Dongwon Industries illegal fishing case in West Africa In the Greenpeace report, Dongwon Industries was highlighted as one of the worst offenders with a recent IUU fishing case in Africa, including forgery of official documents. Two tuna purse seine vessels, one owned and one operated by Dongwon Industries, the F/V PREMIER and the F/V SOLEVANT, were caught fishing illegally in Liberia in 2011and 2012 and were under investigation by the Liberian authority.54 This and other illegal fishing cases have prompted the European Union55 and the United Kingdom56 to issue warnings to importers that IUU products may have entered their canned tuna market, while several countries in the Western Indian Ocean have denied a fishing licence to the F/V PREMIER due to the then ongoing IUU case in Liberia. Rather than cooperating with the investigation, an employee of Dongwon Industries forwarded two letters to the Government of Kenya, implying that the F/V PREMIER was innocent of the illegal fishing charges in Liberia.57 The Bureau of National Fisheries in Liberia later confirmed the letters were forged.58 This has created an international scandal and has resulted in unified action by coastal States in the Indian Ocean to refuse to license the vessel or allow it services in port.59 Dongwon Industries negotiated a settlement with the Government of Liberia and have paid a fine of USD 2M.60 Although Dongwon Industries has maintained its claim as a victim of fraud,61 the fact that the agency they have used is also involved with five other vessels from Inter-Burgo,62 another Korean operator that is notorious for IUU activities, suggested the company has lax standards in its overseas operations and weak due diligence in high risk countries. Dongwon Industries is currently under investigations on multiple fronts in South Korea, which has raised questions regarding the competence of the general operations and governance of the company. Since the illegal fishing case in Liberia has surfaced, the South Korean Coast Guard has initiated an independent investigation into this case. In addition, several Members of the Parliament from the National Assembly hosted a workshop on 11 May 2013 to look into the general ethnics of Korean fishing companies and find ways to prevent similar cases from happening in the future. The National Tax Service raided Dongwon group’s office on 25 April 2013, along with Sajo, on suspicion of offshore tax evasion related to ‘their illegal practices such as flag-of-convenience fishing vessels’, and ‘irregular money transfers during the import and export production’ as reported by Money Today and Hankuk Economy TV.63
Questionable acquisition of Senegalese cannery
The inconvenient truth behind the ‘out-performed’ Dongwon Industries
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In 2012, Dongwon Industries acquired the largest cannery in Africa, Societe de conserverie en Afrique SA, which later changed its name to Societe d’exploitation-Societe nationale de conserverie du Sengeal (Se-SNCDS). It appears that the acquisition went under the decree of former president Abdoulaye Wade, without the proper tender process required by Senegalese law.64 Local media questioned the motive of the previous government in signing the deal.65 In April 2013, top management of Dongwon Industries had to appear in the Dakar criminal court, under legal procedure brought about by local businessman Fouad Nouasser. Mr Nouasser invested CFA 3B (approx. USD 6M) in the cannery before the Dongwon Industries’ acquisition and was the company’s Deputy Director. Mr Nouasser claimed that he was removed from the cannery’s board by Dongwon Industries based on forged documents.66 By acquiring the Senegalese cannery, it appears that Dongwon Industries is aiming to expand into the European market and take advantage of an EU tax exemption for fisheries products originating from Senegal. However, the poor business ethics of the company, in particular in their overseas operations, raises questions about whether they could meet the higher regulatory and consumer standards demanded of a multi-national company.
Investor risks : • Current and possible future financial liabilities from fines due to unlawful activities in countries where it fishes and operates. • Mishandling of environmental, social and governance issues poses a reputational risk to Dongwon Industries.