Global businesses are facing mounting pressure from activist groups and the US government to reexamine and cut any ties they might have to China’s Xinjiang region, where allegations of human rights violations have run rampant for years.
Accusations that Uyghurs and other Muslim minority groups in the region have been imprisoned in re-education camps and forced to work are not new, nor are claims that their labor feeds into the global tech and retail supply chains, either directly or indirectly. But they have recently gained fresh attention as tensions between the United States and China escalate, and as Washington, DC sanctions Chinese goods it claims have been produced with forced labor.
Last week, for example, the US government restricted 11 Chinese companies from buying American technology and other goods because it claims they are linked to Xinjiang-related human rights abuses. That came after Washington, DC warned American companies of the risks of doing business with Chinese companies that use labor or goods from Xinjiang because of potential “supply chain exposure to entities engaged in forced labor and other human rights abuses.”
And on Thursday, a coalition of over 180 organizations called out dozens of clothing brands and retailers that it accused of having links “to specific cases of Uyghur forced labor” in Xinjiang. The Coalition to End Forced Labour in the Uyghur Region cited “credible investigations and reports” by media outlets, nonprofit groups, government agencies and think tanks to support its claims.
China’s western Xinjiang region is culturally and ethnically different from much of the rest of the country, with a large Turkic minority population. In recent years, marred by ethnic clashes of violence, Uyghurs and other religious minorities have had an uneasy relationship with the government in Beijing.
The US State Department estimates that since 2015, as many as two million Muslim-majority Uyghurs and other Turkic minorities have been imprisoned in enormous re-education camps in Xinjiang.
Beijing has long defended the crackdown in Xinjiang as necessary to tackle extremism and terrorism, and in line with Chinese law and international practice, and has called accusations that it is detaining massive numbers of people a “groundless lie” and “sensational rumor.” It has also claimed that its facilities are voluntary “vocational training centers” where people learn job skills, Chinese language and laws.
The Chinese government has also taken issue with the US response: Last Tuesday, a spokesperson for China’s Ministry of Foreign Affairs responded to the recent US sanctions on Chinese companies, saying that “this violates the basic norms of international relations, interferes in China’s internal affairs, and harms China’s interests.”
Addressing the allegations
CNN Business reached out to dozens of companies named in the recent reports and activist pressure campaigns, and their responses illustrate the complex ways in which companies are addressing the allegations.
Some companies, such as PVH (PVH), the US owner of Calvin Klein and Tommy Hilfiger, told CNN Business that it was working on “reducing our supply chain footprint in China, which will result in us ending all business relationships with any factories and mills that produce garments or fabric, or use cotton grown, in Xinjiang within the next 12 months.” The move was in line with a broader long-term strategy that had already been in the works for several years, a spokesperson said.
And Big W, a discount department store chain operated by Australia’s Woolworths (WOLWF) Group, said that while the company does not have any factories in Xinjiang, it acknowledged that “currently, we do not have visibility of the full supply chain of cotton.”
“We are aware … that some of the cotton sourced via our suppliers is likely to be from this region and we are conducting further due diligence,” a spokesperson said.
But several companies — including Nike (NKE), Puma and Adidas (ADDDF) — denied that they sourced products from the region, and stressed that they had worked to eliminate problematic practices from their supply chains.
“We have confirmed with our contract suppliers that they are not using textiles or spun yarn from the region,” Nike said in a statement released last week. The company referred CNN Business to that statement on Friday when asked for comment.
Nike did acknowledge that one of its partners in China may have previously hired people from Xinjiang, but said it had “stopped hiring employees” at its Qingdao facility once reports surfaced of problematic practices.
That manufacturer “has confirmed” it no longer has employees from the region, Nike said. “To date we have not found employment of Uyghurs or other ethnic minorities from [Xinjiang] elsewhere in China.”
A murky picture
The statement that Nike provided to CNN Business was originally published in response to a report released this spring by the Australian Strategic Policy Institute (ASPI), a think tank partially funded by the Australian government.
The report — which linked Nike and dozens of other companies to laborers from Xinjiang, and which has been widely cited by media outlets and activist groups since its publication — was based on Chinese government documents, Chinese state media, satellite imagery, business supplier lists, academic research and on-the-ground media reporting. Nike said some of its affiliations were “inaccurately reported.”
The response from these brands highlights the challenges of clarifying an incredibly murky picture, according to Danielle Cave, a deputy director at ASPI’s International Cyber Policy Centre, who co-authored the report.
“Full supply chains can often be opaque,” she told CNN Business. “Brands often claim knowledge of only their [direct] suppliers and, frankly, they try to pass the buck on the rest of their supply chain.”
She noted that while some brands defend themselves by saying they have no direct relationships with suppliers found to use forced labor, “Chinese supply chains are complicated, and can [involve] multiple subcontractors.”
Adding to the complexity is the fact that some factories can falsely claim to supply global brands. With Adidas, for instance, “one factory in Xinjiang has a giant billboard of Adidas on their premises,” said Cave, citing an analysis of satellite imagery.
But when asked about its ties with that manufacturer, Adidas denied having any direct relationship with the firm.
A spokesperson for Adidas later told CNN Business that the “falsely displayed company logos seem to have been removed from their website and building by now.”
Other companies said that they reviewed their supply chains and business partners in the wake of the ASPI report and other allegations — and found no wrongdoing, at least on their direct assembly lines.
“When we learned of the allegations from ASPI earlier this year, we immediately took additional actions,” Apple said in a statement. “We have found no evidence of any forced labor on Apple production lines and we plan to continue monitoring.”
The tech company even said that it conducts “surprise audits” on its partner O-Film, a Chinese company sanctioned by the United States last week after the government accused it of having links to forced labor involving Uyghurs.
“We have worked with O-Film for several years and have regularly conducted detailed audits of their facilities,” Apple said.
Cave, the ASPI deputy director, said that the mounting pressure could force businesses to reexamine their pledges to keep forced labor out of their supply chains.
“Now that the risks involved with forced labor in China are beginning to be better understood, companies will have to increase their ability to track their suppliers down to raw materials and component parts if they really want to ensure they live up to their ethical manufacturing commitments,” she said.
— Jill Disis, Eoin McSweeney, Philip Wang and Ben Westcott contributed to this report.