China’s identity as the nucleus of the global fashion supply chain may be fading.
In addition to the challenges posed by continued political jockeying and an epidemic that has brought the country to its knees, the country is also facing blowback for alleged human rights abuses stemming from the very factories that have earned it a place at the top of the global economy.
According to a newly released report from the Australian Strategic Policy Institute (ASPI) and the International Cyber Policy Centre (ICPC), China’s government has facilitated mass transfers of Chinese Uyghur Muslims and other ethnic minorities from camps in the western region of Xinjiang to factories throughout the country.
The unsafe state of many of the factories and the social conditioning or “re-education” programs that the Uyghurs have been forced to take part in strongly suggest forced labor, analysts said.
The report estimated that since 2017, more than a million Uyghurs and other Turkic Muslim minorities have vanished into the system of re-education camps, where they’re forced to renounce their religion and culture and are subjected to political brainwashing and even torture.
While the scheme originated in the Xinjiang region, the report asserted that the Uyghurs and other groups (whom the government now insists have “graduated” from their training program) are being increasingly transported throughout the country to work in a variety of different factories.
ASPI has identified 27 factories across nine Chinese provinces that have been using Uyghurs for labor since 2017, and the group estimates that about 80,000 people were dispatched from Xinjiang between 2017-2019 under a government policy called Xinjiang Aid.
Those factories play an integral role in the supply chains of dozens of globally recognized brands in the technology, apparel and automotive sectors. Using data from published supplier lists, media reports and the factories’ claimed suppliers, ASPI determined that 83 global companies have benefited from the use of Uyghur labor outside of Xinjiang.
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On the footwear and apparel side, those brands include Abercrombie & Fitch, Adidas, Amazon, Calvin Klein, Carter’s, Cerruti 1881, Fila, Gap, H&M, Hart Schaffner Marx, Jack & Jones, L.L.Bean, Lacoste, Li-Ning, Nike, The North Face, Oppo, Polo Ralph Lauren, Puma, Skechers, Tommy Hilfiger, Uniqlo, Victoria’s Secret, Zara, and Zegna.
Notably, major auto and technology companies like Apple, Dell, Google, BMW, Volkswagen, GM, Jaguar, Nintendo and Mercedes-Benz also made the list.
In the wake of these discoveries, ASPI said that a small number of listed companies said they had instructed their vendors to cease working with the known forced-labor-driven suppliers in 2020.
Case studies
The report provided a case study citing athletic juggernaut Nike, which was linked to a factory in Qingdao called Taekwang Shoes Co. Ltd., which employs 600 ethnic minority workers from Xinjiang. The workers at the Taekwang facility, which primarily services the American brand, were mostly Uyghur women who were subjected to “vocational training” and “patriotic education” in the evenings when they finished work.
The Washington Post reported that Uyghurs at the factory were not allowed to return home for holidays, transported to Qingdao from Xinjiang against their will, and unable to practice their religion freely.
The facility belongs to Korean-owned Taekwang Group, a chemical and textile conglomerate. The company’s footwear factory near Qingdao is one of Nike’s largest manufacturers, supplying the athletic company with more than seven million pairs each year.
Nike did not respond to requests for comment.
Another case study highlighted apparel factory Haoyuanpeng Clothing Manufacturing Co. Ltd., which touts strategic partnerships with Fila, Adidas, Puma and Nike on its website. According to analysts, the factory participates in the government’s Xinjiang Aid program, and has sourced workers from the re-education programs to work in its factories in Xinjiang and Anhui.
When asked to comment on its relationship with Haoyuanpeng and two other manufacturers, Qingdao Jifa Huajin Garment Co. Ltd and Huafu Top Dyed Melange Yarn Co. Ltd, which were all linked to the Xinjiang Aid program, Adidas spokesperson Stefan Pursche told Sourcing Journal, “The Adidas workplace standards strictly prohibit all forms of forced and prison labor and apply to all companies across our supply chain.
“After the allegations were made in spring 2019, we immediately and explicitly instructed our suppliers not to source any products or yarn from the Xinjiang region and not to award any contracts to [Huafu Top Dyed Melange Yarn Co. Ltd.]. The use of forced labor by any of our partners will result in the termination of the partnership.”
He declined to confirm cooperation with Haoyuanpeng or Qingdao Jifa Huajin Garment Co. Ltd.
German footwear brand Puma outright denied any direct or indirect business relations with the aforementioned Haoyuanpeng Clothing Manufacturing Co. Ltd. or Kashgar Haoyuanp Garment Co. Ltd., a factory that analysts named as a beneficiary of Xinjiang Aid that was also linked to the brand.
Spokesperson Kerstin Neuber did admit that Puma’s fabric suppliers had bought yarns from Huafu Top Dyed Melange Yarn Co., though she denied any direct relationship between the brand and the factory.
“The allegations are severe and we are closely monitoring the situation,” she told Sourcing Journal. “We had already raised this issue with partners who we collaborate with in terms of monitoring Tier 3 suppliers (yarn suppliers). We continue to observe the case and conduct further investigations.”
Puma’s longstanding supply chain monitoring program was re-accredited by the Fair Labor Association last year, Neuber said, noting that the company monitors “all manufacturers of Puma products (so-called Tier 1 suppliers) on a frequent basis, typically at least once per year.”
Over the past three years, Puma has extended that oversight to cover its most prominent Tier 2 suppliers, which provide fabric and components. “For the lower levels of the cotton supply chain, we rely on industry partners in terms of ethical business conduct,” Neuber said.
Brands respond
Sourcing Journal reached out to footwear and apparel brands identified by ASPI as being linked to the Xinjiang Aid program and Uyghur-driven labor.
In response to an alleged relationship with Huafu Top Dyed Melange Yarn Co. Ltd, H&M Group spokesperson Ulrika Isaksson declined to confirm or deny a supply chain connection. She intimated that the firm is looking into ASPI’s findings.
“H&M Group strictly prohibits forced labor in our supply chain and we are deeply concerned by reports from civil society organizations and media that include accusations of involuntary labor from ethnoreligious minorities in Western China,” she said. “All our direct suppliers sign our Sustainability Commitment that clearly spells out our expectations with regards to forced labor and discrimination linked to religion or ethnicity.”
The company is in close contact with human rights experts, other brands and stakeholders to evaluate cases of alleged abuse and that its decisions regarding suppliers will be based on those conversations, Isaksson said.
According to ASPI analysts, American retailer Abercrombie & Fitch was also linked to Huafu Top Dyed Melange Yarn Co. Ltd, along with two other factories—Shandong Zoucheng Guosheng and Qingdao Jifa Huajin Garment Co. Ltd—which allegedly benefit from forced labor.
A company spokesperson admitted that the company had indeed sourced from Huafu Top Dyed Melange Yarn Co. Ltd, but said that Abercrombie & Fitch had severed ties.
“In 2019, as part of our regular review of our global supply chain, we decided to stop sourcing from this spinner from 2020 onward for any of our company’s brands; we formally instructed our vendor not to source any material from this spinner,” the spokesperson said.
The spokesperson went on to deny “any relationship” with the two other factories referenced in the report, and said that it was not given the chance to confirm or deny the allegations before the report was published. ASPI released an updated version of the report on Tuesday reflecting the company’s assertion.
The spokesperson said that per Abercrombie & Fitch’s vendor code of conduct, the company does not tolerate use of forced labor, adding that “the safety, security and welfare of the people with whom we work is a priority. Our sourcing and sustainability teams closely monitor our network of suppliers to ensure we only work with organizations aligned with our principles and values.”
Victoria’s Secret owner L Brands was also linked to Huafu Top Dyed Melange Yarn Co. Ltd by ASPI’s report, but the company’s spokesperson declined to comment directly on the relationship.
“L Brands has a strict policy against the use of forced labor of any kind and will only work with suppliers that share our commitment to ethical and responsible business practices,” the spokesperson said. “We recently required all suppliers to re-certify that they have received, read and understand our no forced labor policy, including the prohibition on the use of cotton from Xinjiang Uyghur Autonomous Region, and any other form of forced labor.”
Molly Cuffe, director of corporate responsibility communications for VF Corporation, denied that the firm or its outdoor brand, The North Face, maintained any relationship with Nanjing Synergy Textiles Co. Ltd., as alleged by ASPI.
“The report published by [ASPI] incorrectly states that The North Face brand has a relationship with Nanjing Synergy Textiles Co. Ltd.,” Cuffe said. “As a purpose-led organization dedicated to improving lives and the planet, we are deeply disturbed by the reports of human rights violations in China’s Xinjiang region. VF is committed to upholding internationally recognized human rights throughout our global supply chain, including prohibiting any kind of forced labor or modern slavery.”
Amazon, Calvin Klein, Carter’s, Cerruti 1881, Fila, Gap, Hart Schaffner Marx, Jack & Jones, L.L.Bean, Lacoste, Li-Ning, Nike, Oppo, Polo Ralph Lauren, Skechers, Tommy Hilfiger and Zara did not respond to requests for comment by the time of publication. Zegna declined to comment. Uniqlo could not be reached for comment.