Dark Patterns, Risky Business, and Money Laundering: Illegal Fishing and Human Rights Abuses at Sea

June 2019

Please see our related collaboration on this topic with our partner, Oceana, here.

Human trafficking is a crime of crimes.¹ It includes elements of document forgery, fraud, illegal border crossing, kidnapping, physical violence, slavery, and sexual assault. It is often, but not always, transnational in nature, involving the movement of bodies across invisible or physical borders. It is exploitative at its very core. Trafficking in persons is the fastest growing transnational criminal enterprise in the world, generating $150 billion US dollars yearly and enslaving an estimated 21.9 million people.²

The cases we broadly reference in this document have elements of modern slavery, which includes both human trafficking, where individuals are transported against their will via force, fraud, or coercion, and forced labor, where trafficked individuals are forced against their will to labor in inhumane conditions.³ Conditions of forced labor can occur without the act of trafficking, for example if the worker has agreed to work on a fishing vessel under one set of conditions but later find that the conditions are different from what was agreed, and is unable to leave to due violence, threats, physical restraints, physical isolation, or debt bondage. Accounts also exist from workers that include them being drugged, kidnapped, and sold.

Fishing crew are particularly vulnerable to human trafficking and forced labor because many of the world’s largest fleets are reliant on workforces comprised of migrant labor.⁴ The fishing industry is also particularly rife with these abuses because of the lack of written contracts with workers,⁵ and where contracts exist, they can be in multiple languages that the worker does not understand.

Research suggests that over a ten year period of time, a sample of vessels examined initially for forced labor and/or human trafficking demonstrate that there may be a link between vessels that engage in IUU fishing and trafficking workers for forced labor, as they are already evading laws, regulations, and oversight to drive profits and may be more willing to exploit workers.⁶⁷

Illegal, unregulated, and unreported fishing (IUUF) is a major factor in undermining the sustainability of fisheries. It exploits the natural resources of sovereign nations, directly impacts economic opportunity and national food security, promotes the rise of organized criminal elements, and creates an increasingly unstable environment unsafe for the vulnerable and ripe for corruption. As an illicit activity, it is estimated that illegal fishing generates an average of $23.5b US dollars per year, making it the sixth largest transnational criminal enterprise by revenue.⁸ The same factors that enable large scale illegal fishing are the same factors that enable human trafficking.

Human trafficking and forced labor may be deeply intertwined with illegal fishing. Recent reports from global media⁹ and investigative NGOs¹⁰ confirm a close relationship between illegal fishing, forced labor and human trafficking. Migrants report working in slave-like conditions onboard vessels that are fishing illegally in foreign waters.¹¹ The illegal catch from the slave- manned vessels is then laundered into the international food supply and traded in the $150.9 billion per year¹² global seafood market. Businesses are using unfree labor as a model to cut costs to increase profits as part of regular business operations.

Human trafficking, forced labor, and environmental crimes, including illegal, unregulated, and unreported fishing, are designated categories of money laundering offense.¹³ As predicate crimes to money laundering, the financial system has an obligation under the international Anti-Money Laundering framework to proactively look for and actively seek remedy when informed of such offenses. Every time a commercial fishing company sells, packages, and distributes its wares, it is likely doing so using a financial services product. Human rights organizations have been sounding the alarm on labor abuses and applying pressure to businesses via legal and reputational risk; financial services providers must also actively seek information on illegal fishing and slavery and then leverage the available financial tools to increase pressure on companies within the fishing industry to operate within the law.

Though some fisheries are strictly regulated, there is no overarching governance within the fishing industry to hold and disperse dynamic information on bad actors or infrastructure to reward good ones. There is not a centralized structure whereby to make information on illicit fishing and human rights abuses available to the industry as a whole, nor an international legal framework to encourage these kinds of investigations. In lieu of an official tool, Global Fishing Watch (GFW) is one open source tool available for free to the public that uses satellite information to track AIS and other publicly available vessel data.¹⁴ Combined with IUU lists, RFMO data, and piecemeal bits of information that are available in the public domain, another tool like the Seafood Slavery Risk Tool¹⁵ combined with information from Global Fishing Watch can help governments, enforcement bodies, and other industry stakeholders fill the gap until a more permanent solution is reached.

A separate but related research initiative with GFW and the Sustainable Fisheries Group at University of California, Santa Barbara has been ongoing for the past year seeking to determine if vessel monitoring data and machine learning approaches can be used to identify vessels at risk for forced labor on a global scale. This initiative, and others like it, will help stakeholders detect a needle in a haystack - vessels engaged in illicit activity, like human trafficking, at sea.

An analysis of compiled research by media, NGOs, universities, and independent sources indicate similar vessel behaviors detectable in GFW that show up across a wide variety of both forced labor and illegal fishing cases, including:

• Staying at sea for extended periods of time.
• Large gaps in AIS data, especially around Exclusive Economic Zones (EEZ) and marine protected areas.
• Regular transshipment at sea.
• Avoidance of strict ports known to enforce regulations.

From overfishing a cascade of illicit activities begins, including illegal fishing and human trafficking. By detecting vessel behavior patterns linked to both, we can begin to disrupt these criminal activities.

Using information gleaned from publicly available sources and supported by data from both research and rescue NGOs, Liberty Shared was able to detect and analyze behavior in eight total confirmed cases of illegal fishing and labor exploitation at sea, and come to the following conclusions:

• There is a pattern to risky vessel behavior at sea that is detectable via satellites and open source tools.
• Pelagic fishing, occurring deep in the open ocean, far away from prying eyes, is by its nature more vulnerable to cases of illegal fishing, human trafficking and forced labor.¹⁶ It is an environment where any criminal activity can easily occur undetected.
• Illegal fishing and forced labor occur in every region in the world. Regions especially at risk include any area with weak oversight and lax governance.
• Businesses are using forced labor - slavery - as a way to cut costs and increase profits. While money and profit are certainly the driving incentive for lowering overhead expenses, fishing businesses also have to contend with depleted stock and low profit margins as well as downward pricing pressure from their distributors. Recent research by Sala et al suggests that deep sea fishing would be largely unprofitable without the benefit of subsidies and low labor costs.¹⁷

Recommendations for Financial Institutions:

• Financial institutions providing financial services to participants in the fishing industry should conduct more contextual due diligence, beyond just seeking to check and confirm company and individual profiles, to actually gain information on current and potential issues in the fisheries in which their client is conducting their business, both directly and further up the supply chain.
• Financial institutions involved in vessel chartering, such as lease financing, or involved in vessel insurance should also be clear about the underlying activities being conducted. Free open source tools such as the Seafood Slavery Risk Tool, GFW, and others to come, will all help provide context and increased knowledge.
• Financial institutions must ask their clients about their client’s current risk management policies and practices. The increasingly transparent environment in fishing is very similar to the developments in financial crimes risk environment and confirming how a client requires robustness of their counterparties is vitally important. The complexity of supply chains and the weak governance culminate in high potential risk.
• It is important for financial service providers to seek all transactional mapping information available showing movement of proceeds from suspicious criminal activities¹⁸, media data on perpetrators, and vessel monitoring services available, as transparency from civil society and reporting technology is increasing the standard of what is reasonable knowledge, and reasonable due diligence is making both much more onerous. It is prudent for financial institutions to not be caught unaware; though money laundering fines do not happen regularly, when they do they can be very large¹⁹ and cause huge loss in customer trust.

The fishing industry has not previously had the kind of incentives and stimulus to create and adhere to a global framework that prevents egregious human rights abuses and environmental crimes from occurring. As information transparency and availability have increased, financial institutions, law enforcement, and government actors are narrowing their foci of attention to criminality in the fishing world. At some point, this attention will cause both risk and costs to increase to a tipping point, and if actors within the industry have not moved to show that they are proactively addressing slavery issues within their supply chains by creating a risk management framework with robust practices and administration, they may be subject to onerous regulation and legal obligations.

Lack of oversight and a weak regulatory and legal environment make commercial fishing a vulnerable sector to illicit activity and create opportunities for bad actors to profit, including in illegal fishing, human trafficking, and forced labor. Increasing transparency over both vessel operations and ownership will make it harder for bad actors to continue their illicit behavior and easier for well-intentioned business owners to continue to be successful. Open source research is a useful, cost efficient tool to check on human rights records of recruiting agencies tied to particular vessels or fishing companies, and beyond media surveys, GFW and the Seafood Slavery Risk Tool are freely available and can be used to look at behavior patterns of vessels to monitor for risky behavior patterns to see if a region, company, or fishery merits a closer look. These are tools available to small and large entities within the commercial fishing industry as well as the financial providers that service them.

References
1 Nair, Dr. P.M (2007) Trafficking Women and Children for Sexual Exploitation, Handbook for Law Enforcement Agencies in India [Revised edition 2007]. Retrieved from https:// www.unodc.org/documents/human-trafficking/India_Training_material/ Handbook_for_Law_Enforcement_Agencies_in_India.pdf

2 International Labour Organisation (2014) Profits and Poverty: The Economics of Forced Labour, Retrieved from http://www.ilo.org/global/about-the-ilo/newsroom/news/ WCMS_243201/lang--en/index.htm

3 International Labour Organisation What is forced labour, modern slavery and human trafficking. Retrieved February 2019 from https://www.ilo.org/global/topics/forced-labour/ definition/lang--en/index.htm

4 Verite (2016) Fishing and Aquaculture. Retrieved from https://www.verite.org/wp-content/ uploads/2016/12/Fishing-and-Aquaculture-Overview.pdf

5 International Labor Rights Forum (2016) Tragedy in the Marine Commons: The Intertwined Exploitation of Ocean Ecosystems and Fisheries Workers. Retrieved from https://laborrights.org/ sites/default/files/publications/ TragedyInTheMarineCommons_SpecialRapporteurQuestionnaireResponse.pdf

6 United Nations Office on Drugs and Crime (2011) Transnational Organized Crime in the Fishing Industry. Retrieved from https://www.unodc.org/documents/human-trafficking/ Issue_Paper_-_TOC_in_the_Fishing_Industry.pdf

7 Environmental Justice Foundation (2010) All at Sea - The Abuse of Human Rights Aboard Illegal Fishing Vessels. London. Retreived from https://ejfoundation.org/resources/downloads/ report-all-at-sea_0_1.pdf

8 Global Financial Integrity (2017) Transnational Crime in the Developing World. Washington, DC. Retrieved from https://www.gfintegrity.org/wp-content/uploads/2017/03/ Transnational_Crime-final.pdf

9 McDowell R, Mason M and Mendoza M (2015) AP Investigation: Slaves may have caught the fish you bought | Associated Press. Retrieved from https://www.ap.org/explore/seafood-from- slaves/ap-investigation-slaves-may-have-caught-the-fish-you-bought.html

10 Environmental Justice Foundation (2013) Sold To Sea. Retrieved from https://ejfoundation.org/ resources/downloads/Sold_to_the_Sea_report_lo-res-v2.compressed-2.compressed.pdf

11 Couper AD, Smith HD, Ciceri B (2015) Appendix of Abuse and Slavery; Fishers and Plunderers: Theft, Slavery and Violence at Sea. London: Pluto Press.

12 FAO (2017, September 29). Prices up for key species as improving economic conditions revitalize seafood demand. Retrieved from http://www.fao.org/in-action/globefish/market- reports/resource-detail/en/c/1040685

13 FATF (February 2012) International Standards On Combating Money Laundering And The Financing Of Terrorism & Proliferation (updated October 2016). Retrieved from: http:// www.fatf-gafi.org/media/fatf/documents/recommendations/pdfs/FATF_Recommendations.pdf

14 https://globalfishingwatch.org/
15 http://www.seafoodslaveryrisk.org/

16 AIS data is mostly on large-scale vessels that operate in the open sea. Satellite coverage is much better on the high seas than in nearshore waters. So while the locus of activity may initially skew towards pelagic fisheries, there is information indicating that human trafficking and forced labor may be a problem in nearshore fisheries as well, but these are smaller scale fleets that don't travel as far from port, and as such they do not typically carry AIS and cannot be detected with this approach.

17 Sala, Enric, et al. (2018) “The Economics of Fishing the High Seas.” Science Advances, Vol. 4, no. 6, Science Magazine. DOI: 10.1126/sciadv.aat2504. Retrieved from https:// advances.sciencemag.org/content/4/6/eaat2504.

18 Liberty Shared (2018) Increased Transparency of Forced Labor and Money Laundering in Seafood Supply Chains. Retrieved from https://libertyshared.org/s/Increased-Transparency-in- the-Seafood-Industry.pdf

19 United States Department of Justice (2017) Western Union Admits Anti-Money Laundering and Consumer Fraud Violations, Forfeits $586 Million in Settlement with Justice Department and Federal Trade Commission. Retrieved from https://www.justice.gov/opa/pr/western-union- admits-anti-money-laundering-and-consumer-fraud-violations-forfeits-586-million