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Levi’s Vacates Better Cotton Initiative Board Seat. Is Xinjiang to Blame?

Levi Strauss’s sustainability czar has exited the board of the Better Cotton Initiative, cutting short a four-year term that was scheduled to end next year, the Wall Street Journal reported Friday, citing people close to the matter.

Jeffrey Hogue, who inherited the seat from his predecessor last year, is currently focused on building the denim giant‘s sustainability team and preparing the release of its first sustainability report and ESG disclosure, a spokesperson confirmed to Sourcing Journal.

Levi‘s maintains its status as a member of the cotton sustainability program, which features boldface names such as Adidas, Burberry, H&M, Ralph Lauren and Ikea on its roster, the spokesperson added. BCI, which declined to “provide input on this topic,” updated its website early Friday to strike Levi’s from its so-called BCI Council.

BCI’s leadership, members of the Geneva-based not-for-profit told the Wall Street Journal, remains deeply divided over its response to suspected human-rights abuses, including forced labor, in China’s northwestern Xinjiang Uyghur Autonomous Region.

Kenneth Roth, executive director of the watchdog group Human Rights Watch, intimated as much Friday afternoon, writing on Twitter that Levi’s was vacating its spot because BCI has “gone soft on the Chinese government’s use of Uyghur Muslims forced labor to produce cotton in Xinjiang.”

BCI’s engagement on what human-rights groups and several governments have dubbed “genocide” has continued to confound industry watchers. By pulling out of all field-level activities in Xinjiang on the one hand, and scrubbing all public references to why it was doing so on the other, the group has become a target of opprobrium from both China, which launched its own cotton certification scheme in retaliation, and anti-slavery campaigners, who in May slated BCI for “putting at risk any credibility it could have in its commitment to ensure that decent work is embedded across its global cotton sustainability program.”

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In June, Belgium-based retailer C&A said it wasn’t satisfied with BCI’s continued equivocation on the issue of forced labor in Xinjiang, where half a million ethnic minority workers are reportedly forced to pick cotton by hand through a state-sponsored labor transfer and “poverty alleviation” scheme.

“C&A [is observing] the current activities of the Better Cotton Initiative with high interest and we are not satisfied with the recent developments,” Betty Kieß, head of corporate communications for the European retailer, told Sourcing Journal. “Whilst we still believe that BCI was and is an important organization to promote more sustainable cotton cultivation we believe it is now the time for a change.”

Xinjiang cotton accounts for 85 percent of China’s cotton, which in turn makes up roughly one-fifth of the world’s supply. It’s currently banned from entering the United States.

Taking a stand against forced labor in Xinjiang, which Beijing views as an attempt to interfere with its domestic affairs, has damaged the bottom lines of brands that have dared to speak out. These have included H&M, whose Greater China sales fell 23 percent in the three months through May to 1.6 billion kronor ($185 million), and Adidas, which saw its second-quarter revenues in the region tumble 16 percent to 1 billion euros ($1.2 billion) as a result of state-media-incited consumer boycotts.

Levi’s CEO Chip Bergh said in April, however, that the company hasn’t had business dealings in Xinjiang for more than a decade, and that China accounts for a fraction of its total revenue.

“We will not tolerate and we do not tolerate any forced labor, and we also insist on the ability to audit our suppliers and be able to do that unannounced. And those two conditions have kept us out of Xinjiang Province for more than a decade,” Bergh told CNN’s Poppy Harlow. “Our commercial business in China is still very small. It’s only about 3 percent of our total business. And we’re trying to thread the needle to maintain a commercial business there while standing up for what we know is right with respect to the human-rights violations of China.”