SET-listed Thai Union Group Plc (TU), the world's biggest producer of canned tuna, has signed a memorandum of understanding (MoU) with the World Tuna Purse Seine Organisation (WTPO) to cooperate on ensuring fair labour practices.
The move is part of measures by the Thai government and private fisheries firms to improve their labour practices to avoid non-tariff barriers being slapped on their products by importers.
Darian McBain, TU's global director of sustainable development, said the MoU aims to establish a high-level framework for discussion and development of policies and rules for ethical crew employment and fair labour practices. Those policies include training, social responsibilities and rules for sea-based operation in the tuna purse seine industry.
"As the largest seafood producer in the world, Thai Union Group is committed and focused on reform efforts in the fishing industry and has taken significant steps to promote safe and legal labour," Ms McBain said.
TU and the WTPO have agreed to exert earnest efforts to ensure the viability and success of this project, and to adhere to the principles of good faith and fair play in all transactions relating to its implementation as well as in dealing with one another, she said.
Thai seafood producers face the threat of the EU banning Thai fishery imports unless the country develops ample laws and regulations to counter slavery and human trafficking in the industry. The government has imposed various measures to tackle illegal, unreported and unregulated fishing and human trafficking.
Beyond the MoU, TU is considering a 1-billion-baht investment in a second research and development house, expecting it would start operation by 2018. The new R&D facility would focus on animal nutrition and create added value for seafood products.
TU posted record sales in the third quarter, but net profit dropped as rising raw material prices led to weaker margins.
Consolidated third-quarter sales totalled 35.1 billion baht, up 7.7% year-on-year, marking a second straight quarter of record sales. But gross profit fell by 12.4%, while gross profit margin was 14.1%, down from 17.3% a year earlier.
TU shares closed Friday on the SET at 20.60 baht, down 20 satang, in trade worth 365 million baht.