On Wednesday, December 2, Customs and Border Protection (CBP) released a Withhold Release Order (WRO) against cotton and cotton products from the Chinese state-owned company Xinjiang Production and Construction Corps (XPCC) and all its subordinates and affiliated entities. In August, CAL had joined other rights groups in writing a petition, asking CBP to issue a regional WRO which would ban all cotton products from the Xinjiang Uyghur Autonomous Region in China.
In Xinjiang, forced labor is rampant and XPCC, like many other companies active in the Xinjiang cotton industry, are reported to use forced and prison labor.
This blog post discusses human rights violations in Xinjiang, the scope of the new WRO, and its implications on human rights in cotton supply chains. It concludes with an outlook on future legislation.
Human rights violations in Xinjiang
Xinjiang is an autonomous region situated in northwestern China and home to the Uyghur and other Turkic Muslim minorities. Due to its location, it is central to Xi Jinping’s Belt and Road Initiative. In recent years, China has continuously tightened control over the region. As a result, the international community has increasingly grown concerned over practices that have been described as “cultural genocide” and ”the largest-scale detention of religious minorities since World War II.” Chinese Human Rights Defenders noted that in 2017, 21% of arrests in China were in Xinjiang, while it has only 1.5% of the population.
The Chinese government has been placing members of the Uyghur in internment camps, so-called “re-education camps,” in what China calls a fight against religious extremism. In 2018, a UN committee member called the Xinjiang region “something resembling a massive internment camp, shrouded in secrecy, a sort of no-rights zone.” People are detained just for talking to relatives abroad or for wearing religious symbols such as veils or beards. In the detention centers, they are forced to cite communist slogans and are tortured if not obedient.
In 2018, the UN said it had credible reports that over one million Uyghurs had been placed in internment camps. Detainees are forced to work in factories within internment camps or are sent to factories in other regions through a government-led labor transfer scheme and forced to work there. In reaction to increasing international pressure, the Chinese government stated in 2019 that everyone has “graduated” and been released,” but satellite images show the camps have continued to grow.
The WRO
Xinjiang is a major producer and exporter of textiles, producing 85% of China’s cotton. Many products used in the US and elsewhere, can wholly or partly be traced to forced labor from Xinjiang. The Australian Strategic Policy Institute identified that at least 82 global brands source some products produced by Uyghur forced labor, including Abercrombie & Fitch, Adidas, Amazon, Apple, General Motors, Marks & Spencer, Google, Lenovo, Volkswagen, Zara, and others.
Through providing a market for these products, importing countries enable and support the exploitation of the Uyghur and other Turkic and Muslim minorities. For that reason, CAL joined nine other rights organizations to file a petition with CBP, requesting that CBP issue a WRO banning all cotton products produced in Xinjiang from entering the US.
While this WRO bans products connected to XPCC and not the entire Xinjiang cotton sector, it is an important victory. Under the WRO, all cotton products produced by XPCC, its subordinates or affiliated entities, and any products containing such cotton, like apparel, garments, and textiles, will not be allowed to enter the US.
XPCC was founded some sixty years ago to structure the Xinjiang region. It is a state-owned company and is characterized as a paramilitary organization, in part carrying out government functions such as running schools and health care facilities. XPCC has over 862,000 holdings in over 140 different countries, employs 12% of the population in Xinjiang and is responsible for 17% of the region’s cotton products.
It is omnipresent in China’s cotton market: “It is so massive that even though it appears that it’s a single company, from our perspective it is equivalent to a regional WRO,” Acting Deputy Secretary of the Department of Homeland Security Ken Cuccinelli said. He added that CBP is still contemplating a regional ban.
Implications for cotton supply chains
The US is China’s biggest market for textiles and clothing and 38% of US textile imports are from China. This WRO is therefore an important step in closing off the US market for forced and prison-labor produced goods and pushing back on human rights violations in Xinjiang.
Since the scope of the WRO is broad, products that are made only in part by XPCC are covered. Opaque and long supply chains are a reality in today’s world. Across different sectors, companies generally maintain that it is difficult or next to impossible to trace all suppliers and manufacturing steps up the supply chain. This applies all the more for XPCC, whose products are often used to make other products. Several companies have stated that although they do not source directly from factories in Xinjiang, they cannot guarantee that their suppliers do not.
With this WRO, CBP might just be asking companies to do what they claim is impossible. One day after its release, US customs made a first detention of goods under the WRO, signaling that CBP is serious about the ban. CBP also recently sent a questionnaire to some retail and garment factories, asking them to map their supply chains up to the extraction of raw materials and to describe how labor is secured at each of the manufacturers and suppliers.
While the WRO only blocks XPCC-produced products to the US market, this WRO could force companies to become more aware of their cotton supply chains. Previously, companies have defended themselves against allegations of sourcing from Xinjiang by stating they did not know that their suppliers sourced such products. We can hope that now companies will cut these suppliers from their entire supply chains, and not just for the US market.
Upcoming legislation
The WRO is part of a number of actions the US has taken recently to increase pressure on China for its treatment of the Uyghur. In July, the US Department of the Treasury’s Office of Foreign Assets Control sanctioned the XPCC, along with a former political commissioner of XPCC and the Deputy Party Secretary and Commander of the XPCC. As a result, US companies had to cut direct ties with XPCC and any majority held entity by XPCC. That same month, the US government also sent out an advisory to companies on human rights violations in Xinjiang. Then, in September, CBP issued five WROs targeting companies in the region, although it did not include XPCC.
Currently, the Senate is debating two laws. The Uyghur Forced Labor Prevention Act would require companies to show clear and convincing evidence that their products were not made in Xinjiang by forced labor. It passed the House 406 to 3 on September 22. It is currently in the Senate, where reports of companies lobbying against the law have surfaced.
Apple, Nike, Coca-Cola, and other companies have reportedly lobbied Congress to water down some provisions. These companies all have human rights policies condemning forced labor. Yet Apple reportedly paid $90,000 to an outside firm to lobby to weaken the bill. Republican Senator Ben Sasse recently sent a letter to Nike calling out the discrepancy between Nike’s human rights policies and what he called Nike’s “aggressive lobbying campaign.”
On September 30, the House passed the Uyghur Forced Labor Disclosure Act of 2020. This bill would require publicly listed companies to disclose information on whether goods or materials were sourced from Xinjiang – and if they were, whether they were produced with forced labor – to the Securities and Exchange Commission each year.
Until the legislation is passed, we hope that this WRO will force companies to both trace their supply chains and make those supply chains transparent.
For more information on using WRO petitions as a human rights see here.
For more information on the petition CAL and nine other rights groups filed see here.
Bettina Braun is a Legal Fellow at Corporate Accountability Lab.
