Correspondence
Letter couriered from Shanghai and confirmed delivered.
The letter said: "My name is Ian Urbina and I’m the director of The Outlaw Ocean Project, a journalism non-profit based in Washington D.C. that publishes stories about human rights and environmental issues connected with the sea.
I’m writing to you in light of our latest investigation, which concerns the Chinese squid fishing industry, and a link we’ve discovered between abuses in that industry and Rongcheng Haibo Ocean Food Co. Ltd.’s supply chain.
This link concerns a Chinese squid jigger owned by Rongcheng Wangdao Ocean Aquatic Products. In a seven-month period between August 2020 and March 2021, one crew member died and a second was disembarked for emergency medical treatment after suffering serious mistreatment and abuse while on board the vessel.
Our reporting also documents multiple indicators of forced labor among crew onboard that vessel: recruitment linked to debt, deceptive recruitment, enforced isolation, degrading living conditions, physical violence, wage withholding, the retention of personal identity documents and strong financial penalties for leaving employment.
Squid caught by the vessel has been transshipped to a refrigerated ship connected with Rongcheng Haibo Ocean Food Co. Ltd. through your company’s ownership, the Lu Rong Yuan Yu Yun 009. That refrigerated ship has also transshipped with a squid fishing vessel, owned by another Chinese fisheries company, which was penalized by Argentinian authorities for illegal, unreported and unregulated fishing.
Our investigation has also found that other reefers connected to your company through ownership transhipped with dozens of squid vessels that are connected to instances of forced labor, violence, illegal fishing, and crew neglect.
We’ve heard from multiple stakeholders at all levels of the squid industry - importers, exporters, ship owners, cold storage owners, processing companies - that there are many places where the catch can get comingled, which makes it extremely difficult for squid exporters to know with certainty that their products do not come from vessels involved in abuses. At the reefer level, after squid is caught by multiple ships, it can be comingled. At the docks level, it can get comingled as it comes off the ships. At the processing level, it can get comingled in the plant. There’s also the reality of collectives in China and conglomerates that often trade between each other.
Please let us know by Monday, January 23, 2023 if you have any comment or statement to make on the record in response to this information."
Liu Wei (Cindy) at Rongcheng Haibo replied by email with statements attached in English and Chinese signed by Xiao Junyong, President of Rongcheng Haibo.
The statement said: "Regarding the issues raised in the investigation report of The Outlaw Ocean Project, our company hereby states as follows:
-
Rongcheng Wangdao Ocean Aquatic Products is a subsidiary of Shandong Jiekou Fishery Group Co., Ltd., 100% owned by Jiekou Group. Not any subsidiary of Chishan Group. There is no relationship between Rongcheng Wangdao Ocean Aquatic Products and Chishan Group. In addition, there is no any business relationship between Rongcheng Haibo Seafood Co., Ltd. and Rongcheng Wangdao Ocean Aquatic Products. We never purchased any raw materials from Rongcheng Wangdao Ocean Aquatic Products! Chishan Group and Rongcheng Haibo Seafood Co., Ltd. hereby confirm that we are not involved in any human rights disputes of Rongcheng Wangdao Ocean Aquatic Products. This report is totally a fabrication. Please refer to Annex 1 in attachment for the registration information of Rongcheng Wangdao Ocean Aquatic Products, the registration information of Shandong Jiekou Fishery Group Co., Ltd.
-
The allegation that Chishan Group’s vessels illegally fished in the waters of North Korea in violation of the UN regulations in 2017 and 2018 is completely fabricated. Rongcheng Chishan Ocean Fishery Co., Ltd., a subsidiary of Chishan Group, is a large standard fishing company. It operates in accordance with the law and never violate any international Marine Fishing regulations or have any other illegal acts. They fish legally within the licensed sea area. Nor has it received any notification from relevant international or domestic authorities.
-
Even though Rongcheng Haibo Seafood Co., Ltd. and Rongcheng Chishan Ocean FIshery Co., Ltd. are both affiliation to Chishan Group, each subsidiary of the Group has an independent legal person and operates totally independently.
-
The raw materials purchased by Rongcheng Haibo Seafood Co., Ltd. are all legally caught. And the raw materials of squid products exported by our company are mainly imported raw materials, mainly from Argentina, the United States, Uruguay, New Zealand, South Korea and other countries.
-
Rongcheng Chishan Ocean Fishery Co., Ltd. which belongs to Chishan Group has only 15 ocean fishing vessels, 4 trawlers, 11 jiggers. And also it has only one small transportation ship with small horsepower, just operate in offshore waters, because of its small horsepower, it can not go to South America or Argentina which are very far from China. All the cargoes from Rongcheng Chishan Ocean Fishery are all transhipped by “China seafood Group” which is called “ZhongShui Group”, so the report is totally untrue and wrong, totally slander.
In conclusion: Rongcheng Wangdao Ocean Aquatic Products belongs to Shandong Jiekou Fishery Group and has no relationship with Chishan Group. It also has no relation with Rongcheng Haibo Seafood Co., Ltd. The vessels of Rongcheng Chishan Ocean Fishery Co., Ltd. have not violated any international regulations on Marine fishing and have no any illegal activities. Raw materials purchased by Rongcheng Haibo Seafood Co., Ltd. are all legally fishing. The squid raw materials processed and supplied for our customers are imported and all legally caught. The report provided is completely defamatory and untrue. If necessary, we will take legal measures to protect our company’s rights and interests.”
The email also included an attachment showing Rongcheng Wangdao Dayang Aquatic Product Co. Ltd.’s corporate registration details in China, indicating it is 100% owned by Shandong Jiekou Fishery Group.
The Outlaw Ocean Project replied: "Thank you very much for your email and for your statements. We have additional information regarding points you raised in that statement:
-
The statement says that there is no relationship between Rongcheng Wangdao and The Chishan Group, however transshipment data indicates otherwise. Three of Rongcheng Wangdao’s fishing vessels have transshipped with reefers owned by Rongcheng Chishan Ocean Fishery over the past five years – two of those interactions were as recent as 2022. The ships involved were: A. The Lu Rong Yuan Yu 186 鲁荣远渔186 (registered to Rongcheng Wangdao since 2018) has transshipped with the Lu Rong Yuan Yu Yun 008 鲁荣远渔运 008 and Lu Rong Yuan Yu Yun 009 鲁荣远渔运009 (both are registered to Rongcheng Chishan Ocean Fishery); B. The Lu Rong Yuan Yu 187 鲁荣远渔187 (registered to Rongcheng Wangdao since 2018) has transshipped with the Lu Rong Yuan Yu Yu 008 鲁荣远渔运 008 (registered to Rongcheng Chishan Ocean Fishery); C. The Zhen Fa 7 振发7 (registered to Rongcheng Wangdao since 2011) has transshipped with the Lu Rong Yuan Yu 009 鲁荣远渔运009 (registered to Rongcheng Chishan Ocean Fishery).
-
The statement says that the allegation that Chishan Group vessels fished illegally in North Korean waters in violation of UN regulations in 2017 and 2018 is “completely fabricated”. We have evidence gathered via satellite tracking that these vessels were indeed fishing in North Korean waters in the period stated. The Lu Rong Yuan Yu 739 鲁荣远渔739 was observed fishing in these waters in 2017, the Lu Rong Yuan Yu 802 鲁荣远渔802 in 2018, and the Lu Rong Yuan Yu 809 鲁荣远渔809 in 2019. All three are registered to Rongcheng Chishan Ocean Fishery Company and were registered to it at the time of their operations in these waters.
-
The statement says that Rongcheng Chishan Ocean Fishery only has one (1) small transportation ship which does not have engine capacity to travel as far as South America or Argentina. Both the Lu Rong Yuan Yu Yun 008 鲁荣远渔运008 and Lu Rong Yuan Yu Yun 009 鲁荣远渔运009 carrier reefer vessels are registered to Rongcheng Chishan Ocean Fishery since October 2018. The transshipments involving the 008 and 009 referenced earlier in this email occurred in the South Pacific Ocean and in the Argentine Sea.
-
The statement says that Rongcheng Haibo and Rongcheng Chishan Ocean Fishery are both affiliated to Chishan, but operate independently of each other. It also says that raw materials purchased by Haibo are all legally caught and the raw materials exported by the company are mainly imported raw materials mainly from Argentina, the US, Uruguay, New Zealand, S. Korea and other countries. Are you claiming that squid caught by fishing vessels and/or transported by refrigerated cargo vessels operated by Rongcheng Chishan Ocean Fishery do not supply any raw squid material to Haibo?
In addition to the above information regarding the issues we raised in our initial letter to your company, we have also seen reports from credible organizations that at least one squid fishing vessel registered to Rongcheng Chishan Ocean Fisheries Co. Ltd, the Lu Rong Yuan Yu 701 鲁荣远渔701, fished illegally in Indonesian waters in July 2020. Remote observation data indicates that another two of the company’s squid vessels, the Lu Rong Yuan Yu 805 鲁荣远渔805 and Lu Rong Yuan Yu 808 鲁荣远渔808, exhibited behavior consistent with a high risk of IUU fishing in the Argentine Sea in 2018 and 2019.
Do you have any additional statement or comments to make in light of the above details?"
Liu Wei (Cindy) at Haibo replied: "We do not know anything about Chishan Fishery Group, as we are an independent company. We are also sure that we have not purchased squid raw materials from this company."
The Outlaw Ocean Project emailed Haibo, saying: "I wrote to Rongcheng Haibo Ocean Food Co. Ltd. earlier this year regarding our research into the Chinese squid fishing industry, and I am contacting you again with regard to findings we’ve made concerning forced labor.
Rongcheng Haibo has received multiple groups of workers from the Xinjiang Uyghur Autonomous Region of the People’s Republic of China under the government’s labor transfer program. The United Nations, human rights organizations and academic experts agree that since 2018, the Chinese government has systematically subjected Xinjiang’s predominantly Muslim ethnic minorities to forced labor across the country via state-sanctioned employment schemes which use coercive methods in worker enrollment, and obstruct freedom to leave employment.
Rongcheng Haibo’s international customers include companies in the U.S., where the importation of goods produced from state-imposed forced labor is prohibited. Does Rongcheng Haibo have any comment or statement to make in response to this email?"
Liu Wei (Cindy) at Haibo replied: "We are a company run in accordance to the law and regulations, please do not spread untrue rumors, making things up. Please respect the law. Respect us."
Lund's Fisheries provided a statement given to them by Rongcheng Haibo, to The Outlaw Ocean Project's publishing partner, The New Yorker. The Haibo statement said: “Regarding the Chishan Group website article involving the use of Xinjiang workers issues in Rongcheng Haibo company
In order to improve the quality of life of employees and exchange typical practices of internal enterprises, an article was published in the general issue of Chishan Daily on September 22, 2022, reporting the practices of Haibo Company that treating Xinjiang workers well and ensure their quality of life. The relevant situation involved in the report is hereby clarified as follows:
First the report misidentified the employer as “Haibo Company”. The objective fact is that the main unit using the Xinjiang workers is Rongcheng Hailong Cold Chain Co., Ltd., which is a sole proprietorship enterprise and has no connection with Chishan Group and Haibo Company. Because Rongcheng Hailong Cold Chain Co., Ltd. and Haibo Company are located in the same industrial park, Hailong has not set up a separate halal canteen, and it borrows the idle canteen of Haibo Company to meet the dining demands of Xinjiang employees. The author of the article did not understand the above situation, and saw that there were Xinjiang people eating in the canteen of Haibo Company without grasping the real situation, which caused a clerical error.
Secondly, the use of Xinjiang employees of Rongcheng Hailong Cold Chain Co., Ltd., is totally legal, and there was no bullying or forced labor behavior during the work of Xinjiang workers. Rongcheng Hailong Cold Chain Co., Ltd. is in the same industrial park with our company. We are more familiar with the management of this enterprise. What we see is: Rongcheng Hailong Cold Chain Co., Ltd. legally provides jobs for Xinjiang workers, solves the employment problem of Xinjiang workers, and provides them with a good working and living environment, pays wages on time and in full, and enables them to learn advanced production skills. There was no forced labor, and all Xinjiang workers enjoyed full freedom and equal pay for equal work. Moreover, the company respects the eating habits of XInjiang workers and provides halal diet to Xinjiang workers.
Third, we must be vigilant against the unfounded rumors and slander from the individual organization. We have reason to believe that the evidence of “using Xinjiang workers” produced this time is actually just an attempt by some organizations with ulterior motives to smear our company’s image with the so-called Xinjiang-related issues in order to achieve their purpose of disrupting our normal economic and trade relations. We are firmly opposed to this. We also hope that relevant Chinese and US companies can enjoy friendly cooperation and healthy development in a lawful and just environment. At the same time, we reiterate once again that Rongcheng Haibo Seafood Co., Ltd. has never employed any Xinjiang workers, and our company reserves the right to pursue legal responsibility for the malicious injured.”
The Outlaw Ocean Project emailed Lund's and Rongcheng Haibo with further information and questions in response to their email to The New Yorker. The Outlaw Ocean Project's email said:
"Dear Bob, Wayne, and Rongcheng Haibo:
Thank you for your letter dated October 6, 2023, and for continuing to engage with regard to our ongoing investigation.
We have been in ongoing conversation with Lund’s since January 23, 2023, when we had a Zoom meeting with the company’s CEO and seven of its staff, during which we explained our findings and methodology, and fielded your questions. In the subsequent eight months, we replied fully to your company’s emails seeking further input from us, and sent you additional questions. We took a similar approach with Haibo, which we contacted by registered letter on February 2, 2023, to detail our initial findings and in which we began asking questions. Throughout our investigation, we have given stakeholders in the industry and tied to our investigation ample time, typically weeks or months, to look into the matters we have been uncovering.
As we explained to Lund’s previously, we cannot provide the exact documents or source names behind various pieces of evidence because to do so runs the risk that the relevant company in China and/or authorities tied to the Chinese state will alter or remove the specific evidence that we are using before (or after) we can complete our investigation. There is also a risk to some of our sources inside China.
Your October 6 letter says that you only began your investigation into the issues we raised when you were contacted by The New Yorker. However, in our Zoom meeting and in your subsequent emails, including one on June 26, 2023, you confirmed that you were investigating the matters that we brought to your attention. The Haibo statement that you enclosed in your October 6 letter is itself dated June 22, 2023.
Your October 6 letter also states that we declined to provide you with any information about the source of our evidence. However, we provided you with descriptions of the type and content of multiple pieces of evidence. Your October 6 letter quotes one of the examples of our evidence that we provided to you. In that reference, you cite our description of a Chishan Group newsletter that you took to be one from September 22, 2022, in which the company explicitly describes Haibo receiving Xinjiang workers. Haibo’s explanation of this - that the workers were in fact from another company entirely unconnected to the Chishan Group or Rongcheng Haibo - is simply not credible given the volume of evidence we have compiled.
Your October 6 letter establishes the extent of your relationship with Haibo and your reliance on SMETA audits for oversight of forced labor concerns at your processing partners. You write for instance: “Lund’s Fisheries has worked with Rongcheng Haibo for ten years, and the firm has consistently passed required SMETA audits. Our investigation did not find any evidence of illegal activity or forced labor in the operations of Rongcheng Haibo.” Thank you for clarifying these points.
Your October 6 letter says that the Chishan Group newsletter citing Xinjiang workers at their plant was incorrect due to a reporting error on the Chishan Group’s part. Again, the explanation provided is simply not credible. We must make clear that our evidence does not rest upon a single document, but on dozens of sources. We found articles in the state news media from 2021, in both Uyghur and Chinese, that describe government labor transfers to Rongcheng Haibo. Three newsletters published by the Chishan Group also describe the use of Xinjiang labor at Haibo, and also detail government labor transfers to Rongcheng Haibo. An additional four newsletters describe Xinjiang workers at other Chishan Group enterprises, including Shandong Haidu, another processing plant that exports to the United States. Detailed in these articles are high-level meetings in 2020 and 2021 between corporate executives, including Rongcheng Haibo senior management, and Chinese government representatives.
In February 2021, the Chishan Group published a newsletter in which an article celebrated the arrival of Xinjiang workers at Rongcheng Haibo. The article included an image of the workers arriving at the site.
In May 2021, a Chishan Group newsletter said the company had held meetings with government officials in which the transfer of additional laborers from Xinjiang was discussed. Present at the meeting was Haibo's general manager, as well as representatives of a Xinjiang Zhongtai Group subsidiary, a company on the Uyghur Forced Labor Prevention Act Entity List for "working with the government of Xinjiang to recruit, transport, transfer, harbor or receive forced labor or Uyghurs, Kazakhs, Kyrgyz, or members of other persecuted groups out of Xinjiang." The article said the Chishan Group was "looking forward to the arrival of laborers from Xinjiang" and said that the meeting concluded with an agreement between the Bayingolin Mongol Autonomous Prefecture Human Resources and Social Security Bureau and the Xinjiang Zhongtai Group subsidiary to facilitate the transfer of "qualified Xinjiang migrant workers to Chishan enterprises as soon as possible."
In October 2021, a representative of Kashgar’s Human Resources and Social Security Bureau and Shandong’s ‘Xinjiang Aid’ program visited Chishan Group to “investigate the employment environment” of the company, alongside a representative from a state-owned Kashgar company and Xu Wu, director of the Public Employment and Talent Service Center and member of the Human Resources and Social Security Bureau of Rongcheng. Xu Wu oversees the Xinjiang Aid Labor Service Workstation, located within the Shidao Management District, which has provided Xinjiang labor to Chishan Group as well as other Rongcheng seafood enterprises, according to state media.
In September 2022, a Chishan Group newsletter said that Rongcheng Haibo implemented special kitchen arrangements for Xinjiang workers.
In addition to this, four other newsletters reference the transfer and/or accommodation of Xinjiang workers at other Chishan Group companies, including Shandong Haidu, another major exporter to the United States. Again, the practice of cooperation with government authorities to facilitate the transfer of Xinjiang workers is described.
Beyond state media and company materials, we've obtained footage uploaded by Uyghurs to social media that shows them working at Rongcheng Haibo. Video clips uploaded by seven users between March 2022 and June 2023 depict scenes that are verifiably shot from within Rongcheng Haibo, and around the company compound, according to our analysis. The videos include images and clips of the Uyghurs in employee overalls on the processing plant floor.
There is also a clip of a Xinjiang worker at Rongcheng Haibo that was uploaded on the same day in 2022 that SGS undertook a SMETA audit of the site. Our evidence further indicates that social audits have consistently failed to detect Xinjiang labor at numerous Shandong seafood plants over a period of several years.
In December 2021, the United States signed into law the Uyghur Forced Labor Protection Act, which introduced a legal presumption that all imports produced “wholly or in part” from Xinjiang were derived from state-imposed forced labor. This presumption also applies to goods made with Uyghur and other ethnic minority labor transferred out of Xinjiang via government affiliated labor transfer programs.
In light of your input and additional disclosures, we have a number of follow-up questions for you.
Questions for Lund’s:
- You have previously disclosed that you hired two people to work full-time for you in China, inspecting the processing plants that export to Lund’s. Have you asked them for any insights on the issues we raised?
- Our email to Lund’s dated June 28, 2023, did not receive a reply. In it we asked about Lund’s requirement for all of its suppliers to comply with the SMETA standard. Can you disclose who carried out that SMETA audit of Haibo for Lund’s?
- Does Lund’s or any partners tied to its supply chain store any of its seafood at Rongcheng Hailong Cold Chain Co. Ltd.? Have they done so at any point in the past?
Questions for Rongcheng Haibo:
Your letter states: “At the same time, we reiterate once again that Rongcheng Haibo Seafood Co., Ltd has never employed any Xinjiang workers.”
- Can you explain the February 2021 Chishan Group article that celebrated the arrival of Xinjiang workers to the Haibo company and included an image of the workers arriving?
- Can you explain why the Haibo Company was party to an agreement with Xinjiang Bayingolin Mongol Autonomous Region Human Resources and the Zhongtai Company to receive Xinjiang workers in May 2021?
- Can you explain why, as detailed in a September 2022 Chishan Group article, the Haibo Company implemented special kitchen arrangements for Xinjiang workers, if it did not employ Xinjiang workers?
- Can you provide an explanation why at least seven workers from Xinjiang took at least 20 videos from inside and outside the Haibo processing plant, including images of them on the processing plant floor in employee overalls, if they were not working at Haibo?
- Can you tell us how many Xinjiang workers were transferred to work at other companies owned by the Chishan Group, such as Shandong Haidu? This process is described in multiple newsletters published by the Chishan Group.
- Does the Chishan Group or its subsidiaries store any of its seafood at Rongcheng Hailong Cold Chain Co. Ltd.? Have they done so at any point in the past?
Thank you for your prompt attention. If you could please get us replies by October 20, 2023, it would be helpful.
Sincerely,
Ian Urbina The Outlaw Ocean Project"
Guogang Li, a lawyer for Haibo Seafood Co. and Shandong Haidu Ocean Product Co., sent a letter to The Outlaw Ocean Project:
"Dear Ian Urbina:
Please allow me to introduce myself, Guogang Li, a lawyer from Tahota (Beijing) Law Firm (please see Attachment 1 for my biography), entrusted by Haibo Seafood Co., Ltd. (hereinafter “Haibo”, please see Attachment 2 for the Power of Attorney) and Shandong Haidu Ocean Product Co., Ltd. (hereinafter “Haidu”, please see Attachment 3 for the Power of Attorney). I would like to send the following comments below to you regarding the report in the “Outlaw Ocean Project” related to the Uyghur laborers in the seafood processing factories for your consideration.
I. Among the laborers in Haibo and Haidu, there are no ethnic minorities from Xinjiang. Since we were entrusted by Haibo and Haidu in October 2023, we have conducted a cross-check on the employee rosters and payrolls of Haibo and Haidu, as well as physically interviewed the employees at the company, and found that Haibo and Haidu do not employ any workers from Xinjiang and there has never been forced labor in Haibo and Haidu. It would be appreciated if you and your team could visit Haibo and Haidu and conduct the audit to identify whether ethnic minority laborers from Xinjiang exist. Any unverified information or data should not be used to support conclusions or as an application for requesting import restrictions from the federal government of the United States, since this could harm downstream and upstream industries as well as consumers in the United States.
You mentioned the Uyghur Forced Labor Prevention Act (UFLPA) many times, and I used to be the director in China’s Ministry of Commerce (MOFCOM), dealt with counterparts from the United States Department of Commerce and U.S. Customs and Border Protection, and also worked as a trade and customs lawyer at WHITE & CASE LLP in the United States and assisted a number of Chinese companies to respond to CBP’s WRO and the UFPLA. My understanding is that the purpose of both the WRO and the UFLPA is to eliminate any forced labor that may exist in the manufacturing or supply chain of a product through customs measures, and not to penalize a company or even an industry. It would be contrary to the starting point of WRO and the UFLPA if CBP were to impose sanctions on Chinese companies based on the principle of punishing, rather than eliminating forced labor. Otherwise, it implies that the applications to the sanctions have been influenced by certain competing interests and is intended to be used to harm competitors.
II. The SMETA audit report and the SYSCO Quality Assurance audit report respectively found no forced labor in Haibo and Haidu.
In August 2023, an independent third-party auditor conducted a SMETA 2-pillar audit of Haibo on Labor Standards, and Health and Safety at the request of our foreign client. In September 2023, an independent third-party auditor conducted a SYSCO Quality Assurance audit of Haidu. According to the audit, Haibo and Haidu do not engage in forced labor in any aspect of wages, working hours, or recruitment, in accordance with the internationally recognized audit standards.
I noted that you mentioned in your email that social audits have not been able to identify the use of Xinjiang workers in many seafood factories in Shandong and so the impartiality of the social audits is questioned.
My reminder is that SMETA and SYSCO Quality Assurance adhere to audit standards. The audits include individual working hours, child labor, workers’ wages and income, and other internationally recognized forced labor standards. Additionally, a worker analysis is conducted, including the identity of the worker, whether they are local employees or migrant employees, as well as whether they are of Chinese nationality, etc. A SMETA audit does not identify whether the employees come from a particular region or country, such as Xinjiang of China or North Korea. The objectivity and reliability of the SMETA and SYSCO Quality Assurance audits cannot be questioned on the basis of not auditing the identities of Xinjiang and North Korean employees, as that is not the audit standard or content. Moreover, from what I understand, no auditing firm audits employees’ ethnicity or whether they are from Xinjiang or North Korea; instead, they only verify whether the company complies with internationally recognized forced labor standards. I would like to reiterate and emphasize that no forced labor was found in Haibo or Haidu, according to SMETA and SYSCO Quality Assurance audit reports.
III. The UFLPA’s Rebuttable Presumption does not mean that the use of workers from Xinjiang constitutes forced labor, as determined by the 11 indicators of forced labor of the International Labor Organization (ILO).
According to your email, the UFLPA presumes that all imports of products produced in whole or in part from Xinjiang are the result of forced labor by the government, and the presumption also applies to the government’s labor transfer program. In my opinion, your understanding of the UFLPA is incomplete. According to the UFLPA, it is specifically referred to as “Rebuttable Presumption”, which means that despite the presumption that products from Xinjiang involve forced labor, the presumption can be rebutted. No matter whether the product is manufactured in Xinjiang or produced by laborers from Xinjiang, it is not in violation of the UFLPA if it is demonstrated that none of the 11 indicators of forced labor exist.
The rebuttable presumption of UFLPA does not apply to Haibo and Haidu since neither Haibo nor Haidu has laborers from Xinjiang, and the SMETA and SYSCO Quality Assurance audit reports found Haibo and Haidu did not have any of the 11 indicators of forced labor of the ILO.
I understand your concern regarding forced labor in marine fishing and seafood as director of the Outlaw Ocean Project, and we also pay more attention to this. We are looking forward to developing a good relationship with you and hope to improve the understanding and clarify the misunderstanding between us. Moreover, we would like to invite you and your team to conduct an on-site audit of Haibo and Haidu to verify if forced labor exists.
Additionally, Haibo and Haidu reserve the right to take further legal action against any behavior that negatively impacts its reputation.
Thank you. Sincerely,
Guogang Li
Counsel Tahota (Beijing) Law Firm"
The Outlaw Ocean Project responded and asked further questions:
"Dear Mr. Guogang Li,
Thank you for your letter from November 6, 2023. This letter comes as the latest in a series of exchanges in which representatives at Rongcheng Haibo Seafood Co., Ltd. and/or Shandong Haidu Ocean Product Co. Ltd have claimed that no Xinjiang workers have been at the plants. You can review that back-and-forth for Haibo and Haidu on our website. In prior replies on this matter, we itemized the diversity of evidence indicating the existence of Xinjiang workers at these plants. We resurface that material again here:
Your November 6, 2023 letter says that the Chishan Group newsletter citing Xinjiang workers at their plant was incorrect due to a reporting error on the Chishan Group’s part. Again, the explanation provided is simply not credible. We must make clear that our evidence does not rest upon a single document, but on dozens of sources. We found articles in the state news media from 2021, in both Uyghur and Chinese, that describe government labor transfers to Rongcheng Haibo. Three newsletters published by the Chishan Group also describe the use of Xinjiang labor at Haibo, and also detail government labor transfers to Rongcheng Haibo. An additional four newsletters describe Xinjiang workers at other Chishan Group enterprises, including Shandong Haidu, another processing plant that exports to the United States. Detailed in these articles are high-level meetings in 2020 and 2021 between corporate executives, including Rongcheng Haibo senior management, and Chinese government representatives.
In February 2021, the Chishan Group published a newsletter in which an article celebrated the arrival of Xinjiang workers at Rongcheng Haibo. The article included an image of the workers arriving at the site.
In May 2021, a Chishan Group newsletter said the company had held meetings with government officials in which the transfer of additional laborers from Xinjiang was discussed. Present at the meeting was Haibo's general manager, as well as representatives of a Xinjiang Zhongtai Group subsidiary, a company on the Uyghur Forced Labor Prevention Act Entity List for "working with the government of Xinjiang to recruit, transport, transfer, harbor or receive forced labor or Uyghurs, Kazakhs, Kyrgyz, or members of other persecuted groups out of Xinjiang." The article said the Chishan Group was "looking forward to the arrival of laborers from Xinjiang" and said that the meeting concluded with an agreement between the Bayingolin Mongol Autonomous Prefecture Human Resources and Social Security Bureau and the Xinjiang Zhongtai Group subsidiary to facilitate the transfer of "qualified Xinjiang migrant workers to Chishan enterprises as soon as possible."
In October 2021, a representative of Kashgar’s Human Resources and Social Security Bureau and Shandong’s ‘Xinjiang Aid’ program visited Chishan Group to “investigate the employment environment” of the company, alongside a representative from a state-owned Kashgar company and Xu Wu, director of the Public Employment and Talent Service Center and member of the Human Resources and Social Security Bureau of Rongcheng. Xu Wu oversees the Xinjiang Aid Labor Service Workstation, located within the Shidao Management District, which has provided Xinjiang labor to Chishan Group as well as other Rongcheng seafood enterprises, according to state media.
In September 2022, a Chishan Group newsletter said that Rongcheng Haibo implemented special kitchen arrangements for Xinjiang workers.
In addition to this, four other newsletters reference the transfer and/or accommodation of Xinjiang workers at other Chishan Group companies, including Shandong Haidu, another major exporter to the United States. Again, the practice of cooperation with government authorities to facilitate the transfer of Xinjiang workers is described.
Beyond state media and company materials, we've obtained footage uploaded by Uyghurs to social media that shows them working at Rongcheng Haibo. Video clips uploaded by seven users between March 2022 and June 2023 depict scenes that are verifiably shot from within Rongcheng Haibo, and around the company compound, according to our analysis. The videos include images and clips of the Uyghurs in employee overalls on the processing plant floor.
There is also a clip of a Xinjiang worker at Rongcheng Haibo that was uploaded on the same day in 2022 that SGS undertook a SMETA audit of the site. Our evidence further indicates that social audits have consistently failed to detect Xinjiang labor at numerous Shandong seafood plants over a period of several years.
In this reply we would direct attention to a video which focuses on Haibo and Haidu and their parent company, the Chishan Group, and seeks to explain the methodology and evidence further. Please take a look.
Below are our replies to specific points raised in your most recent letter.
Your letter mentions: “Among the laborers in Haibo and Haidu, there are no ethnic minorities from Xinjiang. Since we were entrusted by Haibo and Haidu in October 2023, we have conducted a cross-check on the employee rosters and payrolls of Haibo and Haidu, as well as physically interviewed the employees at the company, and found that Haibo and Haidu do not employ any workers from Xinjiang and there has never been forced labor in Haibo and Haidu. It would be appreciated if you and your team could visit Haibo and Haidu and conduct the audit to identify whether ethnic minority laborers from Xinjiang exist. Any unverified information or data should not be used to support conclusions or as an application for requesting import restrictions from the federal government of the United States, since this could harm downstream and upstream industries as well as consumers in the United States.”
Reply: Your comment is in the present tense. It says that no Xinjiang workers are at these plants now. The pertinent question, however, is whether any workers from Xinjiang have been employed at either plant in the past 5 years. This question was the focus of our investigation. You also, separately, mention that there has never been forced labor in either plant. It would appear that to come to this conclusion, you interviewed workers to see whether any of them were forced labor. Is this, in your view, an effective method for investigating the possible existence of forced labor? Can you identify who conducted the interviews, the questions they used, and whether managers were present? Is it your view that interviewing present workers would give you an indication of whether past workers were part of a forced-labor program?
As for your generous invitation to visit Haibo and Haidu, thank you. But it is unclear what journalistic purpose that would serve. Though kind, this type of invitation highlights a larger misunderstanding. A pre-scheduled visit (be it by hired auditors, western journalists or a lawyer hired by the plants) is the opposite of a spot check or true inspection. Such a visit would be a public relations event, not an effective means for assessing true conditions. Researchers have pointed out repeatedly that pre-announced visits are among the core flaws in how social auditing is conducted. Obviously, advance notice enables managers to show what they want the world to see.
Your letter mentions: “My understanding is that the purpose of both the WRO and the UFLPA is to eliminate any forced labor that may exist in the manufacturing or supply chain of a product through customs measures, and not to penalize a company or even an industry.”
Reply: No one has claimed, at least to my knowledge, that the goal of WROs or the UFLPA or our investigation is to punish companies. My understanding of these measures is their aim is to stop the import of goods that may be tied to forced labor.
The questions that researchers and experts pose to me to help me understand the category at issue here are the following: If a worker from North Korea is found in a Chinese seafood plant that exports to the U.S., are the goods from that plant banned from import into the U.S.? Would it be the same if a child laborer were found to be working in a processing plant that exports to the U.S.? What if both types of workers (the North Korean and the child laborer) were interviewed by a lawyer hired by the plant operator or by an official from the Chinese government or by a private social auditing firm? If the child laborer or North Korean worker said in the interview that they were not forced labor — would their testimony be deemed credible in light of the relevant context?
Other points made in the most recent letter broadly claim that the audits done on these plants clear them of the presence of forced labor and raise questions about the definition of forced labor. For these points we would kindly like to hew closely to the wording used in your letter itself.
Your letter says: “A SMETA audit does not identify whether the employees come from a particular region or country, such as Xinjiang of China or North Korea. The objectivity and reliability of the SMETA and SYSCO Quality Assurance audits cannot be questioned on the basis of not auditing the identities of Xinjiang and North Korean employees, as that is not the audit standard or content.”
Reply: We agree on the point that the audits have not identified Xinjiang workers at multiple plants in China. You also say that the audits are not supposed to identify these two categories of workers. This, of course, is precisely the point we sought to make. UFLPA and CATSA presumptions categorize the presence of Xinjiang or North Korean workers as distinctly problematic and categorically worthy of specific attention tied to forced labor, and any audit that did not involve asking about the ethnic identities of workers and where they are from would be irrelevant to rebutting these the presumptions in these laws. Under UFLPA, workers from Xinjiang are categorically seen as part of state-sponsored forced labor because they are not given the true option to decline the work nor to leave the work without penalty. This interpretation is consistent with CBP’s description of labor transfer programs in the UFPLA implementation strategy. That description relates back to the legal definition in the U.S. Tariff Act and the ILO indicators: work that is “performed under the menace of any penalty and for which the worker does not volunteer.”
Your audit review and my reporting both found that the audits did not investigate regional origin or ethnicity of workers. Your position seems to be that the audit is valid because it adhered to auditing standards. But those standards did not include the most important question about the origin of workers.
That said, I might offer a point of nuance. As you know, SMETA self-assessment questionnaires (SAQ), required by the SMETA audit, call for workers to disclose whether they are migrants, as well as their primary languages, and thus if done properly at Chishan would have identified Xinjiang and North Korean workers. That they apparently failed to do this underscores one of the shortcomings of social audits. But the other deeper concern with these types of audits, that experts have pointed out, is whether any of them can be effectively conducted in China where access to plants and independent assessments by NGOs is tightly controlled and organizations (including journalism organizations or ocean conservation NGOs) are expelled from the country if they are critical of the government or companies.
As part of our investigation, we engaged auditors with China-specific expertise from multiple international firms to ask their views on why social audits aren't detecting state-imposed forced labor affecting Xinjiang ethnic minorities. The reasons given included: Chinese audit teams being reluctant to raise the presence of Xinjiang workers as a finding; auditees concealing Xinjiang workers ahead of announced audits, as well as payroll and other documentation; Xinjiang workers interviewed by auditors being reluctant to answer questions candidly; auditors lacking the training and expertise to ask the right questions to investigate state-imposed forced labor.
Social audits have also failed to identify hazards in other countries and industries, such as in a case when hundreds of workers died at Rana Plaza and other sites in Southeast Asia. Our reporting identified audit gaps for seafood that are consistent with reports on other industries. These include audits after an incident (after evidence is cleaned up or removed), advance notice of an audit (to remove evidence), coercion of workers (managers present for interviews, criminal liability for interviews), delegation of illegal work to contractors (outside the scope of an audit), reliance of self-reporting by industry managers, failure to inspect all premises, and failure to audit for known indicators of forced labor.
Thank you again for your kind invitation and thoughtful email. Furthermore, thank you for pointing out that you and your clients are presently going to “pay more attention to” the concerns we raised about forced labor in the seafood supply chain.
As I’m sure you’re aware, Haibo and Haidu are important to the global seafood supply chain, accounting for roughly thirty percent of all squid processed in China, according to the Rongcheng government. These facilities are distinctly important in the U.S. context since they produce at least seventeen percent of all squid imported into the United States, according to trade and NOAA data, which means that the discovery of Xinjiang labor in the plants has direct pertinence to the UFLPA and the Tariff Act.
Take care,
Ian Urbina The Outlaw Ocean Project
The Outlaw Ocean Project emailed: "As part of our ongoing investigation of global seafood, we have questions for Rongcheng Haibo arising from research we conducted about a certain plant that was recently formed.
We’ve received information from a source in China that this company named Shandong Nabaixian is either the same plant as one previously called Rongcheng Haibo, or is very closely affiliated with Rongcheng Haibo. The source has had direct dealings with Shandong Nabaixian. We also checked various trade and company databases and found that this company called Shandong Nabaixian was created in October 2023 and that it was listed in a Chinese business directory with the same email address and phone number that appeared in Haibo’s listing. Import records show that the U.S. seafood company Ruggiero was the consignee for dozens of shipments of seafood from Shandong Nabaixian since December 2023.
We have the following questions for Rongcheng Haibo:
- Can you explain what the relationship is between Shandong Nabaixian and Rongcheng Haibo?
- Can you also indicate what seafood Shandong Nabaixian produces, and who it ships to in the U.S. and Europe?
- Records also indicate that this plant is owned by Chishan Group. Is that correct?
Please let us know your responses to the above questions by close of business on August 2, 2024, noting that all interactions remain on record."
Rongcheng Haibo replied: "Your email has been well received. Thank you for contacting us. We are pleased to address your questions and provide the following response:
Regarding your first question about the relationship between Shandong Nabaixian and Rongcheng Haibo, we respond as follows: Rongcheng Haibo has no relationship with Shandong Nabaixian.
Additionally, regarding your second question what seafood this plant produces, and who it ships to in the U.S. and Europe, please note that under the Chinese law, legal entities operate independently. This plant operates independently, and information about its products and sales channels is considered commercial confidential. As another independent legal entity, we do not have access to details about the seafood produced or its shipping destinations.
Regarding your third question on whether this plant is owned by Chishan Group, we clarify that this statement is incorrect. Chishan Group does not own this plant.
The above is our response to the questions raised in your email.
Thank you once again."
The Outlaw Ocean Project replied: "Thank you very much for replying to our questions. Given your responses, can you explain why corporate records for Shandong Nabaixian share the same email address and telephone number as for Rongcheng Haibo? The registered street addresses also show the two are based at the same complex."
Rongcheng Haibo replied: "Thank you for your prompt reply. Regarding your further questions, we respond as follows:
Firstly, the registered address of Rongcheng Haibo is No. 599, Eshishan Industrial Park, Rongcheng, Weihai City, Shandong Province. Based on our online search, the registered address of Shandong Nabaixian is No.89 North Road of Longyue, Dongshan Street, Rongcheng, Weihai City, Shandong, P.R. China. The addresses of the two companies mentioned above are not at the same location, nor could they be in the same building. Please note that they are two independent and distinct companies.
Secondly, regarding the issue you mentioned about the email addresses and contact numbers of Shandong Nabaixian and Rongcheng Haibo being the same, thank you for bringing this to our attention. We will contact Shandong Nabaixian to investigate the matter. You may also reach out to Shandong Nabaixian directly for more information.
Thank you again!"
The Outlaw Ocean Project replied: "Thank you again for your quick response to our questions.
Additional indicators, including maps of the area, point to connections between Shandong Nabaixian and Rongcheng Haibo and Chishan Group:
- We have mapped the street addresses for the two companies Haibo and Nabaixian and the addresses do indeed appear to indicate the same site; North Longyue Road runs along one side of the site, while Eshishan Road runs along another side of the site.
- According to Chishan Group’s website here as well as logo design proposal details published online several years ago here, ‘Nabaixian’ is a name that has been associated with the Chishan Group since at least 2016.
- U.S. trade data shows that a shared customer of Shandong Nabaixian and Rongcheng Haibo uses the same invoice reference structure when importing from either company, but does not use it in relation to any other companies they import from.
Based on this, we are satisfied that Rongcheng Haibo and Shandong Nabaixian are connected companies, unless you are able to demonstrate otherwise.
Please let us know by close of business on August 2, 2024."
Rongcheng Haibo replied: "Thank you for your reply again. We are surprised by the conclusions you have drawn from the content of your email.
First, we are shocked by your statement that the two companies you mentioned are considered the same company because they are located on the same street. While there are several seafood companies on that street, it does not imply that these companies are owned by Chishan Group or Rongcheng Haibo. Drawing the conclusion that different companies on the same street are therefore owned by the same company is entirely inconsistent with the actual situation.
Second, a brand name is not the same as a company name. Chishan Group did previously had the “Nabaixian” brand, but we cannot prevent other companies from using “Nabaixian” as their company name upon registration. Therefore, Chishan Group’s “Nabaixian” brand has no association with Shandong Nabaixian Company.
Lastly, regarding the issue of Shandong Nabaixian and Rongcheng Haibo using the same invoice reference structure, we appreciate you bringing this to our attention. Our invoice reference structure are created according to the requirements of our clients, and we are unaware whether Shandong Nabaixian Company has used the same reference structure for the shared client requirements.
Thank you again."