Uyghur forced labour in Xinjiang and UK value chains Contents

2The transparency of business and value chain connections to XUAR

16.The Australian Strategic Policy Institute’s (ASPI) Uyghurs for Sale policy brief made serious allegations about business relationships between high-profile international fashion, media and technology brands and factories in China accused of using the forced labour of Uyghurs and other minority groups. Given these concerns, we wrote to a number of companies in order to challenge them to clarify their links to the region and explain how they can guarantee transparency in their supply chains.32

17.All of the companies confirmed that they do not directly source products from factories or suppliers based in Xinjiang. A number also noted that they do not have any business relationships with the region, but none could guarantee definitively that the raw cotton they source for their products does not partly originate from Xinjiang. The technology company Segura Systems Ltd. (which runs a platform that enables fashion retailers and brands to manage the procurement of the garments they produce) asserts that “[a]ny large retailer that says they are absolutely sure that there is no material from [XUAR] in their garments is being disingenuous at best”.33

The fashion industry

18.Several of the companies, including H&M, Puma and IKEA, are members of the Better Cotton Initiative, which is a global not-for-profit organisation that runs the largest cotton sustainability programme in the world and provides licences to farmers who meet certain environmental and labour sustainability standards.34 The Better Cotton Initiative suspended licencing in Xinjiang in March 2020 due to concerns over human rights abuses, and on 21 October 2020 it ceased all field-level activities in the region. In his evidence, Maajid Nawaz, Founder of Quilliam International summarised the situation: “If 84% of China’s cotton originates in that area, I would say as a default, just as the United States of America has done in a law that is yet to be ratified, that we in Britain must approach cotton coming from China by default as having a presumption that it is tainted by enslaved labour and genocide unless it can be proven otherwise.”35

The Better Cotton Initiative suspended licensing in Xinjiang in March 2020 due to concerns over human rights abuses.

19.Despite these important actions, several companies accepted that it is not currently possible to fully trace the cotton used in final products, which means cotton produced in Xinjiang could still be part of their supply chains. David Sävman, Head of Supply Chain for H&M, noted that increasing supply chain transparency is a priority for the sector, and said “there are a lot of things going on”. He explained:

“We in Britain should approach cotton coming from China by default as having a presumption that it is tainted by enslaved labour and genocide unless it can be proven otherwise” - Maajid Nawaz, Founder of Quilliam International

The first is classical paper trailing. You can continue to trace back packing lists, invoices, et cetera, to make the mass balance more granular. We have pilots for interesting ways to make it more exact, a lot of which are based on blockchain techniques, to make sure you have an open source so you can see the mass balance of accredited cotton in a much better way. There is already work today on things such as isotope analysis and proper DNA sourcing, where you can see where different fibres are from. It is not valid in scale today, but it is an interesting thing to have as a support going forward.36

20.Sean Cady, Vice President, Global Sustainability and Responsibility at VF Corporation, also explained that they “have a traceability team that manages the traceability back to the origins of our raw materials. Through that traceability effort, we can gain assurances that all our business partners throughout our extended supply chain comply with our global code of conduct and uphold human rights through that supply chain”.37 He further noted that “[e]very factory in our supply chain must undergo an audit by our internal audit staff prior to us engaging with them”.38

21.Jaycee Pribulsky, Vice President for Global Footwear Sourcing & Manufacturing at Nike, explained that the company’s approach is aligned with the UN guiding principles on business and human rights and the International Labour Organization conventions.39 She added that “[w]e expect all suppliers across Nike’s supply chain to be in compliance with our code of conduct and we regularly audit facilities across our supply chain”, but also noted “that there are limitations to audits. Audits are a moment in time, and we drive and seek continuous improvement”.40

22.Andrew Reaney, Group Director of Responsible Sourcing, Boohoo Group, stated that the company is “relatively new to this journey”, adding that “we specifically report and are going to report on tier 1 and tier 2, which for us, effectively, is manufactured goods. Beyond that, the next stage of our journey will be to do what we have just been talking about here, which is effectively starting to map fabrics, trims and finishes”.41 Following the evidence session on 5 November, it was reported that Boohoo had hired Sir Brian Leveson to chair an independent review of the company’s supply chain and ethics.42 John Lyttle, the CEO of Boohoo, has confirmed the appointment of Sir Brian Leveson to provide independent oversight of their Agenda for Change programme. His first report was presented to the Boohoo Board on 12 January 2021.43

23.Marks & Spencer (the second largest clothing retailer in the UK by market share), has also taken action on this issue since the launch of our inquiry. In January 2021, M&S became the first UK company to formally sign the “Brand Commitment to Exit the Uyghur Region” organised by the Coalition to End Uyghur Forced Labour.44

M&S became the first UK company to formally sign the “Brand Commitment to Exit the Uyghur Region”.

24.Given that evidence of serious human rights abuses in Xinjiang has been widely reported over many years, we are appalled that companies still cannot guarantee that their supply chains are free from forced labour. We found that many companies asserted that they have robust procedures for prohibiting human rights abuses while failing to undertake the necessary and basic due diligence procedures to know for certain that their supply chains are not implicated in slave labour or the abuse of minorities in China.

25.It is clearly unacceptable that Boohoo was found to have only minimal data about the different tiers in their supply chain, resulting in labour abuses in the UK. Boohoo and other companies need to accurately audit their supply chains both in the UK and around the world. We welcome Boohoo’s decision to appoint Sir Brian Leveson to review the company’s supply chain transparency in response to our inquiry. We would encourage other companies to undertake independent inquiries into their due diligence policies.

Media and technology companies

TikTok

26.In September 2020, the Digital, Culture, Media and Sport Sub-committee on Online Harms and Disinformation highlighted concerns relating to the business links of some media and technology companies (with UK operations) in Xinjiang. In an evidence session held on 22 September 2020, the Sub-committee raised concerns around TikTok’s algorithm and the alleged censorship of content critical of the Chinese Government on the video-sharing platform with Theo Bertram, Director, Government Relations and Public Policy EMEA, TikTok.45 In its written evidence to us, TikTok (TiKTok Information Technologies UK Ltd) stated that it does not operate in China, and that it does not censor content that is critical of China or content related to Uyghurs.46

27.TikTok UK is a subsidiary of a global parent company, ByteDance Ltd, which is incorporated in the Cayman Islands. There is a China-based subsidiary of the same global parent company, called ByteDance (HK) Ltd.47 TikTok UK noted in its written evidence that “[n]one of the companies that operate TikTok (including TikTok UK) roll up to the Chinese subsidiary”, but also confirmed that “the subsidiary of ByteDance Ltd that operates in China complies with Chinese law”.48

28.Article 7 of China’s National Intelligence Law (2017) states that “[a]ny organisation and citizen shall, in accordance with the law, support, provide assistance, and cooperate in national intelligence work, and guard the secrecy of any national intelligence work that they are aware of”.49 While TikTok stated that its policy is “not to share any […] data with the Chinese Government and, in fact, the Chinese Government has never asked for it”,50 it is clear that the National Intelligence Law compels Chinese companies to deny to any other Governments that they are sharing data, and keep secret any intelligence work they undertake on behalf of the state.

Article 7 of China’s National Intelligence Law (2017) states that “[a]ny organisation and citizen shall, in accordance with the law, support, provide assistance, and cooperate in national intelligence work, and guard the secrecy of any national intelligence work that they are aware of.”

29.Elizabeth Kanter, TikTok’s Director, Government Relations and Public Policy UK, reassured the Committee that aid sent to Xinjiang by the Chinese subsidiary of ByteDance, TikTok’s parent company, was not being used to inflict further human rights abuses in the region. She noted that “it is going to the farmers in the region to promote their goods to users of the Douyin app [a video-sharing app owned by the Chinese subsidiary of ByteDance]”.51 She later clarified that the Douyin team “provided aid in Makit County to support local farmers to promote their produce via Douyin”.52

30.Yuan Yang, Beijing Deputy Bureau Chief and Technology Correspondent, Financial Times, previously discussed the algorithm and the alleged censorship of content on the platform with the DCMS Sub-committee. She noted that “the way in which [TikTok’s] algorithm plus its human moderators […] recommend content is largely opaque”, and that “[i]n the distant future, I think […] Chinese Government influence on the recommendation algorithm is a possibility”.53

31.We welcome TikTok’s offer to review its algorithm, and we will visit their offices to do so with an expert team as soon as is possible. Meanwhile, we remain deeply concerned about the flow of information between TikTok UK, its parent company ByteDance Ltd and other subsidiary companies (such as ByteDance (HK) Ltd), which are subject to China’s National Intelligence Law. We invite TikTok to publish independently verified governance and data flow arrangements to confirm full legal separation between TikTok UK and other ByteDance Ltd group companies.

The Walt Disney Company

32.In 2017, The Walt Disney Company partnered with Chinese production company - Beijing Shadow Times Culture Co. Ltd. - on the filming of the motion picture Mulan in Xinjiang. The Rt Hon Sir Iain Duncan Smith MP (Co-Chair of the Inter-Parliamentary Alliance on China) has previously raised concerns about Disney’s decision to film part of Mulan in Xinjiang and allegedly working with the security services in the region.54 Disney told us that the UK Government had not issued a risk advisory for businesses working in the region at that time.55 We wrote to Disney on 16 October 2020 and asked what risk assessments the company completed to ensure that no human rights abuses were taking place during the production of Mulan in Xinjiang. Disney’s response to our letter failed to address this urgent question, and our subsequent attempts to solicit a satisfactory response from Disney were rebuffed.56

Disney thanked the security bureau in Turpan and the publicity department of the CPC Xinjiang Uyghur Autonomy Region Committee in its final titles to the Mulan film.

33.We are deeply disappointed that The Walt Disney Company declined our invitation to give oral evidence, and to engage meaningfully with our inquiry. The Walt Disney Company has a responsibility to demonstrate that none of their actions supported oppression or undermined human rights during the production of Mulan. The Walt Disney Company still has many questions to answer, particularly in relation to concerns about whether it completed adequate risk assessments and put in place sufficient safeguarding measures during the production of Mulan in Xinjiang, and why it refused to answer questions before our Committee. Correspondence continues between the Committee and The Walt Disney Company.

32 Xu, Cave, Leibold, Munro, Ruser, Uyghurs for Sale, February 2020

33 Segura Systems Ltd. (FL0006) para 4

34 According to the Better Cotton Initiative website, as of 2019 BCI had more than 1,800 members spanning the cotton supply chain. This groups includes 168 retailers and brands, 1,585 suppliers and manufacturers, 30 producer organisations, 42 civil society members, and 17 associate members

35 Q2 [Mr Nawaz]

36 Q918 [Mr Sävman]

37 Q952 [Mr Cady]

38 Q952 [Mr Cady]

39 Q957 [Ms Pribulsky]

40 Q959, 962 [Ms Pribulsky]

41 Q967 [Mr Reaney]

43 Confirmed in a letter sent to the Chair of the Committee on 14 January 2021

44 M&S (FL0033) para 1–2

45 Oral evidence taken before the Digital, Culture, Media and Sport Sub-committee on Online Harms and Disinformation on 22 September 2020, HC (2019–21) 646, Q92 [Mr Nicholson]

46 TikTok (FL0022) para 9–11

47 TikTok (FL0022) para 13

48 TikTok (FL0022) para 12, 20

49 Brown University, ‘National Intelligence Law of the People’s Republic’, accessed 23 October 2020

50 TikTok (FL0022) para 21

51 Q17 [Ms Kanter]

52 TikTok (FL0032) para 4

53 Oral evidence taken before the Digital, Culture, Media and Sport Sub-committee on Online Harms and Disinformation on 22 September 2020, HC (2019–21) 646, Q151 [Ms Yang]

54 HC Deb, 8 September 2020, col 545

55 The Walt Disney Company (FL0017) para 22

56 The Walt Disney Company (FL0017)




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