Europe is allowing forced labour at sea to run wild

An estimated 128,000 fishers suffer horrific forced labour abuses onboard fishing vessels every year, a figure that likely significantly understates the full extent of this crisis. 

Abuses include physical violence, unpaid wages and having to spend years at sea, according to the International Labour Organization (ILO).

A recent report found that 22.5% of commercial fishing vessels accused of forced labour are owned by European companies, led by Spain, Russia and the UK. 

Europe came second after Asia whose companies, especially from China, own almost two-thirds of vessels linked to forced labour.

Most European countries — together with other fishing superpowers like China, Indonesia and the US — have not yet ratified key agreements that ban forced labour in fishing vessels such as the ILO Work in Fishing Convention 188, while the relevant EU directive only applies to EU-flagged vessels or those operating in EU waters.

Crucially, ratifying these agreements would render any proceeds of vessels using forced labour equivalent to proceeds of crime under money laundering laws, making prosecutions easier.

Failing to do so, however, explains the reluctance by the Spanish authorities to investigate alleged forced labour abuses onboard several commercial fishing vessels owned by Pescatlant, known in the fisheries sector to be Russian, and one of the main companies accused of these crimes, according to the International Transport Workers’ Federation.

But even if countries implement the ILO Convention and other key agreements, financial secrecy means that ultimate owners of accused vessels can still evade justice. 

What is hiding behind opaque corporate structures?

The reason is that beneficial owners of European and other commercial fishing vessels accused of forced labour often hide behind complex, cross-jurisdictional corporate structures ranging from shell companies to opaque joint ventures.

The European Court of Justice (ECJ) made things worse last year. In a shocking ruling, the court invalidated public access to beneficial ownership information due to privacy concerns in a case brought by a property developer in Luxembourg, meaning that uncovering those ultimately responsible for these crimes will be even harder.

This ruling reversed progress in the 5th Anti-Money Laundering Directive (AMLD5) that mandated public access to beneficial ownership information to prevent and detect money laundering and predicate offences. 

This ruling immediately stopped plans to open beneficial ownership access to the public in countries like Spain and Ireland, many of whose flagged vessels have been accused of forced labour offences.

Currently, the EU is debating whether to make this data available for so-called “legitimate interests” in media and civil society. 

However, this is a slower and more cumbersome process than direct public access, undermining those investigating forced labour abuses in fishing fleets, as well as other environmental and human rights crimes.

Should products of forced labour be treated as profiting from crime?

In the meantime, a recent analysis found that in 13 of 27 EU member states, journalists and civil society representatives can either not access information or have to go through often complex requirements to prove their legitimate interest. 

Also, even in countries like France and Latvia which still have open beneficial ownership registries, these do not record changes in ownership over time, thereby not allowing to uncover the ultimate owners of accused vessels at the time when the offences took place.

Positively, the EU is discussing a proposal to ban all products from forced labour entering or being consumed in the European market which, even though it is currently stalled at the European Council, suggests greater political will to tackle this human rights crisis.

Also, the UK has moved forward to consider goods sourced from companies found out for forced labour to fall under the Proceeds of Crime Act (POCA).

Even if the case in UK courts regarding forced labour reported concerning Uyghur cotton did not lead to a conviction, the judges accepted the general principle of forced labour constituting a proceed of crime.

People’s lives are at stake

But all these measures are not enough unless the underlying problem of financial secrecy is resolved. 

After all, how can one ban fishing products from forced labour without being able to identify the vessels’ legal owners and the individuals who ultimately benefit from these offences? 

Sanctioning the captains or crew of the vessels is completely ineffective; you need to sanction the companies and their beneficial owners.

The way forward is clear: public registries of commercial fishing vessels accused of forced labour should be set up, all countries should ratify key conventions, there should be beneficial ownership registries, and anyone registering a vessel should disclose their legal and beneficial owners and changes in property over time. 

Thousands of people’s lives depend on this happening. There is no excuse not to act.

Matti Kohonen is Executive Director of the Financial Transparency Coalition.

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