Two years after international monitors declared it free of forced and child labor, Uzbekistan’s cotton industry faces a troubling resurgence of exploitative practices. Once a showcase for reform, the sector is again under scrutiny as policy rollbacks, opaque pricing, and stalled worker protections undermine its global reintegration. For executives navigating ESG compliance, the Uzbek case offers critical lessons in labor governance, state accountability, and sustainable sourcing—particularly as companies like Zara, 3M, H&M, and Adidas weigh sourcing alternatives to Chinese cotton.
Reforms Rolled Back: A Fragile Supply Chain
In March 2022, the International Labour Organization removed Uzbek cotton from its forced labor watchlist, and the American Apparel & Footwear Association lifted a long-standing boycott. This was hailed as a turning point for the sixth-largest cotton exporter. However, new reports suggest that the absence of international oversight—and the loss of U.S. government funding—has reopened the door to coercion.
According to the Uzbek Forum for Human Rights, local authorities now enforce de facto production quotas, restrict farmer autonomy, and suppress unionization efforts. The government’s privatization scheme—replacing state-run purchasing with "cotton-textile clusters"—has left growers vulnerable to delayed payments and opaque pricing models.
Clusters Without Accountability
Instead of empowering farmers, the cluster system has transferred state control into private hands—often without the safeguards of a functioning market. Some farmers say they preferred the old state-controlled model, which guaranteed prompt payments and subsidized inputs. Now, they face market-priced fertilizer and fuel, higher interest rates, and contracts with private operators who default on payments with little consequence.
The outcome has been predictable: labor shortages, underpayment, and isolated cases of coercion, especially during the 2024 harvest when production fell short by half a million tons. Reports indicate that regional officials, or hokims, resorted to pressuring public sector employees to fill the labor gap or pay for replacements.
Lost Momentum in Worker Protections
International support had been critical to strengthening local compliance mechanisms. A now-defunded $3M U.S. Labor Department initiative was poised to train workers in grievance redress, collective bargaining, and rights awareness. The program, supported by the Solidarity Center and Uzbekistan’s Ministry of Employment, was canceled as part of a sweeping budget cut labeled “America Last.”
The abrupt halt risks undoing nascent progress. Brands seeking to diversify away from Xinjiang cotton—linked to forced labor among Uyghur communities—are now faced with another uncertain option. The urgency is compounded by U.S. regulatory pressure on importers to demonstrate clean supply chains under the Uyghur Forced Labor Prevention Act.
Brands Are Still Wary
While the formal boycott is over, most brands remain hesitant to resume sourcing. Many of the American Apparel & Footwear Association’s members, including Zara, H&M, and Adidas, continue to view Uzbekistan as high-risk. The 330+ brands that signed the Uzbek Cotton Pledge have emphasized the need for transparent enforcement of labor protections and independent monitoring.
Efforts to establish pilot sourcing programs have faltered. Recent controversies involving Indorama Agro—dropped by Better Cotton after accusations of wage theft and union busting—only reinforced the sector’s credibility challenges.
Conclusion
Uzbekistan’s cotton sector serves as a cautionary tale: legal reforms and international endorsements mean little without sustained accountability. For ESG-focused executives, this is a reminder that true supply chain transparency hinges on more than optics—it requires enforceable rights, farmer agency, and independent oversight. Until such infrastructure is in place, Uzbek cotton remains a reputational and compliance risk for global buyers seeking ethical alternatives to Chinese supply chains.