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China Has ‘No Intention’ of Curbing Xinjiang Textile Industry

Human-rights and labor campaigners urged the Biden administration on Friday to wield the Uyghur Forced Labor Prevention Act (UFLPA) as a sharp instrument for ensuring the United States isn’t complicit in the modern-day slavery of persecuted Muslim minorities both in the Xinjiang region and the rest of China.

The bill, which was signed into law in December and is poised to go into effect in June, creates a rebuttable presumption that all goods in Xinjiang are manufactured with forced labor and therefore barred from entering the United States unless clear and convincing evidence demonstrates otherwise. This, importers fear, could lead to an uptick in detentions at the border, resulting in the delay, loss or obsolescence of goods that could worsen existing supply-chain bottlenecks and stoke inflation.

The public hearing, organized by the Department of Homeland Security on behalf of the Forced Labor Enforcement Task Force (FLETF), followed a 45-day comment period that closed last month. The FLETF, in consultation with the secretary of commerce and the director of national intelligence, must now draw up a strategy for supporting Custom & Border Protection’s (CBP) enforcement of the Act. This will have to be submitted to Congress, which recently approved $27 million in funds in the 2022 fiscal year omnibus appropriations bill to enforce any mandates.

Xu Guixiang, a spokesperson for the government of Xinjiang, denounced the hearing as relying on the testimony of a group of so-called witnesses with “no knowledge of the facts.” Beijing has repeatedly and vociferously refuted claims that it’s conducting genocide against the Uyghur people, including the use of forced labor. The China Chamber of International Commerce has also dismissed the underlying assumptions of the ULFPA as “obviously erred” because “there is no forced labor in Xinjiang.”

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Speaking at the hearing, Jim Wormington, senior researcher and advocate for corporate accountability at Human Rights Watch, said that the “most effective” way for CBP and other government agencies to identify goods linked to forced labor in Xinjiang or elsewhere in China would be to require all brands and retailers importing to the United States to map their global supply chains, from raw materials to manufacturers, and disclose them in a time-bound manner.

“Guidance to importers issued pursuant to the UFLPA should make clear that the onus is on importers to obtain and disclose relevant information on their supply chains,” he said. “If importers in high-risk sectors fail to provide adequate information on their supply chains, CBP should view this as evidence that the products include material from Xinjiang or from entities linked to forced labor and are barred from import under the new law.”

While major industry associations have said that they condemn the use of forced labor and fully support the intent behind the law, many have also bemoaned the difficulty of its evidentiary burden. (They’re also asking for a phased-in implementation approach that will give their members time to adjust.) But this isn’t the first time such a high standard has been imposed on importers to rebut a forced labor presumption, said Martina E. Vandenberg, president of the Human Trafficking Legal Center. In 2017, in response to the oppressive practices of the Democratic People’s Republic of Korea regime, the United States created a similar rebuttable presumption of forced labor involving North Korean workers in global supply chains.

“The burden should indeed fall squarely on companies to trace every tier of their supply chain and prove that they have no links to Xinjiang or forced Uyghur labor, especially in sectors identified as high-priority under the UFLPA,” Vandenberg said. “Some companies claim that it is impossible to trace beyond tier two—this is simply not true. If civil society organizations, academic researchers and investigative journalists can unearth granular details of suppliers implicated in forced Uyghur labor with their limited resources, companies with extensive global operations and deep pockets can surely figure out how to trace their own suppliers.”

Scott Nova, executive director of the Worker Rights Consortium said he was concerned that lobbying by corporations could water down the interpretation of the statute. Comments submitted by several trade associations suggest that many companies “still hope to skate by without having to make the sizable changes in their supply chain operations that genuine compliance with the UFLPA would require.”

He said that traditional workplace audits are “worthless” in Xinjiang because of the lack of access and climate of fear. Nova also pushed back at arguments by trade organizations such as the U.S. Council for International Business that the CBP should focus only on the top tiers of importers’ supply chains, ignoring raw materials and other upstream inputs. “This would mean, to cite the crucial case of the apparel industry, factories that sew cotton garments and export them to the US, but not the farms that supply the cotton, or the mills that spin it into thread,” he said. In other words, CBP would end up ignoring “most of what matters,” since very little garment construction takes place in Xinjiang but a great deal of cotton farming and ginning does.

“For importers to argue that this information is unknowable is effectively to admit that they have no idea whether they have been obeying U.S. law or not,” Nova added. “Fortunately, this information is not unknowable. Indeed, when an apparel brand does not know where its cotton or yarn is coming from it is because that brand has chosen not to know. The question is not whether it is easy, or cheap, to maintain adequate information about every level of the supply chain; the question is whether it can be done—whether it is both logistically feasible and financially viable—and the answer is yes.”

Vandenberg further said that there should be “no safe harbor for forced labor” and that goods subject to a U.S. ban should not be able to find a market elsewhere. FLETF, she said, should work with the governments of Canada and Mexico within the current United States-Mexico-Canada Agreement framework to ensure that there is no “cross-border movement of goods” subject to the forced labor presumption. The U.S. government should also work with its G7 and G20 allies to ensure that there is a mutual exchange of forced labor intelligence and supply chain data.

“Global customs transparency is key to effectively enforcing the UFLPA, especially in relation to goods that are shipped via third countries,” Vandenberg said. “We urge the U.S. government to push other countries to impose import bans against forced labor and make more customs data public. This should be on the agenda at the upcoming G7 meeting in June.”

A ‘more heated debate’

Still, substantial headwinds could remain. Canada may have seized its first shipment of goods over forced-labor concerns in November, but a federal court also rejected last week an application by local activists to overturn a Canada Border Services Agency decision to eschew a ban on all goods from Xinjiang because it lacked the authority. At the same time, a desire to hold brands and retailers to account is building. On Sunday, a coalition of human-rights groups filed a complaint with the Canadian Ombudsperson for Responsible Enterprise (CORE) seeking a probe into the supply chains of more than a dozen Canadian companies, including Gap Canada, Nike Canada and Zara Canada, for evidence of forced labor.

It’s not clear how severely the European Union’s draft directive on corporate sustainability due diligence will scrutinize the Xinjiang issue. Activists have criticized the proposal for applying to only very large EU-based companies and restricting civil liabilities to direct suppliers and not abuses committed further down the supply chain. Businesses are also able to limit their due-diligence obligations to suppliers with whom they have “established business relationships” that are “expected to be lasting.”

Despite the broad international backlash, China appears to be ramping up its plans for Xinjiang’s textile industry. Official documents obtained by China Textile Magazine appear to indicate an “acceleration” of the region’s labor-intensive garment sector to create 450,000 new jobs. The plan is built on three pillars: a diversification of Xinjiang’s fiber output beyond cotton, the promotion of eco-efficient technologies and the construction of up to five new industrial parks.

“China has no intention to curb the development of its textile and apparel industry in [Xinjiang] despite the growing international concerns about the force labor allegation in the region,” Sheng Lu, an associate professor in fashion and apparel studies at the University of Delaware, told Sourcing Journal. “Instead, according to the new plan, China will continue expanding the [Xinjiang] region’s production capacity for cotton and non-cotton textile and apparel products.”

Lu said that China seems to be pushing for greater integration between textile and apparel production in Xinjiang with that of the rest of the country, from raw material supply and investment to the end market. Xinjiang already contributes 85 percent of China’s cotton, which makes up roughly one-fifth of the world’s supply of the fiber.

“However, for whatever reasons, promoting export or exploring the overseas market for [Xinjiang]-made textile and apparel is barely mentioned in the document, which is unusual,” he said. “With the upcoming implementation of the UFLPA and more countries starting to draft their respective legislation on forced labor, we could only expect fashion companies’ China sourcing strategy to become a more heated debate.”

Lianchao Han, vice president of Citizen Power Initiatives for China, said that any Uyghur labor in Xinjiang is almost certainly coerced, and that the construction of industrial parks makes it easier for authorities to corral and monitor Uyghur workers. Any attempts at sustainability are also a way to pander to overseas customers that haven’t rejected Xinjiang goods.

China’s continued investment into Xinjiang also suggests that it’s only tightening its grip on the region, which it sees as a potential “hotbed of terrorism” if it doesn’t root out triggers such as poverty. The “brainwashing” of more than one million Uyghurs and other Turkic groups through reeducation centers and detention camps is part of this, as is 劳改 (pronounced “lao gai”), a criminal justice system involving the use of penal labor, he added. “There still many Uyghurs out there that are not part of this workforce,” Han said. “So [authorities] want to continue that strategy [of employment].”