Muji is still touting products made with Xinjiang cotton, and not only in China, where the Japanese retailer has publicly voiced its support for the fiber despite widespread concern that it’s being harvested and processed by persecuted Muslim minorities.
In stores across Singapore, oxford shirts, shirtdresses and blouses were spotted with tags advertising the cotton’s Xinjiang origins, though the products themselves were cut and sewn either in China or Vietnam. Muji Singapore’s website, however, elides any mention of Xinjiang, where human-rights groups say more than a million Uyghurs, Kazakhs and other Turkic ethnic groups are being held in so-called reeducation camps as part of a broader campaign of religious and cultural oppression that many have dubbed genocide. This stands in contrast to Muji’s Chinese website, where reference to Xinjiang is liberal.
Unlike a growing number of countries, the Southeast Asian nation doesn’t place any import restrictions on goods made with suspected forced labor.
The United States recently established a rebuttable presumption that bars all goods manufactured in whole or in part in Xinjiang or by an entity on the Uyghur Forced Labor Prevention Act (UFLPA) Entity List from entering the market. The import of products tainted with forced labor has been illegal in Canada since last July, when it amended its customs tariff following the passage of the United States-Mexico-Canada Agreement. The European Union is looking at tightening up its modern-slavery laws, as are Australia and New Zealand.
But as Muji’s example shows, such efforts are far from universal. Neither have government mandates and civil-society pressure dissuaded all apparel brands from sourcing from Xinjiang. In the fight to stamp out modern slavery, this could prove a problem, experts say.
“It’s a very stark reminder of the need for global alignment on import bans, mandatory human-rights due diligence and measures to hold violators to account,” Allison Gill, forced labor program director at the Global Labor Justice-International Labor Rights Forum, a member of the Coalition to End Forced Labour in the Uyghur Region, told Sourcing Journal.
The UFLPA is “clearly having an impact,” she added. According to data from the China National Cotton Information Center, sales of ginned Xinjiang cotton through mid-June have plummeted 41 percent from the same period in 2021 even as the production and sales of cotton globally have remained stable otherwise.
Until companies apply a single standard on their supply chain instead of bifurcating them into “clean” products for the United States and “tainted” ones for other markets, that impact will remain limited.
Muji, which sells similar products in the United States, declined to comment on how it complies with UFLPA regulations. Nor would it answer if other markets besides Singapore and China promote Xinjiang cotton. Besides the Singapore dollar, other currencies printed on the tags Sourcing Journal examined include the Australian dollar, the Indian rupee, the Indonesian ringgit and the Philippine peso.
“If Muji is bifurcating its supply chain and thereby directing goods made of Xinjiang cotton everywhere but the US, then that is beyond disreputable,” Scott Nova, executive director of the Worker Rights Consortium, another member of the Coalition to End Forced Labor in the Uyghur Region, told Sourcing Journal. “However, it is also entirely possible that there is no bifurcation and that Muji is sending such goods to the U.S., as well, in violation of the UFLPA. Either way, Muji’s approach should make it a subject of intense scrutiny by U.S. regulators.”
The Ryohin Keikaku-owned company said the products in Singapore were old stock from 2020 and no longer in production. Muji also conducts annual audits by third-party organizations in line with conventions established by the International Labor Organization, the United Nations Guiding Principles on Business and Human Rights and the Organization for Economic Cooperation and Development Due Diligence Guidance for Responsible Business Conduct, it said.
“Ryohin Keikaku believes that its most important responsibility is to respect the fundamental human rights of all people involved in its supply chain around the world and to ensure their physical and mental health, security, and safety,” a spokesperson told Sourcing Journal. “In our business activities, we comply with the laws and regulations of each country and region, and we are taking all necessary steps to respect human rights and manage labor standards.”
When asked if Muji presented any red flags, Customs and Border Protection (CBP) said it does not publicly comment on “conditional business information.”
It’s possible the retailer may already be on the radar. Import data reveals that Muji U.S.A. received shipments from Esquel Garment Manufacturing in Vietnam as recently as May. The company is part of Esquel Group, a Hong Kong apparel giant that has been battling to remove its Xinjiang-based Changji Esquel Textile Co. subsidiary from the Department of Commerce’s Entity List for suspected forced-labor links, albeit to no avail.
In September, Esquel accused CBP of using its Entity List status to “target” its Vietnamese shipments, imperiling its contractual obligations and resulting in “permanent economic and reputational damages.” Changji is also named on the UFLPA Entity List, which Esquel railed against last week as “misguided” and “unjust.”
Esquel didn’t respond to an email asking if any of the cotton in its Muji U.S.A. shipments can be traced to Changji or Xinjiang. It previously said, however, that its vertically integrated end-to-end supply chain allows it to meet “all international standards” for its products while preventing the sale or export of goods in jurisdictions where they are outlawed.
Still, there is a “need for very robust enforcement of the UFLPA to be sure that companies like Muji that clearly continue to use cotton tainted with forced labor don’t slip through the cracks,” Gill said. “CBP has made it clear that companies will have to show significant evidence to overcome the presumption, including complete supply chain information. It would be interesting to know how Muji can credibly show that its U.S. supply chain is completely free of Xinjiang-origin materials.”
Muji’s “blatant” support for Xinjiang, as Gill described it, could come down to avoiding the wrath of Chinese consumers, who have lashed out against brands such as Adidas and Nike for shunning the region. H&M, which recently shuttered its Shanghai flagship, vanished from Chinese e-commerce sites such as Tmall and JD.com last summer after voicing concern about forced Uyghur labor.
A similar boycott would strike a significant blow at Muji, which makes more than 40 percent of its net sales from the market, according to its 2021 annual report. The retailer, which operates 299 stores in mainland China, also plans to open another 50 outlets every year until 2030. The United States, on the other hand, has just 10.
Adrian Zenz, the German anthropologist who specializes in China’s crackdown on Uyghurs, said that it’s clear that Beijing is looking to shift the movement of Xinjiang cotton from an increasingly hostile West to its own domestic market and those in Southeast and Central Asia, particularly those involved in the massive infrastructure project known as the Belt and Road Initiative, “where economic concerns dominate.”
“It is not illegal for companies to sell Xinjiang products elsewhere, meaning they can create an internally bifurcated supply chain to supply different markets according to respective regulations,” Zenz told Sourcing Journal. Even detained shipments in the United States can be reclaimed and dispatched elsewhere.
Still, Xinjiang cotton, which makes up roughly 85 percent of China’s supply of the fiber, could be facing a more existential threat: climate change. Reuters reported Saturday that Xinjiang authorities have warned that drought born from above-normal summer temperatures could jeopardize agriculture in the province during a critical growing season.
Chen Chunyan, chief expert at the Xinjiang Meteorological Observatory, told state media that extreme weather in the southern and eastern parts of the region has already lasted some 10 days, with temperatures in Aksu, Bazhou, Hotan and Kashgar potentially exceeding 104 degrees Fahrenheit. Dry, hot days could also impact cotton crops, which require extensive irrigation, she noted.
Meanwhile, continued high temperatures have accelerated glacial melting in mountainous areas, causing natural disasters such as flash floods, mudslides and landslides in many places, Chen said. The melting ice could also pose a “high” risk of dam failure on a tributary of the Aksu River near China’s border with Kyrgyzstan, where cotton is an important commodity.