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Supply Chains and Human Rights

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When you create supply chains without the slightest concern for anything but low costs–ignoring workplace safety, human rights, labor rights, environmentally sustainability, every other concern but wresting profit–you create a situation where if global outrage over one piece of this disaster gets to the point that it matters on a geopolitical scale, the whole supply chain begins to crumble.

This is what is happening with the U.S. ban on cotton from forced labor plantations in Xinjiang.

Last month, Chinese cotton yarn maker Huafu Fashion sent a warning to investors.

“Multiple American brands have canceled orders,” Huafu said in a Shenzhen stock exchange filing, citing U.S. sanctions. “It’s brought negative effects to the company.”

Huafu — which said it lost at least $54.3 million last year vs. a net profit of $62.5 million in 2019 — is one of the few suppliers to publicly acknowledge the sanctions’ effects. But thousands of companies worldwide are affected after the United States blacklisted 87 percent of China’s cotton crop — one-fifth of the world’s supply — citing human rights violations against Muslim Uighurs in China’s northwest Xinjiang region.

What’s happening now in the fashion industry is rare in the history of global trade: a multibillion-dollar supply chain splintered almost overnight over a human rights issue.

Just a year ago, companies “were saying it’s impossible” to stop buying textiles with Xinjiang cotton, said Scott Nova, executive director of the Worker Rights Consortium, a Washington-based advocacy group. “You can’t leave. Or if you could leave, it would take three to five years to even execute such an exit.”

Cotton picked in Xinjiang winds up in garments cut and sewn across Asia, from Bangladesh to Vietnam, textile industry executives say. The U.S. ban applies to products “made in whole or in part” with Xinjiang cotton, “regardless of where the downstream products are produced,” U.S. Customs and Border Protection said.

Patagonia announced in July it was “actively exiting the Xinjiang region,” and said it told suppliers that Xinjiang fiber and manufacturing was prohibited. Gap, which encompasses the Old Navy and Banana Republic brands, said it has prohibited suppliers from sourcing products, components or materials from Xinjiang, directly or indirectly.

Ikea said it “stopped all shipments” to the United States containing Xinjiang cotton after the CBP ban. Ikea and H&M both said their suppliers have stopped new cotton purchases from Xinjiang because of the Better Cotton Initiative’s decision last year to discontinue licensing cotton from the region.

Nike said it has confirmed its suppliers were not using textiles or spun yarn from Xinjiang and that it was communicating the new requirements to them.

Wow, it’s almost as if anyone gave a damn about the rights of workers or the environment or anything else that these companies could in fact make different choices about how their products are made! You mean that it’s a huge lie that companies who control so very well for cost and quality can’t control for labor conditions!!! Well, knock me over with a feather.

The only way out of this on a systematic basis is to push for a Corporate Accountability Act that creates enforcement mechanism on the companies themselves. But international trade standards remains far, far, far from the agenda of even the left in the United States.

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