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IS UYGHUR FORCED LABOR LURKING IN YOUR SUPPLY CHAIN?

by Source Intelligence

on January 26, 2022



Blogs



 

Over the past two years, the Xinjiang Uyghur Autonomous Region of China (XUAR)
has been catapulted into the spotlight and not for the right reasons. Due to
geopolitical tensions, the widespread use of forced labor, detention without
trial, torture, and other intimidation techniques have come to light. As a
result, the United States signed into law the Uyghur Forced Labor Prevention Act
on December 23, 2021, a bipartisan bill to ensure that goods made with forced
labor in the XUAR do not enter the United States market.  

 

These human rights violations are targeted towards Uyghur Muslims and other
minorities. Over 100,000 people are estimated to be in these camps, and there
are as many as 1,200 camps spread across the Xinjiang region.

 

As a 2019 report by the CSIS Human Rights Initiative states, this is believed to
be the largest-scale detention of religious minorities since World War II.

 

The quickly rising issue of forced labor and human rights abuses in the XUAR
headlines the news on a daily basis. More and more details emerge on the
humanitarian crisis and its implications for businesses the world over, in
particular, the growing challenge of gaining supply chain transparency and what
remediating actions can be deployed to eradicate modern-day slavery from supply
chains.

 



 

 

To ensure that goods made with forced labor in Xinjiang do not enter the United
States market, the Uyghur Forced Labor Prevention Act will systematically refuse
the entry of goods into the US market unless companies can prove beyond doubt
that they are not, and Customs and Border Protection is able to determine that
they weren’t “manufactured by convict labor, forced labor, or indentured labor
under penal sanctions.”

 

In this article, we explore which sectors are most at risk of unknowingly
supporting forced labor in China and how businesses can best address the lack of
transparency and visibility in their most complex supply chains.

 


TOP PRODUCTS EXPORTED FROM XUAR

 

The region is particularly productive in the apparel and footwear sectors but is
also exporting electrical machinery, toys, and plastics. The XUAR is an
important source of raw materials such as cotton, rare earth minerals, natural
gas, and oil.

 



 

 

This data is only the tip of the iceberg. Under the cover of its poverty
alleviation program, China transfers the workforce from Xinjiang to other
provinces in the country via a region-pairing system. Most reports reveal some
62,000 workers have been transferred in 2018. A report from the Australian
Strategic Institute advances that 80,000 Uyghurs were sent to work in other
factories across China between 2017 and 2019.

 

To gain even more perspective on the scale of forced labor seeping in supply
chains, Xinjiang produces over 20% of the world’s cotton and is the
third-largest producer of cashmere. With so many sought-after resources, the
region is naturally a supplier hub of choice to a staggering number of
organizations in China alone, when not a direct source to foreign manufacturers
and importers.

 

The products most imported to the United States include chemicals, food, hair
products, metals, minerals, and of course apparel.

 




 


ESCAPING THE DARK CLOUD: WHAT BUSINESSES CAN AND SHOULD DO

 

On average, a US company deals with 500 direct suppliers. The full picture of
the supply chain often adds up to ten times more, making it nearly impossible to
maintain some level of control at every tier. Yet, it is a business’s social
responsibility to engage downstream suppliers and obtain data pertaining to
their own network of partners.

 

The major challenge in determining involvement with Uyghur forced labor is
access to information, or rather lack thereof. The region is mostly under
surveillance and administration by the Xinjiang Production and Construction
Corps (XPCC), a state-owned economic and paramilitary organization known for
helping build detention facilities and committing repression acts on Uyghurs.


The XPCC has stakes in more than 800,000 companies and groups in 140 countries.
Despite the fact that the US placed three of its officials on a sanctions list,
such widespread reach illustrates the level of infiltration at which forced
labor exists in supply chains.

 

Traditional due diligence methods fare no better. XUAR is notoriously
impenetrable, so NGOs, journalists, or field auditors have no opportunity for an
onsite survey of systems, processes, and work conditions.

 

Suppliers involved directly or indirectly with facilities employing detainees or
ex-detainees are not keen on volunteering information, either by fear of
repercussions or by deeply and historically ingrained allegiance to Chinese
authorities.

 

To complicate matters further, ownership structures are often convoluted to the
point of being impossible to sort out.

 


 


 


LEVERAGING OTHER FORMS OF DATA COLLECTION: SOURCE INTELLIGENCE UYGHUR FORCED
LABOR

 

For companies to clearly map out their suppliers’ networks and identify red
flags, sourcing due diligence is really only possible via technology
integration.

 

Source Intelligence’s Uyghur Forced Labor Prevention Act program is designed to
accurately identify risks and deliver actionable insights.

 


RISK ASSESSMENT AND DYNAMIC REPORTING

 

Through a dynamic and collaborative platform fed with aggregated global data,
suppliers can be tagged based on location, names, and known aliases, local
labels (i.e. mandarin characters that can be translated and reveal further
details), IP addresses, and more. These are then displayed on an interactive map
that highlights which suppliers are at risk.

 

Automated daily supply chain audits quickly report areas/partners of concerns,
so you can take timely measures to mitigate and eliminate risk.


 


GET STARTED TODAY

 

To date, large companies are starting to publish their due diligence efforts to
identify and remedy forced labor in their global operations. Marks & Spencer has
set a precedence by publicly committing to the issue.

 

If passed, the Uyghur Forced Labor Prevention Act will officialize the
presumption of guilt unless proven innocent; a concept already largely adopted
by consumers and NGOs for all things linked to Xinjiang.

 

For Source Intelligence, ethical sourcing is not limited to compliance programs.
We dedicate our work to assisting businesses large and small in their CSR
efforts, protecting their reputation, and conserving their competitive
advantage.

 

Request a demo to see how we can make weeding out forced labor and other human
rights issues in your supply chain both easy and affordable.

 

Request a Demo


READ MORE OF WHAT YOU LIKE.


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