Multiple reports are emerging from Xinjiang, an autonomous territory in northwest China, about human rights abuses against the indigenous Uyghur population, including mass detentions and the use of forced and child labor in local factories. Some brands in the apparel and food-processing sectors have already been directly linked to forced labor within “re-education” facilities in Xinjiang. In this conversation with SupplyChainBrain editor-in-chief Bob Bowman, Ryan Aherin, senior commodities analyst with Verisk Maplecroft, says all companies relying on manufacturing in China are at risk of being associated with these abusive practices.
SCB: When did the issue of forced labor in Xinjiang first become an issue?
Aherin: In late 2017, we started seeing early reports that detentions in the area had started, that people were being detained for what might be seen as arbitrary reasons. The Chinese government has clamped down on certain religious practices and things like that, all under the guise of preventing people from succumbing to extremism and engaging in terrorist activities. Also, there have always been some supply chain issues in the region, particularly with regards to the Xinjiang Production and Construction Corps. It’s a sort of military organization that [supposedly] works for economic development in the region, but the real idea is to assimilate Xinjiang into the economy and culture of central China, which is predominantly Han Chinese.
SCB: What type of manufacturing is taking place in Xinjiang?
Aherin: One of the industries that has seen a lot of growth in the last three years, coinciding with the ramp up of these detention centers, is textile and garment manufacturing. The government has been struggling to find ways to keep the Chinese clothing manufacturing industry competitive, especially with rising labor and other costs on the east coast, where much of the production has been traditionally located. They’ve been offering incentives to move this base inland. They've set up industry parks and special economic zones, and some cities in Xinjiang have offered incentives like tax-free incentives, or promises to pay for factories, to get businesses to move their operations out there.
SCB: How are workers there being treated?
Aherin: Within the last year or so, we’ve seen reports that people are being detained under the guise of the government saying, "This is a vocational training program to get people involved in the economy.” But according to firsthand accounts, it’s all part of a government surveillance program to get people in jobs where they can be monitored and forced to work in these factories. If they refuse, they face the threat of being sent somewhere with more prison-like conditions than what they're already experiencing.
SCB: Beyond forced labor, what other types of human rights abuses are taking place in Xinjiang?
Aherin: This isn't just related to industry. In the region, there’s been a huge crackdown on freedom of religious practices. Most of the Uyghur population are practicing Muslims, and the government has imposed restrictions such as prohibiting men from having beards longer than a certain length, preventing people from taking part in Friday prayers, and restricting the kind of religious materials that people are allowed to read. There have also been reports of government agents living with Uyghur families as “guests.” And we’ve seen government surveillance. There's been a lot of talk about facial recognition cameras being installed, to allow the government to keep a closer watch on the population. It’s systematic state repression.
SCB: What has been the response of U.S. companies manufacturing in the region to reports of these abuses?
Aherin: The primary response we see right now is companies saying, "We're investigating any ties that we have to the region. We're looking at suppliers to [make sure] we're not supplying from the region anymore, or that we're going to look more closely at suppliers from that region." But there's doesn't seem to be a real strategy in any industry to look into this more closely. That’s fairly difficult to do because of the restrictions the government has put in place, so you can't really monitor your supplier in this situation. Things like factory audits are much more difficult. What we’re primarily seeing is more of a reactive strategy. Once they’re been linked to allegations that they're sourcing materials from there, companies will say, "We're going to review our suppliers and see what the next step is.” In some ways, it has caught them off guard.
SCB: What’s the relationship between manufacturing in Xinjiang and sourcing in China generally?
Aherin: It's difficult to say for most industries, particularly for textiles and garment production. Xinjiang is a very important region for that industry, because many raw materials, including more than 70% of China's cotton, are produced there. Those materials are already linked to forced labor in the region. After the cotton is harvested, however, it's mixed in with other sources and blended into materials, so it's very hard to trace back to origin. Still, if you're sourcing cotton from China, odds are that some of it was produced in Xinjiang.
SCB: What should U.S. companies be doing in response to these revelations?
Aherin: Companies sourcing from China should really be thinking about whether or not they should continue to do so. The risk of being linked to these practices is quite high. At the very least, they should know if they're sourcing from a particular factory, and where they're getting their raw materials from. They need to get as much traceability into their supply chains as possible. Even then, there's no real cure-all for separating yourself from what's going on there, just because of how prevalent it is, particularly in the apparel industry.
SCB: Is it so widespread that companies shouldn't be manufacturing in Xinjiang at all, or is there legitimate manufacturing going on there as well?
Aherin: It’s really difficult to separate what's legitimate and what's not, due to the restrictions on transparency. We advise our clients that if they're sourcing anything from Xinjiang at all, they should automatically be engaging with that supplier to find out as much as they can about the activities it’s involved in, and possibly even reconsidering whether they should be supplying from that region at all.
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