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AP report implicates Walmart, Aldi in North Korean labor scandal

Report alleges seafood companies benefit from possible 'modern-day slavery.'

Faced with sanctions on several fronts, North Korea is shipping tens of thousands of people to work abroad, sending most of their earnings back to the North Korean government to help subsidize programs including its nuclear weapons program, according to a new AP investigation.

The AP report discovered US consumers buying seafood from Walmart or Aldi could inadvertently be supporting this "modern-day slavery". AP traced seafood processed by North Korean workers to Canada, Germany and other European Union countries, according to the news site.

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Modern-day slavery

The report details North Korean workers in a Chinese seafood processing facility, who live restricted lives with limited access to the outside world and must send up to 70 percent of their salaries to North Korea, according to the report.

Workers earn as little as $90 (€76) per month or $0.46 (€0.39) per hour, while the North Korean government is raking in an estimated annual revenue of $200-500 million (€170-425 million).

A deal created several years ago between China and North Korea allowed factories to contract North Korean workers, which boosted the fish processing sector in Hunchun, China. Chinese companies prefer North Korean workers over Chinese workers because their pay is cheaper, their contracts are longer -- usually 2-3 years -- they take very few sick days and nearly no personal days, according to the news site.

Tainted supply chain?

"While we understand that hiring North Korean workers may be legal in China, we are deeply concerned that any seafood companies could be inadvertently propping up the despotic regime," said National Fisheries Institute President John Connelly, adding that he's urging companies to check their supply chains to "to ensure that wages go to the workers, and are not siphoned off to support a dangerous dictator."

AP identified three seafood processors employing North Koreans and exporting to America:

  • Joint venture Hunchun Dongyang Seafood Industry & Trade Co. Ltd. & Hunchun Pagoda Industry Co. Ltd. distributed globally by Ocean One Enterprise
  • Yantai Dachen Hunchun Seafood Products
  • Yanbian Shenghai Industry & Trade Co. Ltd

These facilities are sourcing seafood from China, Russia and Alaska and this year, more than 2,000 metric tons of seafood were shipped to the United States and Canada from Chinese factories employing North Koreans.

AP listed several alleged US and foreign importers and distributors:

  • Rhode Island-based Sea-Trek Enterprises, which imports snow crab, salmon fillets, squid rings and more. It exports to Europe, Australia, Asia, Central America and the Caribbean. The company said it plans to investigate further.
  • Pennsylvania-based The Fishin' Company supplies retailers and food service companies. It said it stopped sourcing from Hunchun processors this summer, but seafood can stay in the supply chain for more than a year. The company said it plans to investigate further.
  • Seafood products from these Chinese facilities were in Walmart-branded packaging as well as Sea Queen, a seafood brand sold exclusively at Aldi supermarkets.
  • Canadian firms Morgan Foods and Alliance Seafood also received shipments from the Hunchun factories.
  • Some products coming out of these factories were also packaged with brands from some German supermarkets: All-Fish distributors, Rewe and Penny grocers and Icewind brand.
  • Thai Union-owned Chicken of the Sea has indirect ties to North Korean workers in Hunchun, as it purchases products from sister company Yantai Dachen Food. Although both companies are owned by the same Shandong-registered group, they are separate legal entities, and have no commercial relationships. Thai Union said labor standards are met and all employees are Chinese. It also stated that Yantai Dachen Food signed Thai Union's Business and Ethic Labor Code of Conduct and passed an independent Business Social Compliance Initiative audit.

Walmart banned its suppliers, including The Fishin' Company, from processing seafood at a Hunchun factory after discovering possible labor issues following an audit a year ago, said Walmart spokeswoman Marilee McInnis, according to the AP report.

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