Aug 26, 2015

Costco 'Fishing' for Trouble - Slavery and your Supply Chain

We reported recently on the Modern Slavery Act 2015 in Business and Supply Chains and the need for certain business types to produce and publish an annual statement disclosing their efforts taken during that financial year to eliminate slavery and human trafficking within their business and supply chains. The case below highlights the fact that eradicating modern day slavery is not just an issue in the UK but is at the forefront of legal issues globally.

In a move in America, three California law firms are seeking an injunction to stop the US retail chain Costco selling prawns unless they are labelled as the produce of slavery.

The firms have filed a class action lawsuit against Costco and its Thai seafood supplier (CP Foods), alleging that Costco knowingly sold prawns from a supply chain tainted by slavery.

The plaintiff in the action is, Monica Sud, who bought prawns from the membership-based wholesale grocer, but the class action potentially affects millions of customers right across California which is America's most populous state.

Unsurprisingly Costco's code of practice says it does not tolerate human trafficking or slavery in its supply chains.  This has been used by the plaintiff who has cited state laws that bar companies from making false claims about illegal conduct in their supply chain, including human rights violations.

The action follows a Guardian investigation in 2014 entitled "Revealed: Asian slave labour producing prawns for supermarkets in US, UK" which tracked the complex prawn supply chain and found that human trafficking for forced labour and slavery have become endemic in the Thai fishing sector.  The investigation established that large numbers of men who were bought and sold like animals and held against their will on fishing boats off Thailand were integral to the production of farmed prawns.

Thai-based Charoen Pokphand (CP) Foods, was buying fishmeal, which it feeds to its farmed prawns, from suppliers that owned, were operating or buying from fishing boats manned with slaves.

The co-lead counsel in the legal claim explained: "This lawsuit seeks to give Californians confidence that they are not serving slavery for dinner. Slavery in the Thai industry is a huge problem. Costco has the clout to dictate terms to its suppliers and sub-suppliers and enforce its policies against slave labour."

Costco said in a statement: "Allegations concerning issues in the Thai seafood industry have been well publicised for over one year. Costco Wholesale has been working with and will continue to work with various stakeholders (including the Thai government, other retailers, and Thai industry) to address the issues that have surfaced."

Costco further added that, "all of our customers know that if they are dissatisfied with any purchase from Costco Wholesale they can return the item for a full refund."

A CP Foods statement said: "CP Foods notes that it has recently received a copy of a complaint filed in California concerning its shrimp business. CPF believes that it has complied with all applicable laws and regulations, and that the complaint is entirely without merit."

The defendants have 30 days in which to file a defence.

Posted by: in: EU/International, News, Regulatory

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