US Efforts to Combat Forced Labor Targets with Businesses in China

US Efforts to Combat Forced Labor Targets with Businesses in China

After President Biden signed the bill on Thursday, a far-reaching law designed to ban products made using forced labor in China went into effect.

But the next four months — during which the Biden administration will hold hearings to examine how widespread forced labor is and what to do about it — will be crucial in determining how far the legislation will go in changing the behavior of companies that manufacture products. involving China.

While it is against US law to knowingly import goods made with slave labor, the Uyghur Forced Labor Prevention Act shifts the burden of proof from customs officers to businesses. Companies will have to proactively prove that their factories, and those of all their suppliers, do not use slavery or coercion.

The bill, passed nearly unanimously by the House and Senate, is Washington’s first comprehensive effort to control supply chains, which the United States says exploit persecuted minorities, and its impact could be profound. A wide range of products and commodities, such as petroleum, cotton, minerals and sugar, come from China’s Xinjiang region, where allegations of forced labor are mounting. Those materials are often used in Chinese factories that make products for international companies.

“I expect there will be many companies – even entire industries – that will be surprised to realize that their supply chains can also be traced back to the Uyghur region,” said Laura Murphy, a professor of human rights and contemporary slavery. at Sheffield Hallam University in Great Britain.

If enforced as written, the law could force many companies to rethink the way they do business or risk having products blocked at the US border. That high stakes are expected to spark massive lobbying by companies trying to ease the burden on their industries as the government writes guidelines for importers to follow.

“True, effective enforcement will most likely mean companies pushing back and trying to create loopholes,” said Cathy Feingold, the AFL-CIO’s international director. “So implementation will be key.”

Behind-the-scenes negotiations before the bill’s adoption gave an early indication of the ramifications of the legislation on some of America’s largest companies, as corporate groups such as the US Chamber of Commerce and brand names such as Nike and Coca-Cola worked to expand the scope of the bill. .

The Biden administration has labeled the Chinese government’s actions in Xinjiang — including the detention of more than a million Uyghurs and other predominantly Muslim minorities, as well as forced conversions, sterilization and arbitrary or unlawful killings — as genocide.

Human rights experts say Beijing’s policy of relocating Uyghurs to farms and factories that feed the global supply chain is integral to the repression in Xinjiang, an effort to assimilate minorities and rob them of their culture and religion.

In a statement last week, Jen Psaki, the White House press secretary, said Biden welcomed the bill’s approval and agreed with Congress “that action can and should be taken to hold the People’s Republic of China responsible for genocide and genocide.” human rights violations and to address forced labor in Xinjiang.” She added that the administration would “work closely with Congress to implement this bill to ensure global supply chains are free of forced labor.”

Still, some members of the government argued behind closed doors that the bill’s scope could overwhelm U.S. regulators and lead to further supply chain disruptions at a time when inflation is accelerating to nearly 40-year highs, according to interviews. with more than two dozen government officials, members of Congress and their staff. Some officials also expressed concern that an aggressive ban on Chinese imports could jeopardize the government’s goals for fighting climate change, given China’s dominance of solar panels and components to make them, people familiar with the discussions said.

John Kerry, Mr. Biden’s special envoy on climate change, and Wendy R. Sherman, the deputy secretary of state, have separately voiced some of these concerns in recent months in appeals to Democratic members of Congress, according to four known people. with the discussions.

Florida Republican Senator Marco Rubio and one of the bill’s lead authors criticized those seeking to mitigate its impact, saying that companies who want to continue importing products and officials who are reluctant to rock the boat with China,” not just going to give up.” He added, “They’re all going to try and weigh up how it’s implemented.”

One of the reasons why there is so much at stake is because of the critical role Xinjiang can play in many supply chains. The region, twice the size of Texas, is rich in commodities such as coal and oil and crops such as tomatoes, lavender and hops; it is also a major producer of electronics, sneakers and clothing. By some estimates, it supplies one-fifth of the world’s cotton and 45 percent of the world’s polysilicon, a key ingredient for solar panels.

Xinjiang’s significant presence in the solar supply chain has been a major source of tension in the Biden administration, which is counting on solar energy to help the United States meet its goal of cutting carbon emissions by the end of the decade. to be significantly reduced.

At meetings this year, Biden government officials weighed in on how difficult it would be for importers to bypass Xinjiang and move supply chains for solar energy and other products, three government officials said. Labor Department officials and the United States trade representative were more sympathetic to a sweeping ban on Xinjiang goods, according to three people familiar with the discussions. Some officials responsible for climate, energy and economics opposed a comprehensive ban, saying it would destroy supply chains or jeopardize the fight against climate change, those people said.

Ana Hinojosa, the executive director of Customs and Border Protection and led the government’s enforcement of forced labor provisions until she left the post in October, said agencies responsible for “competitive priorities” such as climate change have expressed concerns about the impact of the legislation. Businesses and several government agencies became nervous that the law’s broad authorities “could be devastating to the US economy,” she said.

“The need to improve our clean energy is real and important, but not something the government or the US should be doing on the backs of people working under conditions of modern slavery,” Ms Hinojosa added.

Speaking to California Speaker Nancy Pelosi this year, Mr. Kerry expressed concerns about disrupting solar supply chains, while Ms. Sherman shared her concerns with Oregon Democrat Senator Jeff Merkley, according to people familiar with the conversations.

Mr Merkley, one of the bill’s lead sponsors, said in an interview that Ms Sherman told him she was concerned that the legislation was not properly “targeted and deliberate”. The conversation was first reported by The Washington Post.

“I think this is a focused and considered approach,” said Mr Merkley. “And I think the administration is starting to see how strongly Republicans and Democrats in both chambers feel about this.”

A State Department official said Ms. Sherman did not initiate the appeal and raised no objection to the bill. Whitney Smith, a spokeswoman for Kerry, said all the allegations he lobbied against the Uyghur Forced Labor Prevention Act were “false”. Ms. Pelosi declined to discuss private conversations.

Nury Turkel, a Uyghur-American lawyer who serves as vice chairman of the US Commission on International Religious Freedom, said the United States must “address both genocide and ecocide”.

“Policymakers and climate activists are making it a choice between saving the world and turning a blind eye to the enslavement of Uyghurs,” he said. “It’s false, and we can’t be forced to do it.”

Government officials have also argued that the United States can take a strong stance against forced labor while developing a robust solar energy supply chain. Emily Horne, a spokeswoman for the National Security Council, said Mr Biden “believes that what is going on in Xinjiang is genocide” and that the government has taken a series of measures to combat human rights violations in the region, including financial sanctions, visa restrictions , export controls, import restrictions and a diplomatic boycott of the 2022 Beijing Olympics in February.

“We have taken action to hold the People’s Republic of China accountable for its human rights violations and to address forced labor in Xinjiang,” said Ms Horne, using the abbreviation for the People’s Republic of China. “And we will continue to do that.”

The law highlights the delicate relationship between the US and China, in which policymakers must figure out how to cope with anti-democratic practices while the United States is economically dependent on Chinese factories. China remains the largest supplier of goods to the United States.

One of the biggest hurdles for US companies is determining whether their products have reached Xinjiang at any point in the supply chain. Many companies complain that, in addition to their direct suppliers, they do not have the power to request information from the Chinese companies that produce raw materials and parts.

Government restrictions denying foreigners free access to locations in Xinjiang have made it difficult for many companies to scrutinize their supply chains. New Chinese anti-sanction rules, which threaten sanctions against companies adhering to US restrictions, have made vetting even more difficult.

The Chinese government denies that forced labor is used in Xinjiang. Zhao Lijian, a government spokesman, said US politicians “tried to contain China and hinder China’s development through political manipulation and economic bullying in the name of ‘human rights'”. He promised a “resolute response” if the bill became law.

Lawmakers have struggled over the past year to reconcile a more aggressive House version of the legislation with one in the Senate, which gave companies longer timelines to make changes and removed the SEC reporting requirement, among other differences.

The final bill included a mechanism to establish lists of entities and products that use forced labor or assist in the transfer of persecuted workers to factories in China. Companies such as Apple had lobbied for such lists to be made, believing they would provide greater certainty for companies wishing to avoid entities of concern.

Lisa Friedman reporting contributed.

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Rachel Meadows

Rachel Meadows

Trending topics news writer who enjoys cooking, walking her dog and travel.

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