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Costco Faces Lawsuit Over Sale Of Prawns Harvested With Slave Labor

|Includes: Costco Wholesale Corporation (COST)

Costco Corporation has been sued for selling prawns harvested as a result of human trafficking and slavery.

A lawsuit was filed by a woman in California against Costco Wholesale Corporation, who is believed to have been selling shrimps bought from Thailand, where slave labor and human trafficking are practiced. She was the first customer to have filed such a complaint against a U.S based company who was illegally selling products misleading its customers about it. The woman sued the company as it was violating the state law that strictly forbids companies to make false claims regarding their any illegal activity that happens in their supply chain.

An attorney at the U.S District Court said that the American consumer cares about where the products that they purchase are coming from, they would not knowingly purchase any product that is a result of or manufactured through or made available by the use of slavery. The Third largest retailer in the United States gets its shrimps imported from Charon Pokhpand Foods (CP Foods), a Thai Company.

The shrimps that are sold by these companies comes from farms but these the feed comes from Ghost Ships, that have unpaid migrant workers who are held captive by traffickers. These traffickers make these migrants work for seven days a week and over 20 hours daily. These workers are usually Burmese; some former Burmese Slaves said that they have seen other workers jump off the boats in front of them; these traffickers have beaten them up and electrocuted them as well.

Niall McCarthy, lawyer for the plaintiffs, stated that the evidence that has been collected focuses on Costco whereas other U.S based companies have been selling the same prawns that they have purchased from these Thai based companies. So he believes that more suits will start coming in now. The woman who filed the complaint said that the company has publicly said that human trafficking and slavery are not tolerated in its supply chain, but in spite of the fact that it has publicly admitted of doing so; the company purchases these tainted farmed prawns from CP foods. Costco Wholesale directly has not been accused of engaging in such practices that the Thai companies were a part of but it has cost Costco's high quality reputation to be effected.

According to the lawsuit the wholesale company will be made to pay a fine for illegally purchasing products from such companies, it will also seek to compensate the consumers who have purchased such goods from the Costco stores and along with compensating its purchasers, the company will disclose any other such products that might be in its supply chain.