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Why businesses should care about the use of forced labor in Xinjiang

Monday, 28 January 2019 09:00 GMT

* Any views expressed in this opinion piece are those of the author and not of Thomson Reuters Foundation.

Importing goods used with forced labor from Xinjiang not only poses reputational risks but may have tangible, legal consequences

Mark P. Lagon is Chief Policy Officer at Friends of the Global Fight and Distinguished Senior Scholar at Georgetown University’s Walsh School of Foreign Service.

Olivia Enos is a policy analyst in the Asian Studies Center at The Heritage Foundation where she focuses on human rights challenges in Asia, including human trafficking.

The world was shocked when reports emerged in late 2017 that several hundred thousand, now likely over one million, individuals from the Xinjiang region of China were being held in so-called political “reeducation” facilities. As more information surfaces, the reality of what is going on there couldn’t be further from educational. Instead, an unknown number of individuals may be subject to forced labor, among other abuses, simply for being a Muslim living in Xinjiang, China.

China  occasionally acknowledges and at other times denies the existence of reeducation facilities in Xinjiang, but their existence is frankly, undeniable. Satellite imagery and firsthand testimony from dozens of individuals previously in these facilities provides irrefutable evidence of their existence. When authorities in the Chinese government do acknowledge their existence, however, they often claim that they are de-radicalizing a population by what they call “Sinicizing,” or effectively secularizing, their religious practice, requiring them to learn Mandarin, and providing alternative means of employment.

Through this practice, China has taken well-educated, ambitious Muslims of predominately Uighur and Kazakh ethnicity and replaced their white-collar jobs with manual trades, especially factory work. New reports suggest that Uighur and Kazakh labor may now be used as free – or in the very least, inadequately compensated – labor for the Chinese government and state-owned enterprises.

The U.S. Customs and Border Enforcement (CBP) is currently investigating whether goods produced by forced labor in Xinjiang made their way into U.S. supply chains.

This may have serious consequences for U.S. businesses with supply chains in China.

Reports indicate that goods made at North Carolina-based Badger Sportswear may have been produced with forced labor from Xinjiang. Badger Sportswear has sourced products from Hetian Taida Apparel, a business with likely links to the Chinese government and that shares factory space with re-education facilities in Xinjiang. The Associated Press (AP) originally uncovered the allegations that some laborers at Hetian Taida Apparel received no compensation, while others received minimal wages. (According to AP, the company has since announced a halt to the sourcing arrangement.)

Hetian Taida is far from the only Chinese supplier accused of using forced labor from Xinjiang. Radio Free Asia documented similar instances  of forced labor at Yining County Textile Industrial Park and Ili Zhuowan Apparel Co.  According to one New York Times report, the Chinese government, in fact, intended to use labor from Xinjiang to grow its textile industry by at least 100,000 workers in 2018. And according to Chinese media, the Chinese government had similar aspirations in 2017. It is unclear whether those goals were accomplished.

If China continues to place Xinjiang residents into reeducation facilities where they are subject to forced labor, it will become increasingly difficult for businesses with suppliers in Xinjiang to determine whether their supply chains are tainted by forced labor. In this case, these businesses may face a thorny problem.

If the CBP investigation concludes that goods produced with forced labor entered into the U.S. market from Xinjiang, there will be consequences to businesses who played a role in the importation of those goods. According to Section 307 of the U.S. Tariff Act of 1930, it is illegal for the U.S. to import goods produced with child or forced labor. Companies importing goods made with forced labor from Xinjiang may even be subject to sanctions.

China is among the world’s worst countries regarding human trafficking. In 2018, it retained its Tier 3 (lowest) ranking in the U.S. Department of State’s annual Trafficking in Persons (TIP) Report. The report measures every country’s efforts to comply with the minimum standards for eliminating human trafficking as laid out in the landmark legislation passed in 2000 that created the report.

China more than earns its ranking as a human trafficking pariah. Though it claims to have eliminated reeducation through labor (RTL) facilities in 2013, in practice, it did no such thing. Simply put, it continued engaging in forced labor under different labels. (For example, after China claimed it had eliminated its RTL camps, reports indicated that certain populations were transferred from the RTL facilities to drug rehabilitation facilities where similar labor practices were carried out.) The Chinese government failed to report identifying a single victim of human trafficking or referring them to protective custody, according to the 2018 TIP report. And information points to the reality that countless women predominately from North Korea and Southeast Asia are being trafficked into forced marriages to Chinese men (a phenomenon partially caused by China’s draconian decades-long one- and now two-child policies that resulted in a disproportionate birth ratio of men to women).

The events transpiring in Xinjiang add additional weight to China’s designation in the TIP report and up the ante for businesses with suppliers in China to more closely monitor their supply chain for forced labor. Importing goods used with forced labor from Xinjiang, not only poses reputational risks, but may have tangible, legal consequences once a CBP investigation concludes.

China’s human rights violations are all-too-familiar, but what is taking place in Xinjiang is on a whole new scale. Given the scope and scale of human rights violations taking place in Xinjiang, businesses should take extra care to monitor whether forced labor from Xinjiang is making its way into their supply chains.