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  • This jacket, like many other things, can be purchased online with just a few clicks of

  • your finger or in your neighbourhood departmental store.

  • But do you know its origins?

  • Essentially, really, everything that we purchase at this point is unfortunately touched by this.

  • These are serious human rights crimes under international law.

  • According to activists and academics such as German researcher Adrian Zenz and the

  • Chinese Human Rights Defenders based in the U.S., more than 1 million Uyghurs, an ethnic minority

  • residing in China's Xinjiang Uyghur Autonomous Region, have been unlawfully detained in what

  • Beijing describes asre-education camps.”

  • Amid mounting pressure by governments, activists and civil society groups to act on these allegations,

  • some governments have introduced bills to weed out the presence of alleged forced labor

  • in their supply chains.

  • The Xinjiang Uyghur Autonomous Region, which lies in China's northwest,

  • is its largest administrative region.

  • Although sparsely populated, the vast area of lakes, mountains and deserts is home to

  • more than 24 million residents.

  • This region has seen periodic unrest since the 18th century, when it was part of the Qing Dynasty.

  • As China plunged into civil wars following the collapse of the Qing dynasty,

  • rebels in Xinjiang briefly declared independence before the Chinese Communist Party asserted control in 1949.

  • Since then, the ethnic composition of the Muslim, Turkic-speaking Uyghur population

  • in Xinjiang has shifted from 75% to make up less than half of Xinjiang's present-day population.

  • In the past half century, the influx of Han Chinese boosted its population

  • from 6% of Xinjiang's population to 40%.

  • Other ethnic groups include the Kazakh and the Hui people.

  • For centuries, Xinjiang, which means "new frontier" in Chinese, has been the gateway

  • to China through the ancient Silk Road.

  • Xinjiang borders eight countries, making the region a vital economic corridor to Central Asian,

  • Middle Eastern and European markets and a linchpin in China's Belt and Road initiative.

  • Despite its struggles, China's largest region is of strategic importance to the country,

  • acting as a buffer and gateway to Central Asia.

  • With significant oil and gas resources, Xinjiang is a global hub for China's exports,

  • producing textiles, shoes, and about 20% of the world's cotton.

  • Among the major cotton producers and textile manufacturers in the region are the

  • Xinjiang Junggar Cotton and Linen, Yili Zhuowan Garment Manufacturing and

  • the Baoding LYSZD Trade and Business Co, all of which were sanctioned by the U.S. government in 2020.

  • The Xinjiang Production and Construction Corps, which the U.S. Treasury Department calls a

  • paramilitary group and Chinese government entity, was slapped with sanctions in the

  • same year over alleged human rights abuses.

  • The United Kingdom rolled out similar measures at the start of 2021 to fine certain companies

  • that fail to demonstrate that their supply chains are free of forced labor.

  • In response to queries from CNBC, the Chinese embassy in Singapore categorically denied

  • the accusations of ethnic genocide, religious oppression, and forced labor.

  • It said that the issues related to Xinjiang are about the fight against violence, terrorism

  • and separatism, and thatno violent terrorist incident has taken place in Xinjiang

  • over the past four years and moreas a result.

  • The embassy added thatXinjiang's economy has grown at an annual average rate of 6.1 percent,

  • and per capita disposable income of 5.8 percentsince 2016.

  • There are several challenges in auditing a supply chain, especially in China,

  • says Sophie Richardson, the China director at Human Rights Watch.

  • It's very hard for any company operating in the region to state definitively and credibly

  • that its business operations don't somehow involve a serious human rights violation,

  • because the authorities won't allow the kind of inspections or confidential conversations

  • that that kind of scrutiny requires.

  • We're now at a time when auditing firms, so precisely the kinds of entities that would

  • go and do this kind of due diligence, are themselves saying they can't operate in

  • the region because they don't have the latitude that's necessary to offer up credible assessments.

  • A number of organizations and media outlets have documented that people who were arbitrarily

  • detained in political re-education camps have subsequently been effectively obliged to participate

  • in labor either inside the Xinjiang region or sent by Xinjiang authorities to other parts of China.

  • In 2020, a defense and strategic policy think tank in Australia identified 82 foreign and

  • Chinese companies that may have allegedly benefitted directly or indirectly from forced labor

  • of ethnic minorities across the country, of whom more than 80,000 were Uyghurs.

  • In addressing those allegations, most of the companies stated that they have anti-forced

  • labor policies and a code of conduct for their suppliers.

  • However, the Australian Strategic Policy Institute contended thatno brands were able to rule

  • out a link further down their supply chain.”

  • These brands named by think tank ASPI include major retailers such as Spanish giant Inditex,

  • which owns brands like Zara and Massimo Dutti, and the U .S.-based PVH, owner of brands from

  • Calvin Klein to Tommy Hilfiger.

  • The companies, their own internal ethics policies require that they have anti-trafficking,

  • anti-modern slavery policies, so it is incumbent on the companies to live up to their own internal policies.

  • You cannot make an exception, just because it's China.

  • However, tracing a supply chain isn't that simple.

  • For example, some of these phones may be assembled in Taiwan, but what about their components?

  • From the raw materials, including rare earth minerals used in cell phone cameras, to the

  • displays, antennas and the circuit boards, there are a few hundred suppliers just to

  • make these ubiquitous gadgets.

  • There are a few steps companies can take to root out the presence of forced labor in their

  • supply chains, says Julie Millsap from the non-profit organization, Campaign for Uyghurs.

  • We have to keep in mind that a lot of the data we're looking at, a lot of things we're

  • looking at, is from two years ago.

  • The situation has really deteriorated since then, and this is the reason that we are straight up

  • recommending companies must pull out of the region, period.

  • They must ensure that no one in their supply chain is operating any factory in the region.

  • This is why initiatives like the Coalition to End Uyghur Forced Labor are really important.

  • They have a very strong call to action that's laid out that they are asking brands to sign

  • on to, and it gives them steps, when those steps need to be completed.

  • Companies have to make a decision, essentially.

  • Yes, it might be inconvenient, but we do think it's time that most large corporations start

  • looking at what are the alternative countries that can compete.

  • I'm heading to see Andrew Delios to find out more about the challenges of moving labor

  • away from China.

  • The biggest challenge is always information opacity.

  • We just don't know what is happening, which is what challenges us in this situation and

  • in many other situations when we're dealing with overseas supply chains, whether they're

  • in China, in Bangladesh, or Southeast Asia or East Asia.

  • A lot of people don't know that China is expensive right now, but it wasn't the case 10 years ago.

  • China was deemed cheap.

  • China is not cheap.

  • It's more expensive than Indonesia, Vietnam, it's more expensive than Bangladesh,

  • more expensive than many regions of India.

  • We want to consider why do companies still remain within China when they could easily

  • vacate and go somewhere else for at least parts of their supply chains.

  • Number one is that the infrastructure that has been built up in China, in terms of railroad,

  • roadways, other transportation links, is tremendous.

  • This facilitates production activities.

  • The second thing is that there's a large ecosystem built up amongst manufacturers.

  • So the assemblers, the component suppliers.

  • This makes it difficult for any one individual to leave that clustered industry because then

  • there's costs associated with navigating goods and information across distances.

  • So, it's those two elements that are tying together manufacturing in China in the present day,

  • more so than any considerations about cheap labor.

  • According to the International Labor Organization, there are 11 indicators of forced labor,

  • including excessive working hours, abusive working conditions, intimidation and restriction of movement.

  • Several of the indicators are applicable to Uyghur workers in Xinjiang, the Australian Strategic Policy Institute said.

  • In the first quarter of 2021, the U.S. and Canada accused China of genocide in Xinjiang,

  • while the Dutch parliament became the first European country to pass a non-binding motion

  • with similar accusations.

  • The Chinese embassy denied the claims of ethnic genocide.

  • In a statement to CNBC, it said thatChina strongly condemns the imposition of sanctions

  • by the U.S., Canada, the U.K. and the EU on individuals and entities in Xinjiangand

  • urges the relevant parties to stop political manipulation on Xinjiang-related issues and

  • stop interfering in China's internal affairs”.

  • Even as more companies tout their corporate social responsibility initiatives, more investors

  • are also paying attention to environmental, social and corporate governance standards,

  • and in turn, scrutinizing the supply chains of companies.

  • In September 2020, Apple published its first human rights policy after two-fifths of its

  • shareholders, including two major shareholder advisory groups, ISS and Glass Lewis, voted

  • for the company to publish a report about its stance on human rights in China.

  • Organizations like the Investor Alliance for Human Rights are also rallying investors to

  • force companies to be more forthcoming about their links to Xinjiang.

  • It is an unprecedented situation.

  • I think, you know, businesses, investors alike are all trying to figure out what is the acceptable

  • way forward to address these human rights risks in the Xinjiang Uyghur Autonomous Region.

  • Despite launching a media blitz to counter the international pressure, there are signs

  • of growing unease in Beijing over Xinjiang.

  • In September 2020, the country released a white paper defending its actions in the region.

  • Consumers really do have an important role to play in this, and that is just letting

  • these companies know that absolutely, we do not want to be consuming any product that

  • is tainted by modern-day slavery.

  • Even as some companies attempt to shift their supply chains out of China, the export of

  • Xinjiang cotton to other countries such as Vietnam and Bangladesh means that it may be

  • hard to eliminate total exposure to that fiber.

  • I do believe that technologies are there, we could use blockchain, RF or QR codes.

  • And the reality is there's enough technology, it's just whether the business is willing

  • to invest the time to create that system.

  • It's just a matter of choice but it's not a matter of technology.

This jacket, like many other things, can be purchased online with just a few clicks of

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Why boycotting Xinjiang cotton is easier said than done | CNBC Reports

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    Summer posted on 2021/04/16
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