Major brands seek changes to US ban on Xinjiang labour goods

What’s happening? Apple, Coca-Cola and Nike are among several major US brands that have been working to water down or alter some provisions in proposed US legislation that aims to ban products made using forced labour in China’s Xinjiang region, according to lobbying disclosures. The bill in question would mandate firms to declare any links to Xinjiang to the SEC, and increase scrutiny of Chinese supply chains. Apple and Nike were named among 82 firms that allegedly directly or indirectly benefited from abusive labour transfer programmes in the Xinjiang region, according to a report by the Australian Strategic Policy Institute.

Why does this matter? US corporates have found themselves stuck between a rock and a hard place, and may be placing themselves in an even more precarious position by trying to intervene in a ban which has such strong bipartisan governmental and consumer support. The above-mentioned bill passed the US House of Representatives in September with ease and seems to have enough backing to make it through the Senate.

For the US government, the issue is seems simple: not only is there an opportunity to appear decisive on what has largely been regarded as a global human rights crisis, but the legislation can also serve as a pressure point against China, amid souring US-Sino relations throughout the years of the Trump Administration.

For big brands – and “virtually the entire apparels industry”, according to a coalition of 180 human rights groups – the blanket ban could scupper supply chains, leaving them scrambling to patch together manufacturing capacity. Lobbying against a bill specifically pertaining to the protection of human rights, however, is not a good image for corporates, especially when consumers are becoming more socially conscious.

The companies involved are looking to amend the ban to allow potential supply opportunities where no human rights violations are taking place, and have issued various public pledges and statements to reiterate their support for these issues while also denying allegations of forced labour in their supply chains.

As many advocacy groups have shown, however, due to the obscurity of China’s internal supply chains and the tight grip the Chinese government has on business in the area, foreign companies and auditors are unable to get a clear picture on exactly where textiles, workers or products are sourced from, and under what conditions.

There is, perhaps, an opportunity for smaller firms to showcase their work in supply-chain technology such as blockchain-based tracking, or more localised supply networks that are more easily verified and managed.

Lateral thought from Curation – We’ve previously seen the reputational damage fossil fuel industries have inflicted on themselves by being perpetually resistant to change, historically spending hundreds of millions each year to block progressive legislation. Such doggedness has led to such incriminating incidents as this Chevron-backed anti-environment PR campaign, and, just this week, an uncovered trail of fake news now referred to as “Astongate” (see article below).

In an effort to preserve their businesses, retail firms run similar risks of making the wrong steps and causing irreparable reputational damage. The full New York Times article notes that Nike and Coca-Cola are paying various external lobbyists to pursue the issue.