‘Slavery’ in New Zealand Waters?

Issue No : 81  May - August 2012

By Kate Day

At 4am, 20th June, 2011, the Indonesian crew of the Oyang 75 fled their vessel into the port of Lyttelton, New Zealand. The 32 crew had worked aboard a Korean factory trawler, chartered by a New Zealand company to fish New Zealand waters. Seeking refuge in a church, the crew explained they had escaped verbal and physical abuse at the hands of their Korean bosses. For months they had not been paid. Furthermore, having put up significant collateral to manning agents to secure their jobs, the crew had become bonded labour. The experience of this crew, and others like them, was to expose severe labour problems in the international fishing industry. It would also prompt an unusual case of international solidarity.

The experience of the Oyang 75 crew was not unique. In May 2011, seven Indonesian crew had walked off another chartered Korean vessel, the Shin Ji, in the New Zealand port of Auckland. The crew claimed they were expected to perform 16 hour work days for monthly wages as little as NZ$260 ($US212). They claimed these wages had not been paid for two years. The crew claimed verbal, physical and sexual abuse. The crew had put up land certificates to secure their jobs on the boat. With these held by their employers, they had become bonded labour.

In late 2011, Auckland University academics revealed “institutionalised” abuse aboard foreign charter vessels (FCVs), the foreign-owned vessels chartered to fish for New Zealand companies.[1] The academics revealed widespread non-payment or underpayment of wages, appalling working conditions, shifts of up to 53 hours, and physical and sexual abuse of crews working aboard FCVs in New Zealand waters. Abuse occurred almost solely on Korean vessels.

The report also documented debt bondage. Many Indonesian crews had been forced to put up house titles, education certificates and money to secure their jobs. Many crews paid off manning agents’ fees incrementally from their wages. Many reported fearing fines of US$2,000-10,000 for leaving their contracts, even if fleeing abuse.

The report was followed by still more revelations of exploitation. Between May 2011 and Feb 2012, there were allegations of mistreatment and wage problems aboard the Shin Ji, Oyang 75, Oyang 77, Melilla 201, Melilla 203, and Dong Won 519, a total of no fewer than six incidents in ten months. As international media picked up the cases, concerns rose about ‘slavery’ in New Zealand waters, and severe problems in international fishing supply chains.

Environmental Problems

The labour problems were accompanied by acute environmental concerns. Many FCVs in New Zealand have been linked to illegal dumping of fish, as well as ‘high-grading’, throwing fish overboard to create room on board for higher value catches. New Zealand researchers estimate that the average dumping on Korean charter vessels is as much as 40 to 50 percent of the catch.[2] Other vessels have engaged in ‘fish-mealing’- grinding up illegally caught, high value fish, and selling it as fishmeal. These practices create a mockery of New Zealand’s quota management system, designed to prevent overfishing in its exclusive economic zone (EEZ). In 2011, the total illegally dumped fish was estimated between 79,000 and 197,000 tonnes, draining tens of millions from the New Zealand economy. The 405 tonnes illegally dumped from one vessel alone, the Oyang 75, was estimated to be worth NZ$1.4 million (US$1.03 million).

New Zealand’s Part: Shortcomings in Regulation

The problems aboard FCVs are in part the result of inadequate New Zealand regulation, but in part due to practices extending well beyond New Zealand’s borders. The New Zealand industry is unusual in its reliance on foreign charter vessels (FCVs), which are particularly difficult to regulate. The New Zealand Ministry of Fisheries allocates commercial fishers a quota of fish they are entitled to catch. However, many companies lack the fleet needed to fish the entirety of their quota. They therefore charter foreign vessels. The majority of FCVs is from Korea, and usually hires Indonesian crews. Fishermen from Vietnam, Ukraine, Philippines and China are also hired.

In chartering FCVs, New Zealand companies effectively ‘outsource’ to companies which provide cheaper labour. By Auckland University estimations, foreign crews on Korean boats receive as little as US$560/month compared to the legal minimum wage of roughly US$2000/month received by New Zealand crews. In chartering FCVs, New Zealand companies also distance themselves from responsibility for conditions aboard the boats. While many small New Zealand companies claim reliance on FCVs, others claim that this is a culture that has arisen out of convenience.

Until 2012, foreign vessels in New Zealand waters operated in a law enforcement black hole. Under international law (specifically, the United Nations Convention on the Law of the Sea), New Zealand does not have jurisdiction for crimes which occur aboard foreign-flagged vessels in its EEZ. These fall within the jurisdiction of the ‘flag state’, the state to which the vessel is registered.

Victims of crimes aboard FCVs must therefore go to the flag jurisdiction to seek recourse.  However, they face formidable barriers to doing so. To date there have been no convictions in the flag states for abuse that has occurred in New Zealand's EEZ. While the New Zealand Government has pursued several cases of fish dumping, there has been not one arrest despite the numerous allegations of physical and sexual abuse. The Government has regulated environmental protection more stringently than protection of workers.

The New Zealand Government has over the years made weak attempts to regulate labour conditions aboard FCVs. Until 2012, to be granted visas for a foreign crew, a New Zealand company had to sign that it would abide by a Code of Practice outlining minimum wages and working conditions. However, the Code was weak and poorly enforced. For instance, the Government continued to grant visas for vessels of Sajo Oyang Corporation, despite numerous breaches. In 2010, the Oyang 70 sank, killing six men. In 2011, the Oyang 75 crew fled their vessel alleging physical abuse and unpaid wages. In 2012, the crews of a third vessel, the Oyang 77, also allege non-payment of wages.

Several factors prevented a more adequate Government response. The profits from FCV catches were lucrative. The companies chartering FCVs were influential. In the case of Korean vessels, New Zealand was able to export fish caught aboard Korean vessels tariff free. It was not until media attention made action a matter of economic significance that the New Zealand Government was provoked into action.

Crews’ Home Countries: Unregulated Manning Agents

Some elements of the abuse, however, occurred well outside the enforcement mandate of New Zealand fisheries and labour department officials. In many migrant sending countries, regulation of private recruitment agencies (manning agents) is poor. Agencies took collateral and trapped many crews in exorbitant debt. They also took a substantial part of crews’ wages in fees. Receiving recruitment fees from workers goes against ILO conventions on private recruitment agencies as it traps crews in exploitative employment. These recruitment practices meant that crews were subject to exploitation well before they arrived in New Zealand.

Furthermore, as allowed under the Code of Practice, many crews were paid through their manning agents, who kept substantial portions in deductions and simple embezzlement. In many cases, crew never received their wages. The trail of wage payments through webs of manning agents is opaque. In the Oyang 75 case, even a New Zealand Government-commissioned investigation failed to trace where the wages had ended up.

There is a clear need for greater attention to this point in the fishing supply chain. Simple steps would make substantial improvements, for instance requiring wage payments directly to crews (not through manning agents); requiring the employer to pay all recruitment fees; and imposing a responsibility on vessel operators to recruit only through reputable agencies. These steps would require cooperation between migrant sending and receiving countries, as elaborated below.

New Zealand: Changes in Progress

In New Zealand, media attention in 2011 forced the Government to take action over labour standards aboard FCVs. The Government launched a ministerial inquiry.[3] In 2012, Bloomberg Business week published an article linking abuse in New Zealand waters to United States supermarkets and consumers, a major New Zealand market.[4] Later in 2012, the Government announced comprehensive changes, which will come into effect by 2016. These include compulsory direct payment of wages to crews (not manning agents). Changes also include compulsory reflagging of foreign vessels to New Zealand. This will bring foreign crews into the New Zealand jurisdiction, and therefore under the protection of New Zealand criminal and employment law.

These changes effectively extend New Zealand jurisdiction over a ‘foreign’ supply chain; one that previously operated in a legal vacuum. This is a significant victory. However, the changes fall short of addressing recruitment of fishing crews.

The International Picture

The changes also do little to address the problems elsewhere in the global industry. According to the ILO, an estimated 27 million people work in capture fisheries internationally.[5] Commercial fishing  takes place in some of the world’s most difficult to regulate regions. Little is known about conditions aboard vessels in other jurisdictions, or those operating on the high seas.

Following pressure from Korean NGOs, the Korean Government recently announced its intention to prosecute Sajo Oyang regarding unpaid wages. It will also increase pressure on five other fishing companies with overdue wage payments. This is a testament to the work of Korean NGOs in monitoring and advocacy. However, there is a need for ongoing monitoring of these companies, and  for further research into companies that operate in other jurisdictions. Unless scrutiny of the industry is increased, the same companies that have abused workers in New Zealand waters will continue to do so elsewhere.

Further Cooperation Needed

The abuse and environmental degradation in New Zealand fisheries are likely just the tip of the iceberg in the fishing industry internationally. There are three key areas where further cooperation is needed.

1. Cooperation to identify ‘reputable’ recruitment agencies.

Media publicity has created interest within the New Zealand government, fishing companies and large supermarkets in recruiting from reputable sources. This may be an opportunity to add market pressures to calls for improved regulation of recruitment agencies. This would require methods of identifying reputable agencies.

Some countries such as the Philippines already have public registers of licensed agencies. There is also the possibility of creating private standards to identify reputable agencies. Should either mechanism be developed for recruitment agencies in regions such as Indonesia, this would allow foreign governments, NGOs and consumers to pressure for recruitment of crews to be only through recognised agencies.

2. Monitoring of Korean fishing corporations’ conduct elsewhere in the world

While the law changes will reduce problems in New Zealand waters, action is needed to stop perpetrators continuing to harm workers and the environment elsewhere. There is a need to monitor companies with a history of abuse, such as Sajo Oyang Corporation, Dong Won Fisheries, and Taejin Fisheries, in other parts of the world. Ultimately, there is need for a campaign to end these abuses.

3. Research into fishing labour conditions in other jurisdictions

Very little is known about the extent of labour abuses in the fishing industry internationally. There is a need for research and monitoring in other jurisdictions. Slave Free Seas, in cooperation with the United Nations Inter-Agency Project on Human Trafficking, is currently mapping known cases. Any groups that could provide information on their own regions would help to build up a global picture. Any information can be sent toresearch@slavefreeseas.org or kate.v.day@gmail.com.

Endnotes

1 Christina Stringer, Glenn Simmons, and Daren Coulston. 2011. Not in New Zealand Waters, Surely? Labour and human rights abuses aboard foreign fishing vessels. New Zealand Asia Institute Working Paper Series.

2 Michael Morrah, “Illegal fish dumping may be common practice,” 3News, 13 May 2012.

3 P. Swain, S. McGrath, and N. Walter. 2012. Report of the Ministerial Inquiry into the use and operation of Foreign Charter Vessels.

4 Skinner, E. Benjamin. 2012. Slaves Put Squid on Dining Tables From South Pacific. Bloomberg, March 31, 2012.

5 International Labour Organisation. “Fishers”. 2012. Retrieved 18 October 2012, from the ILO website <http://www.ilo.org/global/standards/subjects-covered-by-international-labour-standards/fishers/lang--en/index.htm>

References

Levy, Danya. Korean fishing firm gags crew with 'peace' contract. Fairfax News. 7 October 2012.

International Labour Organisation. “Fishers”. 2012. Retrieved 18 October 2012, from the ILO website <http://www.ilo.org/global/standards/subjects-covered-by-international-la...

Morrah, Michael. Illegal fish dumping may be common practice. 3News. 13 May 2012.

Skinner, E. Benjamin. 2012. Slaves Put Squid on Dining Tables From South Pacific. Bloomberg, March 31, 2012.

Stringer, Christina, Glenn Simmons, and Daren Coulston. 2011. Not in New Zealand Waters, Surely? Labour and human rights abuses aboard foreign fishing vessels. New Zealand Asia Institute Working Paper Series.

Swain, P., S.  McGrath, and N.  Walter. 2012. Report of the Ministerial Inquiry into the use and operation of Foreign Charter Vessels.