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Hugo Boss, C&A in Hot Seat Over Xinjiang Allegations

A human-rights group has filed a criminal complaint in Germany against five retailers, including C&A, Hugo Boss and Lidl, for allegedly profiting from forced labor in China’s Xinjiang Uyghur Autonomous Region (XUAR) and contributing to “crimes against humanity.”

According to the Berlin-based European Center for Constitutional and Human Rights (ECCHR), whose filing also targets supermarket chains Aldi Nord and Aldi Sued, the retailers should have been aware of the risk of sourcing goods from the region, where authorities are widely believed to be holding more than a million Uyghurs, Kazakhs and other Muslim ethnic minorities in detention camps or coercive employment schemes. Cotton from Xinjiang makes up 85 percent of China’s share of the fiber, which in turn accounts for one-fifth of the world’s supply.

By filing the complaint, the ECCHR said it is asking national prosecutors to probe into the legal culpability of managers of European companies in crimes that the U.S. government, the U.K. House of Commons and the Canadian Parliament have labeled as genocide. Beijing has vociferously rejected all charges of human-rights abuses, however, describing its policies as necessary to root out poverty and extremism in the region.

“The complaint highlights the potential systematic involvement of European companies in alleged state-sponsored forced labor in the XUAR,” Miriam Saage-Maaß, head of the ECCHR’s business and human rights program, said in a statement. “It is unacceptable that European governments criticize China on human-rights violations, while European companies may be profiting from the exploitation of the Uyghur population. It is high time that those responsible in the companies are held accountable if suspicions of forced labor are confirmed.”

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German lawmakers recently approved of a mandatory due-diligence law that could soon fine companies millions of euros for labor abuses that occur at any point in their supply chain. The legislation will roll out in stages, beginning with Germany’s largest companies with more than 3,000 employees in 2023 and then expanding to firms with 1,000 or more employees in 2024. Subcontractors outside of Germany will also be subjected to the same standards.

Hugo Boss said that it does not tolerate any form of forced or compulsory labor and that it requires its suppliers to follow suit. “We believe that our values and standards have been adhered to in the manufacture of our goods and that there have been no violations of the law,” a spokesperson told Sourcing Journal. “We therefore reject ECCHR’s claims to the contrary.”

“Ultimately, the same values and standards apply to all our suppliers worldwide,” the spokesperson added. “Many months ago, we already requested our direct suppliers to inform us and confirm that the production of our goods in our supply chain is carried out in accordance with our values and standards and, in particular, that human rights and fair working conditions are observed along the supply chain.”

A Lidl representative said that the ECCHR’s allegations were based on “old supplier lists and relate to past orders or periods of time.” It also has a “zero-tolerance policy” toward forced and child labor that contractors are beholden to. “If we become aware of concrete facts regarding violations of these provisions, we will investigate and take appropriate steps. In this context, production facilities have been closed,” the spokesperson added.

C&A said it does not buy any clothing from manufacturers based in Xinjiang, nor does it have any fabric or yarn factory under contract there. “We do not tolerate forced labor or unauthorized subcontracting in our supply chain,” a spokesperson told Sourcing Journal. “This is clearly stated and communicated in our supplier code of conduct and verified through regular audits by our team. All our suppliers must sign and comply with our code of conduct as part of our contractual relationships and purchasing agreements.”

A spokesperson from Aldi, representing both Nord and Sued, said that while the company does not maintain direct business relationships with production sites, it does not tolerate any kind of forced labor in its supply chain. “Before entering into a relationship with direct business partners, we check whether they meet our corporate responsibility standards,” the spokesperson said. “We regularly review our business partners to ensure continued compliance with our requirements. Whenever there is a suspicion that production facilities do not meet our standards, we naturally investigate these allegations immediately.”

The ECCHR had supported in April a similar complaint that led to the opening of an investigation by French prosecutors a few months later into Zara owner Inditex, Sandro and Maje owner SMCP, Skechers and Uniqlo.

The human-rights groups Sherpa, the Collectif Ethique sur l’étiquette and the Uyghur Institute of Europe, along with a Uyghur woman, had accused the brands of subcontracting with suppliers in Xinjiang or marketing goods derived from its cotton, “thus knowingly taking advantage in their value chain of the workforce in a region where crimes against humanity are being perpetrated.” Inditex, SMCP and Uniqlo have all denied the charges, while Skechers said the footwear maker doesn’t comment on pending litigation.

The ECCHR had promised at the time that the French filing was only the beginning of a broader campaign. “This planned series demonstrates that this is not an issue of individual companies but demonstrates how closely and systematically European businesses are involved in the allegedly systematic and state-sponsored forceful exploitation of labor in the XUAR region,” it had said.