- WHY DID THE US PASS LEGISLATION AROUND UYGHUR FORCED LABOR?
- WHAT’S IN THE LEGISLATION?
- HOW TO THRIVE WHILE OPERATING UNDER THE UYGHUR FORCED LABOR PREVENTION ACT
The international outcry about the abuse was initially met by the Chinese government with denial and dismissing allegations as international interference. After multiple reports including eyewitness accounts and thorough research, the government eventually admitted the existence of the groups but defended them as necessary to counter terrorism.
Victims of the camps are often forced to work in adjacent or off-site factories, working across sectors including textile products such as cotton, solar component manufacturing, consumer electronics, food products, chemicals, and more. These materials and products are then added into international supply chains, making outside countries and companies complicit in forced labor. This is a clear human rights violation. But there is human rights abuse around the world. So why did the US government and Biden administration take the forced labor practices so seriously? In part, it’s because of international trade agreements.
Under the 2020 United States-Mexico-Canada Agreement (USMCA), the US must prohibit the importation of goods from sources produced in whole or in part by forced or compulsory labor. This turns a human rights issue into a potential trade agreement breach. The forced labor bill was passed with unanimous support through the US Senate and a near-unanimous vote through the House. While the mindset and rationale for the bill may vary across the aisle, it’s clear that both political parties are united in their support for this legislation.
To get an exception from the import ban, the importer must provide “clear and convincing” evidence that the goods were not produced wholly or partially with forced labor. Every time that the Commissioner of CBP issues such an exception, they must submit a report to Congress within 30 days identifying the goods that were subject to the exception and what evidence was submitted for that determination. All of those reports must also be made available to the public, and are usually covered in the media.
At the time of writing, there are a lot of unknowns. Until the FLETF’s strategy is submitted to Congress, it’s impossible to predict exactly what documentation will be required or the best way for importers to move forward and keep supply chains resilient.
That said, there are some first steps that FRDM has identified that can help organizations like yours stay ahead of the legislation, and even prepare for future requirements. These include figuring out any potential connections your supply chain has to Xinjiang, working with your suppliers to document their due diligence and supply chain mapping, and keeping tabs on real-time updates to the information that’s available about potential risks and connections.
Using proprietary first-party data and an innovative product genome, FRDM can analyze your spend data to provide a predictive bill of materials, including upstream commercial connections to your business. With more spend data, like purchase level details, the deeper our analysis can go, telling you where your supply chain may risk being complicit with forced labor. Additionally, FRDM’s Xinjiang module lets you effortlessly see which of your suppliers are based in the contentious region.
You can also use FRDM’s trading partners module to trace second and third-tier suppliers (or beyond) to determine connections to Xinjiang. For example, you may believe that your solar panels are coming from Malaysia, but the polysilicon used to create the panel might have originated in China, exposing you to unknown risks. Until you know more about your suppliers and subsuppliers, you won’t be able to address these concerns.
Once you know more about your suppliers and have a high degree of confidence in your data, you can choose to amplify that information by sending your suppliers a Self Assessment Questionnaire (SAQ) that gathers more information about how they do business. A subscription to FRDM gives you unlimited SAQs, so you can consistently send, assess, and report on your suppliers.
When completed, SAQs are added to your supplier file along with any other certifications or documents that you’ve collected. You can also share your insights with the supplier to work together toward addressing any gaps in the data and mitigating risks. Having a shipment seized isn’t good for you or your supplier, and by working together you can prove that you’re both doing your due diligence to combat forced labor wherever it happens.
While we don’t know exactly what evidence will be required to show that imported goods didn’t come from forced labor in Xinjiang, building this kind of paper trail is always helpful when documenting due diligence on both sides of the buyer-supplier relationship.