Using Technology to Prevent Xinjiang Forced Labor In Your Supply Chain

by Source Intelligence

on May 14, 2021

Despite China’s claim that Xinjiang is only home to re-education facilities designed to combat terrorism and lift the Uyghurs out of poverty, incriminatory reports keep surfacing, bearing evidence of forced labor, abuse, and torture.

 

Several governments have publicly condemned the way China treats the minorities of Xinjiang, with the notable exception of New Zealand, a position that is shaking the foundation of the Five Eyes Alliance. China’s displeasure has made the situation escalate into retaliation schemes, from diplomacy threats to the boycott of Western brands. Regardless of the severity of tactics being used, countries like the US, UK, Australia, and other European nations are not backing down from their intention to eradicate slavery in supply chains in general and Xinjiang forced labor in particular.

 

From both a regulatory and social responsibility perspective, supply chain professionals face the not-so-easy task of ensuring there is no hint of human rights abuses in their supply chains; not just from the XUAR but from other regions to where the Uyghurs may have been displaced to staff factories, farms, and mines.

 

The complexity of global supply chains, especially for products like cotton, makes attaining complete transparency difficult and requires important resources. To simplify the process and eliminate time-wasting tasks, procurement experts recommend the use of technology that can deliver accurate data and delivers a risk-based approach to compliance and prevention.

 

 

Source Intelligence’s Xinjiang Forced Labor Prevention Program

 

 

In the absence of a comprehensive supply chain transparency template pertaining to Uyghur forced labor, we took inspiration from our industry-leading Conflict Minerals program to create a similar process of data collection and risk assessment.

 

Working from tier one, we send a list of specific questions that help determine the supplier’s risk level based on a range of proprietary risk factors. These factors are compiled from a variety of sources worldwide with reference to key industry groups and experts in the field.

 

Documentation and information run through our AI software to be verified and validated or flagged for potential risk. Answers receive a score that helps categorize suppliers into low, medium, or high levels of risk. Assessments are propagated through the supply chain until all suppliers have been reached, providing a unique map of the supply chain and the network of interactions.

 

This type of dynamic risk-based reporting makes the decision process easier and helps quickly determine preventive or corrective follow-up actions.

 

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Extending the Use of Technology to Manage WRO

 

 

In January 2021, the US Customs and Border Protection (CBP) issued a region-wide Withhold Release Order (WRO) on cotton and tomato products produced in Xinjiang. Investigating indicators of debt bondage, threats, and abusive living and working conditions, the agency’s Acting Commissioner Mark A. Morgan stated:

“CBP will not tolerate the Chinese government’s exploitation of modern slavery to import goods into the United States below fair market value,”

 

Echoing the words of Acting DHS Deputy Secretary:

“DHS will not tolerate forced labor of any kind in U.S. supply chains. We will continue to protect the American people and investigate credible allegations of forced labor, we will prevent goods made by forced labor from entering our country, and we demand the Chinese close their camps and stop their human rights violations.”

 

Imports of cotton and tomatoes – and downstream products – produced wholly or partly in Xinjiang are subject to detention at the US port of entry under the assumption that they are tainted with forced labor. Importers are responsible for proving admissibility, i.e. mainly documenting the Certificate of Origin with:

  • Original source of the product (raw cotton/ tomato seeds)
  • Purchase order
  • Invoice and proof of payment
  • Production steps and production records
  • Transportation documents
  • Documents related to employees

 

In addition, standard Certificates of Origin are not acceptable. COs must be signed by the seller/manufacturer and the importer must issue a statement that the goods were not produced with forced labor.

 

Our Xinjiang Forced Labor Program is specifically designed to facilitate such document collection and validation. In addition and if required, we can help with the development of Certificate of Origin documentation based on the data collected and in accordance with 19 CFR 12.43(a).

 

 

Eliminate Forced Labor from Your Supply Chain Now

 

 

Modern-day slavery exists in many places, though it seems the Xinjiang Region is particularly submitted to a wide array of human rights abuses. Any trace of Xinjiang forced labor in your supply chain is bound to severely hurt your company’s reputation and position you against the authorities. The Uyghur Forced Labor Prevention Act is on the House’s 2021 agenda, so things are likely to happen fast and soon expand from WROs to a full-breadth compliance program.

 

Technology developed to satisfy regulatory requirements while minimizing manual work is what we do and have done for years, with a heightened focus on social responsibility issues.  A team of 24/7 multilingual experts always makes sure information and resources are completed timely and diligently.

 

Let us help you eradicate forced labor in your supply chain and contribute to a transparent chain of custody of your goods and products.

 

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