Western brands were caught between the US and China over human rights
Western companies are being forced to choose between human rights and profit coming from China. The US and its allies are embroiled in a ongoing struggle with Beijing over persecution of Uighur Muslims.
As China is being studied Ahead of the 2022 Beijing Winter Olympics, human rights activists are urging companies to take a stand against Uyghur repression, which the US formally proclaimed this week. “genocide”.
Meanwhile, the U.S. Congress is examining legislation that will force companies to ensure that supply chains do not use forced labor from Xinjiang.
The rising pressure occurs at the same time that Beijing began subduing the nationalist opposition such as brands such as Nike and H&M, which have expressed concerns about Xinjiang or have vowed to remove the use of forced labor in the northwestern region of China from supply chains.
While some companies have maintained themselves, others have removed criticism from their websites.
In one example, VF Corporation, which owns The North Face brand, removed the statement about Xinjiang, which referred to the use of forced labor.
He now has a section on forced labor on his website does not mention Xinjiang and a separate section on the region it does not refer to forced labor. That his policy had not changed but that he had not responded to requests to explain the latest change.
PVH, among its brands Calvin Klein, Has also removed a document stating that it was “very concerned” about the coercive work in Xinjiang. The company said its policies had not changed but did not explain why it removed the section.
Jewher Ilham, his enterprising father Ilham TohtiA Uyghur rights defender who was jailed for life imprisonment by China said it was “very worrying” that some brands had encouraged Beijing.
“They need to realize that they are doing the wrong thing,” said Ilham, who works for the Workers ’Rights Consortium, a labor rights monitoring group. “This is a moral test that history will remember.”
“Can they feel at peace”?
While garment companies are under special pressure because Xinjiang is a major source of Chinese cotton, the region of concern extends to other critical supplier sectors, such as the polysiliconation used to make solar panels.
Sophie Richardson, China’s director of Human Rights Watch, said companies were receiving numerous calls as pressures rose.
“I have received more calls since the beginning of this year than in the previous 15 years of Human Rights Watch,” he said. “Banks, manufacturers, investment firms and textile companies are asking the same question – considering all the information. . . About Xinjiang, can they keep the business there and feel at peace? “
And he said the concern has now become a “blind panic” when China mobilized boycotts of some Western brands last week, with US, EU, UK and Canadian sanctions imposed on Chinese officials for their role in Xinjiang policy.
In response to the sanctions, reports of reports of forced labor in Xinjiang in the United States, the monthly release of the U.S. sportswear company by the state media, sparked outrage from Chinese social media users and the company’s local ads. partners.
H&M was accused by the Chinese Communist Youth League of “boycotting” Xinjiang cotton, and then ceased to appear on Swedish shopping lists on major ecommerce platforms.
Bennett Freeman, a former human rights department official who has advised multinationals and entrepreneurs, said the companies “feel right now they are in a war zone.”
“These are the clothing brands. . . they have to decide where they are in an almost impossible place and on which side of history, “Freeman said.” There is no easy solution. “
Rising pressure in Washington
A two-party group of U.S. senators has introduced a bill that would ban imports, as long as they don’t ensure that companies don’t use forced labor.
Support for the project – similar to what was easily surpassed by the House of Representatives last year – has been noted by Congress as a growing crisis for China, coinciding with the importance of investors in social and geopolitical risks.
“Companies are frozen like rabbits in lighthouses,” Alison Taylor said at Stern Business School at New York University. “It’s leading to a nightmare of supply chain oversight.”
In December Coalition to end forced labor in the Uigur region They asked Amazon, Apple, Coca-Cola and others. “come clean”The spot appeared on the bill after some reportedly lobbied to dump the water. Some companies encourage lawmakers to spend more time making sure they comply with the changes.
Jennifer Bisceglie, CEO of Interos Supply Chain, said companies wanted help identifying their exposure, but struggled with the many levels of suppliers that depend on them.
Penalties and Beijing’s response
Adding to the challenges of the supply chain, Ashley Craig, a partner in the law firm Venable, said companies are facing sanctions imposed by the Trump administration on Xinjiang Production and Construction Corp., a paramilitary group that uses forced labor in cotton production.
“This is a complicated calculation of the risk posed by sectors that are dependent on or peripheral to U.S. sanctions,” Craig said, adding that the supply chain is hard to dismantle at the speed required by the government.
The Trump administration also “refuse release orders”Those demanding U.S. Customs and Border Protection to block the import of cotton and tomatoes using forced labor from Xinjiang. But companies have expressed concern about not receiving proper guidance from the U.S. government to comply with the restrictions.
Craig said that beyond the other challenges, China had it new statute this allows Chinese companies to do business with foreign companies in China that comply with U.S. sanctions. “It’s a perfect storm,” he said.