Supply chains marred by forced labor in China, panel finds

WASHINGTON — Human rights activists, labor leaders and others on Friday urged the Biden administration to throw its weight behind an upc...


WASHINGTON — Human rights activists, labor leaders and others on Friday urged the Biden administration to throw its weight behind an upcoming ban on products made with forced labor in China’s Xinjiang region. , claiming that slavery and coercion taint the supply chains of companies that cross the region and China more broadly.

The law, the Uyghur Forced Labor Prevention Act, was signed by President Biden in December and is expected to come into force in June. It prohibits all goods made in Xinjiang or linked to certain sanctioned entities or programs and transfers minority workers to job sites unless the importer can demonstrate to the US government that its supply chains supplies are free from forced labour.

It remains to be seen how well the law is enforced and whether it ends up affecting a handful of companies or many more. A broad interpretation of the law could cast scrutiny on many products the United States imports from China, which is home to more than a quarter of global manufacturing. This could lead to more detentions of goods at the US border, most likely delaying product deliveries and further fueling inflation.

The law requires a task force of Biden administration officials to produce multiple lists of entities and products of concern in the coming months. It’s unclear how many organizations the government will name, but trade experts said many companies that relied on Chinese factories may find that at least part or raw material of their supply chains could be attributed to Xinjiang.

“I believe there are hundreds, if not thousands, of businesses that fit the categories” of the law, John M. Foote, partner in international business practice at Kelley Drye & Warren, said in an interview. .

The State Department estimates that the Chinese government has detained more than a million people in Xinjiang over the past five years – Uyghurs, Kazakhs, Hui and other groups – under the guise of fighting terrorism.

China denounces these claims as “the lie of the century”. But human rights groups, former detainees, participating companies and the Chinese government itself provide abundant documentation showing that some minorities are forced or coerced into working in fields, factories and mines, with the aim of subjugating the population and bringing about economic growth which the Chinese government sees as the key to stability.

Rushan Abbas, founder and executive director of the nonprofit Campaign for Uyghurs, which wrote about his sister’s detention in Xinjiang, told a virtual hearing convened by the task force on Friday that forced labor had become a “profitable business” for the Chinese Communist Party and was aimed at reducing the overall population in the villages and towns of Xinjiang.

“The pervasiveness of the problem cannot be underestimated,” she said, adding that the forced labor was made possible by “the complicity of industry.”

Gulzira Auelkhan, an ethnic Kazakh who fled Xinjiang for Texas, told the hearing that she was imprisoned for 11 months in Xinjiang alongside ethnic Kazakhs and Uighurs who were tortured and sterilized from strength. She also spent two and a half months working in a textile factory making children’s school uniforms and gloves, which her supervisors said were destined for the United States, Europe and Kazakhstan, she said. declared through a translator.

It is already illegal to import goods made with slave labor. But for products that affect Xinjiang, the law will shift the burden of proof to companies, requiring them to provide proof that their supply chains are free of forced labor before they are allowed to import the goods into the country. country.

Supply chains for solar products, textiles and tomatoes have already come under intense scrutiny, and companies in these sectors have been working for months to eliminate any exposure to forced labor. According to some estimates, Xinjiang is the source of a fifth of world cotton and 45 percent of its polysilicon, a key material for solar panels.

But Xinjiang is also a major supplier of other commodities and commodities, including coal, oil, gold and electronics, and other companies could face accounts when the law goes into effect. .

At Friday’s hearing, researchers and human rights activists presented allegations of links to forced labor schemes for Chinese makers of gloves, foil, car batteries, hot sauce and other products.

Horizon Advisory, a consulting firm in Washington, claimed in a recent report based on open source documents that the Chinese aluminum sector had many “indicators of forced labor”, such as links to labor transfer programs and the Xinjiang Production and Construction Corps, which was a target of U.S. government sanctions for his role in Xinjiang abuses.

Xinjiang accounts for about 9% of global aluminum production, which is used to produce electronics, automobiles, aircraft and packaging in other parts of China.

“China is an industrial hub for the world,” Emily de La Bruyère, co-founder of Horizon Advisory, said during the hearing.

“Forced labor in Xinjiang and elsewhere in China is not only a serious violation of human rights, but also taints international supply chains,” she said. “And this is true in all sectors ranging from solar energy to textiles and clothing to aluminum.”

The law had been subject to fierce lobbying by companies and othersincluding critics who feared that a broad interpretation of the law could jeopardize the United States’ ability to fight climate change, or further scramble supply chains and stoke inflation.

Congress has already dedicated significant funds to law enforcement. It has allocated $27.5 million this year to implement the law, funding that is likely enough to dedicate more than 100 full-time staff to enforcing the ban on Xinjiang products alone, Mr. Foote.

Businesses and trade groups said they were willing to follow the restrictions but wanted to avoid unnecessarily harming their businesses.

Vanessa Sciarra, vice president of the American Clean Power Association, which represents solar and wind companies, urged the government to provide detailed guidance to importers on how to audit their supply chains and only use carefully verified information to make decisions.

“Holding a shipment for weeks or months at a stretch is serious business,” she told the hearing.

Many companies have done due diligence on their ties to Xinjiang, and some major industry associations say they have eliminated forced labor from their supply chains.

But some campaigners are expressing skepticism, saying lack of access to the region has made it difficult for companies to carry out independent audits. It is not yet clear what kind of control the government will require or what kind of business ties will be permitted by law.

For example, some companies have bifurcated their supply chains, to ensure that material from Xinjiang goes to produce goods for China or other parts of the world, and not for the United States – a practice that Richard Mojica , a commercial attorney at Miller & Knight Chartered, says should suffice to the letter of the law, but would be “reviewed further in the months and years to come.”

Mr Mojica said in an interview that many businesses expected the government to provide clear and practical advice in the coming months on how to comply with the law, but “that expectation may be wrong”.

“I don’t think we’ll get the level of clarity that some companies expect,” he said.

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Newsrust - US Top News: Supply chains marred by forced labor in China, panel finds
Supply chains marred by forced labor in China, panel finds
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