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China: 83 major brands implicated in report on forced labour of ethnic minorities from Xinjiang assigned to factories across provinces; Includes company responses

In March 2020, the Australian Strategic Policy Institute (ASPI) published a report Uyghurs for sale: ‘Re-education’, forced labour and surveillance beyond Xinjiang, which identified 83 foreign and Chinese companies as allegedly directly or indirectly benefiting from the use of Uyghur workers outside Xinjiang through potentially abusive labour transfer programs. 

ASPI estimates at least 80,000 Uyghurs were transferred out of Xinjiang and assigned to factories in a range of supply chains including electronics, textiles, and automotives under a central government policy known as ‘Xinjiang Aid’. The report identified 27 factories in nine Chinese provinces that are using Uyghur labour transferred from Xinjiang since 2017.

ASPI reached out to the 83 brands to confirm their relevant supplier details. Where companies responded before publication, they have included their relevant clarifications in their report.

Business & Human Rights Resource Centre invited Abercrombie & Fitch, adidas, Amazon, BMW, Gap, H&M, Inditex, Marks & Spencer, Nike, North Face, Puma, PVH, Samsung and UNIQLO to respond; their responses are provided. We invited Apple, Esprit, Fila and Victoria's Secret to respond; they did not. We will continue to post further company responses as we receive them. 

Further company comments can also be found in the articles linked below. 

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All components of this story

Article
4 August 2020

China: Practical guidance discusses ways for investors to identify and mitigate human rights risks in northwest region

Author: Investor Alliance for Human Rights

“Human Rights Risks in Xinjiang Uyghur Autonomous Region - Practical Guidance for Investors”, 3 Aug 2020

… "Human Rights Risks in Xinjiang Uyghur Autonomous Region - Practical Guidance for Investors" informs investors of the salient risks to people associated with the business activities of their portfolio companies in or connected with the Uyghur Region. It provides practical guidance to investors on how to engage with its portfolio companies, as well as other stakeholders, to identify, prevent and mitigate those risks, as they may arise at different stages of the business process or the product lifecycle.

This Guidance discusses:

Human Rights Due Diligence and the challenges of applying commonly
used methods of human rights due diligence to business activities in or connected with the Uyghur Region…  

Assessing Exposure and Engaging with Portfolio Companies during investment decision-making processes and throughout the investment lifecycle for salient human rights risks…

Guiding questions for investors to address with portfolio companies in order to evaluate efforts to conduct human rights due diligence and to address and manage actual or potential human rights risks in their operations and value chains, connected to the Uyghur Region. 

Collaborative action with other investors, civil society stakeholders, international organizations, and policymakers as likely the most effective way to amplify investor leverage to encourage companies to take action to address human rights harms and to achieve more impactful outcomes due to the systemic nature of the human rights violations in the Uyghur Region and the perpetration of abuses by Chinese authorities. 

Read the full post here

Article
30 July 2020

At least two Australian companies reportedly purchase masks made with allegedly forced labour in China

Author: The Guardian (UK)

“Face masks made with allegedly forced Uighur labour in China are being sold in Australia”, 22 July 2020

Face masks manufactured at a Chinese factory using allegedly coerced Uighur labour are being sold in Australia, the Guardian has learned…

At least 200,000 face masks made by Hubei Haixin Protective Products Group Co Ltd in China and then sent to multiple distributors in Australia are in question, and consumers may be unwittingly buying masks made by allegedly coerced labour.

Experts are now warning local face mask distributors, governments and consumers to ensure their supply chains are not tainted by factories using forced Uighur labour…

… a report by the Australian Strategic Policy Institute thinktank identified a series of factories linked to a program of forced labour involving 80,000 Uighurs…

One of the factories named in the ASPI report belonged to the Hubei Haixin Protective Products Group Co Ltd, which manufactures personal protective equipment in Hubei province, central China, and exports to a range of countries, including Australia. ..

The company confirmed to the Guardian it exported supplies to Australia, and that Uighur people were part of its workforce under the government’s policy “supporting Xinjiang development”…

It declined to comment further when asked about claims of forced labour.

The Guardian has established that at least two Australian companies have purchased stocks of surgical masks from Hubei Haixin for local distribution.

Both said they were unaware of the use of Uighur labour, and have expressed concern about the allegations.

One of the companies, MCG Electronics, says Hubei Haixin has shipped roughly 200,000 masks to various distributors in Australia since the beginning of the pandemic…

Experts also say western companies face extreme difficulty in auditing supply chains in China due to the secrecy and sensitivity surrounding its treatment of Uighurs.

The ASPI analyst Vicky Xu, who investigated the Uighur labour program with research assistant Stephanie Zhang, said it was becoming “absolutely impossible” for auditors to conduct normal human rights checks on factories in China, making due diligence extremely difficult…

The second Australian company, My Queen Pty Ltd, was also unaware of the allegations of Uighur labour use, and only purchased one batch of masks from Hubei Haixin. The company has no plans for further purchases…

Read the full post here

Article
23 July 2020

Esquel Group denies allegations of using forced labour in Xinjiang and appeals against US sanction

Author: South China Morning Post (Hong Kong)

“Esquel Group, garment supplier to Tommy Hilfiger and Nike, says it’s seeking to overturn US sanction on its Xinjiang plant”, 21 July 2020

Esquel Group, one of the world’s largest garment producers and supplier for such brands as Tommy Hilfiger, Patagonia and Nike, said it has written to the US Commerce Secretary Wilbur Ross to appeal against the decision by his office to put it on a sanctions list for hiring forced labour in Xinjiang.

“Let me be clear: Esquel does not use forced labour, and we never will use forced labour. We absolutely and categorically oppose forced labour. It is abhorrent and completely antithetical to Esquel’s principles and business practices,” Cheh [vice-chairman] said in his letter to Ross…

There is no evidence “to support the allegations” of forced labour, Chen said. Instead, “there is ample evidence that we do not use forced labour and in fact treat our Uygur employees…

The April 2017 Uygur Human Rights Project Report recognised Esquel as “perhaps the only overseas company that has attested to follow through to corporate pledges to hire Uygurs,” Cheh said…

Esquel has three spinning mills in Xinjiang… It also has two cotton ginning mills built in 2003…

The company would keep the mills running, Cheh said in an interview with the Post. No agency of any government nor any non-governmental organisation has presented such evidence to the allegation and no one from the Commerce Department spoke with anyone at Esquel about the allegations of using forced labour, Cheh said.

An independent audit of three spinning mills in Xinjiang, including Changji, by a leading global audit firm, ELEVATE, commissioned by one of its US customers, was carried out in May 2019, Esquel said.

“ELEVATE rated all three spinning mills with scores of 85 or above and confirmed that there was no forced labour of any kind,” Cheh said…

Read the full post here

Article
22 July 2020

Nike says China-based supplier stopped hiring employees from northwest amid forced labour allegations, but critics say further proof is needed

Author: Radio Free Asia

“Nike Says China-based Supplier Sent All Uyghur Workers Home Amid Forced Labor Allegations”, 21 July 2020

A China-based supplier to Nike has stopped hiring employees from the Xinjiang Uyghur Autonomous Region (XUAR) and sent all workers from the region back home, the footwear giant said in a statement… amid scrutiny over possible links between its supply chain and forced labor…

… in response to questions about the current state of its supply chain in China, the Oregon-based footwear company said it had confirmed that there are no longer any Uyghurs working for Qingdao Taekwang.

“When reports of the situation in XUAR began to surface last year we engaged with management at Taekwang’s Qingdao factory, in consultation with industry experts, as they evaluated their employment of migrant workers from the region,” Nike said in a statement emailed to RFA’s Uyghur Service.

“Taekwang subsequently stopped recruiting new employees from XUAR to its Qingdao facility in 2019 and has confirmed that all remaining employees from XUAR have now returned home. Through the diligence process Taekwang shared documents that indicate all employees at the facility, including migrant workers from XUAR, had the ability to end or extend contracts their contracts at any time.”

In its statement, Nike noted that it does not source products or components directly from the XUAR and said it had “confirmed with our contract suppliers that they are not using textiles or spun yarn from the region,”…

Speaking to RFA… U.S. author and commentator Gordon G. Chang questioned Nike’s statement.

“Maybe they’ve sent all the Uyghur workers home, but I think that Nike needs to show proof that that has in fact occurred because Nike has been making statements that do not appear to be true,” he said, suggesting the company’s statements to The Washington Post for an article the paper published in February were incorrect…

Nike’s response comes a day after the U.S. Commerce Department’s Bureau of Industry and Security (BIS) added to its Entities List 11 Chinese companies involved in alleged human rights abuses in the XUAR… Amongst the entities was Hong Kong-headquartered Esquel Group…

In a statement on its website, Nike claims that it does not have a relationship with Esquel Group, which it said ASPI [Australian Strategic Policy Institute] had inaccurately reported in March…

[Also referred to Apple, BMW, The Gap, Samsung, Sony, Volkswagen, Tommy Hilfiger, Patagonia and Lacoste]

Read the full post here

Company response
24 March 2020

North Face/VF Corp's response

Author: North Face/ VF Corp

Neither VF nor any of its brands have a relationship with Nanjing Synergy Textiles Co. Ltd. The report published by the Australian Strategic Policy Institute incorrectly states that The North Face brand has a relationship with Nanjing Synergy Textiles Co. Ltd.

We are deeply disturbed by any report of human rights violations. VF is committed to upholding internationally recognized human rights throughout our global supply chain, including prohibiting any forced labor or modern slavery.

We continuously work to improve supply chain transparency. Over the past several years, we enhanced our cotton traceability efforts to better identify third party suppliers that may be complicit in human rights abuses. We have ended, and will continue to end, all business relationships with any company that refuses to remediate human rights violations when they occur. 

We believe that VF, in partnership with others in our industry, plays an important role in protecting human rights and eradicating forced labor of all kinds from global apparel supply chains. Comprehensive and sustainable solutions require engagement and cooperation across our industry, along with civil society and governments who are willing to engage. VF is and will remain committed to working on solutions. 

Please read our full Anti-Forced Labor & Responsible Recruitment to learn more about our policies, standards, efforts and compliance underpinning our commitment.

Company response
24 March 2020

Puma's response

Author: Puma

PUMA has no direct relationship with Huafu Top Dyed Melange Yarn Co. Ltd. However, as they are one of the world’s largest cotton yarn suppliers, some of our fabric suppliers buy yarns from them. 

The allegations are severe and we are closely monitoring the situation. 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.

Since the publication of ASPI’s report we have reached out to our cotton-based garment manufacturers and mapped the origin of the yarns they are using.

In parallel we have contacted the company Huafu and established that production of Huafu yarns used by PUMA suppliers is limited to two manufacturing units of Huafu, namely their production unit in Vietnam and their production unit in the Zhejiang province in Eastern China.

We have been assured by Huafu that there are no migrant workers from western China in either of those two facilities. Furthermore, Huafu has shared a compliance audit report on their Zhejing facility issued by compliance expert organization Elevate with which was prepared in 2019. This report does not show any indications of forced labor.

In addition, Huafu has invited PUMA and other buyers to carry out an independent assessment at their facilities. We are considering to arrange such an assessment... 

Our Code of Conduct sets strict regulations for our suppliers to ensure an ethical business conduct. Both in our Code of Conduct and our Supply Chain monitoring program, we clearly ban Forced Labor in any form. Our Sustainability Handbook for Social Standards lists proven cases of Forced Labor as a Zero Tolerance Issue.https://about.puma.com/en/sustainability/codes-and-handbooks

Download the full document here

Company response
23 March 2020

Abercrombie & Fitch's response

Author: spokesperson of Abercrombie & Fitch

Per A&F Co.’s published Vendor Code of Conduct, we do not tolerate use of forced labor and 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.

A&F shared with APSI that as part of our regular review of our global supply chain, we decided to stop sourcing from the spinner (detailed on page 32) from 2020 onwards for any of our company’s brands.

However, we were not asked prior to publication about the two other factories listed in the report as our suppliers. We followed up with ASPI after publication to confirm that we do not believe we source from either of the factories listed as supplying us. They made an update to its report on March 3, 2020 (page 38 and 39). 

Company response
23 March 2020

Amazon's response

Author: Amazon

... Amazon expects all products sold in the Amazon Store or provided to Amazon to be manufactured or produced in accordance with Amazon’s Supply Chain Standards. We do not tolerate the use of forced labor. We regularly assess suppliers, using independent auditors as appropriate, to monitor continued compliance and improvement...

... Given this complex situation, we have taken immediate steps to investigate the Australian Strategic Policy Institute findings and to actively collaborate with industry partners, subject matter experts, governments and other relevant stakeholders to further enhance our due diligence efforts in line with Australian Strategic Policy Institute recommendations. We are also working closely with industry associations such as the Responsible Business Alliance and the National Retail Federation to explore all potential approaches to responsibly address this situation and support both of their recent statements on this issue...

[The full response is attached] 

Download the full document here

Company response
23 March 2020

Gap's response

Author: Gap Inc.

We are deeply committed to maintaining responsible and ethical practices across our business and seek to uphold and advocate for the fundamental values and human rights of individuals and ethnic groups of all origins.

We can confirm that we do not source any garments from the XUAR region. We also recognize that a significant amount of the world’s cotton supply is grown and spun there. Therefore, we are taking steps to better understand how our global supply chain may be indirectly impacted, including working with our suppliers and actively engaging with industry trade groups, expert stakeholders, and other partners to learn more and advance our shared commitment to respecting human rights.

At Gap Inc., we have strict policies against the use of involuntary labor of any kind in our supply chain. Any instance of forced detention and labor or suppression of an individual’s human rights is unacceptable to us. Such conduct not only violates our Code of Vendor Conduct and Human Rights Policy, but also stands against our fundamental beliefs as a company.

As always, we will continue to actively collaborate with other brands and key stakeholders to explore and implement solutions. For more information on how the U.S. apparel industry is seeking to address this issue, please see the industry association statement published on March 10, 2020.

Download the full document here

Company response
23 March 2020

H&M's response

Author: H&M Group

... [W]e are deeply concerned by reports from civil society organizations and media that include accusations of forced labour and discrimination of ethnoreligious minorities in Xinjiang...

We do not source products from this region... [W]e have conducted an investigation at all the garment manufacturing factories we work with in China and... concluded that none of them are employing workers from Xinjiang through... labour transfer programmes. Our products are not connected to Huafu’s facility in Anhui province that is mentioned in the ASPI report. However, we have an indirect business relationship with another of Huafus units in Shangyu province. This said, we have reached out to Huafu on this topic following the release of the report and learnt that they have not extended the contract linked to the labor program.

... [W]e are in close contact with human rights experts, other brands, and stakeholders... to evaluate how we can further strengthen our due diligence and responsibly address the situation.

[The full response is attached]

Download the full document here