Every morning at 2am, they heard a kick on the door and a threat: get up or get beaten. For the next 16 hours, No 31 and his wife stood in the factory with their aching hands in ice water. They ripped the guts, heads, tails and shells off shrimp bound for overseas markets, including grocery stores and all-you-can-eat buffets across the US.

After being sold to the Gig Peeling Factory, the couple were at the mercy of their Thai bosses, trapped with nearly 100 other Burmese migrants. Children worked alongside them, including a girl so tiny she had to stand on a stool to reach the peeling table. Some had been there for months, even years, getting little or no pay. At all times, someone was watching.

Names were never used, only numbers given by their boss. Tin Nyo Win was No 31.

Pervasive human trafficking has helped turn Thailand into one of the world’s biggest shrimp providers. Despite repeated promises by businesses and government to clean up the country’s £4.6bn seafood export industry, an Associated Press (AP) investigation has found that shrimp peeled by modern-day slaves is reaching the US, Europe and Asia.

The problem is fuelled by corruption and complicity among police and authorities, and arrests and prosecutions are rare. Raids can end up sending migrants without proper paperwork to jail, while owners go unpunished.

So far this year, more than 2,000 trapped fishermen have been rescued as a result of an ongoing AP investigative series into slavery in the Thai seafood industry. The reports have led to a dozen arrests, millions of dollars’ worth of seizures and proposals for new federal laws.

Hundreds of shrimp peeling sheds are hidden in plain sight on residential streets or behind walls in Samut Sakhon, a port town an hour outside Bangkok. The AP found one factory that was enslaving dozens of workers, and escaped migrants led rights groups to the Gig shed and a third facility. All three sheds held 50 to 100 people, with many locked inside.

Thai soldiers search workers’ living quarters during a raid on a shrimp shed in Samut Sakhon, Thailand. Photograph: Dita Alangkara/AP

As Tin Nyo Win soon found out for himself, there is no easy escape. One woman had been working at Gig for eight years. Another man ended up peeling shrimps there after breaking free from another factory that was equally brutal.

“I was shocked after working there a while, and I realised there was no way out,” said Tin Nyo Win, 22, whose teeth are stained red from chewing betel nut. “I told my wife, ‘We’re in real trouble. If something ends up going wrong, we’re going to die.’”

Last month, AP journalists followed and filmed trucks loaded with freshly peeled shrimp from the Gig shed to major Thai exporting companies and then, using US customs records and Thai industry reports, tracked it globally. They traced similar connections from another factory raided six months earlier, and interviewed more than two dozen workers from both sites.

US customs records show that the shrimp entered the supply chains of major US food stores and retailers such as Walmart, Kroger, Whole Foods, Dollar General and Petco, along with those of restaurants such as Red Lobster and Olive Garden.

It also entered the supply chains of some of America’s best-known seafood brands and pet foods, including Chicken of the Sea and Fancy Feast, which are sold in grocery stores from Safeway and Schnucks to Piggly Wiggly and Albertsons. AP reporters went to supermarkets in all 50 states and found shrimp products from supply chains tainted with forced labour. There is no suggestion that any of these companies were aware of the use of slave labourers.

European and Asian import and export records are confidential, but the Thai companies receiving shrimp tracked by the AP all say they ship to Europe and Asia as well.

The businesses that responded condemned the practices that lead to these conditions. Many said they were launching investigations after being told that their supply chains were linked to people held against their will in sheds like the Gig factory, which sat behind a gate off a busy street.

Inside the large warehouse, toilets overflowed with faeces, and the putrid smell of raw sewage wafted from an open gutter just outside the work area. Young children ran barefoot through suffocating dorm rooms. Entire families laboured side-by-side at rows of stainless steel counters piled high with tubs of shrimp.

Tin Nyo Win and his wife, Mi San, were cursed for not peeling fast enough and called “cows” and “buffaloes”. They were allowed to go outside for food only if one of them stayed behind as insurance against running away. But escaping was all they could think about.

Burmese worker Tin Nyo Win, known as No 31, right, helps remove a pair of gloves from the hands of his wife, Mi San, in Samut Sakhon, Thailand. Photograph: Dita Alangkara/AP

Shrimp is the most-loved seafood in the US, with Americans eating 590m kg of it every year, or about 1.8kg per person. Once a luxury reserved for special occasions, it became cheaper when Asian farmers started growing it in ponds three decades ago. Thailand quickly dominated the market and now sends nearly half of its supply to the US.

The south-east Asian country is one of the worst human trafficking hubs on earth. It has been blacklisted for the past two years by the US State Department, which cited complicity by Thai officials. The EU issued a warning this year that tripled seafood import tariffs, and is expected to decide next month whether to impose an outright ban.

Consumers enjoy the convenience of dumping shrimp straight from freezer to skillet, the result of labour-intensive peeling and cleaning. Unable to keep up with demand, exporters get their supply from peeling sheds that are often just crude garages adjacent to the boss’s house. Supply chains are so complicated that buyers often don’t know exactly where the shrimp has come from.

The Thai Frozen Foods Association lists about 50 registered shrimp sheds in the country. However, hundreds more operate in Samut Sakhon, the country’s main shrimp processing region. Here the humid air hangs thick with the smell of dead fish. Refrigerated trucks with seafood logos barrel down streets straddled by huge processing plants. Just as ubiquitous are the small pickups loaded with migrant workers from Cambodia, Laos and Myanmar being taken to gut, fillet and peel the seafood that fuels this town’s economy.

Abuse is common in Samut Sakhon. An International Labour Organisation (pdf) report estimated 10,000 migrant children aged 13-15 work in the city. Another UN agency study found that nearly 60% of Burmese labourers toiling in its seafood processing industry were victims of forced labour.

Tin Nyo Win and his wife were taken to the Gig Peeling Factory in July when they made the long drive from Myanmar across the border, crammed so tightly into a truck with other workers that they could barely breathe. Like many migrants, they were lured from home by a broker with promises of well-paid jobs, and came without visas or work permits.

After being sold to the Gig shed, the couple learned they would have to work off what was considered their combined worth, £548m. It was an insurmountable debt.

Because they were illegal workers, the owners constantly threatened to call police to keep them in line. Even documented migrants were vulnerable because the boss held on to identification papers so they could not leave.

Under the US government’s definition, forced labour and debt bondage are considered slavery.

In the Gig shed, employees’ salaries were pegged to how fast their fingers could move. Tin Nyo Win and his wife peeled about 80kg of shrimp for just £2.65 a day, less than half of what they were promised. A female Thai manager, who slapped and cursed workers, often cut their wages without explanation. After they bought gloves and rubber boots, and paid monthly “cleaning fees” inside the shed, almost nothing was left.

Employees said they had to work even when they were ill. Seventeen children peeled alongside adults, sometimes crying, at stations where paint chipped off the walls and slippery floors were destroyed by briny water.

Lunch breaks were only 15 minutes, and migrants were yelled at for talking. Several workers said a woman had died recently because she didn’t get proper medical care for her asthma. Children never went to school and began peeling shrimp just an hour later than adults.

“We had to get up at 3am and then start working continuously,” said Eae Hpaw, 16, whose arms were a patchwork of scars from infections and allergies caused by the shrimp. “We stopped working around 7pm. We would take a shower and sleep. Then we would start again.”

After being roughed up one night by a supervisor, five months into their captivity, Tin Nyo Win and his wife decided they couldn’t take the threats any more.

“They would say, ‘There’s a gun in the boss’s car and we’re going to come and shoot you, and no one will know,’” he said.

The next morning, the couple saw an opportunity when the door wasn’t being watched. They ran. Less than 24 hours later, Tin Nyo Win’s wife was captured at a market by the shed manager. He watched helplessly as she was dragged away by her hair – he was terrified for her and for the baby she was carrying.

Shrimp are left on an abandoned peeling table as a Thai soldier walks past during a raid on the shrimp shed in Samut Sakhon, Thailand, 9 November 2015. Photograph: Dita Alangkara/AP

Tracking shipments from just the Gig Peeling Factory highlights how fast and far slave-peeled shrimp can travel.

The AP followed trucks from the shed over five days to major Thai exporters. One load pulled into N&N Foods, owned by one of the world’s largest seafood companies, Tokyo-based Maruha Nichiro Foods. A second drove to Okeanos Food, a subsidiary of another leading global seafood supplier, Thai Union. Still more went to Kongphop Frozen Foods and the Siam Union Frozen Foods, which have customers in the US, Canada, Europe, Asia and Australia. All the exporters and parent companies that responded said they abhor human rights abuses. There is no suggestion that any of these companies were aware of the use of slave labourers.

Shrimp is mixed with different batches of seafood as it is packaged and shipped. At that point, there’s no way to tell where any individual piece was peeled. Once it reaches American restaurants, hospitals, universities and military chow halls, all the shrimp from those four Thai processors is considered associated with slavery, according to UN and US standards.

US customs records linked the exported shrimp to more than 40 US brands, including popular names such as Sea Best, Waterfront Bistro and Aqua Star. The AP found shrimp products with the same labels in more than 150 stores across America from Honolulu to New York City to a tiny West Virginia town of 179 people. The supermarket chains have tens of thousands of US outlets where millions of Americans shop. (Again, there is no suggestion that any of these companies were aware of the use of slave labourers.)

In addition, the Thai distributors state on their websites that they export to Europe and Asia, although specific records are confidential. AP reporters in Germany, Italy, England and Ireland researched shrimp in supermarkets and found several brands sourced from Thailand. Those stores said the names of their Thai distributors are proprietary.

By all accounts, the work at the Gig shed was off the books and thus even businesses carefully tracking the provenance of the shrimp called the AP’s findings a surprise.

“I want to eliminate this,” said Dirk Leuenberger, CEO of Aqua Star. “I think it’s disgusting that it’s even remotely part of my business.”

I want to stop this. I think it's disgusting that it is even remotely part of my business Dirk Leuenberger, CEO, Aqua Star

Many companies asked for more details. Some, including Whole Foods and HEB supermarkets, said they were confident their shrimp was not associated with abusive factories.

The Thai company that supplies most of the shrimp to the US admitted that it hadn’t known where all of it was coming from, and sent a note outlining corrective measures to US businesses demanding answers last week.

“I am deeply disappointed that despite our best efforts we have discovered this potential instance of illegal labour practice in our supply chain,” Thai Union CEO Thiraphong Chansiri wrote. His statement acknowledged “that illicitly sourced product may have fraudulently entered its supply chain” and confirmed a supplier “was doing business with an unregistered pre-processor in violation of our code of conduct”.

After AP brought its findings to dozens of global retailers, Thai Union announced it would bring all shrimp processing in-house by the end of the year and provide jobs to workers whose factories close as a result. It’s a significant step from the industry leader whose international brands include John West in Britain, Petit Navire in France and Mareblu in Italy; shrimp from abusive factories in Thailand has not been associated with them.

Susan Coppedge, the US State Department’s new anti-trafficking ambassador, said problems persist because brokers, boat captains and seafood firms aren’t held accountable and victims have no recourse.

“We have told Thailand to improve their anti-trafficking efforts, to increase their prosecutions, to provide services to victims,” she said. She added that American consumers “can speak through their wallets and tell companies: ‘We don’t want to buy things made with slavery.’”

The State Department has not slapped Thailand with sanctions applied to other countries with similarly weak human trafficking records because it is a strategically critical south-east Asian ally. Federal authorities say they can’t enforce US laws that ban importing goods produced by forced labour, citing an exception for items consumers can’t get from another source. Thai shrimp slips through that loophole.

Thailand is not the only source of slave-tainted seafood in the US, where nearly 90% of shrimp is imported.

Shrimp products from Thailand packaged under the name “Aqua Star” at a grocery store in Phoenix, Arizona. Photograph: Ross D Franklin/AP

The State Department’s annual anti-trafficking reports have tied such seafood to 55 countries on six continents, including major suppliers to the US. Earlier this year, the AP uncovered a slave island in Benjina, Indonesia, where hundreds of migrant fishermen were trafficked from Thailand and sometimes locked in a cage. In November, food giant Nestlé disclosed that its own Thai suppliers were abusing and enslaving workers and has vowed to force change.

Human trafficking in Thailand also stretches far beyond the seafood industry. Earlier this year, high-ranking officials were implicated in a smuggling syndicate involving tens of thousands of Rohingya Muslims fleeing persecution in Myanmar. A crackdown came after dozens of victims died in Thai jungle camps because they were unable to pay ransoms.

The junta military government has singled out the country’s fisheries sector for reforms. It says it has passed new laws to crack down on illegal activities aboard fishing boats and inside seafood-processing factories and is working to register undocumented migrant workers.

“There have been some flaws in the laws, and we have been closing those gaps,” said ML Puntarik Smiti, the Thai labour ministry’s permanent secretary. “The government has made human trafficking a national agenda. The policy is clear, and every department is working in the same direction … In the past, most punishments focused on the labourers, but now more focus is put on punishing the employers.”

Police point to a new law that goes after officers involved in human trafficking, and say rooting out corruption and complicity is a priority.

However, critics argue that the changes have been largely cosmetic. Former slaves repeatedly described how police took them into custody and then sold them to agents who trafficked them again into the seafood industry.

“There are laws and regulations, but they are being selectively enforced to benefit one side,” said Patima Tungpuchayakul, manager of the Thai-based non-profit Labour Rights Promotion Network Foundation. “When you find there is a child working 16 hours a day and getting paid [£1.80] ... the government has to put a stop to this.”

The peeling sheds that supply to major Thai seafood companies are supposed to be certified and inspected, but the stamp of approval does not always prevent abuses.

A factory just a few miles away from Tin Nyo Win’s shed provided shrimp to companies including Thai Union; a half-dozen former workers said a Thai Union employee visited the shed every day. A runaway worker, Moe Pyae Soe, alerted a local migrant labour group about slave-like conditions there after being brutally beaten across his ear and throat with iron chains. Police raided the factory in May.

Former employees told the AP they had been locked inside and forced to work long hours with no days off and little sleep.

The conditions inside were horrific: a woman who was eight months’ pregnant miscarried on the shed floor and was forced to keep peeling for four days while haemorrhaging. An unconscious toddler was refused medical care after falling about 12 feet on to a concrete floor. Another pregnant woman escaped only to be tracked down, yanked into a car by her hair and handcuffed to a fellow worker at the factory.

“Sometimes when we were working, the tears would run down our cheeks because it was so tiring we couldn’t bear it,” said Moe Pyae Soe, 33, who was trapped inside with his wife. “We were crying, but we kept peeling shrimp. We couldn’t rest … I think people are guilty if they eat the shrimp that we peeled like slaves.”

Shrimp from that factory entered the supply chains of Thai Union, which, in the six months prior to the bust, shipped 6.8m kg of frozen shrimp to dozens of US companies, customs records show. Those included Red Lobster and Darden Restaurants, which owns LongHorn Steakhouse and several other popular American chains. There is no suggestion that any of these companies were aware of the use of slave labourers.

Moe Pyae Soe was a free man after the May raid. But five months later, running low on cash with a pregnant wife, he felt desperate enough to look for a job in another shrimp factory. He hoped conditions would be better this time.

They weren’t. His wages were withheld, and he ended up in the Gig factory peeling shrimp next to Tin Nyo Win, No 31.

Modern-day slavery is often just part of doing business in Thailand’s seafood export capital. Some shed owners believe they are providing jobs to poor migrant workers in need. Police are paid to look the other way and say officers frequently do not understand that practices such as forced labour and debt bondage are against the law.

“We just need to educate everyone on this issue,” said Jaruwat Vaisaya, deputy commissioner of Bangkok’s Metropolitan Police. “I don’t think they know what they’re doing is called human trafficking, but they must know it’s wrong.”

News surfaces about an abusive shed only when workers become so hopeless they’re willing to risk everything to escape. Once on the street, without documentation, they are even more vulnerable; they face possible arrest and deportation or being resold.

After fleeing the Gig shed, Tin Nyo Win was alone. He didn’t even know where the shed manager had taken his wife. He sought help from a local labour rights group, which prompted police to take action.

At dawn on 9 November, nearly two weeks after running away, he returned to the shed disguised in dark glasses, a hat and a mask. He burst through the gate with dozens of officers and military troops, and searched for his wife in the dim quarters on both floors of the complex.

Children and teenagers sit together to be registered by officials during a raid on a shrimp shed in Samut Sakhon, Thailand, 9 November 2015. Photograph: Dita Alangkara/AP

Frightened Burmese workers huddled on the concrete floor, the men and women separated. Some could be heard whispering: “That’s 31. He came back.” One young mother breastfed a baby, while 17 children were taken into a corner. Tin Nyo Win’s wife was nowhere.

However, it didn’t take police long to find her: Mi San was at a nearby fish factory. After being caught by the shed manager, she had been taken to police. But instead of treating her as a trafficking victim, she said they put her back to work. Even as police and her husband escorted her out of the second factory, the Thai owner followed them into the street, complaining that Mi San still owed £15 for food she had eaten.

For Thai police, it looked like a victory in front of the cameras. But the story does not end there.

No one at the Gig shed was arrested for human trafficking, a law that’s seldom enforced. Instead, migrants with papers, including seven children, were sent back there to work. Another 10 undocumented children were taken from their parents and put into a shelter, forced to choose between staying there for years or being deported back to Myanmar alone. Nineteen other illegal workers were detained.

Tin Nyo Win and his wife soon found out that not even whistleblowers are protected. Just four days after being reunited, the couple were locked inside a Thai jail cell without even a mattress. They were held on nearly £2,650 bail and charged with entering the country illegally and working without permits.

Back at the shed where their nightmare began, a worker reached by phone pleaded for help as trucks loaded with slave-peeled shrimp continued to roll out.

The Gig Peeling Factory is now closed, with workers moved to another shed linked to the same owners, local police said. A Gig owner reached by phone declined to comment.

A senior Bangkok police officer was alerted to how the case was being handled and has ordered local authorities to re-investigate it for human trafficking. Tin Nyo Win and his pregnant wife were released from jail 10 days after they were locked up and are now living at a government shelter for victims of human trafficking.

Chaiyuth Thomya, the superintendent of Samut Sakhon’s main police station, called a meeting to explain human trafficking laws to nearly 60 shed owners, some of whom were confused about raids that swept up illegal migrants. Later, Chaiyuth quoted one shed owner as saying, “I’m not selling drugs – why did they take possession of my things?”

Meanwhile, the AP informed labour rights investigators about another shed where workers said they were being held against their will. It is being examined.

• AP videographer Tassanee Vejpongsa in Samut Sakhon, Thailand, and writer Elaine Kurtenbach in Tokyo also contributed to this report