A request by the Canadian government for feedback on how to strengthen its ability to shut out goods made from forced labor, as part of its trade obligations, has resulted in a blunt rejoinder from a consortium of American trade groups about issues it says have hobbled Customs and Border Protection (CBP) enforcement actions stateside, chiefly by limiting the ability of importers to be “fully effective partners.”
The response by the American Apparel & Footwear Association, the Retail Industry Leaders Association, the National Retail Federation and the United States Fashion Industry Association, as members of the Joint Association Forced Labor Working Group, throws into relief a longstanding question about how much regulation is too much regulation, especially for an industry unused to guardrails.
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“Our associations, and the companies we represent, do not tolerate the use of forced labor or other human rights abuses within our supply chains,” the trade groups wrote in a letter to Canadian international trade minister Mary Ng last month. “Our members have spent years, and in many cases decades, working to identify, eradicate and prevent forced labor in their supply chains.”
But effective regulations to prevent imports made with forced labor must “provide space” for mechanisms that allow information sharing with industry, the development of best practices and a transparent enforcement process, said the organizations, which represent household names such as Adidas, Gap Inc., J.Crew Group, H&M Group, Shein and Zara owner Inditex.
These are areas where CBP has also fallen short, the letter said. With what appears to be palpable frustration, the organizations said that when the agency releases a Withhold Release Order (WRO) or Uyghur Forced Labor Prevention Act (UFLPA) detention order, it doesn’t release any of the evidence supporting those orders or the text of the WRO itself, making it difficult for importers to understand what information led to their issuance.
That CBP’s notices fail to furnish details about the type of product or which country of origin or supplier triggered the detention isn’t a new gripe. Neither is the charge that CBP doesn’t specify which parts of a shipment are being held back. The letter said that importers that choose to challenge detentions must “essentially prove a negative” for every purchase order, violating the right of due process that permits the accused to view and refute any evidence against them.
“We understand that there may be constraints in sharing information believed to be law enforcement sensitive; however, having a mechanism that would enable the sharing of this information would give importers the ability to incorporate the information into their future due diligence and amplify enforcement going forward,” the trade groups wrote. “Sharing this critical information reduces the burden for the importer to focus on the problematic part of the shipment, as well as reduces the burden on CBP to evaluate only the problematic part of the supply chain instead of the entirety of the supply chain.”
Legislating against forced labor
Ng opened a public consultation in October to gather comments on potential new measures that Canada can take to strengthen the enforcement of forced labor provisions specified by the United States-Canada-Mexico Agreement, or USMCA. U.S. lawmakers from both sides of the aisle have previously urged Canada and Mexico to do more to plug up possible transshipment routes for products that were denied entry into the United States on suspicion of forced labor, only to be reexported for another break at making it past the American border.
The letter also comes amid a spate of investigations by the Canadian Ombudsperson for Responsible Enterprise, the watchdog group better known as the CORE, into brands such as Ralph Lauren, Levi Strauss & Co. and Zara over whether they benefited or profited from the persecution of Muslim minorities from China’s Xinjiang Uyghur Autonomous Region. The complainants, a coalition of 28 human and Uyghur rights organizations, cited as evidence for their requests for assessments a 2020 Australian Strategic Policy Institute report and 2021 and 2022 studies from Sheffield Hallam University’s Helena Kennedy Centre for International Justice that drew links between brands and Chinese suppliers that have been implicated in the use of Uyghur coerced labor.
Last November, in what must have appeared to the industry as a shot across the bow, the Department of Homeland Security tapped human rights professor Laura Murphy, author of several of Sheffield Hallam University’s reports on Uyghurs, as policy advisor to Robert P. Silvers, undersecretary of the Office of Strategy, Policy and Plans and chair of the multi-agency Forced Labor Enforcement Task Force. Murphy, as a political appointee, will be stepping down after Donald Trump’s re-inauguration as president on Jan. 20.
Writing to Ng, the trade groups claimed that “open source” intelligence from non-governmental organizations, media and academia can “often” be based on “outdated or inaccurate” information or include generalizations for a geographical region and that companies should be allowed to respond to allegations before “conclusions are drawn regarding whether certain supply chains are tainted by forced labor.” It also said that “credible” social compliance audits should remain an accepted tool for assessing forced labor risks.
But experts say that such audits are ineffective in isolation, particularly where state-sponsored exploitation is concerned. In 2020, several prominent supply-chain auditing firms, including Bureau Veritas and Worldwide Responsible Accredited Production, said they would no longer conduct inspections in Xinjiang because their auditors were being harassed, threatened, surveilled and prevented from accessing factories.
“In a country such as the People’s Republic of China, where independent labor unions do not exist, social controls prevent the free exchange of information, and recently passed national security laws make the disclosure of information that portrays China in a bad light a national security offense, social audits are particularly laughable,” Representative Christopher H. Smith, the New Jersey Republican who chairs the Congressional-Executive Commission on China, said in a hearing in March.
Scott Nova, who spoke at the same hearing on behalf of the Worker Rights Consortium, a Washington, D.C.-based nonprofit, agreed that China’s “climate of repression” regarding the Uyghurs requires more than business as usual.
“The industry groups’ letter urges the Canadian government to prioritize corporations’ due process rights over workers’ human rights,” he said. “Hopefully, the Canadians will ignore them.”
Another familiar complaint is the Joint Association Forced Labor Working Group’s criticism of what it described as CBP’s lack of consistency about the information it requires to clear a product of forced labor involvement, thereby confusing importers, and the protracted process of submitting and following up on required documentation when filing petitions, which it says can take anywhere from two to three months—a lifetime in the fashion world that can render cargo “essentially worthless”—because CBP reviews and adjudicates “each and every petition,” mostly related to the UFLPA.
“Some importers have run into issues with repetitive shipments being stopped,” the letter added. “Even though CBP may have released one shipment under the applicability review, they have seen repeat shipments, with the exact same supply chain, stopped. The importer again would provide the same information during the applicability review and the shipment would be released.”
So far, 100 percent of the petitions for goods detained under the UFLPA have come under the applicability review, meaning that the importer claims the shipment shouldn’t have been detained because it has no nexus with Xinjiang, the letter said. And to date, half of those have been subsequently released by CBP, “indicating that those shipments should never have been detained in the first place.”
“In such instances where a petition is rejected, the importer is only informed that it provided ‘insufficient evidence,’” the trade groups said. “These notices do not include any indication why the documentation was insufficient or what additional documents might be needed. The importer can appeal the decision but 1) the same organization that made the initial decision, CBP, reviews the appeal; 2) the appeal is public; and 3) the importer has no idea why their initial petition was insufficient in the first place.”
The UFLPA vs. the industry
That’s not to say the UFLPA hasn’t been effective. Since the law went into effect in June 2022, it has blocked more than 1,260 shipments valued at nearly $26 million. The UFLPA Entity List of so-called bad actors now has 107 names and is poised to expand further. The idea is for businesses to “shift their behavior” to ensure their supply chains are free of goods made with forced labor, CBP senior official Troy A. Miller said at a Center for Strategic and International Studies event in July.
Even so, the letter cast doubt on whether transshipments are as much of a problem as some experts have made them out to be and whether governments should publish a list of goods at risk of forced labor, as the United States does and the European Commission intends to do. In the former case, if re-exporting happens, it’s a right importers have if they lack the time or resources to enter into an admissibility review process, the letter said. In the latter, any rundown of names essentially becomes a “blacklist” that without a high evidentiary threshold could “destroy industries and throw thousands of people out of work based on little evidence and no review.”
“For example, the United States government, through the U.S. Department of Labor, has published a forced/child labor list for over a decade,” it said. “Based on what seems like little evidence, and no explanation, the list includes the entire Bangladesh garment industry and the entire Indian textile industry. Yet, CBP has taken no action to ban imports of Bangladeshi garments or shipments made with Indian textiles under the U.S. forced labor statute. Why? Because there is no specific evidence to target individual shipments and a lack of evidence demonstrating forced labor across thousands of garment factories in Bangladesh or thousands of textile mills in India.”
The Bureau of International Labor Affairs at the Department of Justice maintains that the list is meant to raise public awareness about forced and child labor around the globe and to promote “strategic and focused” efforts to eradicate them, rather than having a punitive intent.
While CBP declined to comment about the letter, saying that it responds to direct correspondence via official channels, it pointed out that its leadership in forced labor enforcement has set a global precedent that has generated international momentum, particularly with Canada and Mexico under the USMCA. Combatting forced labor will also remain a top priority for both the agency and the Department of Homeland Security as they continue to work with like-minded partners such as the government of Canada, to root out modern slavery from supply chains.
Allison Gill, legal director at Global Labor Justice, a workers’ rights nonprofit, is less equivocal, however. She said that the trade organizations’ comments “ignore” the responsibility of companies to know their supply chains and to conduct adequate due diligence, especially since the passage and implementation of the UFLPA.
“Due diligence and enforcement are complementary roles in combatting forced labor. A reverse onus or rebuttable presumption is appropriate where there is reasonable suspicion that the goods were produced with forced labor,” she said. “And it’s working—we know that import bans, both under the Tariff Act and the UFLPA have changed sourcing practices and, at least under the Tariff Act, have made material gains for workers, such as the repayment of millions of dollars of recruitment fees.”
Gill said that while more work needs to be done, it cannot be the responsibility of enforcement agencies alone but rather something that’s shared along the supply chain. It’s especially crucial, she noted, for lead firms to undertake the type of risk-based due diligence that resources such as the Department of Labor’s list of goods produced with child labor or forced labor are intended to facilitate.
“As the AAFA knows, forced labor exists along a spectrum of labor abuses and conditions can shift into and out of forced labor,” Gill said. “Lead firms at the top of the supply chain have an important role to play in taking steps to identify forced labor risks and take steps to address them—especially by prioritizing solutions that strengthen worker empowerment and the ability of workers and unions to bargain for, win, monitor and enforce improvements in their working conditions.”
Still, Gill agrees with the trade groups’ call to strengthen mechanisms to facilitate information sharing and collaboration among market countries, particularly the United States, Canada and Mexico, to bolster the enforcement of forced labor import bans.
“While both Mexico and Canada have adopted import ban measures, neither is fully operational or effectively enforced,” she said. “Civil society organizations in both countries are working to promote more effective implementation and should be seen as important partners for both governments.”
