Under NKSEA, transactions in N. Korean slave labor would be punishable by prison time
Yet again, a news story is reporting that North Korea is sending workers abroad to toil in conditions tantamount to slavery:
When the North Korean carpenter was offered a job in Kuwait in 1996, he leapt at the chance. He was promised $120 a month, an unimaginable wage for most workers in his famine-stricken country, where most people are not allowed to travel abroad.
But for Rim Il, the deal soured from the start: Under a moonlit night, the bus carrying him and a score of other fresh arrivals pulled into a desert camp cordoned off with barbed-wire fences. There, 1,800 workers, sent by North Korea to earn badly needed foreign currency, were living together under the watchful eyes of North Korean government supervisors, Mr. Rim said. They worked from 7 a.m. to 7 p.m. or, often, midnight, seven days a week, doing menial jobs at construction sites.
“We only took a Friday afternoon off twice a month but had to spend the time studying books or watching videos about the greatness of our leader back home,” Mr. Rim said at a recent news conference in Seoul, the South Korean capital. “We were never paid our wages, and when we asked our superiors about them, they said we should think of starving people back home and thank the leader for giving us this opportunity of eating three meals a day.” [N.Y. Times, Choe Sang Hun]
The workers’ rights issue is the more obvious one, and more on that in a moment. There are a few other problems here, too, including the familiar question of how Pyongyang is spending the money, and the fact that U.N. member states are supposed to be keeping an eye on that sort of thing. Do the math, and it’s quite possible that Pyongyang is pulling down $300 million a year this way, which would make it a significant source of income. Ahn Myeong Chol of NK Watch speculates that Pyongyang uses the money to buy luxury goods, which would violate a series of U.N. Security Council resolutions. His guess is as good as mine, but only Kim Jong Un knows for certain. The other interesting detail is this one:
The Workers’ Party, the ruling party in North Korea, instructed a group in Kuwait to send home $500,000 a month, more than its members’ regular salaries combined, a North Korean supervisor who worked there from 2011 to last year told NK Watch.
When net income exceeds gross income, it’s time to be suspicious. One possibility is that North Korea is using “wages” as more than just a source of income. It may be commingling them with the proceeds of other illicit activities, such as arms sales. That’s commonly known as money laundering. Similar suspicions have been voiced about North Korea’s restaurants abroad.
~ ~ ~
I’ve previously written about the business ethics and legal issues surrounding North Korea’s labor practices abroad, including in Siberian logging camps, at future World Cup venues in Qatar, and in Malaysian mines.
They described a system where government minders monitored their movements and communications and required them to spy on one another. The minders often confiscated the workers’ passports.
“These workers face threats of government reprisals against them or their relatives in North Korea if they attempt to escape or complain to outside parties,” the State Department said in a report published last year. “Workers’ salaries are deposited into accounts controlled by the North Korean government, which keeps most of the money, claiming various ‘voluntary’ contributions to government endeavors.”
In theory, the Tariff Act of 1930 prohibits the import of slave-made goods into the United States. A Customs regulation at 19 C.F.R. § 12.42 also allows private petitioners to oppose the landing of goods made with forced labor in U.S. ports; however, few North Korean goods should be imported into the United States now, due to economic reasons, and the licensing requirements applicable under Executive Order 13,570. More fundamentally, the U.S. and North Korea are neither natural nor historic trading partners, which means that this strategy would only be useful in rare circumstances.
In a thoughtful paper, Marcus Noland suggested that those doing business with North Korea apply a code of ethics akin to the Sullivan Principles, which were once applied by U.S. investors in apartheid-era South Africa. In theory, if investors were required to report their North Korean investments in their SEC filings, shareholders could pressure them to adopt more ethical business practices. If North Korea were to be re-listed as a state sponsor of terrorism, the SEC’s Office of Global Security Risk would require the reporting of any such investments, and that requirement would apply to non-U.S. businesses that issue securities in the United States. Unfortunately, those who do business with North Korea are almost by definition unethical, unwilling to press ethical issues, or more concerned about competition from other unethical businesses than with business ethics.
This is where the NKSEA provides a more comprehensive answer, in the form of Section 104(a)(1)(F):
(1) CONDUCT DESCRIBED.—Except as provided in section 207, the President shall designate under this subsection any person the President determines to—
. . . .
(F) have knowingly engaged in or been responsible for serious human rights abuses by the Government of North Korea, including torture or cruel, inhuman, or degrading treatment or punishment, prolonged detention without charges and trial, forced labor or trafficking in persons, causing the disappearance of persons by the abduction and clandestine detention of those persons, and other denial of the right to life, liberty, or the security of a person;
Section 207 contains the humanitarian exceptions, for imports of food and medicine I wrote about here. And obviously, the U.S. has to have jurisdiction to impose these sanctions, such as the use of the U.S. financial system by one of the participants.
Note that this provision is mandatory. If the executive branch finds that a person or entity has “engaged in or been responsible for” human trafficking by the Government of North Korea, the Treasury Department is required to block the designated entity’s assets as they enter the U.S. financial system. Other potential sanctions include criminal penalties, including a $1 million fine, 20 years in prison, or a civil penalty of up to $250,000. The sanctioned person or entity may also be debarred from being awarded U.S. government contracts, or be denied a visa to enter the United States.
For those (such as banks) that facilitate such transactions, other discretionary sanctions may apply under Section 104(b)(1)(G), including the blocking of assets.
Some will argue, in response, that as bad as these working conditions are, they’re far worse in North Korea itself. But the fact that conditions in Qatar or Vladivostok are minimally better than in Hamhung does not make them acceptable. Is a living wage for the workers and their families too much to ask of a nominally socialist regime? Wasn’t the idea of economic engagement to loosen Pyongyang’s restrictive brutality and gently introduce it to the standards and norms the rest of the world lives by? Wasn’t part of the idea to improve the lives of the North Korean people, rather than to be just another way for its oligarchy to exploit its people and enrich itself? Or to undermine fair wages and living standards in the receiving nations?
As always, the question of engaging North Korea becomes a question of who changed whom.
After 20 years of “engagement,” there’s little evidence that any of North Korea’s partners have expected it to engage meaningfully enough to let its workers spend their own paychecks or work in safe conditions. At what point will the defenders of these arrangements expect to see meaningful change, or is this simply an open-ended hope? If the world doesn’t expect even this much of North Korea, where is the social value in engagement, and where is it realistically leading? How can it be anything but a worn-out justification for profiteering on slavery?