Coalition Statement on State Department’s updated Xinjiang Supply Chain Business Advisory
July 13, 2021
Today’s Updated Xinjiang Supply Chain Business Advisory, issued by six U.S. Government departments, is an encouraging further step toward holding the Chinese Government accountable for the continued human rights abuses in the Uyghur Region. Following the June 24 White House announcement of new sanctions cracking down on forced labour in the solar industry supply chain, and after the strong June 13 statement on Uyghur forced labour made by President Biden at the G7 Summit, today’s announcement by Secretary of State Blinken sends a clear message to companies around the world: continuing to conduct business as usual in the Uyghur Region will jeopardise your market access to the United States.
The Coalition welcomes the U.S. Government’s forceful statement on the imperative for the private sector to act, given the risks they face:
“Given the severity and extent of these abuses, including widespread, state-sponsored forced labor and intrusive surveillance taking place amid ongoing genocide and crimes against humanity in Xinjiang, businesses and individuals that do not exit supply chains, ventures, and/or investments connected to Xinjiang could run a high risk of violating U.S. law.”
The Coalition also welcomes the European Commission’s guidance released today on the due diligence expected by companies to identify and curtail forced labour globally, which specifically notes companies should redirect raw material sourcing from high-risk areas where workplace assessments are not feasible. The combination of the U.S. and EU announcements is a clear signal that there is a global consensus emerging that inaction by companies implicated in Uyghur forced labour will not be tolerated. However, although this guidance is a good start, the EU must do more.
The EU should follow the examples of other governments to introduce guidance specific to the Uyghur Region, which makes fully explicit that due diligence on the ground in the Region is impossible and that companies must urgently disengage. Further, the EU should match guidance with strong legislation: an ambitious mandatory due diligence law, import restrictions, and supply chain transparency requirements. The Coalition is encouraged by steps in this direction in the EU, and stands ready to support more tangible outcomes.
A critical step companies must take to align the growing body of laws and enforcement actions on goods produced through Uyghur forced labour is to make a formal commitment to the Call to Action issued by the Coalition to End Forced Labour in the Uyghur Region. The Call to Action sets forth the specific steps companies must take to ensure their supply chains are free from Uyghur forced labour. The Coalition will continue to reach out to companies and encourage them to sign the pledge. Companies must act on the basis of their ethical and normative obligation consistent with the UN Guiding Principles on Business and Human Rights. Moreover, they should recognise the severe legal, reputational and commercial risks they face by continuing to operate in the Uyghur Region or continuing to maintain business ties with suppliers using state-organised forced labour of Uyghurs.