Report Says Xinjiang Cotton Fabric Being Shipped to Other Countries for Finishing
More than $14 billion worth of Chinese raw cotton and cotton and cotton blend textiles was exported in 2019 from five major textile companies with ties to Xinjiang forced labor, according to a recent British study, conducted with the help of international scholars and Chinese reviewers and partly funded by the U.S. Agency for International Development (USAID). The study, called "Laundering Cotton: How Xinjiang Cotton is Obscured in International Supply Chains," analyzed shipping data from Bangladesh, Vietnam, India, Cambodia, Hong Kong, the Philippines, Pakistan, Kenya, Ethiopia and the U.S., tracing how goods went from China to one of those countries directly, or from China to Hong Kong to the foreign factory location, and then from there, to U.S. shelves.
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"The top destinations (in terms of both value and weight) for China’s export of raw cotton, yarn, and fabric are Bangladesh, Vietnam, Philippines, Hong Kong, Indonesia and Cambodia. These countries account for over 52% of exports (by both value and weight) of semi-finished cotton goods exported from China. Manufacturers in these countries serve as intermediaries in finishing cotton-based apparel, thus obscuring the provenance of the cotton," wrote Laura Murphy, the lead author from Sheffield Hallam University.
The five textile companies that Murphy linked to Xinjiang cotton and, in some cases, to Muslim forced labor in their mills, were: Huafu Fashion, Lianfa Textiles, Luthai Textiles, Texhong Textiles, and Weiqiao Textiles. The study found 53 manufacturers in Indonesia, Sri Lanka, Bangladesh, Vietnam, India, Pakistan, Kenya, Ethiopia, China and Mexico that purchased their cotton textiles, and said 103 international brands are supplied by those intermediaries.
"The data shows that international brands’ Tier 1 suppliers sometimes have hundreds of different fabric suppliers, and sometimes only a small fraction of their received cotton materials come from one or several of the Chinese enterprises selected for this study. While this admittedly means that we cannot with certainty claim that a specific brand is without a doubt receiving products made of Xinjiang cotton, it also suggests the challenge brands face in claiming with absolute certainty that there is no Xinjiang cotton in their supply chains," Murphy wrote.
"While we are not imputing the intentions of the parties involved, the effect is nonetheless a 'laundering' of Xinjiang cotton -- obscuring its movement so that the provenance of a finished garment’s cotton becomes difficult to detect," she said. "The benefits of such an export strategy may be clear: the end buyer is no longer directly involved in buying Xinjiang cotton -- international brands and wholesalers can buy from factories in third countries that have few visible ties with Uyghur Region-based companies," the report said. "As a result of the use of intermediary manufacturers, many of the international brands that have made a commitment to eschewing Xinjiang cotton (and even those that simply wish to abide by current U.S. import laws and policies) may unwittingly be purchasing goods originating in the Uyghur Region through international intermediary suppliers."
The report details specific shipments from Chinese textile companies to Indonesian and Sri Lankan manufacturers, and then garments made with the same cotton blends a few months later from Uniqlo, Banana Republic and J.Crew. In that last example, the report traced the specific style number, AR886-3, from a store to an Indonesian manufacturer, and showed that the manufacturer received the 97% cotton twill fabric two weeks earlier from a subsidiary of a Chinese company that said it resettled "more than 1,800 surplus laborers and poor people in southern Xinjiang" by providing jobs in its textile mills.
The report said the goods that have been detained in the U.S. under the Xinjiang cotton withhold release order are the "tip of the proverbial iceberg. The mechanisms that obfuscate Xinjiang cotton sourcing are able to operate precisely because they make it plausible for the end buyers not to know. Therefore, the burden of proof should lie with the corporations that buy goods from abroad; they should be compelled to provide evidence that products do not contain any materials from the Uyghur Region, which can only be established when the raw materials and all manufacturers and shipping companies in a supply chain are both traced and made transparent to consumers."
The report called on countries to make customs records publicly available. It also called on countries to "enact legislation to hold liable companies that benefit from forced labor, whether the forced labor is committed by the corporation or by its subsidiaries, suppliers, sub-suppliers, or business partners, whether or not they had knowledge of it or intended for the violations to occur."
The report noted that the European Center of Constitutional and Human Rights filed a criminal complaint in Germany against textile companies for profiting from Uyghur forced labor. "A similar claim was filed in France by several NGOs and a Uyghur survivor with the Public Prosecutor’s Office in Paris," the report said.
Murphy said that a garment company that asks Tier 1 or Tier 2 suppliers to answer questionnaires about their suppliers "is insufficient and cannot be trusted on its own to ensure compliance." They said that all companies should be required to trace their supply chain suppliers back to the raw materials, without exception.
"Companies should understand the working conditions at all tiers. They should also be required to identify and assess the impact of supplier and sub-supplier business models and strategies, including trading, procurement, and pricing practices," the report said.