The Walmart Effect: Child and Worker Rights Violations at Narong Seafood

Publication Date: 

September 24, 2013


International Labor Rights Forum & Warehouse Workers United

Each year Thailand’s shrimp industry exports hundreds of thousands of tons of shrimp, (worth roughly USD 1.5 billion) to the United States, its largest export market. The shrimp are raised on farms, peeled, cooked, processed and packaged by a low‐paid workforce that is made up almost entirely of migrant workers from Burma, Cambodia and Laos. Many of these workers are trafficked into the country by labor brokers and are often subjected to labor exploitation and debt bondage. Horrible working conditions, including under and non‐payment of wages, violations of minimum wage laws, long overtime hours, dangerous and unsanitary working conditions and the systematic denial of freedom of association and collective bargaining rights are common. Since Thailand has not ratified core ILO conventions, migrant workers have no legal right to freedom of association. Worse still, instances of forced and child labor are known  to be widespread in the industry.  

Although some observers argue that conditions in the large shrimp processing factories have improved, this briefing paper indicates inhumane working conditions and human rights violations continue to be a problem at even the most reputable factories. More specifically, this brief documents a number of serious violations of Thai law and international human rights standards at Narong Seafood, a model company and longtime supplier to Walmart. Violations at Narong’s principle shrimp processing facility in Samutsakorn, Thailand include utilizing underage workers, nonpayment of wages, charging workers excessive fees for work permits, and an ineffective auditing regime.

In recent years, problems in the industry have received considerable international attention. In 2008, AFL‐CIO's Solidarity Centre published The True Cost of Shrimp, a report focused on exposing the exploitative conditions faced by shrimp processing workers. Shortly after, the Thai Government and the Thai Frozen Foods Association (TFFA) implemented a variety of reforms to strengthen the monitoring of processing factories and the enforcement of labor and occupational health & safety standards. Shrimp producers exporting to the US must meet the TFFA's membership criteria as well as the standards established by the Global Aquaculture Alliance's Best Aquaculture Practices (BAP) certification system. BAP is organized by the trade group Global Aquaculture Alliance which includes producers, importers, retailers and restaurant chains.

Acknowledging the well‐documented problems of food quality, environmental degradation, and labor rights violations endemic to the global aquaculture industry, Walmart joined BAP. Unfortunately, recent incidents at Phatthana Seafood (Songkhla Province), a supplier to Walmart and other US retailers and restaurants raise questions about the effectiveness of the industry’s reform initiatives. In April 2012, Human Rights Watch reported on a strike at a Walmart seafood processing factory in Thailand’s southern province of Songkhla; the factory, owned by a Bangkok‐based company called Phatthana Seafood Co., Ltd, is one of Walmart’s largest shrimp suppliers.

According to HRW, though the workers went on strike due to wage issues, many of Phatthana’s migrant workers found themselves in conditions amounting to debt bondage due to excessive recruitment and other fees.

Although BAP standards primarily focus on food quality and environmental issues, its standards do contain language on the treatment of workers. BAP standards for treatment of workers include specific language concerning minimum wage, use of underage workers, forced labor, and human trafficking.

BAP audits, as with the audits Walmart conducts to verify compliance with its 'Standards for Suppliers', are not subject to public review or verification by outside organizatons. Contrary to Walmart’s claims that third‐party audits are unannounced after the initial audit, our research indicates that Narong managers knew about inspections in advance and adjusted to be in compliance. Furthermore, audits never occurred during the night shift. That the problems at Narong went unannounced by auditors demonstrates the shortcomings of the BAP and Walmart auditing regimes.

Walmart aims to provide ‘everyday low prices’ to consumers, however this focus often comes at the expense of workers in the shrimp industry as well as workers in the company’s broader global supply chain. Walmart is not the only buyer of Thai shrimp, however, due to its size has a large impact on all aspects of the industry. As a global grocer, Walmart is more than twice as large as its two closest competitors (Tesco and Carrefour). In the United States, Walmart is the largest retailer of food controlling 25% of the total US food market and the largest buyer of imported farm‐raised shrimp in the US.  

These findings support the prevalent criticism that corporate self‐monitoring fails to address serious labor and human rights violations in the global supply chains of companies like Walmart. They are also relevant for those in the environmental and food safety communities who rely on the same set of standards and audits to determine the sustainability of global aquaculture.