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Vietnamese Exports Could Be Linked to Forced Labor

A coalition of organizations from Vietnam is urging the Department of Homeland Security to pay closer attention to exports from the Southeast Asian nation, which it claims has been importing raw cotton and semi-finished cotton goods from China’s Xinjiang Uyghur Autonomous Region to produce clothing for brands such as Adidas Canada, American Eagle, Calvin Klein, Gap, and Levi Strauss.

By doing so, Vietnamese suppliers have been helping Beijing “bypass” trade sanctions meant to punish it for human-rights violations, including mass detention, forced labor and torture, against Uyghurs and other Muslim ethnic minorities, the Alliance for Vietnam’s Democracy said Sunday. Cotton and cotton-containing products from the region have been barred from entering the United States since last January, while a “rebuttable presumption” that all goods from Xinjiang contain forced labor and are therefore impermissible is poised to take effect in mid-June.

Xinjiang provides 85 percent of China’s cotton, which in turn accounts for one-fifth of the world’s supply of fiber, according to trade data. Since cotton exports from Xinjiang to the United States have all but dried up over the past two years, cotton-based yarns, textiles and finished garments grown and manufactured for overseas markets could be taking a more circuitous route, the Alliance for Vietnam’s Democracy said, creating a “laundering” effect that obscures their true origin.

Between 2016 and 2019, Vietnam was the fourth-largest importer of cotton or cotton-mixed products from China in terms of product value ($20 billion) and the second-largest in terms of weight (2 billion kilograms). The country is also the second-most popular destination for Chinese exports of semi-finished cotton products after Bangladesh in terms of value ($7.3 billion) and weight (939.3 million kilograms). Shipping data suggests that intermediary manufacturers use those materials to create finished garments for international markets with “no indication to consumers of the cotton’s origin,” according to Laura Murphy, professor of human rights at Sheffield Hallam University’s Helena Kennedy Centre for International Justice.

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“The benefits of such an export strategy may be clear: the end buyer is no longer directly involved in buying Xinjiang cotton—international brands and wholesalers can buy from factories in third countries that have few visible ties with Uyghur region-based companies,” Murphy wrote in a November study that Alliance for Vietnam’s Democracy used as the basis for its allegations. “A stable supply of Xinjiang cotton to the international market is thus guaranteed, even as brands, governments, and consumers increasingly turn away from Xinjiang forced-labor-made goods.”

Murphy’s research identified 53 intermediary suppliers that purchased fiber and textiles from five major Chinese textile companies that reportedly use Xinjiang cotton: Huafu Fashion, Jiangsu Lianfa Group, Luthai Textile, Texhong Textile and Weiqiao Textile Company. Of them, six—Eins Vina, Indo Taichen Textile Industry, Nobland Vietnam, Seshin Vietnam, Thanh Cong Textile Garment and Tung Mung Textile—are Vietnamese, according to the Alliance for Vietnam’s Democracy, placing their “well-known” clients at high risk of harboring forced labor in their supply chains.

Ein Vina parent Sae-A told Sourcing Journal that it has terminated business with all suppliers that were unable to provide a “letter of guarantee stating that they are fully excluded from the use of Xinjiang cotton.” The Vietnam Textile and Apparel Association (VITAS) said that Thanh Cong Textile Garment is a member of the U.S. Cotton Trust Protocol and often buys cotton from the United States and Brazil, not from China. The other suppliers did not respond to emails seeking comment.

Most of the brands singled out by the Alliance for Vietnam’s Democracy have produced statements indicating that they neither use Xinjiang cotton nor tolerate any forms of modern slavery.

American Eagle, for instance, “prohibits the manufacture of any product or the use of any raw material” from the region, while Calvin Klein owner PVH Corp. has placed Xinjiang on its restricted jurisdictions list. Gap says it doesn’t produce garments in the region, and Levi’s CEO Chip Bergh said last April that the denim giant hasn’t had business dealings there in a decade. Adidas, meanwhile, famously saw its profits tumble in China after it expressed concerns about forced labor in Xinjiang.

Eileen Fisher and Everlane, which the Alliance for Vietnam’s Democracy also named, are two of the few retailers that have committed to the Coalition to End Forced Labour in the Uyghur Region’s call to action to root out any traces of Uyghur coercion from their supply chains. Only Eddie Bauer has yet to publicly declare its stance on Xinjiang cotton.

Everlane shared a statement, which it provided Murphy during her research, saying that it has added Xinjiang to its restricted sourcing list. Its factory partners, including those named in Murphy’s report, the brand said, have “executed and agreed to the contents” of its No Conflict Materials or Labor agreement. While Everlane had sourced yarns from Huafu’s Vietnam division, and had confirmed that the cotton originated outside of China, “in light of [the] research, we have made the decision to immediately stop sourcing from Huafu’s Vietnam division and have made our suppliers aware of this change,” it said.

Eddie Bauer said that while it works with Thanh Cong Textile Garment, the supplier confirmed that it no longer purchases yarn from Huafu Fashion or any of its subsidiaries, including New Lanka. “Therefore, Eddie Bauer is not at risk of having Xinjiang cotton in their supply chains,” a spokesperson told Sourcing Journal. Adidas declined to provide a statement, and the other brands did not respond to requests for comment.

Murphy said that while international brands may be unaware of the Chinese manufacturers their suppliers are sourcing from, they can “no longer afford” not to do their due diligence.

“All companies must do this. I know it because I do it from my desk with very little resources,” she told Sourcing Journal. “When it comes to being able to tell where your goods are coming from, a company should either know, 100 percent, all the way down to the farm, where their cotton and raw materials are coming from, or they should stop buying from suppliers that refuse to look and [find out]. So if you have no visibility, then that’s a problem you can fix.”

Editor’s note: This story was updated on April 5, 2022, to include comments from VITAS, on March 31, 2022, to clarify Everlane’s position and on March 30, 2022, with a statement from Eddie Bauer.