Supply chains widely tainted by forced labour in China, witnesses say

It remains to be seen how stringently the law is applied and if it ends up affecting a handful of companies or far more. PHOTO: REUTERS

EWASHINGTON (NYTIMES) - Human rights activists, labour leaders and others urged the Biden administration on Friday to put its weight behind a coming ban on products made with forced labour in the Xinjiang region of China, saying that slavery and coercion taint company supply chains that run through the region and China more broadly.

The law, the Uyghur Forced Labor Prevention Act, was signed by President Joe Biden in December and is set to go into effect in June.

It bars all goods made in Xinjiang or with ties to certain sanctioned entities or programmes that transfer minority workers to job sites, unless the importer can demonstrate to the United States government that its supply chains are free of forced labour.

It remains to be seen how stringently the law is applied and if it ends up affecting a handful of companies or far more.

A broad interpretation of the law could cast scrutiny on many products that the US imports from China, which is home to more than one-quarter of the world's manufacturing.

That could lead to more detentions of goods at the US border, likely delaying product deliveries and further fuelling inflation.

The law requires that a task force composed of Biden administration officials produce several lists of entities and products of concern in the coming months.

It is unclear how many organisations the government will name, but trade experts said many businesses that rely on Chinese factories may realise that at least some part or raw material in their supply chains can be traced to Xinjiang.

"I believe there are hundreds, perhaps thousands, of companies that fit the categories" of the law, Mr John M. Foote, a partner in the international trade practice at Kelley Drye & Warren, said in an interview.

The State Department estimates that the Chinese government has detained more than 1 million people in Xinjiang in the past five years - Uyghurs, Kazakhs, Hui and other groups - under the guise of combating terrorism.

China denounces these claims as "the lie of the century".

But human rights groups, former detainees, participating companies and the Chinese government provide documentation showing that some minorities are forced or coerced into working in fields, factories and mines, in an attempt to subdue the population and bring about economic growth that the Chinese government sees as key to stability.

Ms Rushan Abbas, founder and executive director of the nonprofit Campaign for Uyghurs, who has written about the detention of her sister in Xinjiang, said at a virtual hearing convened by the task force Friday that forced labour had become a "profitable venture" for the Chinese Communist Party and was meant to reduce the overall population in Xinjiang's villages and towns.

"The pervasiveness of the issue cannot be understated," she said, adding that forced labour was made possible by "the complicity of industry".

Ms Gulzira Auelkhan, an ethnic Kazakh who fled Xinjiang for Texas, said in the hearing that she had been imprisoned for 11 months in Xinjiang alongside ethnic Kazakhs and Uyghurs who were subject to torture and forced sterilisation.

She also spent 2 1/2 months working in a textile factory making school uniforms for children and gloves, which her supervisors said were destined for the US, Europe and Kazakhstan, she said through a translator.

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

Supply chains for solar products, textiles and tomatoes have already received much scrutiny, and companies in those sectors have been working for months to eliminate any exposure to forced labour.

By some estimates, Xinjiang is the source of one-fifth of the world's cotton and 45 per cent of its polysilicon, a key material for solar panels.

But Xinjiang is also a major provider of other products and raw materials, including coal, petroleum, gold and electronics, and other companies could face a reckoning as the law goes into effect.

In the hearing Friday, researchers and human rights activists presented allegations of links to forced labour programmes for Chinese manufacturers of gloves, aluminium, car batteries, hot sauce and other goods.

Horizon Advisory, a Washington-based consultancy, claimed in a recent report based on open-source documents that the Chinese aluminium sector had numerous "indicators of forced labour", like ties to labour transfer programmes and the Xinjiang Production and Construction Corps, which has been a target of US government sanctions for its role in Xinjiang abuses.

Xinjiang accounts for about 9 per cent of the global production of aluminium, which is used to produce electronics, automobiles, planes and packaging in other parts of China.

"China is an industrial hub for the world," Ms Emily de La Bruyère, a co-founder of Horizon Advisory, said at the hearing.

"Forced labour in Xinjiang and elsewhere in China not only constitutes a grave human rights transgression but also taints international supply chains," she said.

"And this is true across sectors ranging from solar energy to textiles and apparel to aluminium."

The law had been the subject of fierce lobbying by corporations and others, including critics who fear that a broad interpretation of the statute could put the US ability to combat climate change at risk, or further scramble supply chains and stoke inflation.

Congress has devoted significant funds to the law's enforcement. It appropriated $27.5 million (S$37.5 million) this year to carry out the act, funding that is probably enough to devote more than 100 full-time employees to enforcing the ban on Xinjiang products alone, according to Mr Foote.

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

But some activists express scepticism, saying the lack of access to the region has made it difficult for companies to conduct independent audits. It is also not yet clear exactly what kind of scrutiny the government will require, or what kind of business ties will be permitted under the law.

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