This jacket, like many other things, can be purchased online with just a few clicks of
your finger or in your neighbourhood departmental store.
But do you know its origins?
Essentially, really, everything that we purchase at this point is unfortunately touched by this.
These are serious human rights crimes under international law.
According to activists and academics such as German researcher Adrian Zenz and the
Chinese Human Rights Defenders based in the U.S., more than 1 million Uyghurs, an ethnic minority
residing in China’s Xinjiang Uyghur Autonomous Region, have been unlawfully detained in what
Beijing describes as “re-education camps.”
Amid mounting pressure by governments, activists and civil society groups to act on these allegations,
some governments have introduced bills to weed out the presence of alleged forced labor
in their supply chains.
The Xinjiang Uyghur Autonomous Region, which lies in China's northwest,
is its largest administrative region.
Although sparsely populated, the vast area of lakes, mountains and deserts is home to
more than 24 million residents.
This region has seen periodic unrest since the 18th century, when it was part of the Qing Dynasty.
As China plunged into civil wars following the collapse of the Qing dynasty,
rebels in Xinjiang briefly declared independence before the Chinese Communist Party asserted control in 1949.
Since then, the ethnic composition of the Muslim, Turkic-speaking Uyghur population
in Xinjiang has shifted from 75% to make up less than half of Xinjiang’s present-day population.
In the past half century, the influx of Han Chinese boosted its population
from 6% of Xinjiang’s population to 40%.
Other ethnic groups include the Kazakh and the Hui people.
For centuries, Xinjiang, which means "new frontier" in Chinese, has been the gateway
to China through the ancient Silk Road.
Xinjiang borders eight countries, making the region a vital economic corridor to Central Asian,
Middle Eastern and European markets and a linchpin in China’s Belt and Road initiative.
Despite its struggles, China's largest region is of strategic importance to the country,
acting as a buffer and gateway to Central Asia.
With significant oil and gas resources, Xinjiang is a global hub for China’s exports,
producing textiles, shoes, and about 20% of the world’s cotton.
Among the major cotton producers and textile manufacturers in the region are the
Xinjiang Junggar Cotton and Linen, Yili Zhuowan Garment Manufacturing and
the Baoding LYSZD Trade and Business Co, all of which were sanctioned by the U.S. government in 2020.
The Xinjiang Production and Construction Corps, which the U.S. Treasury Department calls a
paramilitary group and Chinese government entity, was slapped with sanctions in the
same year over alleged human rights abuses.
The United Kingdom rolled out similar measures at the start of 2021 to fine certain companies
that fail to demonstrate that their supply chains are free of forced labor.
In response to queries from CNBC, the Chinese embassy in Singapore categorically denied
the accusations of ethnic genocide, religious oppression, and forced labor.
It said that the issues related to Xinjiang are about the fight against violence, terrorism
and separatism, and that “no violent terrorist incident has taken place in Xinjiang
over the past four years and more” as a result.
The embassy added that “Xinjiang's economy has grown at an annual average rate of 6.1 percent,
and per capita disposable income of 5.8 percent” since 2016.
There are several challenges in auditing a supply chain, especially in China,
says Sophie Richardson, the China director at Human Rights Watch.
It’s very hard for any company operating in the region to state definitively and credibly
that its business operations don’t somehow involve a serious human rights violation,
because the authorities won’t allow the kind of inspections or confidential conversations
that that kind of scrutiny requires.
We’re now at a time when auditing firms, so precisely the kinds of entities that would
go and do this kind of due diligence, are themselves saying they can’t operate in
the region because they don’t have the latitude that’s necessary to offer up credible assessments.
A number of organizations and media outlets have documented that people who were arbitrarily
detained in political re-education camps have subsequently been effectively obliged to participate
in labor either inside the Xinjiang region or sent by Xinjiang authorities to other parts of China.
In 2020, a defense and strategic policy think tank in Australia identified 82 foreign and
Chinese companies that may have allegedly benefitted directly or indirectly from forced labor
of ethnic minorities across the country, of whom more than 80,000 were Uyghurs.
In addressing those allegations, most of the companies stated that they have anti-forced
labor policies and a code of conduct for their suppliers.
However, the Australian Strategic Policy Institute contended that “no brands were able to rule
out a link further down their supply chain.”
These brands named by think tank ASPI include major retailers such as Spanish giant Inditex,
which owns brands like Zara and Massimo Dutti, and the U .S.-based PVH, owner of brands from
Calvin Klein to Tommy Hilfiger.
The companies, their own internal ethics policies require that they have anti-trafficking,
anti-modern slavery policies, so it is incumbent on the companies to live up to their own internal policies.
You cannot make an exception, just because it’s China.
However, tracing a supply chain isn’t that simple.
For example, some of these phones may be assembled in Taiwan, but what about their components?
From the raw materials, including rare earth minerals used in cell phone cameras, to the
displays, antennas and the circuit boards, there are a few hundred suppliers just to
make these ubiquitous gadgets.
There are a few steps companies can take to root out the presence of forced labor in their
supply chains, says Julie Millsap from the non-profit organization, Campaign for Uyghurs.
We have to keep in mind that a lot of the data we're looking at, a lot of things we’re
looking at, is from two years ago.
The situation has really deteriorated since then, and this is the reason that we are straight up
recommending companies must pull out of the region, period.
They must ensure that no one in their supply chain is operating any factory in the region.
This is why initiatives like the Coalition to End Uyghur Forced Labor are really important.
They have a very strong call to action that's laid out that they are asking brands to sign
on to, and it gives them steps, when those steps need to be completed.
Companies have to make a decision, essentially.
Yes, it might be inconvenient, but we do think it's time that most large corporations start
looking at what are the alternative countries that can compete.
I’m heading to see Andrew Delios to find out more about the challenges of moving labor
away from China.
The biggest challenge is always information opacity.
We just don’t know what is happening, which is what challenges us in this situation and
in many other situations when we’re dealing with overseas supply chains, whether they’re
in China, in Bangladesh, or Southeast Asia or East Asia.
A lot of people don’t know that China is expensive right now, but it wasn’t the case 10 years ago.
China was deemed cheap.
China is not cheap.
It’s more expensive than Indonesia, Vietnam, it’s more expensive than Bangladesh,
more expensive than many regions of India.
We want to consider why do companies still remain within China when they could easily
vacate and go somewhere else for at least parts of their supply chains.
Number one is that the infrastructure that has been built up in China, in terms of railroad,
roadways, other transportation links, is tremendous.
This facilitates production activities.
The second thing is that there’s a large ecosystem built up amongst manufacturers.
So the assemblers, the component suppliers.
This makes it difficult for any one individual to leave that clustered industry because then
there’s costs associated with navigating goods and information across distances.
So, it's those two elements that are tying together manufacturing in China in the present day,
more so than any considerations about cheap labor.
According to the International Labor Organization, there are 11 indicators of forced labor,
including excessive working hours, abusive working conditions, intimidation and restriction of movement.
Several of the indicators are applicable to Uyghur workers in Xinjiang, the Australian Strategic Policy Institute said.
In the first quarter of 2021, the U.S. and Canada accused China of genocide in Xinjiang,
while the Dutch parliament became the first European country to pass a non-binding motion
with similar accusations.
The Chinese embassy denied the claims of ethnic genocide.
In a statement to CNBC, it said that “China strongly condemns the imposition of sanctions
by the U.S., Canada, the U.K. and the EU on individuals and entities in Xinjiang” and
“urges the relevant parties to stop political manipulation on Xinjiang-related issues and
stop interfering in China’s internal affairs”.
Even as more companies tout their corporate social responsibility initiatives, more investors
are also paying attention to environmental, social and corporate governance standards,
and in turn, scrutinizing the supply chains of companies.
In September 2020, Apple published its first human rights policy after two-fifths of its
shareholders, including two major shareholder advisory groups, ISS and Glass Lewis, voted
for the company to publish a report about its stance on human rights in China.
Organizations like the Investor Alliance for Human Rights are also rallying investors to
force companies to be more forthcoming about their links to Xinjiang.
It is an unprecedented situation.
I think, you know, businesses, investors alike are all trying to figure out what is the acceptable
way forward to address these human rights risks in the Xinjiang Uyghur Autonomous Region.
Despite launching a media blitz to counter the international pressure, there are signs
of growing unease in Beijing over Xinjiang.
In September 2020, the country released a white paper defending its actions in the region.
Consumers really do have an important role to play in this, and that is just letting
these companies know that absolutely, we do not want to be consuming any product that
is tainted by modern-day slavery.
Even as some companies attempt to shift their supply chains out of China, the export of
Xinjiang cotton to other countries such as Vietnam and Bangladesh means that it may be
hard to eliminate total exposure to that fiber.
I do believe that technologies are there, we could use blockchain, RF or QR codes.
And the reality is there's enough technology, it's just whether the business is willing
to invest the time to create that system.
It's just a matter of choice but it's not a matter of technology.