide a preference for
goods produced in the United States.\31\
---------------------------------------------------------------------------
\31\ 2 CFR 200.322 Domestic preferences for procurements.
---------------------------------------------------------------------------
This ``practicable'' standard amounts to a recommended practice;
they ``should'' rather than ``must.'' \32\ It is not a constraint on
local purchasers that seek a price advantage from purchasing foreign-
sourced fish. Local authorities are likely to purchase directly or
indirectly from the same importers who sell to neighboring businesses
that Outlaw Ocean reporting has linked to forced labor--the likes of
Food Lion, Giant Foods, Gordon Food Service, Harris Tweeter, IGA,
Kroger, Sysco, and US Foods.\33\
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\32\ 2 CFR 200.101(b) Applicability to different types of Federal
awards.
\33\ Outlaw Ocean, Bait-to-Plate sourcing tool, https://
www.theoutlawocean.com/investigations/china-the-superpower-of-seafood/
bait-to-plate/#buyers (viewed October 21, 2023).
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3. Forced-labor prohibition in procurement
The FAR prohibits procurement of goods made with the benefit of
trafficking, which includes forced labor.\34\ Trafficking is a
composite of related harms that include commercial sex, forced labor,
fraud, and the worst forms of child labor.\35\
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\34\ FAR 22.1504 (Violations and remedies); Exec. Order No. 13,126,
Prohibition of Acquisition of Products Produced by Forced or Indentured
Child Labor (June 12, 1999), 64 Fed. Reg. 32383 (June 16, 1999).
\35\ FAR 22.1703 (Combat human trafficking--policy); FAR 22.1704
(Violations and remedies). ``Severe forms of trafficking in persons''
means ``(1) Sex trafficking in which a commercial sex act is induced by
force, fraud, or coercion, or in which the person induced to perform
such act has not attained 18 years of age; or (2) The recruitment,
harboring, transportation, provision, or obtaining of a person for
labor services, through the use of force, fraud, or coercion for the
purpose of subjection to involuntary servitude, peonage, debt bondage,
or slavery.''
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a. Definition of forced labor
The FAR waters down the definition of forced labor in comparison to
the ILO's definition. In the FAR:
`` `Forced labor' means knowingly providing or obtaining the
labor or services of a person--(1) By threats of serious harm
to, or physical restraint against, that person or another
person; (2) By means of any scheme, plan, or pattern intended
to cause the person to believe that, if the person did not
perform such labor or services, that person or another person
would suffer serious harm or physical restraint.'' \36\
---------------------------------------------------------------------------
\36\ FAR 22.1702 Definitions.
In contrast to ``threats of serious harm,'' the ILO requires only a
``menace of penalty.'' Many elements of the Chinese labor schemes for
Uyghurs and other Turkic and Muslim-majority peoples appear to violate
both definitions of forced labor. Yet the FAR definition is
qualitatively less comprehensive when it comes to coercion that does
not involve threats or physical restraint. For example, it is not clear
whether serious harm includes being fired or canceling a work visa if a
worker refuses to work overtime. Similarly, it is not clear whether
physical restraint includes locking factory doors during working hours
or other constraints on freedom of movement.
The FAR's definition of forced labor is also inconsistent with the
definition in the Tariff Act of 1930, which prohibits import of goods
produced with convict, forced, or indentured labor.\37\ The Tariff Act
is the foundation for the Uyghur Forced Labor Prevention Act.
---------------------------------------------------------------------------
\37\ Section 307 of Title III, Chapter 497 (46 Stat. 689); Tariff
Act of 1930, 19 U.S.C. 1307.
---------------------------------------------------------------------------
b. Prevention plans
The FAR requires certain contractors to have a plan to prevent
forced labor, but this is limited to contracts for products or services
acquired outside of U.S. territory that exceed $500,000.\38\ No
prevention plan is required when there is evidence that a product is
being imported to the United States from a region or a business that
has a high-risk of forced labor. Nor is there any link between
procurement and the high-risk sectors identified under the UFPLA or the
list of entities known to have connections with forced-labor schemes in
Xinjiang.
---------------------------------------------------------------------------
\38\ FAR 22.1703(c) Policy.
---------------------------------------------------------------------------
4. The fix-it list
a. Implement procurement tools
(1) Exceptions to the Buy American Act
(a) Non-availability--Close the ``non-availability'' gap \39\
by requiring agency contract officers to:
---------------------------------------------------------------------------
\39\ This would entail rulemaking by the FAR Council of FAR
25.103(b) Nonavailability.
i. formally determine when domestic products are not
available (prior to 2030 when they must do it anyway),
---------------------------------------------------------------------------
and
ii. determine availability based on both domestic
content of a product and domestic processing of a
product.
(b) Reasonable prices--Enable agency contract offices to
waive the rule on reasonable prices from foreign suppliers \40\
(the 20-percent range) when there is evidence that a supply
chain poses a high risk of human trafficking or forced labor.
---------------------------------------------------------------------------
\40\ This would entail rulemaking by the FAR Council of FAR
25.103(c) Unreasonable cost; FAR 25.106(b)(1) Determining
reasonableness of cost.
(2) Compliance with the FAR's prohibition of trafficking and forced
---------------------------------------------------------------------------
labor
(a) Apply the UFLPA presumption of forced labor to bidders
and suppliers of contractors in U.S. government
procurement.\41\
---------------------------------------------------------------------------
\41\ This would entail rulemaking by the FAR Council of FAR 22.1703
Policy and FAR 11.1704 Violations and remedies. See the pending
legislation introduced by Senators Rubio and Merkley, S. 1770, the
Uyghur Genocide Accountability and Sanctions Act of 2023, Sec. 10.
Prohibition on certain United States government agency contracts.
(b) Require a trafficking and forced-labor prevention plan
for high-risk imports, starting with seafood and priority
sectors for UFPLA enforcement. The FAR already provides for
prevention plans in limited circumstances (services provided
abroad in contracts over $500,000).\42\
---------------------------------------------------------------------------
\42\ FAR 22.1703(c) Policy.
(c) Define forced labor for procurement consistently with its
definition in the Tariff Act and the ILO Convention--based on
the menace of a penalty, rather than explicit threats.\43\
---------------------------------------------------------------------------
\43\ This would entail rulemaking by the FAR Council of FAR 22.1702
Definitions.
(d) Do not recognize ``social audits'' as evidence of
compliance if (1) the auditor is paid by the supplier, or (2)
the auditor fails to conduct confidential interviews with
workers using strict protocols to avoid coercion by
employers.\44\
---------------------------------------------------------------------------
\44\ See Testimony of Scott Nova, Executive Director of the Worker
Rights Consortium, Hearing of the Senate Committee on Finance: Ending
Trade that Cheats American Workers By Modernizing Trade Laws and
Enforcement, Fighting Forced Labor, Eliminating Counterfeits, and
Leveling the Playing Field, 13-14 (February 16, 2023), https://
www.finance.senate.gov/imo/media/doc/
2023.02.16%20Nova%20Testimony%20for%20Customs%20Hearing.pdf (viewed
October 21, 2023).
---------------------------------------------------------------------------
(e) Develop NOAA audit protocols for USDA purchasing.
(3) Federal Funding Accountability and Transparency Act of 2006--
Fully implement the Federal Funding Accountability and Transparency Act
of 2006 (FFATA), in which Congress mandated transparency of federal
suppliers and sub-suppliers down to contracts of $25,000. However, the
Office of Management and Budget used rulemaking to exclude most
supplier subcontracts.\45\ Congress could re-assert its transparency
obligation by:
---------------------------------------------------------------------------
\45\ Federal Funding Accountability and Transparency Act of 2006,
Pub. L. No. 109-282, 2(b)(1)(D), 120 Stat. 1186, 1187 (2006); Reporting
Executive Compensation and First-Tier Subcontract Awards, 77 Fed. Reg.
at 44052-53.
(a) clarifying that public disclosure of contractors and
subcontractors applies not only to prime contractors (first-
tier), but also to all subcontractors and their suppliers
---------------------------------------------------------------------------
(second and third tier),
(b) requiring Federal contractors to disclose their full
government supply chains, either on USAspending.gov or Open
Supply Hub, a neutral transparency platform,\46\ and
---------------------------------------------------------------------------
\46\ Open Supply Hub, Explore Global Supply Chain Data, https://
opensupplyhub.org/, and OSH, Civil Society, https://
info.opensupplyhub.org/civil-society (viewed October 23, 2023).
(c) requiring broader public disclosure of records of
shipments to the U.S. from overseas suppliers as a way of
providing the government and public with the means to verify
---------------------------------------------------------------------------
the completeness and accuracy of brand disclosures.
(4) Need for a human rights strategy in procurement
As noted above, U.S. procurement law prohibits purchase of goods
made with human trafficking and forced labor.\47\ The law requires
contract managers to require greater transparency on high-risk
contracts by writing a prevention plan and reporting any
investigations. However, a GAO audit found that agencies were
completely unaware of their duties under this law.\48\
---------------------------------------------------------------------------
\47\ 47 FAR 22.1503, 52.222-50.
\48\ U.S. Government Accountability Office, DOD Should Address
Weaknesses in Oversight of Contractors and Reporting of Investigations
Related to Contracts (Washington: GAO-21-546, 2021), 1, 19.
---------------------------------------------------------------------------
Contract officers do not have the time, human rights expertise,
corporate-affiliation data, or trade data they need to monitor
suppliers' compliance with human rights obligations. Other countries
have been more creative. For example, Swedish counties have created an
inter-agency SWAT team to oversee its human rights standards.\49\ And
over 900 European universities and government entities have affiliated
with Electronics Watch to monitor and enforce their ITC procurement
codes.\50\
---------------------------------------------------------------------------
\49\ See Pauline Gothberg, Public Procurement and Human Rights in
the Healthcare Sector: The Swedish County Councils' Collaborative Model
(London: Edward Elgar 2019), 165-179.
\50\ Electronics Watch, Affiliates, https://electronicswatch.org/en
(viewed October 21, 2023); Id, What We Do; Id, Monitoring Partners; Id,
Electronics Watch Contract Conditions with Guidance for Contractors
(EW, June 2020).
---------------------------------------------------------------------------
b. Implement the UFLPA
Reforming the mechanics of the Federal Acquisition Regulation is a
heavy lift, and the forum for doing so (the OMB) is dedicated to saving
money, not saving lives. It should be easier to persuade U.S. Customs
and Border Protection to implement already authorized elements of the
Uyghur Forced Labor Prevention Act. No ``reform'' is necessary. The
challenge is to just do it--understanding that the agency has been
swamped by evidence that importers are sourcing from Xinjiang and from
facilities in other parts of China connected to forced labor. Several
ideas have been presented to this committee (and DHS) by Dr. Laura
Murphy of Sheffield Hallam University, and to the Senate Finance
Committee by Scott Nova at the Worker Rights Consortium. These and
other published reports are posted in the online library of the
Coalition to End Forced Labour in the Uyghur Region.\51\ Here is a
thumbnail sketch for two of their recommendations: \52\
---------------------------------------------------------------------------
\51\ Coalition to End Forced Labour in the Uyghur Region, https://
enduyghurforcedlabour.org/ (viewed October 21, 2023).
\52\ For a broader overview of UFPLA reforms, see Marti Flacks,
What's Next for the Uyghur Forced LaborPrevention Act? (CSIS, June 21,
2023), https://www.csis.org/analysis/whats-next-uyghur-forced-labor-
prevention-act (viewed October 21, 2023).
(1) Known entities--The UFPLA's presumption of forced labor is
triggered by doing business with a ``known entity'' implicated in
forced labor or importing products with any content from Xinjiang.\53\
The original list of known entities was based on CBP's past withhold-
release orders (WROs) or Commerce Department actions. The first list,
issued June 2022, included 20 known entities. Two months earlier, Dr.
Murphy's team sent the Forced Labor Enforcement Task Force (FLETF)
evidence of 55,000 Xinjiang entities doing business in the Uyghur
Region and 150 businesses that participate in state-sponsored labor-
transfer programs that are tantamount to forced labor.\54\
---------------------------------------------------------------------------
\53\ U.S. Customs and Border Protection, Operational Guidance for
Importers, 4-5 (June 13, 2022); Uyghur Forced Labor Prevention Act,
Pub. L. No. 117-78, 135 Stat. 1529, 2(d)(2)(B)(ii) and Sec. -3(a).
\54\ Testimony of Professor Laura T. Murphy, Sheffield Hallam
University, Helena Kennedy Centre for International Justice, Hearing of
the Congressional-Executive Commission on China: Implementation of the
Uyghur Forced Labor Prevention Act and the Impact on Global Supply
Chains, 3 (April 18, 2023), available at https://www.cecc.gov/events/
hearings/implementation-of-the-uyghur-forced-labor-prevention-act-and-
the-impact-on-global (viewed October 21, 2023).
---------------------------------------------------------------------------
Yet the list has expanded by only seven entities. Obviously, the
FLETF must triage its workload, and it needs to establish an efficient
process for vigorously expanding the known-entity list. Quality of
evidence matters, and entities cited in high-profile reports by Outlaw
Ocean, Sheffield Hallam University, and others merit additions to the
known-entity list.\55\
---------------------------------------------------------------------------
\55\ See Testimony of Scott Nova, Executive Director of the Worker
Rights Consortium, Hearing of the Senate Committee on Finance: Ending
Trade that Cheats American Workers By Modernizing Trade Laws and
Enforcement, Fighting Forced Labor, Eliminating Counterfeits, and
Leveling the Playing Field, 9-10 (February 16, 2023), https://
www.finance.senate.gov/imo/media/doc/
2023.02.16%20Nova%20Testimony%20for%20Customs%20Hearing.pdf (viewed
October 21, 2023).
(2) High-priority sectors--The FLETF monitors and develops an
enforcement plan for high-priority sectors, which include apparel,
cotton and cotton products, silica-based products, and tomatoes and
---------------------------------------------------------------------------
downstream products.\56\
\56\ U.S. Customs and Border Protection, 2023 Updates to the
Strategy to Prevent the Importation of Goods Mined, Produced, or
Manufactured with Forced Labor in the People's Republic of China--
Report to Congress 9-11 (July 26, 2023); Uyghur Forced Labor Prevention
Act, Pub. L. No. 117-78, 135 Stat. 1529, 2(d)(2)(B)(viii) and (ix). See
Scott Nova testimony, 11-12.
---------------------------------------------------------------------------
No new priority sectors have been added since the UFPLA was first
implemented. The Outlaw Ocean reporting makes an urgent case that the
FLETF should adopt seafood as the next priority sector. Moreover, the
reporting and interactive tools provide elements that CBP could
incorporate into its own monitoring and enforcement strategy.
c. Expand the Seafood Import Monitoring Program (SIMP)
(1) Scope of SIMP--The SIMP requires disclosure of seafood imports
for 1,100 unique species, categorized in 13 species groups, that are
vulnerable to illegal fishing, seafood fraud, or both. SIMP covers
about half of all seafood imports into the United States. SIMP species
groups include Abalone, Atlantic cod, Blue crab (Atlantic), Dolphinfish
(Mahi Mahi), Grouper, King crab (red), Pacific cod, Red snapper, Sea
cucumber, Sharks, Shrimp, Swordfish, and Tuna (Albacore, Bigeye,
Skipjack, Yellowfin, Bluefin).\57\
---------------------------------------------------------------------------
\57\ NOAA Fisheries, Seafood Import Monitoring Program, https://
www.fisheries.noaa.gov/international/seafood-import-monitoring-program
(viewed October 21, 2023).
(2) Gaps in coverage--In light of the Outlaw Ocean reporting, it
becomes clear that SIMP is not designed to cover species connected with
forced labor, in part because most of these are not at risk of
extinction from illegal fishing. Not covered by SIMP are squid and the
species that are purchased by USDA including Haddock, Pacific Rockfish,
---------------------------------------------------------------------------
Pacific Whiting, Pollock, Salmon, and various groundfish.
(3) NOAA proposed rule--In December 2022, NOAA reported that
``shrimp and tuna (Albacore, Bigeye, Bluefin, Skipjack and Yellowfin)
are the most predominant species that are entering U.S. markets and
that are vulnerable to forced labor in the supply chain.'' With shrimp
and tuna already on the SIMP list, NOAA proposed adding additional tuna
species to the list.\58\
---------------------------------------------------------------------------
\58\ NOAA, Notice of Proposed Rule, Magnuson-Stevens Fishery
Conservation and Management Act; Seafood Import Monitoring Program, 87
FR 79836-79848, 50 CFR 300, Agency/Docket No. 221215-0273, RIN:0648-
BK85, Document No. 2022-27741, available at https://
www.Federalregister.gov/documents/2022/12/28/2022-27741/magnuson-
stevens-fishery-conservation-and-management-act-seafood-import-
monitoring-program (viewed October 21, 2023).
(4) Need to significantly expand SIMP--A coalition of leading civil
society organizations replied to the NOAA proposal by calling for
several major expansions of SIMP. They provided 19 pages of commentary
and recommendations, including these among others: \59\
---------------------------------------------------------------------------
\59\ Comment on NOAA-NMFS-2022-0119, RIN: 0648-BK85, submitted by
World Wildlife Fund, Oceana, Greenpeace, International Corporate
Accountability Roundtable, Azul, Conservation International, and Global
Labor Justice/International Labor Rights Fund (March 28, 2023), https:/
/www.regulations.gov/comment/NOAA-NMFS-2022-0119-2163 (viewed October
21, 2023).
(a) Cover of all species of seafood imports, whether by land,
---------------------------------------------------------------------------
air, or sea,
(b) Report unique vessel identifiers to enable traceability,
(c) Deepen supply chain reporting requirements such as the
provenance of fish feed used in aquaculture.
(d) Address forced labor by disclosing the country or
regional fishery management organization (RFMO) where the
fishing occurs, the home country of the fishers, and the
countries where the fish may be processed or consumed,
(e) Require recordkeeping of worker and crew manifests at
sea, proof of minimum age requirements (18 or older), duration
of work at sea (less than 3 months), and proof of grievance
mechanisms, and
(f) Increase transparency on SIMP audit procedures.
(5) Need for international cooperation--Congress directed the
Departments of State and Commerce to report on human trafficking,
including forced labor, in seafood supply chains. The agencies reported
(December 2020) on the need to expand seafood transparency beyond
traditional health and environmental concerns, both domestically and in
terms of international cooperation. They identified 29 countries that
pose a significant risk of forced labor in their seafood supply chains:
Bangladesh, Burma, Cambodia, Cameroon, Ecuador, Fiji, Gabon, Ghana,
Guinea, Honduras, Indonesia, Ireland, Kenya, Madagascar, Mauritania,
North Korea, Pakistan, Papua New Guinea, the People's Republic of
China, Philippines, Seychelles, Sierra Leone, South Africa, South
Korea, Taiwan, Tanzania, Thailand, Vanuatu, and Vietnam.\60\
---------------------------------------------------------------------------
\60\ Report to Congress Human Trafficking in the Seafood Supply
Chain Section 3563 of the National Defense Authorization Act for Fiscal
Year 2020 (Pub. L. 116-92), available at https://
www.fisheries.noaa.gov/international/international-affairs/forced-
labor-and-seafood-supply-chain (viewed October 21, 2023).
---------------------------------------------------------------------------
Appendix 4 of the DOS/DOC report includes technical recommendations
to deter human trafficking and forced labor outside of U.S. waters.
This Commission could ask the multi-agency group focusing on seafood to
comment on how the Outlaw Ocean reporting relates to their
recommendations and strategy for deterrence.
It would be ironic if the result of stronger U.S. measures against
forced-labor imports merely resulted in those goods being shipped to
other countries. Outlaw Ocean's reporting highlights the need to expand
border bans, similar to the UFLPA and Tariff Act, among other
countries. The U.S. government should work with trading partners to
ensure no country is a dumping ground for fish processed with Uyghur
forced labor.\61\ The UFPLA model will be truly effective when other
countries follow suit.
---------------------------------------------------------------------------
\61\ Section 4(b)(1) of the UFLPA requires the U.S. Government
strategy for implementation of the law to include ``a plan to enhance
bilateral and multilateral coordination, including sustained engagement
with the governments of United States partners and allies, to end
forced labor of Uyghurs, Kazakhs, Kyrgyz, Tibetans, and members of
other persecuted groups in the Xinjiang Uyghur Autonomous Region.''
---------------------------------------------------------------------------
Appendix 1
The Outlaw Ocean Project Discussion
U.S. Department of Agriculture \62\
---------------------------------------------------------------------------
\62\ The Outlaw Ocean Project, Discussion, U.S. Department of
Agriculture, https://www.theoutlawocean.com/investigations/china-the-
superpower-of-seafood/discussion/#us-
department-of-agriculture (viewed October 20, 2023).
---------------------------------------------------------------------------
July 10, 2023
Email sent to the U.S. Department of Agriculture's Acting Deputy
Director of Communications, Ed Curlett. The email outlined procurement
contracts awarded by the USDA to five seafood companies whose supply
chains are linked to Uyghur forced labor, and that the U.S. has
prohibited the import of goods produced by forced labor. The email also
asked for comment.
July 13, 2023
Paige at the U.S. Department of Agriculture press office replied:
``Thank you for reaching out. I'm looping you with Allan Rodriguez,
USDA's Press Secretary.'' July 13, 2023: Allan Rodriguez emailed:
``USDA is committed to preventing forced labor and human trafficking.
All agricultural products, including fish, purchased by USDA for use in
food assistance programs are procured in accordance with the Federal
Acquisition Regulation (FAR) System, and must be grown and processed in
the United States or its territories. The FAR implements procurement-
related aspects of various statutes and Executive Orders, including
those addressing forced or indentured child labor and the trafficking
of persons. Thanks, Allan [Quoted text hidden] [Quoted text hidden]
USDA includes FAR-prescribed contract terms regarding combatting human
trafficking which outlines required notifications, contractual
remedies, and contractor compliance with U.S. Government policy.''
July 19, 2023
Email sent to USDA Press Secretary Allan Rodriguez for further
clarification on the USDA's statement. The email asked: 1. As we have
identified five companies in the U.S. that are major providers of
seafood to the USDA and these companies rely heavily, if not
exclusively, on processing in China, how does the USDA ensure that all
the seafood they're providing through these contracts is processed in
U.S.-based processing facilities? 2. Does the USDA verify this
independently or do you rely on the contracted company to provide the
verification? 3. If the latter, what types of information or
documentation are required from the contractor to verify the country of
origin and location of processing of the seafood provided under USDA
contract?
July 20, 2023
The Outlaw Ocean Project replied to say yes, that was fine.
July 21, 2023
Allan Rodriguez replied with the following answers:
1. USDA requires that our seafood products be sourced in U.S.
waters by U.S. flagged vessels and produced in U.S. establishments
approved by the U.S. Department of Commerce's Seafood Inspection
Program. USDA ensures this requirement is met by conducting pre-and
post-production, onsite audits.
2. USDA and the Department of Commerce verify requirements are
being followed by conducting onsite pre-production and post-production
audits to ensure that contractual, technical, and operational
requirements of each Department are met. In addition to verifying
compliance with requirements, these onsite audits verify that
processing facilities are based in the U.S. or its territories.
3. Each contractor must declare the production facilities and
shipping points they intend to use to produce products for USDA. In
addition to onsite verification, contractors are required to provide
documents during audits that show compliance with contractual,
technical, and operational requirements including domestic origin.
Contractors that source seafood from both U.S. and international waters
or flagged vessels must have a segregation plan in place that ensures
only seafood sourced from U.S. waters and flagged vessels is provided
to USDA's food purchase program.
U.S. Department of Defense \63\
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\63\ The Outlaw Ocean Project, Discussion, U.S. Department of
Defense, https://www.theoutlawocean.com/investigations/china-the-
superpower-of-seafood/discussion/#us-
department-of-defense (viewed October 20, 2023).
---------------------------------------------------------------------------
July 12, 2023
Email sent to the U.S. Department of Defense regarding procurement
contracts awarded to Sysco.
The email said that Sysco sells Ruggiero and High Liner seafood;
Ruggiero and High Liner have imported seafood from Chinese processors
connected to Uyghur forced labor. The email also asked for comment.
U.S. Department of Justice \64\
---------------------------------------------------------------------------
\64\ The Outlaw Ocean Project, Discussion, U.S. Department of
Justice, https://www.theoutlawocean.com/investigations/china-the-
superpower-of-seafood/discussion/#us-
department-of-justice (viewed October 20, 2023).
---------------------------------------------------------------------------
July 10, 2023
Query sent to the U.S. Department of Justice via the online form
required for media queries.
The email outlined procurement contracts awarded by the Bureau of
Prisons to a seafood company whose supply chain is linked to Uyghur
forced labor, Channel Fish Processing, and that the U.S. has prohibited
the import of goods produced by forced labor. The email also asked for
comment.
Appendix 2
The Outlaw Ocean Project
Methodology \65\
---------------------------------------------------------------------------
\65\ The Outlaw Ocean Project, Methodology, https://
www.theoutlawocean.com/investigations/china-the-superpower-of-seafood/
methodology/#method-discussion (viewed October 20, 2023).
How did the investigation calculate the total number of seafood plants
---------------------------------------------------------------------------
connected to Xinjiang forced labor?
We found user-generated content posted in the last 12 months
showing Xinjiang minorities working at ten seafood enterprises, for
which we also had state media and/or company statements describing
Xinjiang labor transfers. The ten plants are operated by five corporate
entities, and each group owns two facilities:
------------------------------------------------------------------------
Company name Corporate Group
------------------------------------------------------------------------
Qingdao Lian Yang Aquatic Products Co. Tianyuan
Ltd..
Qingdao Tianyuan Aquatic Products Co. Tianyuan
Ltd..
Rizhao Jiayuan Foodstuff Co. Ltd....... Shandong Meijia
Rizhao Meijia Keyuan Foods Co. Ltd..... Shandong Meijia
Rizhao Rirong Aquatic Products Co. Ltd. Rongsense
Rizhao Rongxing Food Co. Ltd........... Rongsense
Rongcheng Haibo Ocean Food Co. Ltd..... Chishan
Shandong Haidu Ocean Food Co. Ltd...... Chishan
Yantai Longwin Foods Co. Ltd........... Sanko
Yantai Sanko Fisheries Co. Ltd......... Sanko
------------------------------------------------------------------------
How did the investigation find out about social audits conducted at
Shandong seafood-processing plants using Xinjiang labor?
We communicated our findings to hundreds of North American and
European companies buying seafood from Shandong plants using workers
from Xinjiang. In many cases, companies pointed to social-audit reports
to assert there was no evidence of forced labor at the implicated
factories. We asked importers and their customers to tell us when and
what types of social audits had been conducted, who had conducted them,
and what they had found with respect to Xinjiang workers. Although in
most cases, companies declined to answer our enquiries, usually
referring to commercial confidentiality, some buyers confirmed audit
dates, auditor identities, and the standard used (Sedex Members Ethical
Trade Audit, or SMETA). A few even shared audit reports. In order to
further ascertain whether Xinjiang workers were being detected by
social audits, we spoke to the auditors, and standards and
certification bodies, about our findings.
How did the investigation identify companies importing seafood from
Chinese processors connected to abuses at sea and on land?
Trade data allowed us to track exports from processing plants to
stores and restaurants outside of China. We obtained data from a
variety of sources, including Chinese customs and private aggregators
of import data from North American and European countries. We also
searched company websites for information about customers and export
approvals. Footage posted to Douyin by workers in seafood plants often
featured seafood packaging showing useful details like vessel names or
brand labels. We also used optical character-recognition searches to
look for examples of packaging and documentation featuring the unique
export codes of Chinese processing plants (export approval codes and
health marks issued by government authorities, certification codes
issued by the Marine Stewardship Council and the Aquaculture
Stewardship Council).
How did the investigation connect companies importing seafood tainted
or associated with crimes or other concerns to consumers?
Trade data told us which companies were importing seafood from
Chinese suppliers of interest, but in most cases, we needed to look at
the next link in the chain: the customer of the importer. We searched
through importers' websites, product catalogs, and social-media
profiles in order to ascertain who they were supplying. We used
OpenCorporates, an open database of companies, to identify the
ownership and corporate structures of companies in the U.S., Canada,
Europe, and elsewhere. We also used a U.S. Government trademark data
base and a global brand database to expand our list of brands owned by
companies importing seafood tainted by forced labor or illegal fishing
to search across catalogs and online stores for major grocery chains
and food service groups.
We identified unique codes for importers--health marks issued by
market state authorities, certification codes issued by the Marine
Stewardship Council and the Aquaculture Stewardship Council--and
conducted optical-character recognition searches for those codes on
product packaging and commercial documents. We visited dozens of stores
in 12 states (Alabama, Arkansas, California, the District of Columbia,
Florida, Georgia, Hawaii, Massachusetts, New York, South Carolina,
Texas, and Virginia) and several countries (Australia, France, Ireland,
and the United Kingdom) to obtain images of seafood packaging in order
to establish, using those unique codes, the origin of the seafood. We
reviewed product listings on major retailer and foodservice distributor
websites to identify seafood products that were produced or sold by
target importers and that matched the types of seafood sourced from
Chinese processors of interest.
Finally, communications with seafood importers and their
customers--and, in some cases, the next tier of buyers--helped clarify
our findings on the connections among fishing vessels, processing
plants, and global consumers.
How did the investigation connect companies importing seafood tainted
by or associated with potential crimes or other concerns to public
procurement chains in North America and Europe?
We looked at government-contract databases, such as the European
Union's tender data base, which contains detailed records of tenders
and contracts for all European Union countries and European agencies,
and USASpending.gov, which provides federal spending data, to identify
the main companies supplying frozen seafood to government agencies. We
used trade data to identify any companies that received procurement
contracts and also imported from Chinese companies tied to seafood
associated with potential crimes, including those using Uyghur labor.
We also investigated major government suppliers' product lists and
catalogs to ascertain if they were supplied by companies that imported
seafood associated with potential crimes and risk indicators.
In the UK, whitefish is supplied by companies associated with our
investigation to public institutions such as schools and hospitals. The
supply is typically through intermediaries, working under what are
known as ``framework agreements'' that identify government-approved
vendors. Implicated seafood suppliers were identified through reference
to brand names and the use of unique Marine Stewardship Council (MSC)
codes on primary school menus for 2023 and other documentation.
U.S. public procurement rules have various exemptions that allow
local-level buyers for school-lunch or other federally supported
programs to purchase food and other products if they are looking for
better options in terms of price, quality, quantity, or availability.
In the U.S., half of the fish sticks served in public schools have been
processed in China, according to the Genuine Alaska Pollock Producers,
an industry group. They said their research was derived from a review
of purchasing records of their members. States and large school
districts have historically used USDA grants to buy seafood directly
from commercial vendors, much of which is sourced through China, the
organization said. Foods purchased by the USDA have only accounted for
about 20 percent of what is served in schools, according to the
organization, which means the remaining 80 percent is purchased mostly
by local buyers.
______
Statement of Greg Scarlatoiu
The witness wishes to thank HRNK team members Ingyu Choe, Mohona
Ganguly, Raymond Ha, Doohyun (Jake) Kim, Damian Reddy, as well as Jung
Gwang-il, Ko Young-hwan, Lee Hyun-seung and Ri Jong-ho for their
invaluable contributions to research, translation, editing, direct
testimony, and securing testimony from key witnesses in China and North
Korea.
Executive Summary
Mindful of Section 321 of the Countering America's Adversaries
Through Sanctions Act (CAATSA), ``Sanctions for Forced Labor and
Slavery Overseas of North Koreans,'' as applied to North Korean workers
officially dispatched to Chinese seafood processing plants, HRNK
endeavored to make a preliminary determination as to whether the
working conditions these workers face are subject to Section 302(b) of
the North Korea Sanctions and Policy Enhancement Act of 2016 (22 U.S.C.
9241(b)). We further endeavored to identify Chinese entities that
employ North Korean laborers, with the aim of determining if such
entities and individuals in charge meet the criteria under Section 111
of the Trafficking Victims Protection Act of 2000 (22 U.S.C. 7108)
relating to the prevention of trafficking in persons.
Until their repatriation began on August 23 or 29, 2023, there were
thousands of North Korean workers officially dispatched to Chinese
seafood processing plants. In many cases, these workers processed
seafood imported from North Korea. The importation of seafood processed
by North Korean workers in China, seafood exported from North Korea to
China, or a combination of both, into the United States directly from
China or relabeled ``Made in Russia'' in the Russian Far East would
constitute a blatant violation of CAATSA.
Chinese seafood processing plants are notorious for their reliance
on forced or indentured labor, including that of North Korean workers.
For over three decades, North Korea has been officially dispatching
workers to countries such as Russia, China, and the UAE, where they
work in factories, restaurants, and in other enterprises to earn
hundreds of millions of dollars annually for the regime. This is
despite the various sanctions against overseas North Korean labor, and
the ban imposed on North Korean overseas workers by the United Nations
Security Council in 2019. This ban required the immediate expulsion of
North Korean workers from the countries that were benefiting from their
labor. \1\ However, despite the severity of these measures, they have
largely been ignored.
---------------------------------------------------------------------------
\1\ Choe Sang-hun, ``North Koreans Trapped in `State-Sponsored
Slavery' in Russia,'' The New York Times, April 3, 2023. https://
www.nytimes.com/2023/04/03/world/asia/north-korea-human-rights.html.
---------------------------------------------------------------------------
China continues to utilize North Korean overseas labor to the
fullest extent possible. For instance, as claimed by the Chinese
government, last year, there were over 80,000 North Korean workers
residing in one northeastern Chinese city alone. At least 450 of these
workers were working in seafood processing plants, according to HRNK's
research. Despite the Chinese government's most ardent efforts to erase
any mention of these workers on the internet, numerous posts on Chinese
social media have featured them in some capacity. \2\ According to
individuals interviewed by HRNK, much of the seafood products that
these workers process is exported to the United States, which is a
clear violation of CAATSA and other applicable U.S. legislation.
---------------------------------------------------------------------------
\2\ Ian Urbina, ``The Crimes behind the Seafood You Eat,'' The New
Yorker, October 9, 2023. https://www.newyorker.com/magazine/2023/10/16/
the-crimes-behind-the-seafood-you-eat.
---------------------------------------------------------------------------
North Korean Workers in Chinese Seafood Processing Plants:
International Legal Implications
The dispatch of North Korean workers to Chinese seafood processing
plants has long been a controversial subject due to its multifaceted
legal and human rights implications.
The employment of North Korean workers in Chinese seafood
processing plants may raise concerns regarding human rights abuses and
labor exploitation. The International Labour Organization (ILO) sets
internationally applicable labor standards, including the Forced Labor
Convention (No. 29) and the Abolition of Forced Labor Convention (No.
105), which prohibit the use of forced labor. These workers often face
exploitative conditions, including long working hours, low wages (or
wages that are appropriated), inadequate safety measures, and limited
freedom of movement. Such practices contravene the principles of
various ILO conventions, as well as the Universal Declaration of Human
Rights (UDHR).
The employment of North Korean workers in Chinese seafood
processing plants has raised allegations of forced labor and human
trafficking. There have been reports indicating that workers' passports
are confiscated by the North Korean authorities, leaving these workers
vulnerable to exploitation and restricted movement. These actions
violate Article 4 of the UDHR, which prohibits any slavery or forced
labor. Such conduct also violates the Protocol to Prevent, Suppress and
Punish Trafficking in Persons (also known as the Palermo Protocol),
which condemns any behavior amounting to trafficking in persons.
The involvement of Chinese seafood processing plants employing
North Korean labor has also evoked questions relating to international
economic sanctions imposed on North Korea. These sanctions aim to
stifle the North Korean government's sources of revenue, including the
exportation of labor. Thus, the presence of North Korean workers in
Chinese seafood processing plants could potentially violate these
sanctions, demanding further international attention and action. The
international community generally condemns the use of forced labor.
States and organizations can rely on conventions such as the UDHR, the
International Covenant on Civil and Political Rights (ICCPR), and the
International Covenant on Economic, Social and Cultural Rights (ICESCR)
to address labor rights violations and protect the rights of North
Korean workers. Both China and North Korea have ratified the ICCPR and
the ICESCR. China is a founding member of the ILO, and it has ratified
Conventions 29 and 105.
Under the Countering America's Adversaries Through Sanctions Act
(CAATSA), the United States has imposed sanctions on various entities
involved in North Korean labor exports. The purpose of these sanctions
is to prevent North Korea from earning foreign currency through labor
exports, which could be used to fund its nuclear weapons and ballistic
missile programs. The CAATSA sanctions target not only North Korean
workers abroad, but also foreign companies and individuals involved in
their employment. Under Section 321 of CAATSA, the United States
imposes sanctions on entities involved in ``knowingly employing North
Korean laborers.'' If Chinese seafood processing plants employ North
Korean workers, they risk being subjected to U.S. sanctions. This
provision serves to deter countries from engaging in these practices
due to the potential economic and reputational consequences.
The human rights implications for the above conduct include:
1. Inhumane Working Conditions: North Korean workers dispatched to
Chinese seafood processing plants often face extremely challenging
working conditions. Reports suggest that workers are subjected to long
work hours, harsh treatment, and minimal safety measures, posing a risk
to their physical and mental well-being. The denial of proper rest and
breaks violates the workers' right to safe working conditions.
2. Lack of Freedom and Communication: Workers dispatched from North
Korea are often isolated. They are allowed limited contact with the
outside world and their families. As a result, they are unable to
exercise their right to freedom of movement and communication. This
isolation also leaves them vulnerable to exploitation and unable to
seek assistance or redress for any human rights violations they may
face.
3. Absence of Labor Rights: The labor rights of these workers,
including the right to join a trade union and engage in collective
bargaining, are severely curtailed. This lack of representation
compromises workers' ability to advocate for fair wages, acceptable
working conditions, and access to social security benefits.
Living and Working Conditions for North Korea's Overseas Workers
North Korean workers must undergo a strenuous process before being
sent abroad, and suffer from horrific and squalid working and living
conditions once they cross the border. Overseas positions are highly
coveted by North Koreans, as the average monthly remittance of $50 to
$100 makes a considerable difference for their families back home, as
opposed to the $3 monthly wage they would receive as factory workers in
North Korea. North Korean workers dispatched to Chinese seafood
processing plants pocket about $70 a month (500 Chinese yuan). \3\
---------------------------------------------------------------------------
\3\ Interview with North Korean escapee, October 8, 2023.
---------------------------------------------------------------------------
Selection is a particularly competitive undertaking, as prospective
workers utilize all available resources to bribe officials into
allowing them to work overseas on an ``official'' contract. These are
considered to be ``golden opportunities'' for North Korean workers, who
are catalyzed into attempting to be dispatched overseas by the
purported benefits, such as earnings to start businesses in North
Korea, and even the allure of obtaining ``middle-class status
symbols,'' such as watches, televisions, and foreign-made rice cookers.
The average bribe paid to a government official to be dispatched
overseas is $2,000-$3,000. The workers often come from the dong-yo
(``wavering'') class in North Korea's songbun system of loyalty-based
social classification. For these workers, this is a huge amount of
money. The only option is to borrow it from money lenders and pay it
back with interest. \4\
---------------------------------------------------------------------------
\4\ Interview with North Korean escapee, October 9, 2023.
---------------------------------------------------------------------------
One North Korean escapee, Lim Il, recounted his reaction to
learning he was to be sent overseas to China:
``I felt like I had won the lottery,'' he said. ``People
fantasized about getting overseas labor jobs . . . . Unless you
were an idiot, you wouldn't give up such an opportunity.'' \5\
---------------------------------------------------------------------------
\5\ Tim Sullivan, Martha Mendoza, and Hyung-Jin Kim, ``NKorean
Workers Prep Seafood Going to US Stores, Restaurants,'' AP News, August
21, 2021. https://apnews.com/article/sports-middle-east-canada-europe-
global-trade- 8b493b7df6e147e98d19f3abb5ca090a.
Once they reach their destination, their passports and any other
official documents are confiscated by their minders. The minders
closely monitor them, limiting their freedom of movement and preventing
them from speaking to other workers. The laborers sometimes work up to
fourteen to sixteen hours a day. They are given no holidays
(potentially having one day off a month at most), and they are not paid
directly by their foreign employers. According to the North Korean
overseas workers, as well as the former officials who used to supervise
the process of their expatriation, the North Korean government seized
up to 90 percent of their salary, leaving a measly 10 percent for the
workers and their families back home to survive on.\6\
---------------------------------------------------------------------------
\6\ Greg Scarlatoiu, Raymond Ha, and Hyunseung Lee, ``North Korean
Workers Officially Dispatched to China & Russia,'' The Committee for
Human Rights in North Korea, September 26, 2022. https://www.hrnk.org/
uploads/pdfs/Overseas_Workers_0926.pdf .
---------------------------------------------------------------------------
Their living conditions are also inhumane, as laborers are often
forced to reside in unsanitary and hazardous accommodations provided to
them by their employers. They can sometimes also be subjected to
excessive fees to pay for this housing. \7\ Laborers whose wages are
specifically being used to provide revenue for the North Korean
government are placed in collective housing arrangements and
purposefully isolated from other workers of different nationalities.
After enduring these ruthless conditions, North Korean workers who
eventually return home are subject to strict surveillance by the
Ministry of State Security (MSS) for three years. \8\
---------------------------------------------------------------------------
\7\ U.S. Customs and Border Protection, ``North Korea Sanctions &
Enforcement Actions Advisory,'' July 23, 2018. https://www.cbp.gov/
sites/default/files/assets/documents/2018-Aug/
NorthZ%20Korea%20Sanctions%20_%20Enforcement%20Actions%20Advisory.pdf.
\8\ Scarlatoiu, Ha, and Lee, ``North Korean Workers Officially
Dispatched to China & Russia.''
---------------------------------------------------------------------------
History of North Korean Involvement in China's
Seafood Processing Industry
North Korean workers have long been involved in China's seafood
processing industry. Over 3,000 workers were employed pre-COVID in
seafood processing plants in the northeastern city of Hunchun. The
major seafood processing companies that have historically employed
North Korean labor and have exported their products to the United
States include Joint Venture Hunchun Dongyang Seafood Industry & Trade
Co. Ltd. and Hunchun Pagoda Industry Co. Ltd., distributed globally by
Ocean One Enterprise; Yantai Dachen Hunchun Seafood Products; and
Yanbian Shenghai Industry & Trade Co. Ltd.\9\
---------------------------------------------------------------------------
\9\ Sullivan, Mendoza, and Kim, ``NKorean Workers Prep Seafood
Going to US Stores, Restaurants.''
---------------------------------------------------------------------------
North Korean laborers have not only suffered from inhumane working
and living conditions, but have also been explicitly discriminated
against by their Chinese employers. In Dandong, North Korean workers
even had to wear blue headbands, allegedly to distinguish themselves
from Chinese workers. \10\ Chinese workers received job protections and
were allowed to take days off, while North Korean workers finished
their contracts while taking no sick days and filing no complaints. The
restrictions these workers face have made them very ``valuable''
employees in the eyes of Chinese employers. Li Shasha, a sales manager
at Yanbian Shenghai Industry and Trade Co, claimed that North Korean
laborers were ``more stable'' than Chinese workers, and that ``they
won't take leave for some personal reason.'' \11\
---------------------------------------------------------------------------
\10\ Choi Woo-jung, ``Korean Workers in Dandong All Wearing Blue
Bands on Their Heads . . . Why?'' [in Korean], TV Chosun, December 20,
2013. Accessed October 10, 2023. https://www.chosun.com/site/data/
html_dir/2013/12/20/2013122003710.html.
\11\ ``How U.S. Seafood Fans May Help Fund North Korea ,'' CBS
News, October 4, 2017. https://www.cbsnews.com/news/how-us-seafood-
fans-may-unwittingly-help-fund-north-korea/.
---------------------------------------------------------------------------
North Korean laborers are also paid considerably less than their
Chinese counterparts. For instance, at one seafood processing plant,
North Korean workers were reportedly paid about $300, compared to the
Chinese workers' salary of $540.\12\ However, due to ``voluntary
contributions'' demanded by the North Korean authorities, those
involved in the seafood processing industry only get to retain about
$70 out of the $300 they earn.
---------------------------------------------------------------------------
\12\ Sullivan, Mendoza, and Kim. ``NKorean Workers Prep Seafood
Going to US Stores, Restaurants.''
---------------------------------------------------------------------------
North Korean workers in China are far more heavily monitored and
surveilled than their counterparts in other countries, such as Russia,
the UAE, and Malaysia. The North Korean government fears that the
workers dispatched to China may be more predisposed towards wanting to
escape, as they could potentially follow the example of tens of
thousands of North Koreans who escaped to or through China.
Most of the workers at the Hunchun seafood processing plant are
women in their twenties. They arrive at the plant already divided into
work units, each headed by a North Korean overseer. They are isolated
from all others, including their fellow workers, and even their
employers.\13\ One supervisor at a Hunchun company that has many North
Korean employees stated that, ``They're not allowed to mingle with the
Chinese . . . . We can only communicate with their team leaders.'' \14\
---------------------------------------------------------------------------
\13\ Ibid.
\14\ Ibid.
---------------------------------------------------------------------------
The workers are surrounded by North Korean propaganda. There are
even posters featuring political slogans posted all over their living
quarters. Because of the constant surveillance, it can be said that
there is very little difference, if any, between the workers' treatment
in North Korea and their conditions in China.\15\ One medical worker
who had treated many North Korean workers corroborated this account,
saying, ``They only talk about what they need to. They don't talk about
what they might be thinking.'' \16\
---------------------------------------------------------------------------
\15\ Ibid.
\16\ Ibid.
---------------------------------------------------------------------------
Were Seafood Products Processed with North Korean Labor
Exported to the United States?
Seafood products processed by North Korean workers were almost
certainly exported to the United States. In ``The Crimes Behind the
Seafood You Eat,'' Ian Urbina and his team discovered that companies
that have employed North Korean and Uyghur workers have exported over
47,000 tons of seafood. Around 17 percent of the squid processed and
packaged by Uyghurs and North Koreans was sent to dozens of U.S.
importers, which in turn distributed it to destinations including
military bases and public schools. North Korean escapees interviewed by
the witness, including those who were directly involved in North Korean
seafood exports to China or the dispatch of North Korean workers to
Chinese seafood processing plants, concurred with Urbina's findings.
This blind spot is in part due to the seafood industry being
notoriously difficult to monitor and police.\17\ These difficulties are
compounded by the fact that China has often obstructed the details of
its seafood processing industry from the U.S. government. \18\
---------------------------------------------------------------------------
\17\ United Nations Office on Drugs and Crime, ``Fisheries Crime,''
accessed October 9, 2023. https://www.unodc.org/documents/about-unodc/
Campaigns/Fisheries/
Fisheries_Leaflet_PRINT.pdf.
\18\ Urbina, ``The Crimes behind the Seafood You Eat.''
---------------------------------------------------------------------------
The United States has strict laws banning the importation of all
goods made with North Korean labor, the most prominent of which is
CAATSA. The implementation of these laws in numerous industries has
been documented recently, including the confiscation of products made
with North Korean and Uyghur labor. However, seafood processed with the
use of North Korean labor has made its way through American import
companies, and eventually to the public through supermarkets and
restaurants. Some examples of distributors are Sea-Trek, which is based
in Rhode Island and ships products to Europe, Central America,
Australia, and the Caribbean, and the Fishin' Company, which exports
and supplies seafood to supermarkets, retailers, and food companies.
Seafood proven to be processed using North Korean labor has, in recent
years, been found not only through these suppliers, but through notable
supermarket chains as Walmart and ALDI. In 2017, several of these
companies moved to address concerns regarding their supply chains. \19\
However, these efforts have not halted the importation of ``tainted''
seafood.
---------------------------------------------------------------------------
\19\ Sullivan, Mendoza, and Kim, ``NKorean Workers Prep Seafood
Going to US Stores, Restaurants.''
---------------------------------------------------------------------------
Have Chinese Factories Processed Seafood
Imported from North Korea?
According to a report published by South Korea's Korea
International Trade Association (KITA), seafood caught on North Korea's
east coast is first gathered at the port of Rajin before it is
transported overland, passing through North Korean customs at Wonjeong
and Chinese customs at Quanhe. \20\
---------------------------------------------------------------------------
\20\ Baek Seong-ho, ``North Korea's Seafood Production and and
Exports'' [in Korean], KITA Inter-Korean Trade Report vol. 7 (2020).
https://www.kita.net/cmmrcInfo/internationalTrade Studies/
researchReport/
northKoreaTradeReportDetail.do?pageIndex=1&no=13&classification=19
&searchReqType=detail&pcRadio=19&searchClassification=19&searchStartDate
=&searchEnd Date=&searchCondition=CONTENT&searchKeyword=&continent--
nm=&continent--cd=&country--nm=&country--cd=§or--nm=§or--
cd=&itemCd--nm=&itemCd--cd=&searchOpenYn=.
---------------------------------------------------------------------------
North Korean seafood that has passed through Chinese customs is
distributed and sold in cities and counties within China's Yanbian
Korean Autonomous Prefecture, Jilin Province. Some of it is processed
in seafood processing facilities in Hunchun and then exported as frozen
or dried seafood to the United States, Europe, Japan, and other
countries.\21\
---------------------------------------------------------------------------
\21\ Ibid.
---------------------------------------------------------------------------
Additionally, after North Korean seafood clears Chinese customs at
the Quanhe (Hunchun) border crossing, a significant portion of it is
transported by plane to inland cities, including Beijing. The main
North Korean seafood products transported inland in this manner include
squid, flounder, snow crab, horsehair crab, and lobster. \22\
---------------------------------------------------------------------------
\22\ Ibid.
[Statement continues with table entitled ``Status of Major North Korean
Seafood Trading Companies'' on next page.]
Status of Major North Korean Seafood Trading Companies \23\
--------------------------------------------------------------------------------------------------------------------------------------------------------
Year
Company Affiliation Established Main products Notes
--------------------------------------------------------------------------------------------------------------------------------------------------------
Chosun Ryoongseong Trading Company.... Korean People's Army (KPA) Rear Seafood Major seafood export bases in
Service Bureau Chongjin, Sinpo, Wonsan,
Onchon, Haeju, and Uiju, with
ownership of numerous fishing
vessels.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Chosun Chongunsan Trading Company..... KPA 1997 Seafood ................................
--------------------------------------------------------------------------------------------------------------------------------------------------------
Chosun Shinheung Trading Company...... KPA (State SecurityP Department) Seafood ................................
--------------------------------------------------------------------------------------------------------------------------------------------------------
Chosun Shinjin Trading Company........ KPA (General PoliticalP Bureau) Seafood, Processed Seafood ................................
Products
--------------------------------------------------------------------------------------------------------------------------------------------------------
Chosun Birobong Trading Company....... KPA (ReconnaissanceP Bureau) 1988 Seafood ................................
--------------------------------------------------------------------------------------------------------------------------------------------------------
Chosun Maebong Trading Company........ Ministry of the People's Armed 1980 Seafood ................................
Forces
--------------------------------------------------------------------------------------------------------------------------------------------------------
Chosun Gwangmyeong General Trading Cabinet (External Economic 1976 Seafood ................................
Company. Affairs Committee)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Chosun Namsan Trading Company......... Nampo Economic & Administration 1984 Seafood (clams, shellfish, ................................
Committee Trade Bureau crab, shrimp)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Chosun Songdowon Trading Company...... Wonsan Economic &P Administration 1983 Seafood (pollock,P flounder, ................................
Committee Trade Bureau red snapper, clams, squid,
abalone, shrimps, crabs, seaP
cucumbers, etc.)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Chosun Fishing & Vessels Company...... Cabinet (FisheriesP Committee) Primarily responsible for ................................
seafood-related
transportation services
--------------------------------------------------------------------------------------------------------------------------------------------------------
Chosun Daeseong General Trading Korean Workers' Party (KWP) 1974 Seafood ................................
Company.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Chosun Rungrado General Trading KWP (Pyongyang City Party 1973 Seafood, Shellfish ................................
Company. Committee)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Interview Findings
HRNK interviewed ten individuals, including former officials with
direct involvement and experience dealing with the importation of North
Korean seafood into China and the dispatch of North Korean workers to
Chinese food processing plants, as well as individuals still actively
involved in North Korea's seafood trade and the export of labor to
Chinese processing plants.\24\
---------------------------------------------------------------------------
\23\ Kim Jong-hwa, ``The Current Status of North Korea's Fisheries
Industry and Ways to Promote Inter-Korean Exchange'' [in Korean],
Chungnam Institute Issue Report (April 30, 2019), 12. http://
oak.cni.re.kr/handle/2016.oak/5676.
\24\ English and Korean versions of the questionnaire and
respondent answers are available upon request.
---------------------------------------------------------------------------
None of the individuals interviewed by HRNK were aware of North
Korean sailors or fishermen dispatched to Chinese fishing vessels.
However, all ten interviewees were aware of the presence of North
Korean workers at Chinese seafood processing factories. North Korean
workers dispatched to Chinese processing plants also process fish and
other seafood caught by North Korean vessels and subsequently exported
to China.
Thousands of North Korean seafood processing laborers have worked
in China, stifled under various tight restrictions and egregious human
rights abuses. They have worked in seafood processing plants, such as
those in Hunchun, while the Chinese and North Korean regimes continued
to grow richer by exporting products processed with North Korean labor
to countries including the United States, which would be a clear
violation of CAATSA.
Reflecting on his experience, stating that while he never thought
of himself as being put through such unbearable treatment, a North
Korean formerly dispatched to a Chinese seafood processing plant
remarked that ``These North Korean workers (today) still don't know
they are slaves.'' \25\
---------------------------------------------------------------------------
\25\ Sullivan, Mendoza, and Kim, ``NKorean Workers Prep Seafood
Going to US Stores, Restaurants.''
---------------------------------------------------------------------------
selection and dispatch procedures
Based on the decisions of North Korean authorities (central and
regional) and based on consultation between North Korean and Chinese
entities, investment proposals are first publicly announced in China.
Subsequently, contracts are signed with Chinese counterparts who meet
the requisite conditions.
This is followed by the selection of workers within North Korea.
The regime agencies tasked with the official dispatching of overseas
workers include the Central Party's Overseas Dispatch Department and
the Provincial Party's 2nd Department (Overseas Dispatch Department).
The ultimate controlling authorities are typically officials from the
Korean Workers' Party (KWP), in particular the Organization and
Guidance Department, as well as the Ministry of Social Security with
respect to
security-related matters.
The KWP's Overseas Dispatch Department sends an official document
related to overseas dispatch worker recruitment to the Provincial
Party. Then, the Provincial Party's 2nd Department (Overseas Dispatch
Department) recruits workers to be dispatched overseas. To be selected
as an overseas dispatch worker, one must be employed in a factory or
enterprise at the provincial level or above.
Guidelines for selecting personnel are issued to various factories
and enterprises. The selection process follows a principle of
voluntariness rather than coercion. In principle, worker selection is
done by the relevant unit's trade company, the unit committee, and the
city or provincial committee, with approval from the municipal office
of the Ministry of Social Security.
The Provincial Party's 2nd Department is supposed to send a
recruitment notice to the provincial factory/enterprise to select
personnel, but this procedure is not followed. The selection process is
rigged. There is already a list of people that will be sent. Those who
wish to go abroad have already bribed the relevant officials with the
help of brokers, and their identity and background checks are already
complete.
The background check can take several months. The Ministry of
Social Security thoroughly checks the resident registration documents
for each individual, verifying, through authorities at the local level,
the chulsin songbun (social class assigned at birth), ideological
orientation, and family relationships. If even a minor problem is
discovered during this process, the individual will be disqualified at
the document review stage. Having relatives in China is also a reason
for disqualification. Those with relatives in China are considered to
be at high risk of defection. During the document review, individuals
must also undergo a physical examination to determine if they can work
overseas for an extended period. The Ministry of State Security
conducts a final review of all the aforementioned items prior to
issuing the visa.
Before initiating the clearance process, the individual needs to
receive a positive review and evaluation from the organization (Youth
League or Party organization) of the factory/enterprise they belong to.
If all goes smoothly, the Provincial Party's 2nd Department finally
informs the factory/enterprise that certain individuals will be
dispatched as overseas laborers to China. The bribe required to go
abroad varies by region, and it can range between $2,000 and $3,000. In
North Pyongan Province, one must pay a $2,000 bribe in cash.
Generally, the standard duration of overseas work contracts is
three years. The standard duration of a work permit issued for dispatch
to China is three years. In some cases, workers may be dispatched for
shorter periods, such as one-year or three-month intervals for training
or internships. When the contract expires, it can be extended by
allowing the workers to exit and re-enter customs on the same day,
thereby enabling them to continue working in China. \26\ Workers
typically travel by bus and train both when they are dispatched to
China and when they return home. This is mainly because they are often
assigned to companies near the North Korea-China border, making
transportation by bus, train, or sometimes even traveling on foot a
viable option.
---------------------------------------------------------------------------
\26\ Contract extensions may occur based on mutual agreements at
the local level between the parties involved. However, the North Korean
regime is reluctant to allow workers to spend too much time outside the
country. More often than not, the teams of dispatched workers are
replaced entirely after repatriation. Their chances of being allowed to
leave the country again are extremely low.
---------------------------------------------------------------------------
Due to a lack of transparency regarding their contracts, the North
Korean authorities ultimately employ deceptive methods to dispatch
workers. For instance, when dispatched to China, the contract
stipulates a monthly wage of 2,000 to 2,500 Chinese yuan, i.e., $280 to
$350, luring workers with false promises. This leads to a climate where
workers strive to be dispatched abroad, particularly to China, as
foreign currency-earning laborers. However, at the dispatch sites, the
workers' wages are heavily poached under various pretexts. \27\ After
excluding food expenses, living expenses, medical expenses, national
contributions, and state support funds, the amount paid to workers from
the contracted 2,000 Chinese yuan is typically only an average of 200
to 300 Chinese yuan. Moreover, wages are often not paid in full for
various reasons, leading to widespread dissatisfaction and an unjust
cycle of exploitation.
---------------------------------------------------------------------------
\27\ This includes financing projects such as greenhouse
construction, construction of hydroelectric power plants, revolutionary
historical site construction and renovation in Pyongyang, and
construction in Samjiyon. The funds needed for such projects is often
siphoned from the wage statements of overseas workers. As a result,
many workers reportedly have nearly empty wage statements even after
having worked abroad for several years.
---------------------------------------------------------------------------
working conditions and employment practices in china
The interviewees confirmed that in Dandong, China, the focus is on
clothing production and repair rather than fish processing. Seafood
processing primarily takes place in the Yanbian, Yanji, Hunchun, and
Tumen areas. However, interviewees mentioned the presence of at least
three seafood processing factories where officially dispatched North
Korean workers are employed in Donggang, Dandong City. One interviewee
pinpointed the name of one such factory-- Donggang Luyuan Food Co.,
Ltd.
North Korean workers process a wide variety of fish at the Chinese
plants depending on the season: fish caught seasonally, such as cod and
pollock; clams during clam season, and crab, including snow crab,
during crab season. They also process squid, octopus, shellfish, and
package them as Chinese products for export. The interviewees reported
instances of processed seafood marked ``Made in China'' being shipped
out to Vladivostok in the Russian Far East, where labels are switched
to ``Made in Russia'' and subsequently exported to third countries.
Working conditions for the North Korean workers dispatched to
Chinese seafood processing plants are dire. Wage violations (through
compulsory ``contributions'' extracted by the North Korean
authorities), unpaid overtime, and precarious safety and health
conditions are common.
Wages are not directly handed to the laborers, but are recorded in
the company's books for payment. The Chinese companies pay the North
Korean authorities mostly based on production volume, and the payment
is made in Chinese currency. Since the company's books are under the
control of the company owner or management, there is always a risk of
wage arrears, and a significant portion of the wages that laborers are
supposed to receive upon returning to North Korea may be appropriated
by the state or left unpaid. This has led to significant
dissatisfaction among the workers.
Safety is governed by labor safety rules established in cooperation
with local Chinese companies, but these rules are often not properly
enforced due to the overriding focus on earning foreign currency for
the North Korean regime. Due to excessive exploitation, most of the
workers are in a severe state of physical and emotional exhaustion.
There is insufficient medical coverage for those who fall ill. Minor
illnesses are treated with over-the-counter medicine, but for severe
cases, workers were taken to a ``Welfare Hospital'' in Dandong City,
which is now closed.
One interviewee mentioned that his cousin often visited the Chinese
seafood processing plants as an interpreter, and he also went several
times to translate. The first thoughts that came to his mind when he
saw the workers' appearance and their work environment were
``prisoners'' and ``jail.'' Men mainly carry frozen fish blocks, and
women sit down and peel fish or squid or sort clams and crabs. The
sorting is done based on size, categorizing the larger ones as first-
grade, the smaller ones as second-grade, etc., as there is a price
difference based on grade. Most of the workers in seafood processing
factories work in cold storage, so they work all day in extremely cold
conditions. Additionally, the pungent smell inside is unbearable. Due
to such poor working conditions, local Chinese people are unwilling to
work there.
North Korean workers at Chinese seafood processing plants usually
work about 10 hours a day. However, if production targets are not met,
the workday can extend to over 12 hours. If they fail to complete their
daily assigned tasks, the workers face collective pressure within the
company. Moreover, if deficiencies such as failure to complete one's
tasks or any behavior deemed ``deviant'' persist, their monthly wages
may be partially reduced or not paid at all.
According to eight out of ten interviewees, North Korean workers'
monthly wages are paid upon their return to North Korea, in North
Korean currency, at the official exchange rate. The reason behind that
procedure is that the North Korean authorities do not want the workers
to be in possession of larger amounts of cash while in China, as that
may facilitate their defection. Two interviewees stated that payments
to the workers were made monthly while in China. When workers in China
want to purchase daily necessities such as toilet paper, cosmetics,
toothpaste, toothbrushes, sanitary pads, underwear, and medications,
they are required to manage these expenses themselves. When workers
request these necessary products from their managers, the managers
purchase the items on their behalf and deduct the cost from the
workers' wages. This way, a portion of the workers' wages is spent on
these personal consumables in China.
North Korean workers at Chinese seafood processing plants make
about 500 Chinese yuan a month, i.e., $70. The average salary of a
North Korean industrial worker in North Korea is $3 per month. Despite
severe exploitation, these jobs are highly coveted, as they allow the
workers to dramatically increase their families' income in North Korea,
by North Korean standards. However, since contracts run for only up to
three years, they must moonlight for other companies to have enough to
pay back the loan sharks who lent them $2,000 to $3,000 to bribe
officials in order to be sent to China. Moonlighting must be approved
by the three site supervisors (party, security agency, technical
manager), who also must be bribed. On rare occasions, their own
worksites may pay a limited amount of overtime, according to the
interviewees. Overall, a North Korean seafood processing worker in
China may make up to 1,500 Chinese yuan a month, or about $210.
The working conditions involve collective living, where both work
and daily life take place within the factory and dormitory facilities.
This arrangement can be likened to detention or confinement facilities.
Workers are generally not allowed to go outside except for specific
instances such as visiting a hospital or buying groceries, which
require supervision by a guardian or a fellow worker.
impact of the covid-19 pandemic
Due to the border lockdown during COVID, North Korean workers in
China could not return home. As a result, these workers stayed in China
for up to five or six years. The workers received no wages during the
pandemic, and the interest on loans they had taken from loan sharks in
North Korea to bribe officials increased, leading to many female
workers taking their own lives. North Korean authorities reportedly
used deception to manipulate families in the aftermath of such
incidents.
Beginning on August 23 or August 29 of this year, all or most North
Korean workers in China, including workers at the Chinese seafood
processing plants, were repatriated. Those who were sick and those over
30 years of age, were reportedly the first ones to be sent back. \28\
According to interviewees, many buses were observed entering North
Korea at dawn. From October 1st to October 10th, an eyewitness thought
it was due to the Korean Chuseok (Thanksgiving) holiday period, but he
witnessed buses going in again on October 12th. The repatriated workers
will be replaced by entirely new teams dispatched from North Korea.
According to one interviewee, there has been speculation that seafood
processing workers will not return to China in the future. Instead, it
is expected that China will build such factories in North Korea and
employ people there.
---------------------------------------------------------------------------
\28\ There were workers who were diagnosed with cancer during their
stay in China. They could not return due to COVID and only recently
managed to return to North Korea. The body of a deceased worker was
also recently sent back to North Korea.
---------------------------------------------------------------------------
Repatriation may come as a great relief to North Korean workers
officially dispatched to China, including workers previously stationed
at China's seafood processing plants. Their life under COVID was
terrible. For several years, they had to seek accommodation within the
factory premises. Essentials were provided by the person in charge, who
would go shopping once or twice a week. Since the official contracts
had ended, they had no work and had to do odd jobs, especially on
Chinese farms, to secure even one meal a day. One interviewee spoke
about North Korean workers being spotted picking up discarded vegetable
clippings at local markets to use as soup ingredients.
possible ties to south korea
None of the interviewees were able to name any South Korean
companies involved in trading Chinese seafood processed by North Korean
workers, although they were aware of the close association with South
Korean businesses in certain sectors, including clothing and
electronics assembly. Thus, interviewees thought that collaboration
with South Korean entities in the seafood processing sector was not
entirely outside the realm of possibility. However, three of them
stated that most of the seafood processed in factories in Donggang,
Dandong City goes to South Korea. The interviewees also mentioned that
all Russian frozen crabs exported to South Korea are processed by North
Korean laborers who label them as Chinese or Russian products.
Recommendations
On behalf of the Committee for Human Rights in North Korea (HRNK),
I respectfully recommend to the Congressional-Executive Commission on
China that it consider some, or all of the following:
Encourage civil society organizations with connections to
North Koreans currently or formerly involved in the official
dispatching and management of North Korean workers at Chinese seafood
processing plants to continue investigating conditions of labor at
these facilities, as well as the possibility that seafood products
processed by North Koreans may end up on the U.S. market.
Propose that new findings regarding violations of
internationally accepted labor standards affecting North Koreans at
Chinese seafood processing plants be included in the Annual Report on
Trafficking in Persons, required under Section 110(B) of the
Trafficking Victims Protection Act of 2000 (22 U.S.C. 707(B)).
Seek to determine whether the government of China has
made serious and sustained efforts to eliminate severe forms of
trafficking in persons, as they relate to the official dispatching of
North Korean workers to Chinese seafood processing plants and the
working conditions at such facilities.
Seek to confirm whether seafood exported from China to
the United States contains North Korean seafood products, and whether
North Korean workers officially dispatched to China processed seafood
exported from China to the United States. Should that be the case, such
seafood products exported from China to the United States would have to
be denied entry at any of the ports of the United States, pursuant to a
prohibition under Section 307 of the Tariff Act of 1930 (19 U.S.C.
1307).
The witness also recommends continuing to seek information
pertaining to the following questions, some of them addressed in the
current submission:
Do the working conditions at seafood processing plants in
China, as they apply to officially dispatched North Korean workers,
qualify for an exemption to the prohibition above? Is there any
evidence that such North Korean labor does not qualify as forced or
indentured labor?
Are there any extenuating circumstances that may grant an
exception to some of the persons involved in dispatching North Korean
workers to Chinese seafood processing plants?
Does the employment of North Korean laborers result in
the direct or indirect transfer of stores of value to the North Korean
authorities?
Are all wages and benefits provided directly to the
laborers and held in bank accounts within the Chinese jurisdiction in
which they temporarily reside, and are such wages and benefits
denominated in Chinese currency?
Do the North Korean laborers' working conditions conform
to internationally accepted standards, in particular to the
International Labour Organization (ILO) core conventions?
Statement of Sally Yozell
Representative Smith, Senator Merkley, and members of the
Commission, thank you for the opportunity to testify today.
My name is Sally Yozell, and I am the Director of the Environmental
Security Program at the Stimson Center, a nonprofit, nonpartisan
research institution based here in Washington, D.C. Our program employs
a research-to-action model that supports innovative policy actions to
create durable global change for good. A central focus of our work is
combating illegal, unreported, and unregulated (IUU) fishing.
impacts of iuu fishing
IUU fishing can take many forms--from local, small-scale boats
misreporting catch, to large-scale, industrial foreign-flagged vessels
underreporting their catch. Beyond this there are also coordinated
efforts supported by flag state governments or transnational crime
syndicates. IUU fishing is a ``crime of convergence,'' and has been
linked to other criminal and illicit activities such as the smuggling
of guns, drugs, and wildlife; human trafficking and forced labor; as
well as money laundering and tax fraud. i
In all its forms, IUU fishing directly contributes to
overfishing, threatening the sustainability of fish stocks and damaging
marine ecosystems. The consequences of IUU fishing ripple throughout
increasingly complex supply chains, far beyond the point of harvest. It
harms the economic, food, and environmental security of coastal
communities. IUU fishing destabilizes the security of maritime states,
supports organized criminal networks, fuels corruption, destabilizes
good governance, distorts markets, and drives human trafficking and
labor and human rights abuses in the fishing industry.
I saw this firsthand on a recent research trip to the Gulf of
Guinea to better understand the impacts of foreign-flagged fishing on
coastal communities. Chinese-owned operations have expanded their
presence in West Africa through industrial fleets, fish meal
operations, and bases. All these enterprises deepen partnerships with
West African governments and increase access to fish in West African
waters. This rapid expansion is occurring in developing nations that
lack the financial, technical, and operational capacity to manage and
enforce their fisheries. There is often a lack of political will to
manage these distant water fleets, which can be linked to corruption or
influenced by other Chinese foreign investments. The degradation of
these fisheries can lead to food insecurity, unemployment, and
environmental degradation and has the potential to drive civil unrest
and destabilize the security of these maritime states. ii It
is imperative that the Chinese fleets consider investing in sustainable
fisheries management as part of their expansive fisheries access
agreements.
It is estimated that IUU fishing accounts for up to a third of the
world's total fisheries harvest and is valued at more than $30 billion
annually, but due to its clandestine nature the number in fact could be
higher. iii Ultimately, IUU fishing occurs because it
remains profitable, loopholes persist, and the opaqueness and
complexities of the global seafood supply chain have made it largely
invisible to governments, businesses, and consumers.
That is, until last week.
Mr. Urbina's reporting has blown the lid off one of the most traded
food commodities in the world, revealing a dark side that has
flourished undetected.
complexities of the global seafood supply chain
Seafood accounts for more than $140 billion in trade each year.
iv Commercial fishing is big business, with a complex global
seafood supply chain and over 56 million people working on vessels to
support it. v The demand for seafood is greater than ever;
in 2022, the United States imported 340,000 metric tons of seafood,
valued at just over $30 billion. vi
Fueling this demand are distant water fishing (DWF) fleets.
The details of their operations are largely obscured as they fish far
from shore, often with little oversight from their home countries or
accountability in the regions where they fish. The five largest DWF
fleets--from China, Taiwan, Japan, South Korea, and Spain--target four
main regions of the ocean: the Pacific, West Africa, East Africa, and
South America. vii With regard to China, which has by far
the largest global DWF fleet, there is little insight into vessel
ownership--and the Chinese-owned enterprises that support these
vessels, the conditions aboard these vessels, nor the fisheries access
agreements these fleets use. The challenges these fleets pose to
coastal countries' marine resources will persist unless there is
measurable shift toward improved fisheries management, accountability
of flag-state responsibilities, and overall transparency throughout the
seafood industry and supply chain. As the largest distant water fleet,
China has the opportunity to improve transparency by providing more
detailed information about the beneficial ownership of its fishing
enterprises.
Against this complicated backdrop, we know one simple truth: U.S.
consumers--and consumers around the world--do not want to eat seafood
that is caught illegally or that is the product of forced labor. In
fact, 72% of U.S. consumers support increased traceability for seafood;
they want all parts of the industry to be fair and equitable,
especially for the harvesters, processors, and merchants who follow the
rules. viii
But how can they know?
The seafood supply chain is complex. Seafood is harvested all
around the world in nearshore coastal waters, in territorial seas and
Exclusive Economic Zones, and on the high seas. Depending on the fish,
the seafood supply chain looks different. It is often transshipped and
processed at sea, or processed in major centers often located in China
where seafood can be commingled with other global catches and altered,
making it difficult to distinguish, while also opening up the potential
for mislabeling, all before it moves by air or sea to various wholesale
suppliers, stores, and restaurants. At each point in the supply chain,
new and different risks emerge.
The United States imports about 85% of if its seafood. ix
Just under 40% of U.S. seafood imports are caught in U.S. waters,
processed in China, and then imported back into the United States.
x After being processed, it is imported back into the United
States.
An illustrative example of this is pollock and salmon. As a result
of Russia's invasion of Ukraine, Russian-caught seafood is currently
banned from the United States. Yet despite this, Russian pollock and
salmon still enter U.S. commerce today. xi Since 2014,
Russian seafood exports to the U.S. have grown by 173%. xii
In 2021 Russia exported $1.2 billion worth of crab, cod, pollock,
salmon, and other fish to the United States.
Under the U.S. Country of Origin Labeling (COOL) Act, seafood
products are labeled as products of the processing country. Russian-
caught fish that is processed in China becomes a product of China--
essentially hiding its real origin. Russian catch is processed
alongside U.S. harvested fish, where it can be commingled and processed
into fish blocks, fish sticks, canned salmon, or frozen fillets, and
sent back to U.S. grocery stores, restaurants, and even school lunch
programs for unwitting American consumers. xiii
Stopping the importation of ``Putin's pollock'' through China
is an easy fix. If the United States government implemented a
comprehensive traceability system that tracked all seafood through the
supply chain, IUU fish products could not be masked.
towards traceability
In 2015, the Obama Administration's Task Force on Combating IUU
Fishing and Seafood Fraud created the Seafood Import Monitoring
Program, which is managed by NOAA Fisheries. As a former co-chair of
the Task Force, I can say with certainty that it was originally
envisioned to be a cornerstone of a comprehensive risk-based seafood
traceability system. It was meant to effectively and efficiently track
imported seafood from the point of harvest to its initial entry into
the U.S. market--from bait to gate.
Our goal was to initially start with a limited number of 13 species
groups at risk of IUU fishing and seafood fraud and eventually ramp up
to cover all species. Now in operation for six years, the Seafood
Import Monitoring Program covers about 45% of U.S. seafood imports. But
it does not cover several high-risk species like pollock, salmon, blue
swimming crab, and squid.
This is a pivotal time for the Seafood Import Monitoring Program.
Per its rulemaking last year (0648-BK85), NOAA Fisheries is considering
adding new species, increasing the use of electronic catch
verification, applying artificial intelligence to the process, and
increasing enforcement and auditing. Expanding the Seafood Import
Monitoring Program to include all species is a good next step to
provide greater confidence to consumers that the seafood they buy is
not illegally harvested.
As NOAA Fisheries looks to improve its program, they must consider
the fact that, rather than a true traceability system, the Seafood
Import Monitoring Program is a single narrow program. It is siloed from
other relevant trade monitoring programs that exist within NOAA
Fisheries and across other federal agencies. It is hamstrung by its
reliance on a paper-based framework, which opens the door for
falsification, and which altogether prevents the use of advanced risk
analytics. The program is further constrained by inadequate enforcement
capacity and limited interagency communication.
Unlike the European Union's IUU fishing law, which uses a red-
yellow-green card system, which relies on a government-to-government
certification process, the Seafood Import Monitoring Program places the
burden of proof on the importer of record. Without digitization and
electronic catch certification, importers of record lack the ability to
see across the full length of the seafood supply chain to verify that
each unit of seafood entering U.S. commerce has been safely, legally,
and sustainably harvested.
As a leading market state, the United States has tremendous power--
and responsibility--to transform global fishing practices and improve
monitoring, control, and surveillance. Together with Japan and the
European Union, we import more than 60% of all internationally traded
seafood. This is a powerful market block. The United States can do so
much more to improve fishery resources globally and provide consumers
with the confidence that the seafood they consume is safe, legal, and
sustainable.
We cannot fail.
opportunities for improvement
As more seafood tracking and traceability systems are implemented
around the world, other countries are looking to the United States as a
global leader in this space, with a functional and effective seafood
traceability system that is standardized, streamlined, and
synchronized.
Importers, harvesters, and businesses in the seafood supply chain
are well aware, data and information about seafood is collected and
stored by numerous U.S. agencies. NOAA Fisheries examines seafood data
from the point of harvest to when it enters the U.S. market; the U.S.
Coast Guard uses automatic information systems (AIS) and radar to track
fishing vessels at sea; the Department of Labor monitors forced labor
allegations and evidence of human rights abuses; the Food and Drug
Administration collects seafood data relating to human health and food
safety; and the Treasury Department follows the money, which could
provide insights into beneficial ownership of IUU fishing enterprises.
I could go on.
Despite all of this data and all of these programs, the
International Trade Commission estimated that $2.4 billion worth of
IUU-caught products entered the U.S. market in 2019 alone. xiv
Regulators, advocates, and industry agree; more can be done.
One key barrier to a better system is the lack of standardization
of the data the U.S. government collects. Standardized data is needed--
from different points in the supply chain--that is appropriately
granular and verifiable so that it can be communicated across agencies
in a timely manner. Moreover, the paper-based system that exists today
hinders success. In today's world, how many multi-billion-dollar
industries lack digitization and rely on paper-based records?
A cohesive system requires a globally standardized list of fish
species at risk for IUU fishing and mislabeling. This is critical as
more international traceability programs come online. IUU fishing is
inherently a global problem; illegally caught or mislabeled species
entering one major market state are very likely to enter other global
markets. For example, Japan's new counter-IUU fishing regulation covers
pacific saury, squid, mackerel, and sardine. None of these species are
included in the U.S. program and we know from Mr. Urbina's reporting
that illegally and unsustainably caught squid is entering the U.S.
market. On the other hand, Japan's list of species considered at risk
for IUU fishing does not include sharks and tunas, which are covered by
the U.S. program. The scale of our solutions needs to match the scale
of the global problem; gaps in our collective efforts will only allow
IUU fishing to continue to thrive.
As regulators work towards standardizing data, they must be
cognizant of the burden these data and information requirements have on
harvesters and businesses. Simplifying the data collection process is
imperative and creating a digitized, interoperable system is essential.
Alignment of data elements across trade tracking programs opens the
door to improved interagency data sharing and collaborative
enforcement, while simultaneously reducing the burden on law-abiding
industry.
There is no need to reinvent the wheel. Risk analytics systems
already exist and are used by other federal agencies. For example, the
Food and Drug Administration screens more than 50 million imports a
year for health and safety, including seafood. The FDA uses the PREDICT
system, which electronically reviews trade data and targets risk
screening for fraudulent and adulterated products.
The multidimensional problem of IUU fishing needs an equally
multidimensional solution. Viewing risk in a more holistic way--and
creating a synchronized system to communicate that risk between and
among relevant agencies, businesses, and stakeholders--is exactly the
path forward to gain more success.
Beyond focusing only on species considered at risk, the United
States should widen the aperture of what is considered ``risk'' in the
seafood supply chain. Forced labor and human rights abuses should be a
priority for the U.S. government, as outlined in President Biden's 2022
National Security Memorandum on Combating IUU Fishing and Associated
Labor Abuses. xv NOAA should follow through on its work to
amend the definition of IUU fishing to include forced labor and human
rights abuses in the seafood supply chain (0648-BG11).
Federal agencies also need to work together and use all their
available tools to share information and reduce risks within the
seafood supply chain. Risks can be linked to vessel histories,
ownership information, and land- and sea-based processing.
Transshipment, ports, flag-state activities, the role of middlemen and
intermediaries, also present risk. Armed with a more detailed
understanding of these risks and how they interact, the U.S. government
can better focus its resources to target and root out bad actors and
prevent IUU-caught fish from entering our markets, while rewarding
those who abide by the laws.
necessary next steps
No seafood trade tracking system is perfect. As technology advances
there will be new opportunities for improvement. There are some
incremental changes that can be made now to achieve a broader, more
holistic vision to prevent IUU-caught fish from entering our markets.
Beyond providing confidence to consumers that the seafood they are
buying is legally harvested, creating an effective seafood traceability
system can positively impact environmental, economic, and human
security around the world.
Last year, NOAA Fisheries published a draft rulemaking to update
its Seafood Import Monitoring Program, but it fell short and, perhaps
more importantly, lacked input from stakeholders. NOAA Fisheries and
its interagency partners should begin a public and transparent process
to improve the Seafood Import Monitoring Program, by:
Including all seafood species under the Seafood Import
Monitoring Program.
Creating a globally standardized list of fish species at
risk for IUU fishing and mislabeling.
Widening the aperture of what is considered ``risk'' in
the seafood supply chain, including and especially with respect to
human rights abuses and forced labor.
Improving monitoring, control, and surveillance by
requiring automatic information systems and vessel monitoring systems
to be used on vessels throughout the seafood supply chain and by
sharing the data publicly.
All relevant agencies should implement the relevant
provisions of the FY2023 National Defense Authorization Act, including
harmonizing data standards. xvi
Improving information sharing among the relevant
government agencies. xvii
Moving to a fully digitized seafood traceability
system.
Using risk-based analytics to better target bad actors.
Requiring electronic catch documentation that is verified
by governments to accompany all seafood that enters the U.S. market.
Requiring detailed beneficial ownership information to
accompany harvest documents.
No single agency or organization alone can solve this challenge.
IUU fishing is a global problem that requires global solutions. The
United States government has the opportunity--and responsibility--to
chart a path forward to move the global seafood supply chain out of the
shadows. A transparent system will benefit all.
(References appear on the next page.]
REFERENCES
i Royal United Services Institute for Defence and
Security, ``Below the Surface: How Illegal, Unreported, and Unregulated
Fishing Threatens our Security,'' Cathy Haenlein, (2017). https://
static.rusi.org/201707_rusi_below_the_surface_haenlein.pdf.
ii The Stimson Center, ``Charting a Blue Future for
Cooperation between West Africa and China on Sustainable Fisheries,''
Sam Geall et al., (2023). https://www.stimson.org/2023/
charting-a-blue-future-for-cooperation-between-west-africa-and-china-
on-sustainable-fisheries/.
iii Gina Fiore & Peter Horn, ``6 Facts You May Not Know
About Illegal, Unreported, and Unregulated Fishing,'' Pew, June 7,
2023. https://www.pewtrusts.org/en/research-and-analysis/
articles/2023/06/07/6-facts-you-may-not-know-about-illegal-unreported-
and-unregulated-fishing.
iv The Role of the Seafood Supply Chain in Sustainable
Fisheries,'' Pew, May 3, 2022, https://www.pewtrusts.org/en/research-
and-analysis/articles/2021/04/13/the-role-of-the-seafood-supply-chain-
in-sustainable-fisheries.
v The Stimson Center, ``Shining a Light: The Need for
Transparency across Distant Water Fishing,'' Sally Yozell & Amanda
Shaver, (2019). https://www.stimson.org/2019/shining-light-need-
transparency-across-distant-water-fishing/.
vi United States Department of Agriculture, ``Seafood
Market Update,'' Shinsuke Kitada
(Tokyo, 2023 https://apps.fas.usda.gov/newgainapi/api/Report/
DownloadReportByFileName?file
Name=Seafood%20Market%20Update_Osaka%20ATO_Japan_JA2023-0020.pdf.
vii Yozell & Shaver, ``Shining a Light.''
viii Morning Consult, ``World Oceans Day Summary
Findings,'' Deborah Beck, (2022). https://
www.waltonfamilyfoundation.org/about-us/newsroom/walton-family-
foundation-urges-action-on-seafood-traceability-ahead-of-world-oceans-
day.
ix Oceana, ``U.S. Seafood Demand Drives Illegal Fishing
Around the World, Says Oceana Report.'' February 1, 2022, https://
usa.oceana.org/press-releases/u-s-seafood-demand-drives-illegal-
fishing-around-the-world-says-oceana-report/.
x Jessica A. Gephart, Hally E. Froelich & Trevor A.
Branch, ``To create sustainable seafood industries, the United States
needs a better accounting of imports and exports,'' PNAS, (2019): 9142-
9146, https://www.pnas.org/doi/10.1073/pnas.1905650116.
xi Frank Asche, et al., ``China's seafood imports--Not
for domestic consumption?,'' Science January 375 (2022): 386-388.
https//:www.science.org/doi10.1126/science.ab14756.
xii Oceana,``U.S. Seafood Demand Drives Illegal Fishing
Around the World, Says Oceana Report.'' February 1, 2022. https://
usa.oceana.org/press-releases/u-s-seafood-demand-drives-illegal-
fishing-around-the-world-says-oceana-report/.
xiii Yuka Hayashi, ``Russian Fish Find Way Onto American
Tables Despite Import Ban,'' Wall Street Journal, April 7, 2022,
https://www.wsj.com/articles/russian-fish-find-way-onto-american-
tables-despite-import- ban-11649329202.
xiv United States International Trade Commission,
``Seafood Obtained via Illegal, Unreported, and Unregulated Fishing:
U.S. Imports and Economic Impact on U.S. Commercial Fisheries,'' Renee
Berry et al., (Washington, 2021). https://www.usitc.gov/publications/
332/pub5168.pdf.
xv ``Memorandum on Combating Illegal, Unreported, and
Unregulated Fishing and Associated Labor Abuses,'' (Washington, 2022).
https://www.whitehouse.gov/briefing-room/presidential-
actions/2022/06/27/memorandum-on-combating-illegal-unreported-and-
unregulated-fishing-and-
associated-labor-abuses/.
xvi United States of America, National Defense
Authorization Act for Fiscal Year 2024, Washington, June 30, 2023,
https://www.govinfo.gov/content/pkg/CRPT-118hrpt125/pdf/CRPT-
118hrpt125.pdf.
xvii United States of America, Maritime Security and
Fisheries Enforcement Act, Washington, October 23, 2019 https://
uscode.house.gov/view.xhtml?path=/prelim@title16/chapter99&edition=
prelim.
______
Statement of Representative Smith
The compass is an instrument of great assistance to navigators and
seafarers. Its origins lie in ancient China, specifically the Han
Dynasty, which dates to the third century BC. It is one of the many
enduring contributions China has made not only to maritime exploration,
navigation, and safety, but also world civilization.
Yet today, we find ourselves confronting a very different reality
in China, where its moral compass appears to be adrift, both at sea and
on land.
Recent revelations from a comprehensive four-year investigation
conducted by The Outlaw Ocean Project shed light on deeply troubling
practices within the Chinese distant water fishing fleet and seafood
processing industry.
These practices involve egregious violations of human rights,
including forced labor and other exploitative activities. A four-year
investigation led brilliantly by Ian Urbina, who will testify today,
found for example that ``almost half of the Chinese squid fleet, 357 of
the 751 ships we studied, were tied to human rights or environmental
violations'' and over 100 Chinese squid ships engaged in illegal
fishing, including trespassing into the waters of other nations.
On land, the investigation reveals a disconcerting pattern of PRC-
based companies exploiting the forced labor of Uyghurs and North
Koreans to process substantial quantities of seafood destined for the
U.S. market.
From fish sticks to calamari, these products infiltrate the supply
chains of major restaurants, wholesalers, and even find their way into
the meals served at American schools and military bases. Such actions
directly contravene the Uyghur Forced Labor Prevention Act (UFLPA) and
the Countering American Adversaries Through Sanctions Act (CAATA), both
of which strictly prohibit the importation of goods produced by forced
labor into the U.S. market.
It is evident that the People's Republic of China is not the sole
party involved in these reprehensible practices. Governments--including
our own--have been complicit in the procurement of tainted seafood.
Our panel of experts testifying today will emphasize the extent to
which government procurement processes and policies have enabled these
injustices.
This is also why Senator Merkley and I have drafted a letter to the
Department of Homeland Security, calling for a comprehensive
investigation into not only the PRC's disturbing activities at sea and
on land but also the weaknesses in our system and the complicity of the
private sector in the seafood industry.
Beyond these egregious abuses of human rights, there are also
national security implications as well.
Chinese fishing vessels serve as part of China's maritime militia.
Earlier this year, such vessels, under the guise of fishing boats,
severed cables to Matsu Island, an island off the coast of China still
under the control of Taiwan.
Additionally, hundreds of Chinese fishing ships reportedly operate
in waters belonging to the Philippines, Vietnam, Malaysia, and
Indonesia, serving as a civilian militia to escort Chinese oil and gas
survey vessels and drilling rigs.
More to this point, just last Sunday, a Chinese coast guard ship
collided with a Philippine vessel en route to deliver supplies to an
outpost that the Philippines maintains at Second Thomas Shoal, located
approximately 100 nautical miles off its coast.
China claims this territory, far beyond its legitimate boundaries,
despite the fact that the Permanent Court of Arbitration in The Hague
made a binding decision in 2016 under the U.N. Convention on the Law of
the Sea that this area lies within the Philippines' territorial waters.
This underscores an important fact: China, under Xi Jinping and the
Chinese Communist Party, is willing to upend the rules of the global
international order and act in a lawless, predatory manner, both at sea
and on land. It shows no respect for human rights writ large, let alone
labor rights.
But fortunately--thanks in large part to the reporting of Ian
Urbina and his team, published in The New Yorker and elsewhere--the
consciences of American businesses and government leaders are
awakening, and we are beginning to see them walking away from abuse-
tainted sourcing. This includes the supermarket chain Albertsons, as
well as McDonald's Filet-O-Fish. Both have severed ties with a supplier
implicated in Ian's reporting on forced labor practices.
We are seeing similar action taken beyond the seafood industry.
Over the summer the Commission sent a letter to a Wisconsin-based
company, Milwaukee Tool, regarding allegations that the company had
purchased gloves from a supplier that was utilizing forced prison labor
to make those gloves.
Milwaukee Tool took action to investigate its supply chain, and I
met with them last week. They discovered multiple examples of
counterfeit gloves originating in the PRC bearing their brand name.
Part of that lawless behavior I spoke of includes ubiquitous
unauthorized, counterfeit goods. The upshot is that Milwaukee Tool has
cut ties with the glove manufacturer in question and they are moving
that operation outside of China altogether.
I am deeply encouraged that the company has taken these positive
steps, as it is yet another example of an American company responding
constructively to reports of human rights abuses in the PRC.
______
Statement of Senator Merkley
Thank you, Mr. Chairman, for convening this hearing, which builds
on several hearings that this Commission has held on topics such as the
implementation of the Uyghur Forced Labor Prevention Act, the plight of
North Korean refugees in China, the aggressive long-arm of the Chinese
government, and the importance of holding American corporations to
account when they are accomplices in human rights abuses.
Today we will hear about fresh investigative reporting from The
Outlaw Ocean Project that gives us even more information about the
prevalence of forced labor in China. This time we are examining the
seafood supply chain, including its vulnerability to forced labor both
on land and at sea.
At least ten major seafood companies in China were found to have
received more than a thousand Uyghurs and other predominantly Muslim
ethnic minorities from the Xinjiang Uyghur Autonomous Region. These
individuals were forcibly transferred to work in seafood processing
factories in Shandong province, thousands of miles away from Xinjiang.
My colleagues at the Commission and I are horrified to learn that
this seafood processed by Uyghur forced laborers is reportedly entering
the United States--something we worked hard to stop with the Uyghur
Forced Labor Prevention Act.
We will continue working with our friends at the Department of
Homeland Security and Customs and Border Protection to fully enforce
this legislation.
The investigations also revealed evidence of thousands of North
Korean laborers working in seafood processing centers in China along
the border of North Korea. The Outlaw Ocean Project found that over one
thousand tons of seafood have been exported to American importers by
Chinese seafood-processing companies linked to North Korean labor.
Pursuant to the Countering America's Adversaries Through Sanctions Act,
we must swiftly stop these imports.
China's seafood industry is not only responsible for human
trafficking, bad labor practices, and egregious human rights abuses,
but it is also tied to China's illegal, unreported, and unregulated
fishing, which has global repercussions for the environment, for food
security, and for our national security. The PRC's maritime aggression
is alarming, as their fishing fleets have been found to overfish,
target protected species, and encroach on waters of other countries,
violating international law. American businesses need to pay attention
to this behavior and recognize that it impacts them, too.
As we'll hear today, seafood processed in the PRC by Uyghur and
North Korean forced laborers enters the United States illegally--
including through U.S. Federal procurement, impacting hundreds of
American military bases and public school cafeterias.
Major American grocery store chains, restaurants, and food-service
companies are also implicated, unwittingly exposing thousands of
American consumers to seafood linked to forced labor and egregious
human rights abuses.
For the United States to be able to protect American consumers from
exposure to products tainted by forced labor and to best defend
persecuted groups abroad, we need to better understand the nature and
scale of this challenge. I look forward to hearing from our witnesses
as to how we can use existing tools and legislation to address this
challenge and what more we can do.
Thank you, Mr. Chairman.
______
Statement of Representative McGovern
Good morning. I join my colleagues in welcoming those present to
today's hearing on the use of forced labor in the seafood supply chain.
I regret that I am not able to join you in person.
This hearing continues the work of the Congressional-Executive
Commission on China to shine a light on the use of forced labor by the
People's Republic of China, and its consequences for supply chains and
the American consumer.
Forced labor is a grave human rights violation that has been
prohibited under U.S. law since 1930. American consumers should not
have to worry about whether the products they purchase are tainted by
forced labor from China, or for that matter, from any other country.
American workers and American producers should not have to compete
with companies that rely on forced or slave labor. There is wide
bipartisan agreement on this issue.
The U.S. Government has made important progress in enforcing the
ban on forced labor since passage of the bipartisan Uyghur Forced Labor
Prevention Act that I was privileged to lead and which became law in
December 2021. Rather than rely on moral suasion, the law creates a
rebuttable presumption that all goods produced in the Xinjiang region
of China are made with forced labor. That means the burden of proof
lies with those who want to import goods to show that their supply
chains are free of forced labor. In the past we have heard from the
Department of Homeland Security that the law has brought ``a sea
change'' to the way the government approaches forced labor issues. That
is a very good thing. One of the questions in today's hearing is
whether/how the UFLPA can be applied in the fisheries sector.
As we take up this question, it is important to take into account
the work that the U.S. Government is already doing to address forced
labor in the seafood supply chain. The problem is complex and global: a
congressionally mandated report \1\ issued in 2020 by the National
Oceanic and Atmospheric Administration identified 29 countries
particularly at risk for human trafficking, including forced labor, in
their seafood sector. The report provides recommendations that overlap
with proposals we will hear today, in particular the need to promote
and support global traceability efforts.
---------------------------------------------------------------------------
\1\ National Defense Authorization Act for Fiscal Year 2020, Public
Law 116-92, section 3563.
---------------------------------------------------------------------------
The fact that the problem is global does not in any way diminish
the relevance of a focus on China. As The New York Times vividly
reported last fall, China's ``rapacious'' deep-water commercial fishing
fleet is the largest in the world and operates non-stop in
international waters. Not only does the PRC tolerate labor abuse, but
its fleet's fishing practices, driven by rapidly increasing demand for
seafood, harm local economies and the environment, and risk the
sustainability of many species, such as tuna. So there is no question
that we should do all we can to counter the PRC's bad practices--even
as we acknowledge a broader set of actors and recognize that a
comprehensive response will require strong international governance and
cooperation, import standards and proactive supply chain verification,
along with innovative ways to meet rising global demand for protein.
Part of that comprehensive response should be to support U.S.
fishing, which of course does not rely on forced labor. The U.S.
fishing industry, while not perfect, is much more sustainable than
fishing elsewhere. The Magnuson-Stevens Act has been largely successful
at helping revive U.S. fishing stocks after total collapse earlier in
our history. One of the big takeaways from the U.S. experience is that
fisheries management cannot be a race to the bottom. Planning,
community stewardship, a regulatory floor, and verification are
essential.
Finally, let me reiterate a point I have made previously: enforcing
forced labor laws generally, and the UFLPA in particular, requires
resources. This Commission must be clear that talk about human rights
in China has to be backed up with funding. Cuts to the budgets of
agencies that implement human rights policy will gut that policy. It is
important to keep this in mind as the struggle to approve FY 2024
appropriations bills continues.
Thank you.
______
Statement of Senator Sullivan
Overview
Chair Smith, Co-chair Merkley, fellow Commissioners, I appreciate
the opportunity to provide written testimony for this hearing, as I was
unable to attend in person. I commend the Commission for a timely and
laser focus on the impacts of Chinese forced labor on the global
seafood market, which has a significant negative impact on an industry
that is an economic pillar of my state of Alaska.
Forced labor in the Chinese seafood supply chain--both on land and
on sea--has been an open secret for years, but never has it been as
well documented as in CECC witness Ian Urbina's Outlaw Ocean Project
reporting. His thorough reporting on human rights abuses throughout the
seafood supply chain, coupled with other witnesses' testimony and
credible documentation from many others through the years, is a call
for action.
These human rights abuses need to be combated because they are just
wrong. But these unacceptable practices also have two related impacts:
the damage done to global seafood sustainability, and the devastating
economic impact forced labor has on seafood producers that are playing
by the rules--like those in my state. Fortunately, the U.S. and its
partners can tackle all three of these challenges through a series of
national and global actions.
As we all know, Alaska leads the country in the magnitude and
sustainability of its seafood sector. According to the Alaska Seafood
Marketing Institute in its 2022 report, the Alaska seafood industry
nationally creates over 100,000 full-time-equivalent jobs, $6 billion
in annual labor income, and $15 billion in economic output. Alaska and
the U.S. seafood industry in general have produced large, diversified
harvests as a result of a decades-long commitment to sustainable
management.
But the Alaska seafood industry and others around the world that
maintain high sustainability and labor standards cannot compete--and
shouldn't have to--with China's system of forced labor and vacuum-the-
ocean efforts that hide behind obscured supply chains. These supply
chains can crush our U.S. producers because their ``competition'' is
seafood caught through illegal, unreported and unregulated (IUU)
fishing, including with forced labor, as well as seafood caught in
Russian waters.
What Next?
I commend our government's efforts in combating IUU fishing and
forced labor, particularly the efforts of the agencies that are members
of the U.S. Inter-Agency Working Group on IUU Fishing. But we need to
do even better. Our efforts must be both national and global, as China
has strategically positioned itself as an integral component in the
global seafood supply chain, including many U.S.-produced products.
Here are some thoughts on how to further improve our response:
1. U.S. Laws. The U.S. has a number of laws to combat IUU fishing,
forced labor or both, including the Maritime Security and Fisheries
Enforcement Act, the Moratorium Protection Act, and the Uyghur Forced
Labor Protection Act. But are they effective? Do they need further
enforcement? Are there gaps or flaws that need amending? Further
resources to improve enforcement? Lawmakers need to know these answers,
and to provide targeted support if needed.
2. Stronger Seafood Import Controls. Part of U.S. import controls
include the Seafood Import Monitoring Program (SIMP), which, despite
its comprehensive-sounding name, is focused on requirements for
importers; importers are a very small part of the global seafood supply
chain. This is a baked-in design flaw in a program that is meant to be
used for screening and deterrence only, so it does not find imports of
IUU seafood. So instead of expanding this resource-intensive program, I
support strengthening other efforts to ensure integrity in the supply
chain, including enforcing existing U.S. laws and supporting adoption
of global standards by seafood importing nations.
3. Working with Global Partners. The seafood supply chain is truly
global. If seafood produced by forced labor cannot be imported into one
country, it will likely be moved to another. Tackling the issue means
looking at adopting global standards and assisting other countries with
their seafood management. Some of these efforts are captured in my
Fighting Foreign Illegal Seafood Harvests Act of 2023, which focuses on
fighting IUU fishing at its source.
4. Banning Imports of Russian Seafood. Despite Russia's ban on the
import of U.S. seafood, and despite the brutal, illegal invasion of
Ukraine by the Russian Federation, and despite the President's March
2022 Executive Order 14068 that resulted in the prohibition of Russian
seafood imports, seafood products of Russian Federation origin continue
to enter United States commerce through ``substantial transformation''
that is often occurring in China. I urge the Biden Administration to
close this loophole that is lending itself to unethical practices in
both China and Russia, and for Congress to pass my United States-
Russian Federation Seafood Reciprocity Act of 2023, which would codify
this ban.
5. Corporate Efforts, Consumer Knowledge. I don't think any of us
would knowingly choose to eat seafood that came from forced labor. I
support transparency throughout the supply chain, including
corporations raising their standards and labeling that informs
consumers on the origin of their seafood.
Conclusion
We--Congress, executive branch agencies, industry, nongovernmental
groups--share the goal to strengthen the seafood supply chain both
ethically and economically. Some of our efforts have been successful,
while others have fallen short. This is a moment where we must seize
the opportunity to expand our efforts in a thoughtful and comprehensive
way. If done correctly we can both bolster our domestic seafood
industry AND strengthen the global seafood supply chain that provides
healthy, nutritious protein to consumers around the world, strengthens
our economy, and provides jobs to hardworking men and women. Inaction,
and the consequences associated with this, are simply not an option.
______
Statement of Representative Zinke
I would have given the following opening statement if not for my duties
at the House Republican Conference electing a Speaker-designee.
Thank you, Chairman Smith, for holding this very important hearing
on China's use of forced labor in the seafood industry both on fishing
vessels and processing facilities, and the infiltration of related
seafood into the United States supply chain.
It must first be noted that between the legally ambiguous use of
the Antiquities Act to deem large swaths of the U.S.'s Exclusive
Economic Zone (EEZ) restricted to commercial harvests, top-down
regulatory bureaucracy from NOAA Fisheries, inadequate stock
assessments, and the invasion of fishing grounds by wind turbines,
America's fishermen are at the brink.
The number of U.S.-flagged fishing vessels has steadily decreased
over decades and will continue to dwindle as there is hardly any
current incentive for young fishermen to invest their time, money, and
effort in a profession needled by an overbearing regulatory regime and
under constant threat from highly bankrolled e-NGOs.
To supplement the limited amount of domestic catch (by both labor
restrictions and catch restrictions), satiate America's demand for
seafood, and be in the black, U.S. seafood companies are forced to
import from China.
I appreciate the work of Ian Urbina and his team at The Outlaw
Ocean Project in uncovering the extensive use of forced labor,
including Uyghur forced labor, on Chinese fishing vessels and in
seafood processing. However, American seafood companies do not have the
luxury of a crack investigative team with unlimited time and resources
to survey the Chinese exporters they source from.
In fact, many of the U.S. companies mentioned in Urbina's reporting
who later ceased accepting imports from their Chinese counterparts
invested in what industry considered ``top-of-the-line'' third-party
auditors to investigate labor abuses in China.
I hope that this hearing delves into what the United States
Government can do better to identify Chinese companies using forced
labor and ease the burden on U.S. companies just trying to supplement
the U.S. food supply chain.
While decoupling from any users of forced labor is the ultimate
goal, what must be investigated is the extent that Chinese forced labor
infests the American food supply chain and how we can supplant it
without creating inconvenience and higher prices for ordinary
Americans.
Additionally, while not necessarily within the scope of this
hearing, I hope that we can discuss what action can be taken to
revitalize the American seafood industry, particularly through
deregulation and possible amending of the Magnuson-
Stevens Act.
Submissions for the Record
----------
The National Security Imperative
to Tackle Illegal, Unreported, and Unregulated Fishing
[From Brookings Commentary, Order From Chaos: Foreign Policy in a
Troubled World, January 25, 2021]
By Michael Sinclair
[Editor's Note: This piece is part of a series titled ``Non-state Armed
Actors and Illicit Economies: What the Biden Administration Needs To
Know,'' from Brookings's Initiative on Non-State Actors.]
Over the last few years illegal, unreported, and unregulated (IUU)
fishing has become more recognized as a national security concern. At
first glance, fish hardly seem to be on par with other cutting edge
national security issues--cyber, space, artificial intelligence,
drones, nuclear proliferation, and perhaps most importantly the return
of strategic competition now commonly referred to as ``great'' power
rivalry (although perhaps not for long). But in the years to come, make
no mistake, fishin' may indeed become an increasingly important mission
for the United States and its security partners and allies around the
world, and most certainly those in the Indo-Pacific.
To succeed in this mission, the Biden administration should lean on
the U.S. Coast Guard to do what it does best, especially in the
Pacific, where Chinese fishing fleets do double-duty as maritime
militias that threaten and intimidate the fishers from neighboring
nations. The administration should also continue to develop counter-IUU
bilateral agreements, including those that may allow prosecuting
masters of vessels that commit ``grave breaches.'' It may also need to
make a hard choice between partnering with China's neighbors, or with
China itself, to best address this threat.
fishing as an industry
Fishing, a $401 billion global industry, provides 20% of the
protein intake for nearly half of the world's population, and global
fish consumption has been on the rise for almost 60 years. Yet 93% of
the world's fish stocks are fully exploited, overexploited, or
significantly depleted, and global climate change is adversely
affecting stocks.
It's axiomatic that sustainment requires effective management. The
problem is that fish move, so for management to be truly effective it
must be consistently applied both regionally and, really, around the
world. In other words, country A's strong fisheries management
practices can be undermined by country B's if the latter is unwilling
or unable to implement strong practices--or worse, if it actively or
tacitly condones IUU fishing.
enter: china
Chinese fishing practices present a truly unique and dire IUU
threat. First, China boasts the world's largest fishing fleet. It uses
this fleet, to devastating effect, to meet its population's huge demand
for protein. It also provides generous subsidies, which has
incentivized the rapid proliferation of large, capable, ``distant
water'' vessels that can harvest staggering amounts of catch in a
single voyage, often by dragging the ocean bottom without regard to
fish type, age, or quantity limits. When working together in fleets,
these vessels are rapacious.
Chinese-flagged fishing vessels range the world over in search of
catch and are notorious for fishing within other nations'--especially
developing nations'--exclusive economic zones (EEZs). Most recently, a
huge Chinese fishing fleet, estimated to have 350-400 vessels, plied
the waters near the environmentally sensitive Galapagos islands--a
UNESCO World Heritage Site--and so overwhelmed the government of
Ecuador's ability to respond that Ecuador requested U.S. Coast Guard
assistance to protect its EEZ. This fleet then moved south into Chile's
EEZ, where it continued to operate as late as December 2020 in the face
of an active response from the Chileans and a strong rebuke from then-
U.S. Secretary of State Mike Pompeo. Shortly after, Pompeo also imposed
visa sanctions on certain Chinese officials associated with China's
malign maritime activities, including IUU fishing, in the South China
Sea. The presence of this fleet has most recently resulted in a new
sustained regional response: Operation Southern Cross.
While China sometimes attempts to strategically deny oversight for
activities of its distant water fishing fleet in much the same way that
Russia denied responsibility for the activities of armed actors during
violence in the Crimea, China takes the opposite tack in the South and
East China Seas. There, its fishing fleet doubles as the sanctioned
People's Armed Forces Maritime Militia. This militia has a history of
working in a coordinated fashion to harass and bully China's neighbors'
own fishing vessels in disputed maritime territory and, in some cases,
those neighbors' EEZs. It's increasingly clear that these maritime
militias are part of a concerted Chinese ``gray zone'' effort to exert
strategic influence throughout the region.
the operational and legal challenges of fisheries enforcement
IUU fishing is an exceedingly difficult challenge. First, the
operational dynamics are significant. Patrol vessels and aircraft (and
their crews) are expensive. Few countries can afford them or dedicate
such resources to fishing regulation in meaningful numbers. And the
tyranny of distance plagues EEZ protection, like it does other maritime
issues. This makes developing and maintaining the domain awareness
across thousands of miles of ocean necessary for effective fisheries
management a Herculean (or perhaps more accurately Sisyphean) task.
Further, bad actors actively frustrate state attempts to build that
awareness, through tactics like disabling required tracking devices;
deploying difficult-to-detect, untended gear like high seas drift nets
that indiscriminately kill marine life; and using onload/offload
``motherships'' to mask the type and size of fish they catch.
The international legal landscape also makes it difficult for
states, beyond a vessel's flag state, to engage in IUU fishing
enforcement. Thus, often only China can address Chinese IUU fishing.
China is largely not interested in doing so, although that might be
improving slowly as China develops aquaculture capabilities and
recognizes that sustainment and better transparency may be in its best
long-term interests.
Moreover, several other international legal norms complicate
countering IUU fishing. First, Article 73 of the United Nations
Convention on the Law of the Sea (UNCLOS) prohibits criminal
prosecution of fishing offenses in the absence of an express agreement
between two states authorizing such prosecution. While the United
States has signed but not yet ratified UNCLOS, it considers the vast
majority of the treaty to accurately reflect the current state of
customary international law as it relates to the law of the sea. Next,
there are several broad-reaching, multi-lateral international
agreements like the United Nations Fish Stocks Convention and many
specific regional fisheries conventions that provide for enforcement
remedies like catch and vessel seizures, but consistent with UNCLOS, do
not typically allow for criminal prosecution.
Domestically, the Magnusson-Stevens Fisheries Conservation Act and
the Lacey Act provide the substantive law for fishing violations in the
United States EEZ, but aren't particularly helpful elsewhere. On a
positive note, Congress recently passed the Maritime Security and
Fisheries Enforcement (SAFE) Act directing the U.S. government to start
the process of focusing the efforts of relevant federal departments and
agencies on the challenge posed by IUU fishing.
options
The Biden administration can adopt several measures to better
address the national security challenge posed by IUU fishing, both in
general and regarding China.
First, the United States could look to increase its use of non-
governmental organizations (NGOs) as force multipliers, especially in
the realm of improving the quantity and quality of maritime domain
awareness information. The European Union's partnerships with NGOs to
extend its fisheries management capabilities are a good model. But
Washington should exercise great discretion on who to partner with and
what activities the government sanctions--there are some cowboys out
there.
Second, the administration should ensure the maximum availability
of Coast Guard forces in the Pacific theater: both cutters and law
enforcement detachment boarding teams that are embarked aboard Navy
ships and perhaps even integrated within deployed U.S. Marine Corps
forces. An increased Coast Guard presence will help model what
responsible maritime behavior should look like, and provides the
operational commander in theater with flexible options to prevail
across the full spectrum of strategic competition. In other words,
there should be lots of Coast Guard resources in the Pacific, and U.S.
Navy ships there should be fully capable of delivering both lethality
and coast guardsmen, depending on the mission need.
Third, the United States should consider developing the legal
framework, and associated policies and procedures, to embark Coast
Guard boarding teams aboard the National Oceanographic and Atmospheric
Administration (NOAA)'s growing fleet of vessels. NOAA, already in the
IUU fight, oversees the National Marine Fisheries Service (NMFS)
charged with domestic fisheries enforcement. Both NOAA and NMFS have a
long history of teaming up with the Coast Guard. This will require
jointly developed protocols to safely and effectively deploy Coast
Guard law enforcement detachment boarding teams on NOAA's more capable,
longer-range vessels as a sort of ``Coast Guard cutter-lite.'' This
should be undertaken in a manner similar to how the Navy employs
embarked Coast Guard personnel during counter-drug operations.
Fourth, the State Department and the U.S. Coast Guard should expand
the use of bilateral IUU fishing agreements. These agreements are
particularly crucial in the Pacific, where competing claims of
international sovereignty necessitate increasing the capacity and
capabilities of partner nations to better deal with Chinese maritime
aggression, including the malign activities of its fishing fleet/
maritime militia.
More globally, the United States should pursue bilateral agreements
that make criminal prosecution possible for especially heinous cases.
This could be akin to the grave breaches ``try or transfer'' provisions
that established the quasi-universal jurisdiction and helped make the
Geneva Conventions so revolutionary in the humanitarian law context.
Indeed piracy--another crime of universal jurisdiction--shares much
(but not all) in common with IUU fishing, especially as IUU fishing so
often intersects with other forms of criminality. This is of course
easier said than done, especially with nations like Mexico, whose
fishers are notorious IUU fishing recidivists. (Moreover, the United
States is unlikely to reciprocally subject its own citizens to Mexican
criminal jurisdiction.) Yet, despite a long history of U.S. flagged
fishing vessels sometimes violating domestic fisheries laws within the
U.S. EEZ, the overall risk of foreign criminal prosecution for U.S.-
based fishers is relatively low. This is because U.S. fisheries
management within its EEZ has been relatively successful, even if not
perfect. Thus, unlike near Chinese shores, lots of fish remain in the
U.S. EEZ, so U.S.-flagged fishing vessels don't need to travel all over
the world chasing catch.
But, adding prosecutorial teeth and applying those teeth--
especially with regard to the vessel's master--may begin deterring some
of the more egregious IUU violations. The United States would therefore
also need to develop its own applicable extraterritorial criminal
statute, perhaps modeled on the extraterritorial reach of the Maritime
Drug Law Enforcement Act. Such a statute would enable it to engage in
appropriate criminal prosecutions of IUU fishing cases with a
sufficient nexus to the United States. As such, criminal prosecution
for ``grave breaches'' of IUU fishing measures could then become
increasingly central to U.S. negotiations of international fisheries
management agreements.
Finally, fisheries enforcement is not a good issue area for
reducing U.S.-China tensions. In fact, on this issue, seeking
cooperation for the sake of cooperation may pose unacceptable risk.
Specifically, it risks undermining the important and necessary
collaboration with other countries in the Pacific and around the world
to guard their fisheries, including against China's fishing fleet. A
focus on cooperating with China on fisheries enforcement also risks
charges of hypocrisy and complicity against the United States from
specially affected states, including isolated island nations in the
Pacific and West African nations, both of which are extremely
vulnerable and whose fisheries, food security, and livelihoods are
devastated by Chinese fishing. Why should these countries seek
partnership with the United States to check Chinese EEZ encroachments
if the United States is itself partnered with China?
Further, calling for more aggressive Chinese enforcement of the
activities of its fishing fleets also runs the risk of incentivizing
China to engage in more far-flung military operations. China's naval
force grows more impressive by the year. Thus, China could disguise its
military maritime expansionism under the sought-after self-policing of
its fishing fleet (while in reality not breaking with its current tacit
consent to fishing crimes). Better first to build capacities,
capabilities, and partnerships with affected, like-minded countries.
Michael Sinclair, Federal Executive Fellow, The Brookings Institution;
Captain, U.S. Coast Guard, 2023 The Brookings Institution.
The views expressed are the author's alone and do not reflect the
official policy or position of the United States Coast Guard, U.S.
Department of Defense, U.S. Department of Homeland Security, or the
U.S. Government.
______
Statement of Judy Gearhart,
Accountability Research Center, American University
Recent reporting by The Outlaw Ocean Project has highlighted the
need for U.S. leadership in improving ocean stewardship and advancing
transparency in seafood supply chains. The CECC has an important role
to play in both ensuring the implementation of the Uyghur Forced Labor
Prevention Act (UFLPA) covers the seafood industry and enlisting U.S.
seafood industry leaders--both major retailers and importers--in
efforts to prevent human rights abuses in the seafood industry. The
Outlaw Ocean Project findings highlight the geopolitical importance of
the U.S. building stronger alliances around these goals.
U.S. trade policy is a powerful tool, as demonstrated by the
application of the UFLPA to apparel and other industries. To advance
sustainable change, however, these efforts must be paired with an
increase in seafood industry workers' access to remedy and regulatory
incentives for greater producer and retailer cooperation. The solutions
will require:
A. Strengthening interagency cooperation and the Seafood Import
Monitoring Program;
B. Increasing reporting requirements on corporations;
C. Enabling fishers' access to remedy; and
D. Deepening alliances with other countries combating IUU and
forced labor at sea.
A. Strengthening Interagency Cooperation and the Seafood Import
Monitoring Program
In June 2022, the White House issued a National Security Memorandum
(NSM) on Combating Illegal, Unreported, and Unregulated Fishing and
Associated Labor Abuses--calling for greater U.S. leadership and
increased interagency collaboration to address these issues.
Strengthening interagency efforts and policy coherence will benefit
U.S. fishing companies and others operating legally.
The Outlaw Ocean articles highlight reasons to believe a
significant portion of U.S. seafood imports are processed by Uyghur
forced labor in China. Notably, a significant portion of that seafood
may even have been caught legally by U.S. fishing vessels and exported
to China to be processed and then re-exported back to the U.S. or on to
other countries. Such is the case for a third of Alaska's seafood, for
example. Not only is the processing of seafood in China subsidized by
forced labor, but the narrow scope of U.S. regulations currently
enables the commingling of IUU fish with other, similar species and
then exported under the name of the unmonitored species. Fuel subsidies
to distant water fleets, which the WTO is attempting to address,
further enable these practices. Absent stronger trade regulations and
reporting requirements on seafood producers and retailers, U.S.
consumers are helping to finance the operation of the Chinese fleet.
The CECC should encourage current efforts to expand the scope and
strengthen the implementation of the U.S. Seafood Import Monitoring
Program (SIMP) and NOAA's efforts to work more closely and
transparently with other U.S. Government agencies. In response to the
June 2022 NSM and NOAA's proposed new rule for reforms to SIMP, a
number of civil society organizations have called for additions to
SIMP. These recommendations include: 1) reporting on all species of
seafood imports (via land, air, and sea), 2) the use of unique vessel
identifiers to enable traceability, and 3) increased transparency in
SIMP auditing procedures.
1. Covering all seafood imports whether entering by sea, land, or
air would help address issues relating to fraudulent labeling and
challenges in identifying processed seafood correctly. NOAA's most
recent proposal to expand SIMP would still only cover 21 percent of
seafood imports coming from China.
2. Require that importers report producer vessels' unique vessel
identifiers or authorization and related key data elements to enable
greater traceability and facilitate additional reporting requirements
on fishing practices, fisher protections, and producer vessels'
ownership and control.
Traceability data on vessel suppliers that includes key
data elements (KDEs) on the date and location of landing, offloading or
transshipment, and on the commingling or transformation of the product,
will require businesses to adopt more responsible practices.
These and other IUU related KDEs should be paired with
increased reporting on labor issues such as (but not limited to) crew
manifests, duration of work at sea, the labor rights record and
policies of supplier vessels and the manning agencies they use.
Both labor policies and catch documentation must be
paired with requirements that buyers report on the vessels or vessel
group supplying them and the ownership and financing behind those
vessels.
This increased reporting would greatly expand the ability to
identify forced labor risks at sea and thus enable Customs and Border
Protection to better uphold its mandate under the UFPLA and more
broadly, the U.S. Tariff Act, to hold goods at port suspected of being
made in whole or in part with forced labor.
3. Improve upon and increase transparency in SIMP audit procedures
to facilitate the interagency collaboration and stakeholder engagement
mandated by the NSM. This will enable NOAA and other U.S. agencies to
engage with greater credibility when seeking collaboration from key
market actors and allies such as the EU and Japan in monitoring seafood
supply chains.
B. Increase reporting requirements on corporations
To strengthen the implementation of SIMP, additional regulations
and incentivizers should require increased reporting for both retailers
and importers to track KDEs relating to both the provenance of their
seafood and the treatment of fishers as outlined above. Transparent
data sharing between corporations and SIMP could prove essential for
preventing both IUU and forced labor. It may also benefit the U.S.
seafood processing industry.
C. Focus on access to remedy
Multiple studies have documented the correlation between IUU and
forced labor in the seafood industry. The revelation of Uyghur forced
labor in seafood processing in China is an added area of risk. Much of
the seafood processed in China has already come from vessels that may
be using forced labor, some of which may or may not be Chinese vessels.
Encouraging China's ratification and implementation of the Port State
Measures Agreement (PSMA) could provide a constructive pathway to
engage China on overfishing and labor rights abuse at sea. Although
this will not directly address the problem of forced labor in China's
seafood processing sector, it should be included in the context of
future dialog.
Additional policies are needed to prevent forced labor, human
trafficking, and other pervasive human rights abuses at sea. These
include the need for fishers to be allowed access to port services and
connectivity at sea. The expansion of electronic catch documentation
should also come with greater connectivity at sea that is then also
extended to fishers. Access to port services and connectivity at sea
also requires increased engagement of national and global trade unions.
Representative fisher organizations need to be engaged in the
development of greater fisher rights protections on all distant water
fleets to be given access to port and at-sea inspection data so they
can better monitor fishers' welfare and the implementation of policies
meant to protect them.
D. Deepening alliances with other countries combating IUU and forced
labor at sea
U.S. leadership is needed to build a coalition of countries that
prioritize responsible ocean stewardship and the protection of seafood
industry workers on the water and on land. Currently, the U.S.
requirements for electronic catch documentation are applied to a much
smaller number of species than the EU requirements, yet the EU
requirements also do not require key data elements on labor-related
issues.
The U.S. needs to prioritize catch documentation and traceability
and strengthen its collaboration with other countries committed to such
improvements, including the EU and Japan. Such alliances will be
essential to advancing more responsible ocean stewardship, coordinated
policing, and market incentives for responsibly caught and processed
seafood.
______
Statement of Badri Jimale, Horn of Africa Institute
I am Badri Jimale. I represent Horn of Africa Institute. I am
testifying in favor of having meaningful discussion about the illegal
fishing practices conducted by People's Republic of China-based
companies in the Horn of Africa. I will discuss the impact of Chinese
fishers on Somaliland.
The illicit activities of People's Republic of China-based
companies engaging in illegal fishing off the coast of Somaliland are
posing significant challenges for the local fisher industry, placing
immense pressure on its sustainability. Unfortunately, Somaliland lacks
a well-equipped coast guard capable of effectively fending off these
encroachments by Chinese trawlers prowling its waters. This glaring
inadequacy creates an alarming scenario where the delicate balance
between marine resources and human livelihoods is severely jeopardized.
Moreover, what exacerbates this issue is the overall lack of
transparency and communication surrounding these activities, leading to
confusion among local authorities and communities alike.
Disturbingly, it must be highlighted that this problem extends
beyond just Somaliland's shores, as China's fishing in Nigerian seas
has resulted in countless Nigerian fishermen being rendered unemployed
due to extreme overfishing practices employed by Chinese vessels. We
are deeply concerned about the potential ramifications of such a
scenario repeating itself in Somaliland. The devastating consequences
stemming from such unsustainable methods are numerous--depletion of
fish stocks, impacting food security and nutrition; loss of income for
local fishermen leading to heightened poverty levels; and irreparable
damage to fragile marine ecosystems that support diverse species and
maintain ecological balance. These actions not only undermine
sustainable development efforts but also violate international laws
governing maritime territories.
Urgent measures need to be taken by both national and international
stakeholders to address this critical issue before irreversible harm
occurs.
______
Submission of Stephanie Madsen, At-sea Processors Association
1. overview
Chair Smith, Co-chair Merkley, Commissioners, thank you for the
opportunity to provide written testimony to supplement the record. My
name is Stephanie Madsen, and for the last 17 years I have served as
Executive Director of the At-sea Processors Association (APA).
APA represents proud American seafood companies, all participants
in the Bering Sea Alaska pollock fishery. My members are some of the
many seafood sector participants who have read The New Yorker's gut-
wrenching new reporting on human rights abuses in the Chinese seafood
sector and concluded that the status quo is completely unacceptable.
Ian Urbina's Outlaw Ocean Project spent 4 years conducting brave,
innovative and harrowing reporting on the inhumane treatment of workers
on board some of China's distant water fleet vessels and in several
seafood processing plants in Shandong Province. The reporting team
present very credible evidence that forced labor is widespread aboard
some Chinese fishing vessels. They also use analysis of social media
posts to confirm the presence of Uyghur laborers in some Shandong
Province seafood processing facilities--laborers who are victims of
China's brutal repression of Xinjiang and its ``re-education'' of the
province's minority populations.
These human rights abuses should be intolerable for all of us.
Equally intolerable is a system that allows seafood products harvested
and processed under these conditions to enter global commerce.
Unfortunately, while strict U.S. labor and environmental regulations
hold my members to stringent performance standards, Federal and
multilateral policy settings have been largely ineffectual in
discouraging and preventing the exploitation of workers in the Russian
and Chinese seafood sectors.
We can and must do better. On a national level, Federal authorities
and the seafood industry must act with urgency to put in place stronger
systems that can prevent seafood produced with forced labor or via IUU
fishing practices from entering our domestic market. On a global level,
we need reforms that will bring greater transparency and assurance to
seafood supply chains and drive down international rates of IUU fishing
and human rights abuse in seafood production.
2. wild alaska pollock
The contrast between the practices of my members and those of their
Russian and Chinese competitors could not be more stark. I represent
the Bering Sea's Alaska pollock catcher-processor fleet. Our vessels
fish sustainably, exclusively in U.S. waters, operating under U.S.
labor laws. All vessels are crewed overwhelmingly by U.S. citizens and
green card holders. Two federally trained independent observers are on
board at all times. Vessels return to port every 10 to 14 days. We have
voluntarily subjected our vessel operations to independent third-party
social audits in an effort to demonstrate and extend best practices. We
are proud to provide stable family-wage jobs--with full labor and
safety protections--to thousands of American workers.
The United States produces vast quantities of Alaska pollock for
domestic and global consumption. Our products reach consumers in the
form of fish sandwiches, fish sticks, frozen fillets, seafood surimi,
and in many other product forms. The Bering Sea Alaska pollock fishery
is conducted entirely within U.S. federal waters in conformance with
strict federal regulations. This single fishery accounts for more than
one-third of total U.S. fishery landings and provides American and
global consumers with more than three billion seafood meals every year.
The Bering Sea Alaska pollock fishery is also vital for communities
across Alaska, in addition to coastal communities in Washington and
Oregon where many Alaska pollock fishing vessels home port. We provide
a tax revenue base, sustain infrastructure, and generate economic
activity in coastal communities with few alternative means of economic
development. Among the beneficiaries are numerous western Alaska
villages that are some of the most remote and socio-economically
disadvantaged in the Nation.\1\
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\1\ For general background on the Community Development Quota (CDQ)
program, which has enabled Western Alaska communities to now control
catch rights to more than one-third of Bering Sea Alaska pollock quota,
see: https://www.fisheries.noaa.gov/alaska/sustainable-fisheries/
community-development-quota-cdq-program.
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Our vessels not only harvest Wild Alaska Pollock, they also
immediately perform primary processing on board. This process utilizes
the entire fish to produce a variety of products, with frozen fillet
and frozen surimi blocks the two most important for human consumption.
After offload to cold storage and other facilities in Unalaska, AK,
these products are transported to secondary processing facilities
located in or near the markets where they are consumed. U.S. secondary
processing facilities are located in Anacortes, Bellingham and Redmond,
WA; Brunswick and Carrollton, GA; Braintree and Gloucester, MA;
Portsmouth, NH; Cucamonga, CA; Motley, MN; and Carteret, NJ. At these
facilities, fillet and surimi blocks are cut to size and made ready for
consumers through processes such as breading, battering, and re-
manufacturing before being packaged for final sale in retail or food
service outlets. In total, the U.S. Alaska pollock sector generates
approximately 30,000 jobs in the American seafood harvesting,
processing, distribution, wholesale, retail, restaurant and food
service industries.\2\
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\2\ Mckinley Research. The Economic Value of Alaska's Seafood
Industry (January 2022) available at https://www.mcdowellgroup.net/wp-
content/uploads/2022/05/mrg_asmi-economic-
impacts-report_final.pdf.
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Wild Alaska Pollock harvested by our vessels remains fully
traceable throughout the supply chain, and anyone handling our product
at any point can see detailed information about its origin. This
includes the name of the vessel that harvested the fish, the harvest
time and date, and even the exact tow. Importantly, in the United
States only U.S.-harvested pollock can carry the name ``Alaska'' on the
label. If you purchase a fish sandwich, fish sticks, or other whitefish
product labeled as ``Alaska'' or ``Alaskan'' pollock, you can be
assured that its entire production life cycle--from bait to plate--
occurred under the most ethical conditions.
3. the russia-china seafood axis
Few global seafood supply chains are so simple and transparent.
Part of what makes The New Yorker's reporting so important is that
China is a global seafood juggernaut. Not only does it farm and harvest
huge amounts of fish every year, it is also the world's biggest seafood
processing hub. The full supply chains of seafood products that pass
through these Chinese processing facilities can be incredibly complex
and opaque. Product often moves through the hands of myriad supply
chain actors, sometimes becoming intermixed or anonymized over time.
Assurance mechanisms that can provide greater supply chain
transparency frequently fail or are non-existent. Importers and
retailers too often lack visibility of whether the seafood they are
buying is sustainably or ethically produced. This urgently needs to
change.
While human rights abuses in the Chinese seafood sector are rightly
under the microscope today, to focus exclusively on China is to miss a
critical part of the picture. It is impossible to tell the story of the
Chinese seafood industry without expanding one's gaze to neighboring
Russia. That is because so much of the raw material entering Chinese
processing facilities originates in Russian waters. It is harvested by
Russian fishing vessels where human rights abuses, including the
exploitation of North Korean and other vulnerable migrant workers, are
an open secret. These fisheries also directly fund Russia's war in
Ukraine. For example, in 2023 the Russian budget allocated $US3.97
billion in revenue from auctions distributing pollock and crab fishing
quota; \3\ and on October 1st, 2023 Russia imposed a new export duty on
seafood that is now raising significant additional sums for the
Kremlin.\4\
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\3\ See: https://www.seafoodnews.com/Story/1246973/Russia-Ready-to-
Attract-397-Billion-as-
Result-of-Crab-and-Pollock-Actions-This-Year.
\4\ http://government.ru/en/docs/49567/.
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Recognizing the importance of seafood production to the Russian
economy, on March 11, 2022 President Biden signed Executive Order 14068
prohibiting the importation of Russian seafood into the United
States.\5\ Yet sanctions have had minimal impact. Ilya Shestakov, the
head of Russia's Federal fisheries agency, recently stated: ``the
situation in the [Russian seafood] industry is stable. The sanctions,
in fact, did not touch us at all.'' \6\
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\5\ https://www.Federalregister.gov/documents/2022/03/15/2022-
05554/prohibiting-certain-
imports-exports-and-new-investment-with-respect-to-continued-russian-
federation.
\6\ See: https://www.youtube.com/watch?v=sUP2auVdNiw.
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The primary reason for this is the axis that Russia has built with
the Chinese seafood processing sector. The act of re-processing Russian
seafood in China constitutes ``substantial transformation'' under
international trade rules, conferring ``Chinese origin'' on Russian
seafood products and allowing them to evade sanctions and continue
entering the U.S. market--without any import duties or serious
regulatory scrutiny.
Russia and China combine to form a seafood superpower axis. In
2023, analysts estimate that the total Russian wild-capture harvest
will exceed five million tons--a stunning total. Pollock is a key
pillar of Russia's seafood economy, sometimes accounting for up to 40
percent of total Russian fishery landings.\7\ Indeed, Russia harvests a
majority of the world's ``Alaska pollock,'' with its 2023 Total
Allowable Catch set at more than two million tons.\8\ A huge portion of
this harvest is sent directly to China, where it moves through Chinese
seafood processing facilities. Thanks to Ian Urbina's reporting, the
world now knows the conditions under which some Chinese seafood
processing occurs--and much of the time it is Russian raw materials
that are moving through the facilities that lack any serious human
rights due diligence or supply chain integrity.
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\7\ In 2023, analysts expect that approximately two million tons of
Russia's approximately five million tons of fishery landings will be
``Alaska pollock''. See: https://www.youtube.com/watch?v=sUP2auVdNiw.
\8\ See: https://www.intrafish.com/fisheries/russia-sets-pollock-
quota-for-2023/2-1-1340793.
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The Russia-China seafood superpower axis is only getting stronger.
Just this month it was reported that Chinese economic development
officials are planning to open a significant new seafood processing
center to deliver semi-finished products made from imported Russian
seafood.\9\ The new facility will be built in Hunchun, a Chinese city
in far eastern Jilin province, which, tellingly, shares a border with
both Russia and North Korea.
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\9\ See: https://www.intrafish.com/processing/chinese-officials-
launching-seafood-processing-
center-to-produce-value-added-product-from-imported-russian-crab-
pollock/2-1-1530304.
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4. a stronger seafood import control system
Important work has been done over the last two decades to try and
improve seafood supply chain transparency, and now is the time to scale
up what has been proven to work. It will take a range of approaches--
from policymakers, seafood sector participants, and other
stakeholders--to bring needed reform to the global seafood sector. A
critical category of reforms that APA is calling for today is the
adoption of a more uniform and robust system of import controls by
seafood importing nations.
(a) EU Documentation Requirements
In 2010, the European Union implemented a new Illegal, Unregulated
and Unreported (IUU) Regulation.\10\ Although by no means perfect, the
Regulation was a quantum leap forward in the fight against IUU fishing,
and it established effective systems that should inform U.S. action
now.
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\10\ https://eur-lex.europa.eu/legal-content/EN/TXT/
?uri=CELEX:32008R1005.
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A core tenet of the EU's IUU Regulation is the requirement that a
catch certificate accompany all seafood imports. The catch certificate
must be issued by a flag state. Among other things, the certificate
requires disclosure of the type and quantity of seafood harvested, as
well as an attestation that it was caught by a licensed fishing vessel
operating legally. Additionally, the EU system creates what is referred
to as an ``Annex IV'' document requirement. This obliges any third-
country processor or exporter to confirm: (i) that seafood products
received from another country were accompanied by a valid catch
certificate; and (ii) that the final products being re-exported are
coming from that specific consignment. Critically, the Annex IV
document must be endorsed by regulatory authorities of the transiting
state.
These document requirements are in no way a silver bullet. They
are, however, vastly superior to the requirements currently facing
seafood products entering the United States:
(i) They are more comprehensive, applying to all seafood products,
not merely a subset considered to be ``high risk.''
(ii) They are more streamlined, creating a uniform set of
requirements that impose a manageable administrative burden on both
industry and regulatory authorities.
(iii) They are more credible, carrying the imprimatur of regulatory
authorities in both harvest and transshipment countries.
Adopting the EU import documentation requirements would be an
immediate and significant improvement on the status quo for the U.S.
seafood import system. Furthermore, the benefits would be significantly
magnified by the alignment it would create between the two most
important global authorities in the fight against IUU fishing. Uniform
documentation would allow for far deeper U.S.-EU cooperation on
enforcement, limiting the ability of bad actors to present fraudulent
information on catch certificates and Annex IV documentation, and
providing authorities in both jurisdictions with specific,
complementary information about how seafood moves through supply chains
globally. If other major importing nations, notably Japan, could be
encouraged to follow suit, the effectiveness and potential impact of
the document requirements would become even more significant.
APA calls for immediate action from the U.S. Congress and the Biden
Administration to follow Europe's lead and require catch certificates
and the equivalent of Annex IV documentation to accompany all seafood
imports.
(b) ``Identification and Certification'' Authorities
A second element of the European Union system should also be
targeted for adaptation. The EU's IUU Regulation enables issuance of a
``yellow card'' or ``red card'' against any flag state that is not
providing an acceptable level of cooperation in the fight against IUU
fishing. This element of the IUU Regulation arms EU authorities with
critical leverage. It allows them to insist upon state cooperation on
catch certificate and Annex IV requirements; and it empowers them in
broader anti-IUU consultations.
In the United States, the High Seas Driftnet Fishing Moratorium
Protection Act and its implementing regulations provide some parallel
authorities, allowing the President to take action against non-
cooperating countries.\11\ Pursuant to the Act's requirements, NOAA
Fisheries produces a biennial report to Congress on improving
international fisheries management. The report enables NOAA to (i)
``identify'' nations and entities for certain problematic activities;
(ii) consult with identified nations and entities; and (iii) issue
negative certifications against nations or entities that are not
cooperating on corrective action.
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\11\ https://www.federalregister.gov/documents/2011/01/12/2011-507/
high-seas-driftnet-fishing-moratorium-protection-act-identification-
and-certification-procedures-to.
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The EU ``carding'' system and the U.S. biennial IUU reporting
process have both resulted in specific, measurable, and important
improvements in fishing activities and seafood supply chains globally.
For example, the EU issued a ``yellow card'' against Thailand in April
2015. This resulted in a highly productive dialog between Thai and EU
authorities, and the subsequent enactment and enforcement of new Thai
laws and regulations. These reforms improved transparency in Thai
seafood supply chains, created a new system for registering and
monitoring vessels, and channeled more resources into enforcement
activities.\12\
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\12\ See: https://ec.europa.eu/commission/presscorner/detail/en/
IP_19_61.
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Successes have also been achieved through the NOAA Fisheries
biennial IUU reporting process. For example, after the 2019 report had
identified three countries--South Korea, Ecuador and Mexico \13\--the
2021 report revealed that two of those countries had taken significant
corrective actions as a result of bilateral consultations with U.S.
authorities. First, in November 2019 South Korea responded to U.S.
consultations by enacting legislative changes that enable quick
enforcement action against a vessel found to have fished illegally.
Second, consultations with Ecuador resulted in an end to Ecuadoran
recalcitrance in the Inter-American Tropical Tuna Commission, enabling
more effective cooperative action in that critical multilateral
forum.\14\
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\13\ NOAA Fisheries. Improving International Fisheries Management:
2019 Report to Congress (September 2019) available at: https://
media.fisheries.noaa.gov/dam-migration/improving-intl-fisheries-
mgmt_2019_report_final.pdf.
\14\ See: https://media.fisheries.noaa.gov/2021-08/2021Report-to-
Congress-on-Improving-
International-Fisheries-Management.pdf.
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Nonetheless, shortcomings are evident. Most significantly,
bilateral consultations resulting from the U.S. biennial report come
without the clear sequence of economic consequences prescribed by the
EU's IUU Regulation. We believe an optimal program design would
distinguish itself from the EU system by enabling a more targeted
approach to ``carding'' trading partners.
Different seafood supply chains have vastly different challenges
even within individual countries. It is possible for some fisheries or
regions to have effective measures in place while others are plagued by
serious IUU activity. Furthermore, a clear shortcoming of the EU system
is that major nations are, in reality, ``too big to card''. For
example, it is almost impossible to imagine the EU issuing a ``red
card'' against China and prohibiting the importation of all Chinese
seafood into the EU. Both shortcomings can be addressed by giving the
NOAA Administrator power to exclude imports of a specific species from
a specific country when such action is warranted by serious IUU
concerns. APA calls for adoption of such a system as quickly as is
practicable.
(c) Forced Labor and Human Rights
As Commissioners will be aware, Section 307 of the Tariff Act of
1930 provides U.S. Customs and Border Protection (CPB) with the power
to detain any import shipment when it has reason to believe that the
goods--or their inputs--were made with forced labor.\15\ These
authorities have become far more meaningful in recent years thanks to
Congress's enactment of the Trade Facilitation and Trade Enforcement
Act of 2015 (TFTEA) repealing the ``consumptive demand'' clause.\16\
Since the 2016 implementation of TFTEA, Withhold Release Order (WRO)
authorities have been issued by CBP against seafood shipments on
several occasions.\17\
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\15\ For general background see: https://crsreports.Congress.gov/
product/pdf/IF/IF11360#:u:text=
Section%20307%20of%20the%20Tariff(CBP)%20enforces%20the%20prohibition.
\16\ https://www.Congress.gov/bill/114th-congress/house-bill/644/
text.
\17\ See, for example: https://www.cbp.gov/newsroom/national-media-
release/cbp-issues-withhold-release-order-seafood-harvested-forced-
labor and https://www.cbp.gov/newsroom/national-media-release/cbp-
issues-withhold-release-order-chinese-fishing-fleet.
---------------------------------------------------------------------------
With respect to products tainted by Uyghur labor specifically, the
Uyghur Forced Labor Prevention Act provides strong authorities to
ensure that such products are denied entry to the U.S. market. It is
very concerning that the law does not yet appear to have been enforced
with respect to seafood. If investigative journalists have been able to
identify the use of Uyghur laborers at specific seafood processing
plants in China, U.S. Customs and Border Protection authorities should
be able to do so as well. APA calls for full implementation and
enforcement of this landmark law with respect to seafood imports
immediately.
Beyond Uyghur and other forced labor, APA welcomes dialog about
other import control system improvements that may be necessary to
ensure that all seafood imports are produced through processes that
respect the human rights of workers at every stage of production.
(d) The Seafood Import Monitoring Program
APA is sharing the above ideas in good faith and with a spirit of
cooperation. We stand ready to listen to alternative ideas, and to
engage in authentic dialog about their merits with policymakers,
members of civil society, and other seafood industry participants. This
includes with NGO's advocating for Seafood Import Monitoring Program
(SIMP) expansion.
APA has consistently held the view that SIMP has a central design
flaw: it imposes all the obligations on a single and often marginal
player in the supply chain, namely the seafood importer. For many
seafood products, the importer is moving inventory just a single,
modest step along a lengthy global supply chain. The role is
transactional, connecting customer quality and product form
specifications with the lowest cost raw material that can satisfy them.
Importers have expertise in seafood trading, import documentation
compliance, and logistics. What they often lack is either knowledge or
leverage that can be helpful in the fight against IUU.
Transactional importers are not harvesters, or processors, or
retailers. They are not price setters, and they do not define market
tolerance for risk. To make them the central character in our Nation's
seafood import control system is to fundamentally misread the cast.
SIMP stands in contrast with the programs and initiatives discussed
above that focus on fishing and processing operations--and, critically,
the governments that regulate them. The respective results to date
stand in clear contrast, too: since SIMP's implementation in 2018, we
are unaware of even a single instance in which it has operated to
secure any positive change with respect to fishing practices or
meaningful seafood supply chain integrity. The reality is that
transactional importers attempting to comply with SIMP reporting
requirements are not currently reaching up complex and opaque seafood
supply chains to extract useful information or press for needed
changes. Unfortunately, given the position of transactional importers
in most seafood supply chains, we believe it is unrealistic to expect
that this will ever change.
SIMP advocates and responsible seafood sector participants share
strong alignment on values and objectives. Today we are calling for a
renewed dialog across stakeholder groups to reach agreement on how our
shared objectives can be achieved.
5. corporate due diligence
Although not the primary focus of today's hearing, it is important
to note that more effective corporate due diligence in seafood supply
chains must be part of the solution. Seafood companies and corporate
buyers should put in place due diligence programs that are calibrated
to the nature of the risk and designed to provide true assurance
relating to supply chain integrity.
Social auditing is often a central element of such corporate due
diligence processes. As The New Yorker's reporting makes clear, social
auditing is not a panacea. It is ineffective in identifying collusion
among bad-faith operators, for example, or in uncovering falsified
government information or secret government activities. A social audit
provides insight into practices at a specific location and at a
specific moment in time. This may be insufficient in high-risk
environments, in which case additional corporate due diligence methods
will be required.
When used appropriately, however, we strongly believe that social
auditing is an important tool for the seafood sector. It can define
minimum acceptable standards, provide a measure of assurance, and drive
needed improvements globally. In particular, voluntary programs can
enable good-faith actors to receive external scrutiny and feedback,
which in turn can help strengthen effective operational procedures.
In this context it is important to understand that, in many cases,
human rights abuses in the seafood sector occur not as a result of
premeditated actions but because of serious process failures. Where a
vessel operator has not prioritized translation services, crew members
may commence work under conditions they do not fully understand. Where
a company has not anticipated and planned for a scenario where they go
out of business while crew remain at sea, workers may find themselves
stranded. Where recruiting firms rather than vessel operators hold the
contractual relationship with crew members, three-way misunderstandings
may lead to pay or other conditions being contrary to what was
promised. Voluntary social audits can be a mechanism for the
establishment of robust systems in these and other areas.
APA is proud to have undertaken independent, voluntary social
audits of its vessel operations, and we hope other seafood companies
and associations will follow our lead. At the same time, it is always
critical to be honest about the limitations of such programs. They
should never be relied upon as a singular solution, and they should
never be used as a shield against valid criticism of failures to
undertake more comprehensive due diligence in high-risk environments.
6. consumer empowerment
The New Yorker's reporting underscores the shortcomings of another
aspect of the seafood sector's current operations. Opacity in seafood
supply chains and seafood labeling too often disempowers even the most
well-intentioned consumers in the United States and globally, limiting
the ability of even highly diligent individual seafood buyers to make
informed decisions.
For example, in Europe consumers purchase pollock products carrying
the ``Alaska pollock'' species name and assume that it is ethically
sourced. Unfortunately, EU authorities allow this confusion to prevail,
refusing to grant a Geographical Indication to Alaska for pollock
harvested off its coasts. As a result, people from Spain to Slovenia
who purchase ``Alaska pollock'' products harvested in Russia and
processed in China mistakenly assume they are from Alaska. We remain
grateful to the U.S. Congress for enacting legislation to prohibit the
use of the ``Alaska pollock'' name on foreign-harvested seafood
products. This is the kind of ``truth in advertising'' that should be
expanded across more seafood labeling laws in the United States and
globally.
The role of the Marine Stewardship Council (MSC) in seafood supply
chain labor assurance was a focal point of The New Yorker's reporting.
Today, however, I want to highlight another highly concerning dimension
of the MSC's impacts on the global seafood industry: its evolution to
become a barrier to transparency in seafood labeling. The MSC's revenue
model has long relied on logo license fees. In its most recent annual
report, logo license fees from use of the MSC eco-label were reported
as totaling more than 29 million pounds. In our opinion, a thirst to
maintain and grow this organizational revenue compromises the integrity
of the MSC program in numerous ways. One is the MSC program's
concerted, decades-long effort to market a generic MSC logo designed to
provide blanket and anonymous ``assurance.''
Since last year's invasion of Ukraine, this problem has become far
more acute. The MSC has refused to stop certifying Russian seafood, and
its eco-label is now serving to ``blue-wash'' a Russian seafood
industry that many consumers of good conscience have no desire to
finance.
Russian ``Alaska pollock,'' Pacific salmon, Pacific halibut,
Pacific cod and other species reach global consumers behind the veil of
a reassuring MSC ``blue check''. In many cases, there is no easy way
for seafood buyers to see that these products are harvested in Russia
and processed in China, often under completely unacceptable labor and
environmental conditions. As a result, on supermarket shelves the world
over, identical-looking seafood products hide behind identical MSC eco-
labels, leaving even the most diligent seafood consumer disempowered.
Consumers have a right to know where their seafood comes from, and
governments, seafood companies, and assurance programs should all do
their part to bring transparency to consumer purchasing decisions. A
good place to start is to require the display of harvest origin on all
seafood products. APA supports federal action to mandate such
disclosures.
7. conclusion
We want to recognize again the important reporting of The New
Yorker, which has shone a needed spotlight on individuals in the
Chinese seafood sector who are victims of a failing system. To date,
while important progress has been made in the fight against IUU
fishing, there have also been far too many failures. The truth is that
some industry initiatives in this area have been too weak to make a
difference, while some NGO proposals would grind legitimate and ethical
seafood trade to a halt. This issue is too serious to tolerate a
continuation of such failures. We must all work together to implement
more transparent, more ethical global seafood supply chains. APA stands
ready to do its part.
Letter from the Chairs to Secretary Mayorkas
______
October 24, 2023
Secretary Alejandro Mayorkas
U.S. Department of Homeland Security
2707 Martin Luther King Jr Ave SE
Washington, DC 20528-0525
Dear Secretary Mayorkas:
As chairs of the bipartisan and bicameral Congressional-Executive
Commission on China (CECC), we write to pose questions about the
Department of Homeland Security (DHS)'s response to troubling reports
about forced labor and other human rights abuses in China's seafood
industry and to urge immediate actions to ensure that America's seafood
supply chains are forced labor-free. Given that these reports implicate
the United States Government's seafood purchases, we believe the
situation needs a robust and coordinated response across all Federal
agencies.
Recent investigations by Washington, DC-based nonprofit journalist
organization The Outlaw Ocean Project revealed human rights abuses on
board China's illegal, unregulated, and unreported (IUU) fishing fleets
and the forced labor of Uyghurs transferred from the Xinjiang Uyghur
Autonomous Region (XUAR) to seafood processing factories in the
Shandong province of China. There is also emerging evidence of North
Koreans working in seafood processing in Liaoning province. Up to
80,000 North Korean laborers are working in the cities of Donggang and
Dandong, important seafood processing centers. Since 2017, at least
three Chinese seafood processing companies, known for employing North
Korean workers, sent over 1,000 tons of seafood to the United States
through a dozen different importers.
The evidence presented by The Outlaw Ocean Project and detailed in the
New Yorker and other publications globally is compelling and well
documented. Major wholesalers, restaurants, grocery chains, food
service companies, and the U.S. Government all import large amounts of
seafood from the processing plants in Shandong and Liaoning. From the
fish sticks served at school lunches to the fish sandwiches and
calamari sold at major restaurants and grocery chains, the plates of
American consumers are filled with products likely tainted with forced
labor. At the very least, we should all agree that American veterans,
school children, and men and women in uniform should not be unwitting
accomplices to egregious human rights abuses.
As you know, under the Uyghur Forced Labor Prevention Act (P.L. 117-78,
or UFLPA); the Countering America's Adversaries Through Sanctions Act
(P.L. 115-44 or CAATSA) as well as Sec. 307 of the Tariff Act of 1930
(19 U.S.C. Sec. 1307), seafood caught or processed with forced labor
should be prohibited from entry into the United States. Because Uyghurs
and North Koreans are working in PRC-based processing plants, the
ability of DHS to act immediately and robustly is greatly enhanced by
existing legislation.
Given that the information compiled in the reports referenced above was
shared with DHS before publication, we ask you to report on the actions
already taken to address seafood supply chains from China's IUU fishing
and tainted with the forced labor of Uyghurs and North Koreans, and we
urge you to take the following steps as soon as possible:
1) Issue Withhold Release Orders (WROs) for all seafood
processing facilities in Shandong and Liaoning provinces.
2) Place the companies that employ Uyghur labor on the
``Entity List'' pursuant to UFLPA and inform seafood importers
of the intent to stop imports from those companies immediately.
3) Stop imports from companies employing North Korean labor
immediately, pursuant to CAASTA.
4) Coordinate with all Federal agencies purchasing seafood
for schools, veterans, prisons, and military bases to inform
them of DHS actions against China's seafood industry and train
procurement specialists about U.S. laws prohibiting the import
of forced labor-made products and enforcement of both existing
WROs related to China and the UFLPA. We have sent copies of
this letter to the Secretaries of Agriculture, Defense, Labor,
Education, and Veterans Affairs and the Director of the Office
of Management and Budget to start an interagency dialog on
Federal procurement.
5) Report to us on the specific outcomes of DHS coordination
with the Secretary of Commerce to address the import of seafood
caught or processed with forced labor as required by the James
Inhofe National Defense Authorization Act of 2023 (P.L. 117-
263).
We note and appreciate the emphasis placed by DHS on China's seafood
industry over the past several years and the enforcement of the UFLPA
by the men and women of Customs and Border Protection (CBP). There is
always more that can be done, but we continue to offer staunch support
for CBP's enforcement efforts and DHS's leadership of the Forced Labor
Enforcement Task Force. Please let us know how we can assist you to
ensure America's seafood supply chains are cleared of forced labor.
We look forward to your response.
Sincerely,
Representative Chris Smith Senator Jeffrey A. Merkley
Chair Co-chair
cc: Secretary of Defense
Secretary of Agriculture
Secretary of State
Secretary of Education
Secretary of Veterans Affairs
Secretary of Commerce
Secretary of Labor
Director of the Office of Management and Budget
Undersecretary Robert P. Silvers, Department of Homeland Security
Questions and Answers for the Record
______
Question for Greg Scarlatoiu of HRNK from Senator Sullivan
Question. I have introduced the U.S.-Russian Federation Seafood
Reciprocity Act of 2023, bipartisan and bicameral legislation to close
the loophole that is allowing Russian-origin seafood that has been
reprocessed in other countries to be imported into the U.S. What do you
think the impact of closing this loophole would be on the forced labor
situation in China?
Answer. Closing this loophole may provide the basis for a broader
counteroffensive against Chinese export goods produced with forced
labor. A ``domino effect'' could be triggered while addressing the
seafood processing industry, subsequently exposing other Chinese
industrial sectors that use forced labor. The case of North Koreans
officially dispatched to Chinese seafood processing factories could
provide an example of how ``closing the loophole'' may result in
diminished demand and thus reduced numbers of laborers sent to China,
in particular to China's Hunchun region.
Within the greater picture of China's use of forced labor, North
Korean workers represent a group that is systematically abused by their
own regime and the Chinese authorities. Subjected to endless coercion,
control, surveillance, punishment, exploitation, and appalling working
conditions, in a work environment that resembles a North Korean work
setting, North Korean workers provide cheap labor to China, procure
hard currency for their own North Korean regime, and get to keep very
little to themselves.
According to witnesses formerly and currently involved in the
exportation of seafood from North Korea to China and the processing of
seafood by North Korean workers in China, the Russian Far East is an
important destination for such products processed and packaged by North
Koreans.
According to the (South) Korean Industrial Trade Association
(KITA), notably, after the inter-Korean relations were completely
suspended due to the sinking of the corvette Cheonan and the Yeonpyeong
Island shelling incident in 2010, North Korea needed an alternative
market for seafood exports that had been going to South Korea.
Simultaneously, Chinese regional governments and enterprises began to
focus on investing in seafood processing facilities in the border
region of Hunchun as a strategy to alleviate the excess demand for such
seafood. Consequently, Hunchun became the major processing center and
market for North Korean seafood, evolving into the ``Hunchun-Border
Economic Cooperation Zone.''
According to KITA, Chinese provincial governments and enterprises
regarded Hunchun as strategically advantageous due to its convenient
geographical location for trade with North Korea, South Korea, Japan,
and Russia, and shorter transportation distances, leading to cost
savings in seafood processing. This collaboration between North Korea
and Chinese enterprises in the seafood sector gained momentum following
the South Korean government's sanctions after the ``May 24 measures,''
i.e., sanctions imposed by South Korea against the North, a response to
the March 26, 2010, sinking of the ROKS Cheonan by a North Korean
submarine.
KITA confirms that, as of the end of 2019, approximately 30
companies in China's Hunchun region had seafood processing facilities
and were specialized in processing North Korean seafood. It is
estimated that these seafood processing factories employed around 2,000
to 2,200 North Korean workers.
Beginning on August 23 or 29, 2023, most or all North Korean
workers officially dispatched to China, including workers from Chinese
seafood processing factories, were returned to North Korea.
According to sources within the North Korean escapee community in
South Korea and the United States, many of them with points of contact
in China and North Korea, the North Korean regime is likely already
preparing the next groups of workers to be dispatched to China's
seafood processing factories and other industrial sectors. The Russian
Far East is reportedly an important destination for Chinese seafood
processed and packaged by North Koreans in China. ``Closing the
loophole'' presents the potential to curb Russian demand for such
products and reduce the number of North Korean and other forced
laborers involved in China's seafood processing industry, in particular
in the Hunchun region.
Questions for The Outlaw Ocean Project from Representative Zinke
Question. You cite the UFLPA, which creates a CBP rebuttable
presumption of ``forced labor'' for products from the Xinjiang region.
If you think that the onus should be on industry and that currently
available third-party auditors don't provide ``sufficient evidence'' of
a lack of forced labor, how can U.S. seafood companies meet your
standard for proving the lack of forced labor?
Answer. Respectfully, I'd start by refining certain phrasing of
your question because it has errors in its assumptions.
First, it is important to point out that the issue is not that I
``think the onus should be on industry.'' The onus is in fact on
industry under the UFLPA. This is not an aspirational or interpretive
matter. It is a fact of law. Feel free to check with Prof. Stumberg or
other legal experts about UFLPA. But the ``rebuttable presumption''
within that law indeed shifts the burden of proof to an importer to
show that its supply chain from those provinces is free of forced
labor. Under CBP rules, that would require the importer to prove a
negative, either that: (a) its suppliers do not include processing
facilities from those provinces, or, (b) if they do, those suppliers do
not use processing facilities where there is evidence of forced labor.
So the issue is not meeting my standard of proving forced labor.
Second, it is important to look at the meaning of ``forced labor''
in the UFLPA and elsewhere. Here is a helpful pull of relevant spots in
the laws.
CBP's Introduction
The Uyghur Forced Labor Prevention Act (UFLPA) establishes a
rebuttable presumption that the importation of any goods, wares,
articles, and merchandise mined, produced, or manufactured wholly or in
part in the Xinjiang Uyghur Autonomous Region of the People's Republic
of China, or produced by certain entities, is prohibited by Section 307
of the Tariff Act of 1930 and that such goods, wares, articles, and
merchandise are not entitled to entry to the United States. The
presumption applies unless the Commissioner of U.S. Customs and Border
Protection (CBP) determines, through clear and convincing evidence,
that the goods, wares, articles, or merchandise were not produced using
forced labor or that UFLPA does not apply to the goods, wares, or
merchandise seeking to be entered into the United States.
Statutory Definition in the Tariff Act
19 U.S.C. 1307 Convict-made goods; importation prohibited (section
307 of the
Tariff Act)
All goods, wares, articles, and merchandise mined, produced, or
manufactured wholly or in part in any foreign country by convict labor
or/and forced labor or/and indentured labor under penal sanctions shall
not be entitled to entry at any of the ports of the United States, and
the importation thereof is hereby prohibited, and the Secretary of the
Treasury is authorized and directed to prescribe such regulations as
may be necessary for the enforcement of this provision. ``Forced
labor,'' as herein used, shall mean all work or service which is
exacted from any person under the menace of any penalty for its
nonperformance and for which the worker does not offer himself
voluntarily. For purposes of this section, the term ``forced labor or/
and indentured labor'' includes forced or indentured child labor.
CBP Rule for Withholding Imports
19 CFR 42 Findings of Commissioner of CBP
(e) If the Commissioner of CBP finds at any time that information
available reasonably but not conclusively indicates that merchandise
within the purview of section 307 is being, or is likely to be,
imported, he will promptly advise all port directors accordingly and
the port directors shall thereupon withhold release of any such
merchandise pending instructions from the commissioner as to whether
the merchandise may be released otherwise than for exportation.
CPB 2023 Update: Enforcement of the UFLPA Rebuttable Presumption
Page 10:
The UFLPA establishes a rebuttable presumption, which became
effective on June 21, 2022, that the importation of any goods mined,
produced, or manufactured wholly or in part in Xinjiang, or produced by
an entity on the UFLPA Entity List, is prohibited under 19 U.S.C.
1307. The Commissioner of CBP may grant an exception to the presumption
if an importer meets specific criteria outlined in Section 3(b) of the
UFLPA.
UFPLA Section 3(b)
SEC. 3. REBUTTABLE PRESUMPTION THAT IMPORT PROHIBITION APPLIES TO GOODS
MINED, PRODUCED, OR MANUFACTURED IN THE XINJIANG UYGHUR AUTONOMOUS
REGION OR BY CERTAIN ENTITIES.
. . . under subsection (a) unless the Commissioner determines----
(1) that the importer of record has----
(A) fully complied with the guidance described in section
2(d)(6) and any regulations issued to implement that guidance;
and
(B) completely and substantively responded to all inquiries for
information submitted by the Commissioner to ascertain whether
the goods were mined, produced, or manufactured wholly or in
part with forced labor; and
(2) by clear and convincing evidence, that the good, ware, article,
or merchandise was not mined, produced, or manufactured wholly or in
part by forced labor.
CBP Guidance
See the guidance generally; Part II Requesting an Exception to the
Rebuttable Presumption (page 9)
Page 15:
E. Evidence Goods Originating in China Were Not Mined, Produced, or
Manufactured Wholly or In Part by Forced Labor
Documentation may include, but is not limited to:
Supply chain map identifying all entities involved in
production of the goods;
Information on workers at each entity involved in the
production of the goods in China such as wage payment and production
output per worker;
Information on worker recruitment and internal controls
to ensure that all workers in China were recruited and are working
voluntarily; and
Credible audits to identify forced labor indicators and
remediation of these if applicable.
Note: The resources listed in Section III of this CBP operational
guidance document provide additional information on due diligence,
supply chain tracing, and supply chain management measures.
The bottom line is that it is not relevant under UFLPA whether (as
the Chinese government and U.S. companies seeking to do business in
China are apt to point out) select Xinjiang workers in their plants may
be given a wage or attest in interviews with auditors or state media
that they are ``happy'' to have the job, or are provided dorms, meals,
vocational training. The relevant point here is that under UFLPA, these
workers are categorically seen as part of state-sponsored forced labor
because they are not given the true option to decline the work nor to
leave the work without serious penalty. (This interpretation is
consistent with CBP's description of labor transfer programs in the
UFPLA implementation strategy, pages 19-22. That description relates
back to the legal definition: work that is involuntary and performed
under the menace of a penalty.) The comparison to keep in mind here is
prison labor or child labor or North Korean labor or debt bonded labor.
Even if auditors or companies are told that those workers are ``happy''
and earning, the legal lens through which they are viewed is distinct
because of issues of agency and choice. Here again, it is confusing for
lawmakers to ask questions about these matters since in fact this is
embodied in the laws themselves and it is by no means an interpretive
matter of a journalist. Nor does it make much sense for industry to ask
journalists to counsel them on how to comply with these laws. If the
industries seek to do business in settings where such labor concerns
exist, it is likely best for the industries to figure out how and
whether they can do so without running afoul of existing laws. The
relevant questions for the industry and lawmakers to ask would be for
the social auditors: Are they actually inspecting plants for the
presence of Xinjiang labor (not what is the definition of forced
labor)? Can social auditors actually do legitimate inspections that
entail unannounced visits, actual anonymized worker interviews, true
investigation of labor conditions in China and if not, are such audits
illegitimate tools?
Question. Moving further, where does the onus on industry for
compliance end and where does the U.S. Government's responsibility
begin to identify bad actors in the Chinese seafood industry?
Answer. This is a question best answered by scholars or lawmakers
but not likely me.
Question. Prior to your reporting, would you expect any U.S.
seafood company to be able to uncover what you uncovered in a general
audit of a Chinese exporter?
Answer. What made our reporting difficult was that we were needing
to penetrate these supply chains from the outside, typically with no
help from companies; in fact, most often with active resistance from
companies. The companies themselves are the ones who have internal
access and control over their own supply chains, so, yes, to put it
bluntly, the companies can investigate their own supply chains and
indeed are required to do so under U.S. law. The companies have direct
access to their own full and unfettered transport and trade data (which
is vaguely and only partially handed over to government or private
databases mined by reporters and NGO's). The companies have the
decisionmaking power and leverage to instruct their suppliers in China
to allow spot checks and legitimate audits or else those companies will
withdraw from China (reporters and NGO's have no such leverage). The
companies indeed are the ones who have financially benefited from doing
business in contexts like China where labor is cheaper, and this
financial benefit puts added responsibility on them to control their
supply chains to ensure they are devoid of labor or environmental
crimes on their supplier ships or supplier processing plants.
Mandatory human rights due diligence surely would help the
industry. While Section 2(d)(6) of the UFLPA requires the FLETF to
provide guidance to importers on conducting due diligence and effective
supply chain tracing, there is no requirement for firms sourcing from
China to actually undertake due diligence. Mandatory human rights due
diligence in global supply chains is emerging across key market states,
most notably with the European Union's Directive on Corporate
Sustainability Due Diligence.
So, here again, I fear the framing of the question misses the
bigger picture: whether it is easy or difficult to weed out forced
labor in a product's supply chain is immaterial. The law in the U.S.
forbids companies from importing items made with forced labor and
therefore companies likely have to only enter countries or markets
where they are pretty confident that they can operate in compliance
with the law. If there is a reasonable expectation that China might not
allow auditors or companies to fully check on compliance with such
laws, the real question becomes whether those companies can find ways
to fix that problem so that they can operate in those cost-saving
settings lawfully.
______
Questions for The Outlaw Ocean Project from Senator Sullivan
Question. What are some key things to keep in mind when we work
with our global partners on seafood supply chains and forced labor?
Answer. Forgive me for answering a question with more questions but
such is the proclivity of a journalist. To me, the questions I'd
personally be interested to ask of ``global partners on seafood supply
chains and forced labor'' are, for starters, fairly basic ones: Do
ports conduct inspections of crews on ships that enter their waters? Do
they have proper methods for checking whether forced labor exists? Does
the relevant country have a protocol for how they handle instances when
they suspect forced labor or when crew seek to be rescued?
Question. What are the most pressing areas of cooperation between
us and the other countries who import seafood from China?
Answer. I'd humbly refer this question to the broad array of
answers that stakeholders have put forward as potential solutions to
the myriad problems our investigation highlighted. On the Solutions
page of our website we have put forward a variety of answers that NGOs,
academics, industry consultants and associations have posited. See:
https://www.theoutlawocean.com/investigations/china-the-superpower-of-
seafood/solutions/
Question. In your opinion, is this ability to import Russian-
origin, Chinese-processed seafood a loophole that should be closed?
Answer. My team and I have not focused on the Russian-Chinese
nexus, so I will refrain for now from commenting on this specific
matter.
Question. What are your thoughts on expanding efforts to combat IUU
fishing at its sources, rather than focusing efforts at the end of the
supply chain?
Answer. As a journalism organization, not an advocacy organization,
we do not tend to comment on specific pieces of legislation or specific
types of solutions promoted by key NGOs or other stakeholders. That
said, it strikes me that the definition of IUU likely needs to be
adjusted to incorporate the category of illegality that is human rights
and labor violations against the workers involved in the fishing
process.
______
Questions for Robert Stumberg, Georgetown University Law Center,
from Senator Sullivan
1. U.S. Seafood Industry Unfair Competition
Question. What are some key things to keep in mind when we work
with our global partners on seafood supply chains and forced labor?
Answer.
Which of our global partners account for the largest
market share of seafood imports that are sourced in China.
To what extent do domestic fishers and fish processors--
in the United States and elsewhere--suffer from unfair and illegal
competition from the Chinese distant-water fishing fleet.
To what extent does over-harvesting by the Chinese
distant-water fishing fleet undermine seafood as a sustainable protein
resource for domestic consumers in countries around the world.
To what extent do U.S. seafood distributors and their
foreign counterparts trade in forced-labor seafood to supply their
domestic customers.
Question. What are the most pressing areas of cooperation between
us and the other countries who import seafood from China?
Answer. This is not a question that I have studied recently. Others
who spoke to this question before the CECC include Sally Yozell at the
Stimson Center and Judy Gearheart at American University's
Accountability Research Center.\1\ I also recommend the comments filed
in March 2023 by the World Wildlife Fund and six other leading
conservation and human rights organizations on NOAA's proposed rule to
reform the SIMP.\2\
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\1\ CECC, Hearings & Roundtables, ``From Bait to Plate: How Forced
Labor Taints America's Seafood Supply Chain,'' Witnesses and Submitted
Testimony (October 24, 2023), https://www.cecc.gov/events/hearings/
from-bait-to-plate-how-forced-labor-in-china-taints-the-american-
seafood-industry.
\2\ Comment on NOAA-NMFS-2022-0119, RIN: 0648-BK85, submitted by
World Wildlife Fund, Oceana, Greenpeace, International Corporate
Accountability Roundtable, Azul, Conservation International, and Global
Labor Justice/International Labor Rights Fund (March 28, 2023), https:/
/www.regulations.gov/comment/NOAA-NMFS-2022-0119-2163 (viewed October
21, 2023).
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From work I did years ago, important topics of cooperation included
WTO negotiations on subsidies for fishing in international waters and
harmonizing the asynchronous approaches to regulating IUU fishing by
the United States and the European Union.
Finally, as I noted in my October 24 testimony, Congress directed
the Departments of State and Commerce to report on human trafficking,
including forced labor, in seafood supply chains. The agencies reported
(December 2020) on the need to expand seafood transparency beyond
traditional health and environmental concerns, both domestically and in
terms of international cooperation. They identified 29 countries that
pose a significant risk of forced labor in their seafood supply
chains.\3\ Appendix 4 of the DOS/DOC report includes technical
recommendations to deter human trafficking and forced labor outside of
U.S. waters. The CECC could ask the multi-agency group focusing on
seafood to comment on how the Outlaw Ocean reporting relates to their
recommendations and strategy for deterrence.
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\3\ Report to Congress ``Human Trafficking in the Seafood Supply
Chain,'' Section 3563 of the National Defense Authorization Act for
Fiscal Year 2020 (P.L. 116-92), available at https://
www.fisheries.noaa.gov/international/international-affairs/forced-
labor-and-seafood-supply-chain (viewed October 21, 2023).
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2. Russia-China Seafood Axis
Question. I have introduced the U.S-Russian Federation Seafood
Reciprocity Act of 2023, bipartisan and bicameral legislation to close
the loophole that is allowing Russian-origin seafood that has been
reprocessed in other countries to be imported into the U.S. What do you
think the impact of closing this loophole would be on the forced labor
situation in China?
Answer. I have not studied the Russian seafood trade, so I'm not
speaking as an expert on this question. That said, anything that
reduces Russian demand for products made with forced labor should, in
theory, reduce the demand for forced labor within China's seafood
sector.
Upon reading S. 2011, I notice that the bill would sunset upon a
finding that Russia no longer excludes U.S. seafood from its market
(sec. 5). If China's use of forced labor to process seafood outlives
that sunset, then the bill's beneficial impact on forced labor would be
lost.
3. Forced Labor in the Seafood Industry Is a Global Challenge
Question. What are your thoughts on expanding efforts to combat IUU
fishing at its sources rather than focusing efforts at the end of the
supply chain?
Answer. By end of the supply chain, I assume that you are referring
to the UFLPA's ban on forced labor imports into the United States. I
have two thoughts about this question.
First, this is not an either/or choice for Congress. There is a
strong case for both expanding IUU enforcement and importation of
processed fish for consumption in the United States.
Second, the policy objective of an import ban (or a procurement
ban) is to reduce demand for products processed with forced labor,
which in turn, should reduce the demand for forced labor in the first
place. So, this may appear to be a policy that touches the ``end'' of
the supply chain, but in fact, it aims at the beginning of the demand
cycle for Chinese-processed seafood. The effect would be to shift
demand for processing to source countries that do not use forced labor.
______
Question for Sally Yozell of the Environmental Security Program,
Stimson Center, from Senator Sullivan
Question. I have introduced the U.S.-Russian Seafood Reciprocity
Act of 2023, bipartisan and bicameral legislation to close the loophole
that is allowing Russian-
origin seafood that has been reprocessed in other countries to be
imported into the U.S. In your opinion, is this ability to import
Russian-origin, Chinese-processed seafood a loophole that should be
closed?''
Answer. Thank you for your question on closing the loophole of
importing Russian-origin, Chinese-processed seafood. To answer your
question in short, yes, this is a significant loophole that needs to be
closed. With the ongoing war in Ukraine, ensuring an effective ban on
the importation of Russian seafood and seafood products would strike an
economic blow to Russia. In 2021, Russia was the eighth-largest
exporter of seafood to the U.S., with $1.2 billion worth of crab, cod,
pollock, and other fish,\1\ including $900 million in king crab,
entering U.S. markets.\2\ Halting illegal and mislabeled Russian
seafood from entering the United States would serve the American people
well, increasing domestic revenue, growing jobs, and benefiting fishing
communities at home. Furthermore, American consumers do not want to buy
rebranded Russian catch, and U.S. chefs do not want to serve it.\3\
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\1\ Laine Welch. ``Ban on U.S. purchases of Russian seafood opposed
by some national food marketers.'' Anchorage Daily News. March 1, 2022,
https://www.adn.com/business-economy/2022/02/28/ban-on-us-purchases-of-
russian-seafood-opposed-by-some-national-food-marketers/ (Accessed
October 31, 2023).
\2\ Rachel Sapin. ``U.S. seafood industry backs Russia seafood ban,
but says clarity is needed on its impact.'' IntraFish. March 11, 2022,
https://www.intrafish.com/opinion/us-seafood-
industry-backs-russia-seafood-ban-but-says-clarity-is-needed-on-its-
impact/2-1-1183613 (Accessed October 31, 2023).
\3\ Desrochers, ``New poll finds U.S. voters want assurances
merchants are selling legally caught seafood''; Oceana, ``American
Voters Want to End Illegal Fishing & Seafood Fraud''; and Clark,
``Chefs Urge Congress: End Illegal Fishing & Labor Violations.''
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That said, the scope of the issue is far larger than just targeting
Russian-caught, Chinese-processed seafood. The legislative solution
needs to go beyond a timebound, Russian-only fix. A solution to the
larger problem at hand, including a legislative one, needs to address
the issues that allow any illegal seafood, not just illegal Russian
seafood laundered through China, to enter U.S. markets. In 2019 alone,
the International Trade Commission estimated that $2.4 billion worth of
illegally harvested products entered the U.S. market,\4\ accounting for
11 percent of U.S. seafood imports.\5\ Just under 40 percent of U.S.-
caught seafood is processed overseas and re-imported into the United
States; the door is wide open for American-caught products to be
commingled alongside Russian and other illegally harvested and
mislabeled seafood.
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\4\ United States International Trade Commission, ``Seafood
Obtained via Illegal, Unreported, and Unregulated Fishing: U.S. Imports
and Economic Impact on U.S. Commercial Fisheries,'' Renee Berry et al.,
(Washington, 2021). https://www.usitc.gov/publications/332/pub5168.pdf.
\5\ ITC Report, p. 11.
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As the second largest importer of seafood in the world, the U.S.
has the responsibility to play a leadership role in eradicating
Illegal, Unreported, and Unregulated (IUU) fishing and seafood fraud.
There are several effective and realistic ways to accomplish these
goals to prevent ``Putin's Pollock'' and other illegal seafood from
entering American homes, grocery stores, restaurants, school lunch
programs, military bases, and prisons.
Legislation could be tailored to prevent illegally harvested and
mislabeled seafood from entering the United States. In October 2023,
the European Parliament approved new fisheries control rules requiring
digital catch certification on all EU-flagged vessels without
exceptions and full traceability on all seafood throughout the supply
chain. Small vessels will receive certain exceptions until 2030. With
full traceability and digitization, systems can quickly provide
accurate data and information to law enforcement and fisheries
management authorities so they can act. In the U.S., these actions
could include working with Customs to enforce Tariff Act prohibitions
on the importation of products created with forced labor or issuing a
withhold release order (WRO) to prevent the entry of an imported
product into the U.S. market. Additionally, it assures consumers that
the seafood they are purchasing is legal and accurately labelled, while
also rewarding those in the fishing industry who follow the rules.
By legislating a more comparable system to that of the EU, industry
would not have to meet the requirements of different traceability
systems around the globe. Japan is implementing a seafood traceability
program and others will join soon including South Korea and Australia.
It is critical to bring U.S. seafood trade monitoring programs into
alignment with their international counterparts to reduce the burden on
law-abiding industry and eliminate loopholes for illegally harvested
seafood to reach the market.
A comprehensive traceability system in the United States that
tracks all seafood through the supply chain, would put an end to masked
illegally harvested fish products sold in the United States. This
precisely is what NOAA's Seafood Import Monitoring Program initially
set out to accomplish: to be a comprehensive risk-based seafood
traceability system. Yet, 6 years after being implemented, the Seafood
Import Monitoring Program covers only 45 percent of U.S. seafood
imports and excludes several species that are at high risk of illegal
harvesting and mislabeling, such as pollock, salmon, and squid.
The Seafood Import Monitoring Program is at a pivotal moment, and
there are several paths, whether through legislative or executive
action, to expand and improve the program. Such action would provide
consumers with confidence that the seafood they consume is safe, legal,
and sustainable, and would go a long way toward ensuring all parts of
the fishing industry are fair and equitable, especially for the
harvesters, processors, and merchants who follow the rules. I commend
you for your legislation and recommend expanding the bill to prevent
and deter all illegal seafood, beyond just Russian-caught and Chinese-
processed seafood, from entering the United States.
These big challenges merit thoughtful solutions. Stopping illegal
seafood, including that of Russian origin, requires a comprehensive and
flexible seafood tracking system. Both Congress and the Administration
have the power to make that a
reality.
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Witness Biographies
Ian Urbina, Director and Founder of The Outlaw Ocean Project
Ian Urbina is the Director of The Outlaw Ocean Project, a non-
profit journalism organization based in Washington, DC that produces
investigative stories about human rights and environment and labor
concerns on the two thirds of the planet covered by water. Before
founding The Outlaw Ocean Project, Urbina spent roughly 17 years as a
staff reporter for The New York Times. He has received various
journalism awards, including a Pulitzer Prize, two George Polk Awards,
and an Emmy. Several of his investigations have also been converted
into major motion pictures.
Greg Scarlatoiu, Executive Director of the Committee for Human
Rights in North Korea
Greg Scarlatoiu is the Executive Director of the Committee for
Human Rights in North Korea (HRNK). For 10 years, he has been a
visiting professor at Hankuk University of Foreign Studies and Yonsei
University. Scarlatoiu is Vice President of the International Council
on Korean Studies (ICKS). He has been a Radio Free Asia Korean
columnist for 20 years. Scarlatoiu holds a Master of Arts in Law and
Diplomacy from the Fletcher School, Tufts University, and a Master of
Arts and Bachelor of Arts from Seoul National University's Department
of International Relations. He completed the MIT Seminar XXI Program
for U.S. national security leaders in 2016-2017. Scarlatoiu was awarded
the title ``Citizen of Honor, city of Seoul,'' in January 1999. Born
and raised in communist Romania, he is a naturalized U.S. citizen.
Scarlatoiu is fluent in Korean, French and Romanian.
Robert Stumberg, Professor of Law at Georgetown University
Robert Stumberg is a professor of law at Georgetown University,
where he directs the Harrison Institute for Public Law. The Institute
works with public officials and coalitions on community development,
health and food, trade policy, and human rights for workers. His
published work includes ``Turning a Blind Eye? Respecting Human Rights
in Government Purchasing'' (coauthor, ICAR 2014) and ``Transparency:
See and Be Seen,'' a forthcoming chapter in Business, Human Rights, and
Sustainable Development, editors Jahid Hossain Bhuiyan and M. Rafiqul
Islam (Leiden: Brill 2023). BA, Macalester College; JD, Georgetown
University; LLM, Georgetown University.
Sally Yozell, Director of the Environmental Security Program at the
Stimson Center
Sally Yozell is a Senior Fellow and Director of the Environmental
Security Program at the Stimson Center, a security research institute
based in Washington, DC. Her research examines environmental factors
that have the potential to undermine the security of individuals,
communities, and nations across the globe. Ms. Yozell leads a team that
explores the links between environmental degradation and the loss of
natural resources, and how these issues can threaten and undermine
economic, food, and ecological security. They conduct research and
develop global security strategies to combat IUU fishing, thwart
illicit networks, put an end to forced labor and human rights abuse in
the seafood industry, and work to increase transparency throughout the
seafood supply chain.
Ms. Yozell also oversees CORVI, the Climate and Ocean Risk
Vulnerability Initiative, a program that works with coastal cities and
island states to build resilience in communities threatened by the
climate crisis. CORVI is a place-based and data-driven decision support
tool for leaders who need to make smart climate investments to improve
the safety and security of coastal cities and island states. CORVI is
now operating in 15 cities around the world.
Prior to joining Stimson, Ms. Yozell managed the Our Ocean
Conferences for the U.S. State Department (2014-2016) and continued to
serve as an advisor to Our Ocean Conference host governments (2017-
2019). She also served as a Senior Advisor to former U.S. Secretary of
State John Kerry, during which time she co-chaired the Presidential
Task Force on Illegal, Unreported, and Unregulated Fishing and Seafood
Fraud. Previously, she was the Director of Policy and Deputy Assistant
Secretary at the National Oceanic and Atmospheric Administration. Ms.
Yozell led marine programs at The Nature Conservancy and Battelle
Memorial Institute and worked for almost a decade in the U.S. Senate.
She holds an MPA from Harvard University and a BA from the University
of Vermont.
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