[APIL_Comment_20231105]

Rejoinder to CJ Cheiljedang and its subsidiaries

Upon the commencement of our dialogue on August 9, 2022, we are pleased to hear that you conducted human rights due diligence in September and November 2022 on Sinan salt farms, your supplier, as indicated in your response dated February 27, 2023[1]. In addition, we welcome your decision of having “designated palm oil, sea salt, etc., as high-risk raw materials to human rights and established a management system for them”, as reflected in your 2022 Sustainability Report[2], on the contrary to the report from 2021[3].

Nonetheless, we are unable to identify how human rights due diligence was conducted in your sea salt suppliers solely from the above response and the 2022 Sustainability Report[4]. Within the 2022 Sustainability Report, the only relevant contents are: that you “[i]mproved human rights in the sea salt supply chain” as a part of 2022 Road Map, that you “monitor[ed] the employment of salt field workers” in relation to Human Rights Impact Assessment, and that you “[m]itigated human rights risks in the sea salt supply chain” as part of your 2022 Key Achievement.

In particular, on the contrary to your response on 24 August 2022, where you stated that “[i]n March 2014, CJCJ suspended the purchase agreement with the four perpetrators that JTBC reported on”, information provided by a relevant government authority with the help of parliament members, indicates that one of the four salt farm owners punished from the 2014 “Salt Farm Slavery” case continued to supply sea salt to you even until 2023. (The court decision is attached as an appendix with the said perpetrator’s name redacted; according to the facts of crime proved in trial, the crime of the said perpetrator appears to fall under forced labor or human trafficking according to international standards.) Furthermore, according to information provided by a relevant government authority, the salt farm owners including the said perpetrators who supply to you were caught in violation of the Minimum Wage Act and the Labor Standards Act between July and October in 2022 by the Ministry of Employment and Labor’s inspection, the period of which overlaps with when CJCJ purportedly conducted human rights due diligence.

It is within this context that we ask the following to CJCJ and CJCJ’s subsidiaries, i.e. CJ Foods USA Inc. based in California, CJ FOODS SALES UK, LTD. based in the United Kingdom, as well as CJ EUROPE GMBH and MAINFROST FOOD GMBH based in Germany–all subsidiaries that appear to import your sea salt or use it to manufacture other food products.

1. To all respondents, and particularly to CJ Cheiljedang
   1. You have stated that you conducted human rights due diligence to your supplier salt farms in September and November 2022, according to your response dated February 27, 2023. You have also stated that you have “[m]itigated human rights risks in the sea salt supply chain” as your 2022 Key Achievement in your 2022 Sustainability Report.

1) In regards to the human rights due diligence on your supplier salt farm in September and November 2022, please identify who (whether CJCJ or a third party; if a third party, please identify which entity it was) assessed the human rights impact on what (how many salt farms operated by how many salt farm owners), with which stakeholders present (please specify the stakeholders who were present, such as the workers), with what methods (please identify in particular what measures you employed to check the status of intellectual disability among employees of the salt farm owners), through which human rights index, and throughout what period.

2) Please describe in detail what potential and real negative human rights impact you have identified in your supplier salt farms as a result of the above human rights impact assessment. Furthermore, please state what specific measures you established in order to reduce and prevent the identified potential and real negative human rights impact.

1. 1. Among the salt farm owners punished from the 2014 “Salt Farm Slavery” case, other than the perpetrator identified in the court decision attached as appendix, how many supplied sea salt to you after 2014, throughout which period?
   2. Did your 2022 human rights due diligence target those who had been punished from the 2014 “Salt Farm Slavery” case, and continued to supply sea salt to you after 2014, including the perpetrator identified in the court decision attached as appendix? If so, how many salt farms operated by the above owners were subject to your human rights due diligence?
   3. According to the Sea Salt Production Tracking System, we find that the sea salt produced by CJCJ from 2020 to 2022 continues to be sold domestically and internationally. Moreover, based on the date of stock entry, the number of salt farm owners who supplied sea salt to you are as follows: 34 owners in 2020, 28 in 2021, 35 in 2022, and 41 in 2023. Please declare the number of salt farm owners among those listed above who employed workers with disabilities or workers suspected with disabilities in each year from 2020 to 2023.
   4. From 2014 to the present moment in 2023, have you provided remedy to workers with disabilities harmed by your supplier salt farms? If so, please describe in detail.
2. To CJ Foods USA INC., regarding ‘the California Transparency in Supply Chain Act’

We found that you have not disclosed the measures taken to address the above-mentioned violations in Shinan salt farms-your supply chain of sea salt-through your website or other means.

From 2014, when it was revealed that there are salt farm owners punished for labor exploitation against persons with disabilities in Sinan salt farms which supply to CJCJ, to the present moment in 2023, please identify what measures were taken each year in order to reduce and prevent human trafficking or forced labor in Sinan salt farms—the supply chain of sea salt imported by CJ Foods USA Inc., or used in food produced by CJ Foods USA Inc.

1. To CJ FOODS SALES UK, LTD., regarding ‘the Modern Slavery Act 2015’

We found that you have not disclosed the actions taken to address the above-mentioned violations in Shinan salt farms-your supply chain of sea salt-through your website or other means.

Please describe what actions you took each year in order to reduce, prevent, and identify modern slavery such as human trafficking or forced labor in Sinan salt farms—the supply chain of the sea salt imported by, or used in food products produced by, CJ FOODS SALES UK, LTD. in 2021 and 2022.

1. To CJ EUROPE GMBH and MAINFROST FOOD GMBH, regarding ‘the German Supply Chain Due Diligence Act(LkSG)’

Do you import sea salt produced in Sinan salt farms for sale, or for production of food? If so, what is the quantity of sea salt produced in Sinan salt farms that you have imported for sale in 2023? What is the quantity of sea salt produced in Sinan salt farms that you have imported for food production in 2023?

Appendix`

Gwangju Regional Court, Mokpo Branch

The First Criminal Division

Decision

Case: 2014-Gohap-50 | Quasi-Fraud; Violation of the Labor Standards Act

Defendant: A

Prosecutor: Sunjoo Moon (Prosecution), Junseok Ahn (Trial)

Counsel for Defense: B

Date of Decision: 24 July 2014

Orders

The Defendant is sentenced to 1 year of imprisonment with labor.

However, execution of the above sentence is suspended for 3 years upon the date of decision.

The Defendant is ordered with 120 hours of community service.

Among the indictments of this case, the indictment on the violation of the Labor Standards Act based on non-issuance of wages is dismissed.

Reasons

Facts of Crime

The Defendant operates “Salt farm D” (approximately 24,793 meter square) in C of Sinan County, Jeonnam, as well as a salt farm (approximately 17,851 meter square) and a shrimp farm in front of the Defendant’s residence at E. The Defendant is an employer of 4 to 6 workers.

1. Quasi-Fraud

In October 2008, the Defendant was introduced to Victim I as a salt farm worker, through an anonymous employment broker (hereafter “H”) of the Agency G in Mokpo F. The Defendant, exploiting the fact that rational judgment is challenging for the victim who lacks intelligence (IQ 79), and whose social capacity amounts to that of a 7 years and 8 months old (SQ 55), pretended as if wages will be paid without an ability or willingness to provide regular wages, and decided to make the Victim work in their salt farm and shrimp farm, while exploiting the Victim’s labor.

As such, the Defendant lied to the Victim with the following statement: “I will pay you 4 million won every year if you work in our salt farm.”

Therefore, the Defendant, upon making the Victim work in their salt farm or shrimp farm, withheld the wage of 852,020 won (the minimum wage standard) owed to the Victim in November 2008, and from thereon, withheld the wage that amounts to 62,191,940 won up until January 2014, as shown in the List of Crimes 1, attached.

The Defendant, by taking advantage of the Victim’s mental and/or physical disability and making the Victim perform labor, acquired financial gains of the above amount.

1. Violation of the Labor Standards Act in regards to Violence against Employee

While an employer shall not do violence to an employee for the occurrence of an accident or any other reason,

Summary of Evidence

[Matters on the first judgment]

1. Parts of the police’s second protocol concerning the interrogation of a criminal suspect of the Defendant
2. Police’s testimony records on I
3. Report of investigation (clinical psychological evaluation report on Victim I, attached)
4. Doctor’s opinion

[Matters on the second judgment]

1. Trial testimony by the Defendant
2. Trial testimonies by Witness K and J
3. Police’s testimony records on I

Application of Law

1. Applicable law on the fact of crime & decision on sentencing

Article 37, Clause 2 of Subparagraph 1 of Article 38, and Article 50 (combination of severity of punishment based on the sentencing determined for the crime of Quasi-Fraud which entails more severe punishment) of the Criminal Act

1. Probation

Subparagraph 1 of Article 62 (taking into account beneficial extenuating circumstances among the basis for weighing of sentencing)

1. Community services

Clause 1 of Article 62-2 of the Criminal Act; Article 59 of the Act on Probation

Decision on the Claims by Defense

1. Summary of Claims
   1. Within the Indictment in regards to Quasi-Fraud, a specificity of “lacking intellectual ability (IQ 79), and the social capacity amounts to that of a 7 years and 8 months old (SQ 55)” is written; however, not only is this not defined in the law, it also gives rise to the Court’s prejudice, and hence the method of indictment goes against the Principle of Indictment against Surplusage. Therefore, the indictment procedure in this regard is null due to a legal violation, and hence a dismissal of indictment ought to be ruled.
   2. In regards to the crime of Quasi-Fraud, 1) Victim I did not pursue an act to forfeit the right to claim wages, and 2) the Defendant did not lack the will to pay wages to Victim I, as the Defendant provided 4 million won by enrolling the Victim into a health insurance savings account for the Victim. Therefore, the crime of Quasi-Fraud cannot be established[5].
2. Decision
   1. Whether the method of Indictment violates the Principle of Indictment against Surplusage

Violation of the Principle of Indictment against Surplusage shall be determined specifically in a given case on whether the facts documented in the Indictment aside from those required by the law, as well as the materials attached to or quoted in the Indictment, causes prejudice to the judge or the jury, and hence presents an obstacle for the judge or the jury’s understanding of the reality of the fact of the crime, based on the type and the matter of the crime listed in the Indictment. (Supreme Court; decided on 22 October 2009; decision number 2009-Doh-7436; ruled by unanimity)

Upon examination, it is deemed that the Prosecutor simply explicated the Victims’ IQ, SQ, and their social ages in order to specifically and clearly demonstrate the degree of “mental and physical disability”, a component of Quasi-Fraud. Hence, the method of Indictment does not violate the legal procedure in containing the above matter.

1) Based on evidence lawfully chosen and investigated, the Court recognizes the following.

a) While the Defendant provided wages to all workers except Victim I by bringing them out to Mokpo every year, the Defendant did not provide wages to Victim I upon initially recognizing that he lack intellect compared to an average person. Even when the Defendant brought Victim I out on the Lunar New Year of 2010, it was to provide allowance to be used in Mokpo, not to pay wages. (See Investigation Record, p. 1239)

b) In fact, Victim I, while working as an employee of the Defendant, requested money solely for snacks, and never requested payment of wages. (See Investigation Record, p. 23)

c) While Victim I was employed by the Defendant and worked from October 2008, the Defendant’s spouse only subscribed to a health insurance savings account on 9 January 2012.

d) As for the above insurance, the Victim would have only earned the accrued amount if Victim I lived until 9 January 2017; there is no matter to indicate that Victim I agreed to receive the guaranteed monthly wages posthumously in such a conditional way.

2) Based on the above fact, it can be sufficiently recognized that the Defendant had the intention, at least negligently, to force labor without paying wages against Victim I from the moment the Defendant brought them to work, because Victim I lacked intellectual ability.

3) The crime of Quasi-Fraud is established when by taking advantage of the inexperience of a minor or a person’s intellectual disability, one earns property or obtains pecuniary advantage from the victim. In this case, the Defendant’s lie that they will pay a wage of 4 million won to the Victim amounts to the means of entering a disadvantageous employment contract by using the Victim’s lack of perception and judgment. The direct financial gains that the Defendant earned through the crime of Quasi-Fraud is the labor itself performed by the Victim, and the wage calculated based on the minimum wage is valued by numerical evaluation of the above labor. Therefore, even if the Victim did not forfeit the right to claim wages above a certain amount based on the performance of this labor, insofar as the labor was provided based on the Defendant’s quasi-deceptive act, it does not affect the establishment of the crime of Quasi-Fraud.

Reason for Sentencing

1. Range of sentence: imprisonment of 1 month to 15 years
2. Application of standards of sentence
   1. Crime determined for sentencing: Quasi-Fraud

[Determination of category] Fraud > General Fraud > Under 100 million won (First Category)

[Range for recommended sentencing] Imprisonment under 1 year (area of reduction)

A special factor for reduction: non-willingness to punish, or a case where significant amount of damages have been recovered

[Range for recommended sentencing] Imprisonment above 1 month

Following the minimum range of recommended sentencing on the crime of Quasi-Fraud determined for sentencing

1. Determination of sentence: imprisonment of 1 year with the suspension of execution of the sentence for 3 years.
   1. Even for a person with disability, or who lacks intellectual ability, anyone ought to be treated as a human being, whose dignity and value are to be respected. Maximally ensuring humane life and rights for persons with disabilities, and ultimately achieving social integration through their complete social participation and equality, is the ideal welfare society that all social constituents ought to strive for.

Victim I of this Quasi-Fraud case, while not diagnosed with an intellectual disability, has the intellectual ability of IQ 79 and the social ability of SQ 55, and hence their social age (SA) amounts to 7 years and 8 months. Victim I is in a state where mental development has been delayed, as their understanding and judgment capacity on social circumstances are severely lacking. The Defendant, abusing such characteristics of the Victim, brought the Victim under their control and extracted labor for an extended period of time without payment of wages. The severity of the crime is high, and calls for a strict punishment.

Partial Dismissal of Indictment

1. Summary of Indictment

While an employer has to directly pay wages in money to an employee at least once a month in a consistent manner, the Defendant, despite hiring Victim I as a salt farm worker in their own salt farm, did not pay the wage of 904,000 won on May 2009, and from thereon, until January 2014, withheld payment of 56,872,900 won as shown in the List of Crimes 2, attached.

1. Decision

The above matter of indictment falls under Article 109, Subparagraph 1, and Article 43, Subparagraph 2 of the Labor Standard Acts. Pursuant to Article 109, Subparagraph 2 of the same Act, indictment cannot be raised on the contrary to the victim’s explicated will. However, according to the Agreement as well as the Non-Willingness of Punishment forms attached to the trial record, the Victim, on 12 May 2014, upon indictment for this case, reached an agreement with the Defendant and expressed their will against punishment on the Defendant.

Therefore, pursuant to Article 327, Subparagraph 6 of the Criminal Procedure Act, this Indictment is dismissed.

Presiding Judge Hyunmin Jin

Judge Kyeongho Jeon

Judge Mina Lee

List of Crimes 1

(List of Crimes 1 omitted)

List of Crimes 2

(List of Crimes 2 omitted)

[1] https://www.business-humanrights.org/en/latest-news/cj-cheiljedangs-response-to-apils-second-rejoinder/

[2] https://www.cj.co.kr/cj_files/2022%20Sustainability%20Report.pdf

[3] https://www.cj.co.kr/cj_files/2021%20Sustainability%20Report.pdf

[4] https://imagesm.cj.net/download/esg/CJ-ENM-2022-ESG-REPORT-EN.pdf

[5] In regards to the crime of Quasi-Fraud, the Defense also claims that the crime of violating the Labor Standards Act and that of Quasi-Fraud cannot co-exist. Insofar as the Court dismisses the Indictment on the crime of violating the Labor Standards Act, it does not make a separate ruling on this matter.

[6] The Petition submitted under Victim I and their brother’s names on 10 June 2014 states that Victim I wanted a strict punishment on the Defendant. However, reflecting on the Agreement and the Non-Willingness of Punishment forms that appear to be directly signed by Victim I, as well as contextual circumstances, it is doubtful whether Victim I wrote the above Petition themself, and it is difficult to deem that L, Victim I’s older brother, is at a position to rescind the Non-Willingness of Punishment by representing Victim I as their family member who provides de facto protection.