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C&A Exasperated With BCI’s Xinjiang Equivocation. Who’s Next?

The Better Cotton Initiative (BCI) has continued to be evasive on the issue of forced labor in China’s cotton-rich Xinjiang Uyghur Autonomous Region, and C&A, for one, isn’t pleased with the way it’s handling the situation.

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.”

She declined to provide details on what this might mean for the company’s future sourcing strategy, however. Roughly 40 percent of the company’s cotton incorporates organic and sustainable cotton from BCI.

The largest cotton sustainability program in the world—besides C&A, other prominent members include Adidas, Burberry, H&M, Ralph Lauren and Ikea—has been playing to both sides of the controversy, pulling out of all field-level activities in Xinjiang on the one hand and deleting public statements about the region’s “sustained allegations of forced labor and other human-rights abuses” on the other.

But its middle-the-road stance has only elicited anger and frustration. China, for instance, plans to supplant BCI, which has head offices in London and Geneva, with a version that operates according to its own standards. And in March, domestic brands Anta Sports and Fila China, which is operated in Greater China by Anta, announced they were quitting BCI.

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Human-rights advocates have also hit out at the group for a “continued silence” that contravenes its mission statement to “make global cotton production better for the people who produce it.”

“In failing to be transparent and public on BCI’s rationale for exiting the Uyghur region, BCI is putting at risk any credibility it could have in its commitment to ensure that decent work is embedded across its global cotton sustainability program,” the End Uyghur Forced Labor coalition said last month. “BCI’s own website states that ‘BCI does not operate in countries where forced labor is orchestrated by the government.’”

Experts estimate that more than half a million Uyghur, Kazakh and other ethnic minority workers are being forced to pick cotton by hand in Xinjiang through a state-sponsored labor transfer and “poverty alleviation” scheme.

One of C&A’s grouses is BCI’s “mass balance” system, wherein brands pay farmers to grow a certain amount of sustainable cotton and then collect an equivalent amount of the fiber after ginning and spinning. But the scheme doesn’t require the physical segregation of better cotton along in the supply chain, which means it can be mixed or even replaced with conventional cotton.

The organization, which promotes cotton grown with less water, fewer pesticides and higher yields for farmers, compares the process to buying renewable energy. “If you purchase renewable energy credits, a power line is not run from, say, a wind farm directly to your house,” it wrote on its website. “Rather, the credits are proof that a certain amount of renewable energy has been added to the existing power grid. This energy might not be powering the lights in your house, but nonetheless, your purchase ensures that greener energy is added to and pulled from the power grid.”

But an independent task force commissioned by the BCI noted in a December report that the mass balance system, when compared to physical segregation, poses “much higher risks” in terms of ensuring that final products are free of forced labor.

“In relation to the mass balance system (or any other chain of custody used for Better Cotton in the future), BCI needs to continue to ensure that claims that its members can make, in particular in relation to decent work, are credible,” it wrote. BCI has since said that it aims to create a new system that will offer full physical traceability of better cotton by 2022.

Though less than 9 percent of the cotton in C&A’s products originates from China, the retailer “challenges the old fashion mass balance system used by BCI and would welcome steps to change the process into a fully traceable raw material supply chain for BCI cotton,” Kieß said. “We [will] monitor the situation closely to determine next steps.”

BCI declined to comment for this story.

C&A is proving to be an outlier—at least for now. Most of the BCI partners Sourcing Journal reached out to either said they were staying the course with better cotton, declined to comment or did not respond to emailed requests.

Even so, labor advocates warn there could be a risk of reputational spillover.

“Continued silence by BCI taints all brands and retailers that use BCI cotton as an ethical alternative in an industry widely tainted by forced labor, as well as the farmers who trust BCI to take a stand for ‘better cotton’ production everywhere,” the End Uyghur Forced Labor coalition said.

The pressure on brands to pick a position on issues they once remained neutral on will only ramp up. Last week, the Los Angeles Times editorial board told brands that while “running afoul” of Beijing can have a deleterious effect on their bottom lines, no company should back down as long as violations persist.

“The global brands should stand firm, and global consumers should stand with them by shunning cotton and other goods produced with forced labor,” it added.