Multiple groups of US lawmakers are currently scrutinizing some of the world's largest brands in relation to allegations of forced labor and the sourcing of cotton-based products. Senators have taken action by sending letters to the CEOs of major fashion and sportswear retailers, including Nike, adidas, Shein, and Temu, to inquire about their compliance with the Uyghur Forced Labor Prevention Act (UFLP). The UFLP was signed into law by the Biden administration in 2021.
The letters, which have been accessed by AFP, also expressed concerns about Chinese firms Shein and Temu potentially exploiting the de minimis import loophole in US trade law to bypass the UFLPA and continue selling goods under $800 made with Uyghur forced labor to American consumers.
Representative Gallagher stated that using forced labor has been illegal for almost a hundred years—but despite knowing that their industries are implicated, too many companies look the other way hoping they don't get caught, rather than cleaning up their supply chains, which is unacceptable. He emphasized that American businesses and companies selling in the American market have a moral and legal obligation to ensure they are not involved with slave labor.
Clean Supply Chains Will Now Be a Necessity
The message conveyed in the letters to the industry is clear: either ensure clean supply chains regardless of the challenges involved or refrain from operating in countries like China that are implicated in forced labor practices.
Regarding Shein specifically, the lawmakers mentioned that the company is actively raising capital and intends to conduct an initial public offering (IPO) by the end of the year. They requested that regulations be established, mandating Shein to provide independent verification certifying that the company does not employ Uyghur forced labor as a prerequisite for registering to issue securities in the United States.
Nike in the Line of Fire
In an ongoing inquiry, a committee has questioned Nike about its efforts to ensure that the factory responsible for manufacturing millions of Nike products annually no longer employs Uyghur forced labor. This is not the first time that concerns have been raised regarding Nike's supply chain practices.
Earlier this year, activist retail investor Tulipshare urged the Oregon-based apparel giant to enhance transparency regarding working conditions, specifically focusing on tracking forced labor and mitigating the risks of wage theft. With 276 Nike shares in its possession, Tulipshare emphasized the importance of Nike's cooperation in identifying, assessing, and preventing "actual or potential human rights abuses that could significantly disrupt their business."
In 2020, the Australian Strategic Policy Institute accused Adidas and other prominent global brands of sourcing supplies from factories that utilize forced labor. The institute claimed that "some factories across China are using forced Uighur labor under a state-sponsored labor transfer scheme that is tainting the global supply chain." Furthermore, researchers from Agroisolab in Jülich and Hochschule Niderrhein University of Applied Sciences found traces of cotton supplied from Xinjiang in T-shirts manufactured by Adidas, Hugo Boss, and Puma.
At that time, an Adidas spokesperson told news publication, The Guardian that the company exclusively sources its cotton from other countries and takes necessary measures to ensure fair and safe working conditions throughout its supply chain.
Sustainable Certifications that Check for Forced Labor
Fairtrade International: The Fairtrade certification guarantees that producers in developing countries receive fair prices for their products and adhere to social and environmental standards. Forced labor is strictly prohibited, and producers must demonstrate compliance with labor rights.
Rainforest Alliance: The Rainforest Alliance certification focuses on promoting sustainable farming practices, including social and labor rights. It requires companies to implement policies against forced labor, child labor, and other human rights abuses.
UTZ: UTZ is a program for sustainable farming that covers a range of agricultural products. It emphasizes responsible production and sourcing, including social and labor standards. UTZ certification includes measures to prevent and address forced labor.