Domestic criminal accountability for Dutch corporations profiting from North Korean forced labour

I was recently invited as a legal expert to reflect on the potential for accountability of Dutch corporations profiting from the labour exploitation of North Korean workers abroad. Already in 2016, a team led by Remco Breuker, professor of Korean Studies at Leiden University, had issued a report detailing the appalling (forced) labour conditions in which North Koreans work in Europe. This happens in particular in Poland where they are forced to work on shipyards and have to hand most of their wages to the North Korean government. Apparently, North Korea ‘trafficks’ these workers to Poland for self-enrichment purposes. In the wake of this report, investigative work sponsored by the Why? Foundation exposed how various corporations and governments are complicit in these abuses (this work resulted in a documentary, Dollar Heroes, more information can be found here). On that basis, Breuker’s research team produced a follow-up report, released on 6 February 2018, which highlighted the involvement of Dutch corporations, notably as buyers of ships made by North Koreans in Poland. In this post, I explain on what grounds these corporations could be held to account under Dutch criminal law, and in particular how Dutch jurisdiction could be established over them.

In order to hold Dutch corporations profiting from their involvement in exploitative labour practices abroad to account in the Netherlands, the Netherlands should obviously first have jurisdiction. Bearing in mind that the impugned production activities took place abroad (in Poland), and involved foreign (North Korean) nationals, jurisdiction may, at first glance, appear questionable. Can a Dutch prosecutor exercise jurisdiction over a situation with such a strong extraterritorial dimension? While not denying the extraterritorial elements of the situation, jurisdiction in this case can be established on the basis of the uncontested territoriality principle. This follows from a close reading of the relevant legal provisions in the EU Human Trafficking Directive 2011/36/EU and Dutch legislation in Article 273f of the Dutch Penal Code, which makes punishable human trafficking and related exploitative labour practices.

The EU Human Trafficking Directive not only requires EU Member States to exercise their jurisdiction in case the offence of human trafficking is committed in whole or in part within their territory or in case the offender is one of their nationals (Article 10(1)). Crucially, it also authorizes – although does not mandate – Member States to exercise jurisdiction where an offence ‘is committed for the benefit of a legal person established in its territory’ (Article 10(2)). Under Dutch law, the latter form of such jurisdiction already existed, and is currently codified in Article 273f(1)(6) of the Dutch Penal Code, which criminalizes ‘profiting from the exploitation of a person’ (Article 273f(1)(6) Dutch Penal Code). In an extensive study just published by fellow Ucall’er Anne-Jetske Schaap (De strafrechtelijke aansprakelijkheid van ondernemingen voor moderne slavernij, Nijmegen: Wolf Legal Publishers, 2017), Schaap demonstrates that according to this provision, it suffices that a person profits from labour exploitation and for jurisdictional purposes, it is immaterial where that exploitation occurred: it suffices that a domestically incorporated legal person somehow profits. It is the territorial benefit which a corporation draws from exploitative practices, regardless of location, that serves as the jurisdictional linchpin. Schaap argues that accordingly, Article 273f(1)(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.

If we apply this to the involvement of Dutch corporations in the exploitation of North Korean nationals on Polish shipyards, it does not actually matter that these persons are foreign nationals working abroad. What matters is that the products they make – the ships they build – are purchased by Dutch corporations, which go on to benefit or profit in the Netherlands from these practices. This act of benefiting or profiting is a territorial one, and triggers application of the territoriality principle, the basic principle of criminal jurisdiction. Its criminalization somewhat resembles the criminalization of territorial money laundering, receiving stolen goods, or participating in a criminal organization, for which one can also be prosecuted in the Netherlands even if the predicate offence took place abroad (see also F.G.H. Kristen, ‘Maatschappelijk verantwoord ondernemen en strafrecht’, Preadvies Nederlandse Juristenvereniging 2010). For instance, a Dutch NGO (SMX) recently filed a criminal complaint against Rabobank, alleging that Rabobank laundered Mexican drug cartel money and participated in a criminal organization together with these cartels, who allegedly committed crimes against humanity.

So far no Dutch prosecutions have been brought in labour exploitation cases with transnational aspects, but it may only be a matter of time. This has also been highlighted in the already mentioned study by Schaap. She compares Article 273f of the Dutch Penal Code with the UK Modern Slavery Act (2015) which does not provide for the kind of profit-based jurisdiction that would allow buyers to be held to account. She concludes that the Dutch Penal Code provides ample opportunities to hold corporations criminally liable for modern slavery, while finding it remarkable that legal practice does not reflect these opportunities (p. 152). I have made a similar observation regarding the use of the criminal law regarding extraterritorial human rights abuses more generally in a recent article in Criminal Law Forum.

It is our hope that Dutch prosecutors thoroughly examine the involvement of Dutch corporations in the exploitation of North Koreans abroad. They may want to press charges in case of evidence that these corporations, in light of the information reasonably available to them, knowingly accepted the risk that the ships which they bought were produced in conditions of labour exploitation.