What happened?
The Associated Press released an investigative report alleging some of the world's biggest supermarkets are complicit in human trafficking because they purchase shrimp that have been peeled and processed by workers who are essentially slaves. Among the retailers cited as selling the slave-processed shrimp are Wal-Mart (WMT -0.44%), Kroger, Whole Foods Market (WFM), Dollar General, as well as Darden Restaurant's Olive Garden and its former seafood chain Red Lobster.
Does it matter?
This is not a new issue, but in fact burst into the open last year following British newspaper The Guardian running an expose on the prawn trade in Thailand and specifically mentioning Wal-Mart, Costco (COST -0.34%), Carrefour and Tesco as being among the beneficiaries of the slave conditions. Nestle (NSRGY 0.73%), which conducted its own investigation and confirmed abuse was occurring among its suppliers, was hit with a class action lawsuit over the issue. Others, including Costco have been sued as well.
Like the Guardian report, the AP's piece is causing a stir among the retailers who are increasingly demanding more accountability from their suppliers. While some like Whole Foods and Red Lobster are relying upon assurances from their suppliers to maintain their shrimp is not processed under such conditions, the AP reported the suppliers admitted they don't know from where all their shrimp is sourced.
Yet because of pressure brought to bear on it by the likes of Wal-Mart, Costco, and others, Thai Union, the biggest supplier of shrimp to U.S. companies, has announced it would stop using external processors of shrimp and bring the work in-house by the end of the year.
While U.S. and global corporations are routinely criticized when situations like this are revealed, it becomes clear upon closer inspection they are really forces for changing working conditions for the better in countries where they operate. Only their influence has been able to cut through the bureaucracy and corruption found in foreign capitals.
