Taiwan Matters More to China than South China Sea, by Marex

Taiwan & China

File photo

By Reuters

For China, whose President Xi Jinping is already taking an increasingly muscular approach to claims in the East and South China Sea, the question of Taiwan trumps any other of its territorial assertions in terms of sensitivity and importance.

After eight years of calm in what had been one of Asia’s powder kegs, the landslide election of an independence-leaning opposition leader, President-elect Tsai Ing-wen, has thrust Taiwan back into the spotlight as one of the region’s most sensitive security issues.

Defeated Nationalist forces fled to Taiwan at the end of the Chinese civil war in 1949. China claims Taiwan as its sacred territory, is estimated by Taiwan to aim hundreds of missiles at the island over a narrow stretch of water and has never renounced the use of force to bring it under its control.

China carried out rare live-fire drills in the sensitive strait that separates the two sides in September, though Taiwan’s defense ministry described them at the time as routine.

“She (Tsai) is going to deal with a very tough-minded leader in Beijing,” said Chu Yun-han, a professor at the National Taiwan University.

But Tsai will also have to be accountable to her own constituency, especially the more radical, pro-independence younger generation, Chu added. “That doesn’t give her too much room for maneuver.”

The election in 2008 of the China-friendly Ma Ying-jeou, and then re-election four years later, ushered in an unprecedented period of calm with China, with landmark trade and tourism deals signed.

Tsai’s Democratic Progressive Party (DPP) is at pains to stress its election will not cause a return to tensions. She addressed the issue of China almost immediately upon claiming victory, saying she would strive to maintain the peace, but added she would defend Taiwan’s interests and its sovereignty.

While China has been relatively measured in its response, repeating its standard line about opposing independence, great uncertainty lies ahead. China’s official Xinhua news agency warned any moves toward independence were like a “poison” that would cause Taiwan to perish.

In an online commentary on Sunday, Wang Hongguang, a lieutenant general and former deputy commander of China’s Nanjing military region, said the People’s Liberation Army was now better prepared than ever for operations against Taiwan.

“The front line forces are like a tiger who has grown wings,” he wrote. “Tsai Ing-wen and her Taiwan independence forces shouldn’t think they’ll get away with it. The mainland will not swallow the bitter fruit of Taiwan independence.”

The outside world should not underestimate the continued importance of Taiwan to the Chinese leadership, said a senior Western diplomat, citing recent conversations with Chinese policymakers on Taiwan.

“Nothing is more important than Taiwan to Beijing.”

Beijing will have to bear in mind the opinion of a Chinese public that has always been brought up never to question Taiwan’s status as an inherent part of China.

On Weibo, China’s answer to Twitter, the popularity of the phrase “use force to unify Taiwan” soared.

“We are just waiting for you to say the phrase ‘Taiwanese independence’,” said one Weibo user.

In the United States, which has no formal ties with Taiwan but is its most important diplomatic and military supporter, Republican presidential candidate Ted Cruz said the election was “a beacon of light to their neighbors yearning to be free”.

“Now more than ever, we must stand with Taiwan and reaffirm our commitment to their security,” he said in a statement.

Taiwan is a key fault line in the Beijing-Washington relationship.

A month before the election, the Obama administration formally notified Congress of a $1.83 billion arms sale package for Taiwan, prompting anger in Beijing which said it would put sanctions on U.S. firms involved.

A Beijing-based Chinese source, with ties to the People’s Liberation Army and who meets regularly with senior officers, told Reuters the election would have “far-reaching” consequences for China’s ties with Taiwan, and Sino-U.S. relations.

“I’m very worried about what is going to happen now,” the source said, speaking on condition of anonymity. “Things have become much darker.”

Tsai’s election is also an embarrassment to Xi, who held a historic meeting last year in Singapore with Ma, and used the occasion to call for both sides not to let proponents of Taiwan’s independence split them.

China and Taiwan have nearly gone to war three times since 1949, most recently ahead of the 1996 presidential election. Then, China carried out missile tests in waters close to the island hoping to prevent people voting for Lee Teng-hui, who China suspected of harboring pro-independence views. Lee won by a landslide.

Ties were also badly strained when the DPP’s Chen Shui-bian was Taiwan president from 2000-2008 because of his independence rhetoric, even as he tried to maintain positive relations with Beijing.

But then, the DPP did not have a majority in parliament, which constrained its agenda. This time, the DPP has also won a parliamentary majority, which gives it much more leeway to push legislative priorities.

In any case, China does not need to rattle its sabers to pressure Taiwan – Beijing already holds all the economic cards as the island’s most important trade partner and investment destination.

“Taiwan can’t survive without international support,” said Michael Kau, a former Taiwan foreign ministry official and now a senior fellow at Taiwan Foundation for Democracy. “Because our adversary is giant China.”

Merchant Vessel Found Guilty in Indian Navy Collision, by Marex

Indian Navy collision

Leander-class frigate, a sister ship of the Vindhyagiri (courtesy U.S. Navy)

By MarEx

The London High Court ruled last week that the cargo vessel Nordlake bore most of the responsibility in the 2011 collision with Indian Navy frigate Vindhyagiri in Mumbai’s harbor.

The Nordlake was assigned 60 percent of responsibility, Vindhyagiri 20 percent, and the merchant vessel Sea Eagle and one additional naval ship 10 percent each.

The Nordlake was guilty on several counts, the court said: a violation of the narrow channel rule, the requirement to keep safe speed and the maintenance of a proper lookout. As Nordlake and Sea Eagle were the only claimants in the case, the court held that the Indian Navy was not a party and would not be responsible for damages.

The incident unfolded partly as a result of confusion over passing arrangements. On the afternoon of January 30, 2011, the Indian Navy frigate Vindhyagiri was entering Mumbai’s harbor following a picnic excursion, followed by the Sea Eagle. In a series of misunderstandings regarding the traffic situation, the frigate and the outbound Nordlake collided. The Indian Navy’s official First Information Report on the incident blamed the Nordlake for the collision, stating that she made a sharp turn to port and hit the Vindhyagiri. The Nordlake’s captain, Slovakian national Petros Valneo, strenuously denied that his ship was at fault.

The collision led to fire and flooding onboard the Vindhyagiri. She was berthed in the naval harbor, ammunition on board was salvaged and personnel were evacuated, but despite efforts to contain the damage she sank at the dock. While a small spill was reported and contained, no casualities resulted from the incident.

Passengers and eyewitnesses captured the collision on video from several angles.

Coast Guard Searches for Missing Military Helicopters, by Marex


CH-53E Super Stallion (file photo courtesy U.S. Marine Corps)

By MarEx

U.S. Coast Guard District 14 in Honolulu, Hawaii said Friday that it received notification of two downed military helicopters off Oahu late Thursday night.

Media sources report that the incident was the result of a collision between the two aircraft. 

The District dispatched helicopter and fixed wing aircrews from Air Station Barbers Point and requested the assistance of local authorities in the search. The initial report was received at 11:38 PM and the first Coast Guard helicopter was on scene just after midnight; its crew observed a debris field at the search scene about three miles off Haleiwa, on Oahu’s north shore, said Coast Guard Chief Petty Officer Sara Mooers in a statement to media.

USCG, U.S. Navy and Honolulu Fire Department assets are participating in the SAR effort. In addition to locally based assets, the USCG has directed the cutters Ahi and Kisko to get underway to join in. The Ahi was in Maui at the time of the incident; the Kiska was in Hilo.

The Marine Corps is investigating the cause of the incident. In a statement Friday, Marine Corps Captain Tim Irish of the III Marine Expeditionary Force confirmed the crash and ongoing SAR effort.

The two helicopters were CH-53E Super Stallions of Marine Heavy Helicopter Squadron 463, MAG 24, First Marine Aircraft Wing from Marine Corps Base Hawaii, carrying a combined total of 12 Marines.

Marine Corps aircraft will be joining the search.

Authorities requested that the public should not touch any debris that washes ashore and to stay back from any cordons that first responders may establish.

The CH-53E is the largest and heaviest helicopter used by American military forces. It will be replaced by the new CH-53K; flight testing of the new variant is under way and deployment is planned for 2018.

China Seeks Private Investors for Occupied Islands, by Marex

Chinese island

Woody Island in the Paracels (file image courtesy elpais.cr)

By Reuters

China will invite private investment to build infrastructure on islands it controls in the disputed South China Sea and will this year start regular flights to one of them, state media said on Friday, moves likely to anger other claimants.

China claims almost all of the energy-rich waters of the South China Sea, through which more than $5 trillion of maritime trade passes each year. The Philippines, Brunei, Vietnam, Malaysia and Taiwan have overlapping claims.

In 2012 China set up what it calls Sansha city, based on Woody Island in the Paracels, to administer its islands there.

Though China calls it a city, its permanent population is no more than a few thousand, and many of the disputed islets and reefs in the sea are uninhabited.

Sansha’s deputy mayor, Feng Wenhai, said they will welcome private investment and “will initiate public-private-partnership program”, state news agency Xinhua said.

“The city will also push forward the planning and construction of a maritime medical rescue center. Submarine optical cables will be laid and put into use this year, and WiFi will cover all inhabited islands and reefs,” Feng said.

The airport on Woody Island will also this year launch regular flights, Feng added, without elaborating.

China took full control of the Paracels in 1974 after a naval showdown with Vietnam.

Hundreds of Vietnamese demonstrated in Hanoi when China established Sansha city and invited oil firms to bid for blocks in offshore areas that Vietnam claims as its territory.

Tensions between China and Vietnam have flared in recent weeks, after Chinese civilian aircraft conducted several test landings on the disputed Fiery Cross Reef, one of three runways China has been building for more than a year by dredging sand up onto reefs and atolls in the Spratly Islands.

Vietnam says China’s landings were on an “illegally” built reef, and has vowed to defend its sovereignty through peaceful measures.

Chinese state media on Friday showed pictures of what it said was the first batch of civilian passengers to arrive by plane on Firey Cross Reef, family members of troops based there, though it only appeared to be two women and two young children.

“Everyone rapturously looked around at the island’s beautiful scenery,” read a caption underneath one of the pictures carried on the website of Chinese news portal Sina, showing the four of them standing on the tarmac in front of two civilian aircraft.

The United States has criticized Beijing’s building of artificial islands in the disputed Spratly archipelago, south of the Paracels, and has conducted sea and air patrols near them.

The Philippines has challenged Beijing at the arbitration court in The Hague, a case Beijing has not recognized.

As Iran’s Tankers Point Abroad, Oil Prices Tumble, by Marex


File photo

By Reuters

With Iran ready to resume business as usual with the world under a historic nuclear deal, Tehran will target India, Asia’s fastest-growing major oil market, and old partners in Europe with hundreds of thousands of barrels of its crude. Futures markets showed deep concern Friday that the renewed Iranian supply will lead to overcapacity, sending prices tumbling below the $30 a barrel level. 

Iran expects the United Nations nuclear watchdog to confirm on Friday it has curtailed its nuclear program, paving the way for the unfreezing of billions of dollars of assets and an end to bans that have crippled its oil exports.

Tehran plans to lift exports by 500,000 barrels per day (bpd) post-sanctions and gradually raise shipments by the same amount again, adding to a global glut and likely putting more pressure on oil prices which have already dropped 70 percent since 2014, to below $30 per barrel.

Iran has 22 Very Large Crude Carriers (VLCCs) floating off its coast, with 13 fully or almost fully loaded, mapping data on Thomson Reuters’ Eikon showed, carrying enough crude to meet India’s import needs for almost a week.

A senior Iranian source close to supply negotiations said that the country – which has the world’s fourth-biggest proven oil reserves – was targeting India as its main destination for crude.

“Indian crude demand is growing faster than other Asian countries. Like our competitors, we see this country as one of the main targets for Asian sales,” said the official, who spoke on condition of anonymity.

Iran hopes to raise its exports to India by 200,000 bpd, up from the 260,000 bpd currently shipped under sanctions’ restrictions, the official said.

At the right price, Indian refiners said they were keen to import more from Iran, as demand for fuel soars on 10 percent annual growth in car sales, a rate that is now faster than China’s.

“We have a long-lasting relationship with Iran and post lifting of sanctions we will evaluate the scenario,” said L K Gupta, managing director of India’s Essar Oil.

“It makes sense to buy oil from nearby options (like Iran),” said H. Kumar, managing director of another Indian oil firm, Mangalore Refinery and Petrochemicals, but added “intake will depend on prices.”

The Iranian official said there was not much room for major export increases to China, South Korea or Japan due to slowing demand and also because of a shift there towards more non-Middle East crudes.

A South Korean refinery source confirmed he did not expect a big increase in Iranian supplies, largely because of plentiful alternatives.

A Japanese refiner said that his firm could only take Iranian deliveries once it had insurance in place, which could take time.

Iran already trades limited amounts of oil mainly with Asian buyers legitimately under sanctions, but its crude exports have fallen to just over 1 million bpd, down from a peak of over 3 million bpd in 2011, pre-sanctions.

The Iranian official said Tehran planned to revive supply deals with European partners in order to ramp up exports.

Prior to sanctions, Iran was exporting up to 800,000 bpd to Europe with the main buyers being oil majors Royal Dutch Shell, Italy’s ENI and France’s Total Greek Hellenic Petroleum and Spain’s Repsol and Turkish firms.

Most former buyers have repeatedly said they would be happy to resume imports but commercial details could be discussed only after sanctions are lifted.

Iran’s Mehr news agency quoted officials from the National Iranian Tanker Company (NITC) as saying on Friday that as soon as sanctions are lifted some 200,000-220,000 bpd would be exported to France, Britain, Italy, Spain and Germany.

Shipping industry association BIMCO confirmed that European clients would be among the first post-sanctions.

“Former clients of Iran are the ones who are likely to return as buyers… Italy, Spain and Greece were the top EU importers in 2011,” said Peter Sand, BIMCO’s chief shipping analyst.

Following years of under-investment, Iran needs foreign cash to modernize its oil industry.

ENI, Repsol and Total were some of the companies with the biggest delegations at a conference in Tehran last November, during which Iran published new terms for foreign oil investors.

Prospects for exports to the Americas, never a significant market for Iran, appear slim. Not only do U.S. sanctions unrelated to the nuclear issue remain in effect, but the region is already inundated with supply from soaring U.S. and Canadian production.

In a cut-throat market, Iran may also find it difficult to sell its oil as the heavy grades it mostly offers are in low demand.

Latin American suppliers who produce similar heavy crudes have been seeking new buyers in Asia.

Within the Middle East, traders said Iran’s main competitor would be Iraq, which has successfully returned to Asian markets in recent years, with exports rising above 3.5 million bpd.

In Europe, traders said Iran’s crude would compete mainly with Russian Urals and Iraqi grades, which are competitively priced.

In China and India, strong passenger car sales are fuelling gasoline demand, while a slowdown in Asia’s heavy industries means slower demand for diesel, which heavy crudes are often used to produce.

Iran does have light crudes, but needs them for itself to reduce gasoline imports.

Either way, Iran adding to an over supplied global oil market is bound to put more pressure on prices.

“With Iran’s sooner return… there is still further downside risk to prices this quarter,” Barclays Bank said.

The Barclays forecast was validated in the short term by trading on Wall Street Friday, as oil prices dove below $30 a barrel, dragging major equity indices around the world sharply lower.

Major stock indices in Europe and on Wall Street tumbled more than 2 percent while crude prices slid on expectations Iran will increase oil exports once international sanctions are lifted, possibly within days.

Yields on the benchmark 10-year U.S. Treasury note were poised to fall below 2 percent and gold rose as retreating oil prices and equity markets underpinned demand for assets perceived as safer.

The December futures contract on the federal funds rate surged to its highest since October, implying the Federal Reserve will raise rates only one more time this year.

The Australian, New Zealand and Canadian dollars all sank against the U.S. dollar on the back of another slide in Chinese stock markets and the slide in oil. But the dollar fell against both the euro and yen.

E.U. Funds IMO Energy Efficiency Project, by Marex

EU Funds IMO

By MarEx

An IMO project to establish a global network of Maritime Technology Cooperation Centers in developing countries is to go ahead thanks to a €10 million ($11 million) funding contribution from the European Commission.

The funds mobilized by the European Commission illustrate the E.U.’s commitment to support the concrete implementation of a range of measures aimed at addressing energy efficiency and shipping emissions and, through this, contributing to the fight against climate change. This IMO energy-efficiency project is part of the Commission’s broader climate financing portfolio aimed at helping less developed countries take climate actions in specific fields or sectors such as the shipping sector.

The aim of the project will be to help beneficiary countries limit and reduce GHG emissions from their shipping sectors through technical assistance and capacity building. It will encourage the uptake of innovative energy-efficiency technologies among a large number of users through the widespread dissemination of technical information and know-how. This will heighten the impact of technology transfer.

The four-year project will target five regions – Africa, Asia, the Caribbean, Latin America and the Pacific. These have been targeted for their significant number of least developed countries and small island developing states.

The heart of the project will be the establishment of five centers, one in each target region, with seed-funding support from the project. These will have a strong regional dimension, becoming centers of excellence for promoting the uptake of low-carbon technologies and operations in maritime transport. 

Each center is expected to be hosted by an existing institution with a credible standing in the region. These host institutions will be selected through an open process of competitive bidding against a set of criteria and project deliverables. 

The project will be coordinated by IMO’s Marine Environment Division through a dedicated unit at IMO headquarters.

The agreement to fund the project was signed on December 31, 2015 by Stefan Micallef, Director of IMO’s Marine Environment Division, and Peter Craig McQuaide, Head of the Sustainable Energy and Climate Change Unit of the European Commission’s Directorate-General for International Cooperation and Development.

The results of capacity-building activities and pilot projects run by the centers will be widely disseminated within the international maritime community. As a result, the project will enhance capacity at national and regional levels in all aspects of maritime GHG emission reduction and energy efficiency and offer valuable insight of local experiences on the uptake of energy-efficient technologies and operations, data collection and relevant project planning and management.

Energy-efficiency training course now online

A complete package of training materials on IMO’s energy efficiency requirements is now available to download free of charge from the IMO website. The package, including presentations, posters, exercises and assignments, will be of interest to anyone wanting to understand how to implement the regulations in Chapter 4 of MARPOL Annex VI and what the technical and operational implications are for ship designers, shipbuilders, companies and seafarers.

The course has been designed to train individuals to become trainers themselves. This is to encourage the development of a pool of people who can participate in capacity-building activities under either the auspices of IMO technical cooperation activities or in any other formal education and training scenario.

The package includes a trainers manual and modules on: Climate Change and the Shipping Response; Ship Energy Efficiency Regulations and Related Guidelines; From Management to Operation; Ship Board Energy Management; Ship Port Interface for Energy Efficiency; Energy Management Plans and Systems.

The information is available here.

IMF Wants Shipping Carbon Tax, by Marex


By MarEx

A report released this week by the International Monetary Fund (IMF) states that carbon taxes should be levied against the shipping industry.

The December 2015 Paris Agreement laid the foundation for meaningful progress on addressing climate change, now the focus must turn to the practical policy implementation issues, states the report, After Paris: Fiscal, Macroeconomic, and Financial Implications of Climate Change

“At the heart of the climate change problem is an externality: firms and households are not charged for the environmental consequences of their greenhouse gases from fossil fuels and other sources. This means that establishing a proper charge on emissions—that is, removing the implicit subsidy from the failure to charge for environmental costs—has a central role.”

For reducing carbon emissions (mitigation), carbon pricing (through taxes or trading systems designed to behave like taxes) should be front and center, continues the report.

“For climate finance, carbon pricing in developing countries would establish price signals needed to attract private flows for mitigation. Substantial amounts could also be raised from charges on international aviation and maritime fuels. These fuels are a growing source of emissions, are underpriced, and charges would exploit a tax base not naturally belonging to national governments.”

In the lead-up to the December climate talks, a carbon tax for shipping, an absolute emissions target and more responsibility for the IMO were among the recommendations made in a policy brief published by the International Transport Forum (ITF). The brief argued that a carbon tax would be relatively easy to implement, and setting its value at around $25 per ton of CO2 would have a marginal impact on maritime trade.

The report is available here.

Trial for Man Accused of Causing 800 Deaths, by Marex

Criminal trial

By MarEx

The criminal trial of a man accused of being the captain of an illegal migrant ship that capsized last year, killing up to 800 people, started on Tuesday.

The trial is being conducted in the Sicilian city of Catania, and the man allegedly played a lead role in one of history’s worst Mediterranean migrant tragedies.

Mohammed Ali Malek, a Tunisian who was 27 years-old at the time, was allegedly in command of an overcrowded, 20-meter (66 foot) fishing vessel which capsized shortly before midnight on April 18 last year. Malek was among the 28 survivors. Around 800 people, the precise number is unknown, died because they were locked in the ship’s hull.

Malek is accused of causing the collision that occurred between the fishing vessel and a Portuguese container/general cargo ship, King Jacob. The King Jacob was attempting to rescue those on board the fishing vessel.

Shortly after the tragedy, Sicilian prosecutors absolved the merchant vessel’s crew of any responsibility. They said the collision had been caused by steering mistakes made by the fishing vessel’s captain and the panicked movements of the migrants on board.

According to The Guardian, a lawyer for Malek, Massimo Ferrante, has stated that the black box from the King Jacob has been erased and so this information about final moments before the collision will not be available to the court. 

Last year Ferrante suggested that Malek was a scapegoat and had been accused of commanding the vessel by other survivors simply because he had pale skin.

Malek’s brother, Makrem Mahjoub, told Reuters last year that Malek had been forced to take command of the vessel by armed human traffickers because of his experience as a fisherman. 

There were people from Syria, Eritrea, Somalia, Mali, Sierra Leone and Senegal on board, kept on three different levels in the vessel.

The Italian Navy later discovered the wreck of the vessel 85 miles north east of Libya at a depth of approximately 375 meters (1,230 feet).

Malek is expected to face other survivors as part of the trial.

The charity Human Rights at Sea is pressing from more prosecutions such as this one. “The issue of impunity from investigation and prosecution for human rights violations and abuses is one of the greatest human rights challenges of our time,” says Founder, David Hammond. “The loss of life in the Mediterranean has highlighted the need for rigorous pursuance of criminal prosecutions to act as a deterrence and hold individuals accountable. 

“Coastal States and the international community must step up and continue their political and legal actions in upholding the rule of law at sea.”

Tanker Spills on the Decline, by Marex

Spill 1

By MarEx

Over half-way into this decade and the downward trend in oil spills from tankers continues, says the International Tanker Owners Pollution Federation (ITOPF). For the last three and a half decades the average number of incidents involving large oil spills, i.e. greater than 700 tons, from tankers has progressively reduced and since 2010 stands at an average of 1.8 per year.

In 2015, two spills of oil over 700 tons from tankers were recorded; one a crude oil spill in Singapore and the other a spill of naphtha in Turkey. ITOPF provided technical advice to the vessels’ insurers in both incidents. Six medium-sized spills (7-700 tons) were also reported in 2015, involving cargoes of asphalt, naphtha and slurry oil as well as bunker fuel.

The total amount of oil lost to the environment through tanker incidents in 2015 was approximately 7,000 tons, the majority of which can be attributed to the two large spills.

This continuing trend in low numbers of large oil spills annually is encouraging news for tanker operators and governments alike as they continue to work to improve standards of operations in sea-borne transportation, says ITOPF.

In the 1990s, there were 358 spills of seven tons and over, resulting in 1,133,000 tons of oil lost; 73 percent of this amount was spilt in just 10 incidents.

In the 2000s, there were 181 spills of seven tons and over, resulting in 196,000 tons of oil lost; 75 percent of this amount was spilt in just 10 incidents.

In the six year period 2010-2015, there were 42 spills of seven tons and over, resulting in 33,000 tons of oil lost; 86 percent of this amount was spilt in just 10 incidents.

In the period 1970 to 2015, 50 percent of large spills occurred while the vessels were underway in open water. Allisions, collisions and groundings accounted for 59 percent of the causes for these spills. These same causes accounted for an even higher percentage of incidents when the vessel was underway in inland or restricted waters, being linked to some 99 percent of spills.

2015’s Large Spills

On January 2, the Libyan-registered oil tanker Alyarmouk collided with the Singapore-registered bulk carrier Sinar Kapuas about 11 nautical miles north-east of Pedra Branca, east of Singapore.

On June 26, Louis Cristal, a cruise ship registered in Malta, and STI Pimlico, and 182-meter-long oil tanker registered in the Marshall Islands, collided off the Gallipoli coast in the Dardanelles Strait.

Spill 2

Spill 3

Spill 4

Companies Face Human Trafficking Risks, by Marex

Human traffic 1

By MarEx

Over 17,000 human trafficking victims are estimated to enter the U.S. each year. January 11 marked the ninth annual National Human Trafficking Awareness Day and January is the fifth annual National Slavery And Human Trafficking Prevention month. 

More than 20 million people globally are affected by trafficking each year, with the studies from the International Labour Organization showing that three out of every 1,000 people are “trapped in jobs into which they were coerced or deceived.”

In recognition of the day, the non-profit business association TRACE International issued a statement on human trafficking and business:

Mass murders, child soldiers, a crackdown on the press and protests – this is what comes to mind as human rights violations. But what encompasses human rights is extraordinarily broad and includes the right not to be held in slavery or servitude. 

There are seven conventions covering human rights, including the two main conventions on human rights: the International Convention on Civil and Political Rights and the International Convention on Economic, Social and Cultural Rights. Companies thus face risks of violating human rights in every country and in every industry.

Lawsuits and government investigations into alleged human rights violations can be costly for companies. For example, Odebrecht, one of the largest engineering firms in Brazil, was convicted by Brazilian authorities of engaging in human trafficking and slave labor conditions in Angola during the construction of a biofuel plant and ordered to pay 50 million reais ($13 million) in damages.

Companies can reduce their risk by familiarizing themselves with the human rights conventions. However, just as important is understanding the United Nations Framework of “Protect, Respect and Remedy” and the Guiding Principles for implementing the Framework. 

The Framework clarifies the responsibilities of governments and businesses in upholding human rights: Governments have a duty to protect their citizens from human rights abuses committed by third parties, businesses have a responsibility to avoid violating human rights and to address violations that occur, and victims of business-related human rights violations should have access to an effective remedy.

The Guiding Principles are meant to help implement the Framework, providing a roadmap for companies on respecting human rights, including understanding what are human rights, putting in place human rights policies and creating a due diligence process focused on prevention and processes to remediate any possible violations.

Being familiar with human rights and the U.N. Framework and Guiding Principles is a crucial first step in reducing the risk of human rights violations. Armed with this knowledge, companies can more easily adapt to the challenges they face no matter where they operate.

Recent MarEx coverage of human trafficking issues

Inadvertent Support for Slavery and Human Trafficking Human Trafficking Conference Features Maritime Leader India Takes Tough Line on Trafficking Victims Thai Naval Commander Charged over Human Trafficking Myanmar Jails Captain and Crew for Human Trafficking 20 Somalis Convicted for Human Trafficking Human Trafficking: The Giant Ocean Case Hope for New Zealand People Trafficking Crackdown

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