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Xinjiang Sourcing ‘Banned,’ Fair Labor Association Says

The Fair Labor Association (FLA) is prohibiting the sourcing and production of goods, whether directly or indirectly, from Xinjiang in northwestern China.

The move is a first for the multi-stakeholder initiative, whose affiliates include Adidas, Uniqlo owner Fast Retailing, Gildan, Hanesbrands, Lululemon, Nike, Patagonia and Under Armour.

“In its 20-year history, the FLA has never told companies a specific country or region was banned for sourcing because there have always been ways to address labor issues through effective due diligence,” the organization said in a statement Wednesday. “The situation in Xinjiang presents unique human rights and labor violations that defy conventional due diligence norms.”

Evidence of forced labor and other human-rights abuses has been nothing short of overwhelming. The Chinese government is believed to hold at least 1.8 million Uyghurs, Kazakhs and other Turkic Muslim minorities in internment camps and prisons as part of a broader campaign of coercion, torture and indoctrination. Last week, the Center for Global Policy, a Washington, D.C., think tank, published research indicating that more than half a million minority workers are being forced to pick cotton by hand through a state-sponsored labor transfer and “poverty alleviation” scheme. Several leading audit firms have also fled the region, citing their inability to conduct a satisfactory review because of the climate of fear and hostility.

When reports of Uyghur repression first emerged, the FLA cautioned its affiliates to conduct additional due diligence to ferret out potential instances of forced labor in Xinjiang. In January, it updated that advice, noting that effective due diligence was no longer possible in the region and warning affiliates to presume any raw materials and semi-finished and finished goods from Xinijang are “likely to be produced with forced labor.”

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“We also cautioned that companies should presume there is forced labor when workers are recruited or deployed through government labor agencies in factories throughout China,” the FLA said, referring to a labor transfer scheme that experts say has moved some 80,000 Uyghurs out of Xinjiang and into factories across China between 2017 and 2019, often against their will.

In March, the FLA’s board of directors urged the Chinese government to end its assault on Uyghur rights. It also asked its affiliates to review their sourcing relationships in Xinjiang, identify alternative sourcing opportunities and develop time-bound plans to “ensure that their sourcing is in line with the FLA’s principles” of improving worker conditions worldwide.

“Since the FLA issued that statement nine months ago, evidence from a range of credible sources, including governments and independent researchers, continues to mount, indicating that the Chinese government is expanding its policy of repression,” the organization said. “The evidence shows that Uyghurs and other ethnic minorities remain subject to horrendous, ongoing human rights abuses, including arbitrary detention and forced labor. Significantly, more than 100 international civil society organizations have joined forces in a call to action to stop forced labor in Xinjiang, an effort we believe is helpful in seeking to address these systemic rights abuses.”

Sourcing products from Xinjiang—and indeed China at large—is becoming increasingly challenged. In early December, U.S. Customs and Border Protection (CBP) issued a new Withhold Release Order (WRO) on cotton goods from the Xinjiang Production and Construction Corps (XPCC), a paramilitary organization that produces one-third of China’s cotton, employs 12 percent of Xinjiang’s population and generates 17 percent of the region’s gross domestic product. Because of the scope of the XPCC, the order is “almost akin to a regional WRO,” CBP acting commissioner Mark A. Morgan said at the time.

The WRO lent greater heft to the Treasury Department’s July decision to place the XPCC on its sanctions list, prohibiting all American companies and citizens—or non-American companies and citizens subject to U.S. jurisdiction—from engaging with the organization, whether directly or indirectly.

More legislation is coming down the pipeline, the most significant of which is the Uyghur Forced Labor Prevention Act, which passed in the House of Representatives by a margin of 406 to 3 in September and is now awaiting Senate action.

Xinjiang produces 85 percent of China’s cotton, which in turn accounted for more than 22 percent of the world’s supply in fiscal year 2019. The Coalition to End Forced Labour in the Uyghur Region estimates that one in five cotton garments sold globally contains fiber or yarn sourced from Xinjiang, meaning that “virtually” the entire apparel industry is tainted by Uyghur abuses.

“In the last two years, we have provided resources to FLA affiliates to facilitate the tracing of supply chains, conducted training on detecting forced labor, and bolstered our principles and benchmarks to ensure that our affiliates have tools to respond to this human rights crisis,” the FLA said. “We will continue to support our affiliates in their efforts to address the complex challenges presented by the Chinese government’s state-imposed forced labor in Xinjiang, and throughout China.”