Editor’s note: Imke B.L.H. van Gardingen (LLM Int. and EU labour
law, MA Korean Studies) is a policy advisor on labour migration at the Dutch
Federation of Trade Unions (FNV) and a researcher on DPRK overseas labour.
On November 8, 2018 a North Korean
overseas worker who had worked in slave like conditions for a Polish shipyard,
a supplier of a Dutch shipbuilding company, has filed a criminal complaint
against the Dutch firm. The Dutch Penal Code, article 273f(6), includes a
provision criminalizing the act of ‘profiting’ from labour exploitation,
targeting not the direct perpetrators in the labour exploitation, but the ones
profiting from this exploitation. This is a unique case that aims to hold the
company at the top of the chain accountable for modern slavery in its supply
chain. A chain that in the case of shipbuilding is rather short; the buyer
subcontracts the core business of building the complete hull under detailed
instructions cheaply abroad.
Research on DPRK workers
in Poland
The case of the DPRK workers in two Polish shipyards
was brought to light in two reports, published by the LeidenAsiaCentre
(available online here and here), a
research institute affiliated with Leiden University.[1]
In this research we demonstrated how well documented the case of the
exploitation of DPRK workers in Poland is. Due
to EU-mandated minute record-keeping and frequent inspections by the labour
inspectorate, a very precise picture was obtained of how the workers work,
live, and are managed. How they are or are not paid and who their actual or
paper employers were, as well as under what specific circumstances they work.
In both reports it was established that the working conditions and the
situation of DPRK workers amount to labour exploitation. What makes the
EU case particularly interesting is that the rights of migrant workers in the
EU are quite well protected, at least on paper. This offers interesting angles
to explore concrete routes in the context of the EU legal arena.[2]
Explanation of
the case
DPRK workers are recruited in North Korea to work overseas. The selection
criteria range from being a loyal party member to being married and preferably
having children to secure the risk of defection. Only shortly before departure
do the workers receive information on the country they will go to; the travel
is arranged for and mostly through North Korean embassies abroad. Upon arrival
the workers hand in their passports and start working right away without ever
receiving a working contract, having a bank account or obtaining knowledge on
the working conditions and height of the salary. The workers are mostly
employed by a DPRK company registered in Poland or a Polish-North Korean joint
venture and detached to other companies, which is often illegal according to
their working permits. As contractors, the DPRK companies of the joint ventures
receive payment for the assignment. A fraction of that amount is paid to the
workers. There is a wide gap between the formal monthly payment, of which the
payslips with falsified signatures are included in the labour inspection
report, and the payment the workers actually receive. The payment is irregular,
sometimes once a month, but mostly not. Also the amount of the payment is variable,
it can range from a few dollars to a few hundred dollars a month, minus
arbitrary deductions for housing, but also party loyalty fees. The Labour
Inspectorate has often reported hazardous working situations, and also documented
one fatal accident where none of the required safety measures were met. Workers
live in poor conditions; too cramped, moisty with fungus causing headaches, without
proper washing facilities so workers had to wash on the working site. Excessive
overwork is common as workers are presented as never having to take a rest and as
being able to work continuously, day and night 7 days a week. And being DPRK
citizens, they are not free to leave from the worksite, nor to anyplace else.
All in all, it is safe to conclude
that the labour of DPRK workers in Poland can be labelled as ‘forced labour’,
as is also confirmed by the Polish labour inspectorate in the documentaries ‘Cash for Kim’ and ‘Dollar Heroes’ (produced
by the Why Foundation in a series called ‘Why Slavery’), the UN
special rapporteur on DPRK and the US report on human trafficking. The question then is who
can be held accountable for violating the labour and human rights of DPRK
workers and account for the profits made as a consequence of these violations.[3]
The DPRK supplying the workers, the direct or indirect employers as the
perpetrators, subsidiaries or business partners giving the orders and profiting
from it, or all of them? The issue of liability can shift from fault based
liability to strict liability, which could be justified by the fact that all the
parties involved profited from –intolerable - slave labour.
Our first and second report on DPRK
labour in Poland have shown that Polish Shipbuilding companies in Gdynia and in
Szczecin work together closely with Dutch Shipbuilding partners on financing
vessels, supplying parts, project management, technical know-how, security,
obtaining quality certificates and sharing EU funding.[4]
The cases offer sufficient proof of close partnership and cooperation. The key
question is whether in the case of proved abuse and labour exploitation, the
Dutch legal framework can be used to hold the partner companies accountable. If
so, companies could also be held accountable for criminal offenses if the
exploitation is deemed severe enough to fulfil the conditions enshrined in
Article 273 of the Dutch Penal Code, and specifically Article 273f(6),
criminalising ‘profiting from the exploitation of a person’. Prof. Ryngaert
from Utrecht University believes it is a very real possibility. He states,
It is
the territorial benefit which a
corporation draws from exploitive practices, regardless of location, that
serves as the jurisdictional linchpin. Accordingly, Article 273f(6) of the
Dutch Penal Code creates opportunities to trigger Dutch jurisdiction over
corporations linked to acts of exploitation somewhere down the supply chain,
and ultimately hold them liable.[5]
In terms of liability he argues,
In general however, it can be stated that a corporation's liability will
be engaged when it consciously
accepted the risk that the goods it bought were produced in
substandard conditions, including conditions of labour exploitation, even if the corporations did not intend such
conditions to occur, and if the corporation did not have positive knowledge of the conditions
It is now up to the
Dutch Prosecution Office whether they will take up the case and prosecute the
suspected Dutch company for ‘profiting’ from labour exploitation. There will be
legal counter-arguments raised, but other considerations will undoubtably also
play a role. Such as the lack of capacity at the Dutch prosecution office that
is severely understaffed, pressure from politicians and businesses who might
prioritize short term economic interests. In any event, it will be an important
and interesting case to follow. For the value of this case in particular, but also for the window it might open for other
cases in which workers are exploited to the benefit of the corporations sitting
at the top of the chain.
A recent Dutch judgment
from May 2018 is interesting in this respect, it involved the managing director
of a Dutch large shipping company who was held liable for wrongdoings happening
in –amongst other places- Bangladesh and who was sentenced to a fine of €50.000
and disqualified from his profession for a year.[6]
Primarily, this case focussed on environmental offenses. The managing director violated
‘the stipulations of the European
Regulation (EG) Nr. 1013/2006 of the European Parliament and the council of 14
June 2006 with regard to the transfer of waste materials (EWSR).’[7]
But the following considerations are also included in the judgment and have played
an important role in it:
Besides,
the working conditions are appalling. The ships are manually scrapped by
untrained labourers, who do not have the knowledge and expertise to recognize
hazardous materials to take precautions and to follow procedures and who do not
get sufficient protective clothing and auxiliary materials either. With such
scrapping practices, several people are killed annually. Moreover, there is
still child labour in the scrapping companies in Bangladesh.
The suspect has closed his eyes to this problem, of which certainly he as an
executive director of a large shipping company must have been aware. With his
considerations, he obviously only has had eyes for the commercial interest of
the companies for which he was responsible.[8]
Furthermore, the judges concluded in their judgment:
‘[…] a
fine in itself does not do justice to the severity of the facts. That is why a
disqualification from his profession for the duration of one year will be
imposed on the suspect. That also expresses the social importance that should
be attached to an integer management. The suspect in particular, as CFO of a
large company, who also bears final responsibility for the management, may be
expected to take the additional social consequences of the performance of his
tasks into consideration beside the business economic consequences of his
decision, such as in this case the negative consequences for the environment
and the health of the labourers in the shipbreaking yards. [9]
The suspect was therefore convicted
of a ‘fine of €50,000,-, in default of
full payment and full recovery to be replace by 285 days of detention’ and
imposed ‘as an additional punishment on
the suspect a disqualification of the right to practice the profession of
(direct or indirect) executive director, supervisory board member, advisor or
employee with a shipping company of any part thereof, such for the duration of
1 (one) year.’[10]
To conclude, the criminal complaint
of the North Korean worker is potentially a ground-breaking complaint to
enhance the accountability of Dutch corporations for labour exploitation
occurring in their supply chains. The ball is now in the court of the
prosecutor’s office, it’s up to them to decide whether they choose to let the
corporations off the hook or to tackle the issue of slavery and forced labour in
supply chains head-on by criminalising the irresponsible behaviour of certain
corporations.