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When Tainted Supply Chains Affect Products—What Companies Can Do

More than $140 billion worth of goods suspected of being made by forced labor enters the U.S. market each year, according to Human Rights First.

In the cotton industry, this problem has been running rampant for a long time. In Uzbekistan and Turkmenistan, two of the largest exporters of cotton, forced labor organized on a mass scale demands engagement by up to one million people—and possibly more during picking seasons.

In November 2017, the French investigative TV Show, “Cash Investigation,” aired a two-hour expose on the use of government-sponsored forced labor in Uzbekistan. It pointed out that the forced pickers are mainly civil servants (many are nurses and doctors) and students who are transported by bus and escorted by the police every day to the cotton fields. They work from 6:00 a.m. until 5:00 p.m. and have a daily quota which, if not met, results in repercussions that include being fired from their civil servant jobs.

To make matters worse, Cash Investigation demonstrated that much of the cotton produced in Uzbekistan is missing labels or has labels with misleading statements of origin. This provides the opportunity for cotton obtained through human rights abuse to enter manufacturing supply chains often unwittingly. The reality emphasizes the ongoing risks and exposures every company faces as a result of the Uzbekistan cotton situation.

With the risks that accompany the use of unverified cotton, supply chain and corporate social responsibility managers are faced with the human rights issue of forced labor. But they also need to address other aspects of their businesses that are adversely impacted by loss of control of the supply chain. These can include potential loss in market share, brand reputation, stolen IP, liability to recall, potential legal and accounting costs, and even criminal action. And no company is immune. Even quality growers and manufacturers, whose every interest is in shipping non-Uzbek or non-Turkmenistan product, share in these risks.

There is a hope amid this concern, however, because significant steps are being taken to address the risks. For one thing, the situation has drawn the attention of (and action by) government agencies, NGOs and activist groups, many of whom are mobilizing the industry and taking action.

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More than 280 brands and retailers have signed a “Company Pledge Against Forced Labor in the Cotton Sector of Uzbekistan.” The pledge was initiated by the Responsible Sourcing Network, an organization dedicated to ending human rights abuse associated with materials in everyday products, and Cotton Campaign, a coalition of organizations aimed at eradicating forced labor in cotton production. Companies that signed the pledge committed not to knowingly sourcing cotton from Uzbekistan. Another pledge is soliciting signees for the same commitment against the problem in Turkmenistan.

In May, the US government banned the import of goods made with Turkmenistan cotton under a law prohibiting import of goods made with forced labor. The ban, which still has to be put into practice, raises hope that U.S. authorities will target cotton from Uzbekistan, too.

Also in May, a Cotton Campaign delegation met with Uzbek officials to present them with a roadmap of reforms. Recommended actions include legal and policy reforms, a time-bound plan to dismantle the structural underpinnings of the forced labor system, and accountability mechanisms.

Consumers are becoming increasingly conscious about unethically-produced cotton and are putting pressure on the industry with their most powerful asset, their pocketbooks.

Roughly three in five Americans (61 percent) who responded to a recent Harris poll say that, if they discovered a brand made their bedding/clothing products from raw cotton that was picked by child/forced laborers, they wouldn’t buy it.

Finally, there are technologies available to verify the origin of the cotton and its path throughout the supply chain. Fiber Forward traceability with DNA uses DNA molecular tracers and applies them onto the cotton fiber itself. Portable DNA testing systems can be installed on-site at a mill or at the gin for quality control purposes.

Cotton genotyping uses natural biomarkers that designate the DNA fingerprint of the cotton species, some of which may be associated with a geographic region.

And there’s blockchain platforms, which provide open transparency across transactions between supply chain partners. It is essential, however, to ensure the initial data entered into distributed ledgers comes from forensically verified (such as with DNA methods) sources. Otherwise, blockchains may be inadvertently used to promulgate mis-information.

Online quality assurance solutions increase inspection productivity, transparency and efficiency.
Amid the uncertainties perpetrated by certain cotton producers around the world, we can dare to be optimistic. Government entities and activist/influencer groups are highly motivated to make change. Consumers are contributing with their all-important purchasing power, and companies with tracking expertise are racing to develop solutions that can authenticate supply chains. With such momentum, and so much at stake, we can be hopeful that the issue of forced labor involving the cotton industry will decline and that we can reach a time when such heinous practices are ultimately eliminated.

MeiLin leads the Textile group responsible for providing clients with innovative molecular-based solutions to provide traceability, transparency and trust in global supply chains. Through its CertainT platform, solutions relate to, but are not limited to,  cotton, synthetics, recycled PET, wool, viscose, rayon, cashmere, down, feather and silk.