Whole Foods, Costco, PF Chang's Tied to Squid Fishing Slave Labor

What do Whole Foods and P.F. Chang's have in common? Not much, except for the fact that both may be making calamari out of squid caught by indentured fisherman.

A six month investigation conducted by Bloomberg Businessweek found evidence of debt bondage on a South Korean fishing vessel called the Melilla 203 and at least nine others operating in New Zealand's waters. The report reveals human rights abuses committed against ship workers from Indonesia and other countries that involve false contracts, unsafe working conditions, daily physical and sexual abuse, withholding of pay, intimidation, and threats to their families if they walked away.

Fish from the Melilla 203 and other suspect vessels were bought and processed by New Zealand's eighth largest seafood company, United Fisheries, as recently as November 2011. In that same period, those same kinds of fish were sold to U.S. distributors who provide seafood to many major U.S. companies, including some of the country's largest grocery retailers and restaurants.

One of the restaurants that indirectly does business with United Fisheries is P.F. Chang’s China Bistro, which purchases squid exclusively through Turner, an importer based in California. Information from Import Genius and shipping records from Urner Barry indicate that Turner bought at least 568,554 pounds of squid from United Fisheries since November of 2010. According to crew members on the Melilla boats who reported the abuses to authorities, squid was one of the most common seafood species caught on those boats.

United Fisheries founder Kypros Kotzikas told Businessweek that his company sold ling, a species of fish caught by the Melilla crews, to Costco Wholesale Corp, the world's seventh largest retailer and the largest wholesaler in the U.S. The exact quantity of sales of seafood that were made to Costco are not traceable through public records.

In an interview that took place nine days after the three Melilla crew members had run away from the ship, Kotzikas said that he had heard of no complaints from crew members on board the ships. He said that he had personally ensured that conditions on the vessels "are of very high standard." Kotzikas also said that although New Zealand's labor laws are “a thousand pages of, you know, beautiful stuff,” he believed they did not necessarily apply outside New Zealand’s 12-mile ocean radius. Half of United Fisheries' annual revenue is generated outside of New Zealand waters.

Crew members working for Sanford, which is New Zealand's second largest seafood enterprise that sells to Whole Foods, reported similar treatment and abusive practices. On its website, Sanford touts itself as "The Home of Sustainable Seafood." Sanford's Chief Executive Officer, Eric Barratt, said his company's observers, which were placed on their foreign chartered vessels, reported that the ships “don’t have any issues with labor abuse.”

Although it's unclear exactly how much seafood caught by these indentured fishermen ends up on the plates of American consumers, rough estimates indicate that for squid, the number could be significant. Public shipping records are hard to come by, and seafood distributors don't usually disclose who their suppliers are. However, an analysis that uses several different sources, including information from the New Zealand Ministry of Agriculture and Forestry suggests that roughly 40 percent of New Zealand squid exports are caught on vessels that use forced labor.

In the U.S., which imports 86 percent of its seafood, regulators are starting to pay more attention to the conditions under which this food is caught. On January 1st of this year, The California Transparency in Supply Chains Act started requiring all retailers with more than $100 million in sales to disclose efforts to monitor and prevent slavery practices taking place in their supply chains. The law covers more than 3,000 organizations, including several in the seafood business.

[Image credit: FotoosVanRobin, Flickr]

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Kara Scharwath is a corporate social responsibility professional, marketing consultant and Sustainable Management MBA Candidate. She is currently working as a Graduate Associate in Corporate Citizenship at the Walt Disney Company while pursuing her degree at Presidio Graduate School. Follow her on Twitter @karameredith.